The Impact of Customer Relationship Management Capabilities On Organizational Performance Moderating Role of Competition Intensity

Arabian Journal of Business and Management Review (Nigerian Chapter) Vol. 3, No.
3, 2015
THE IMPACT OF CUSTOMER RELATIONSHIP MANAGEMENT

CAPABILITIES ON ORGANIZATIONAL PERFORMANCE;
MODERATING ROLE OF COMPETITION INTENSITY
Muhammad Nouman Shafique

Ph.D Scholar Preston University, Islamabad
Naveed Ahmad
Department of Business Administration , Lahore Leads University, Pakistan
Haider Abbas
Ph.D Scholar Preston University, Islamabad
Alamdar Hussain
Assistant Manager in Punjab Irrigation and Drainage Authority, D.G.Khan
Abstract
Today, organizational success and performance depends on identifying, attracting,
acquiring and maintaining customers in the highly intensive competition environment. The
current research identify the problem of enhance the organizational performance through
customer relationship management capabilities (Customer interaction management
Capability and Customer relationship upgrading Capability) in the presence of competition.
Population of this research was telecom sector in Pakistan. Expected sample size was 300
employees from telecom organizations. They was be administered through adopt
questionnaire including Customer relationship management capability (Customer Interaction
management capability and customer relationship upgrading capability), organizational
performance and competition intensity. Multiple logistic regression analysis tests was used
for further analysis. The current study was enable companies to make a long term and strong
relationship with their customers. This research would enable organizations to understand
and use their capabilities better than was possible before.
Key Words: Customer Relationship management, CRM Capabilities, Organizational

Performance, Competition Intensity.
Introduction
Fundamentals of business was developing and changing rapidly. Customers needs,
organizational strategies and competition leads to this change. In time of industrial revolution
the main focus was on the mass marketing and mass production. Today, customers needs
were changing rapidly and they also change the processes of organizations. The old concept
of business was product oriented model of design-build-sell was change to new customer
oriented model by sell-build-redesign (Rygielski, Wang, & Yen, 2002). At the same time
the process of traditional mass marketing process was changed to new one to one marketing
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Arabian Journal of Business and Management Review (Nigerian Chapter) Vol. 3, No. 3, 2015
concept. In the old marketing concept main focus was to reach more and more customers but
to acquire new customer was more resource consuming as compared to retention the current
customers.
Organizations realize that they dont just focus on transactions; they turn them
towards opportunity to sell products with good service experiences to established long term
one to one relationship with each customer. In recent years, organizations had to quick decide
the right way to build the long term relation with customer through different tools and
techniques. Customer Relationship Management (CRM) was also a tool having different
techniques to attract, acquire, retain and build a strong relationship with customers. Customer
Relationship Management was a dual creation process in which information was captured,
integrated, accessed then exchanged to create value for future customer from current
customer (Boulding, Staelin, Ehret, & Johnston, 2005).
Today, CRM was becoming popular rapidly and organizations were investing in the
implementation of CRM system. In 2006 worth 3.6 billion dollar licensed global CRM
software were purchased and it was increasing by 10.5 percent per year according to this 6.6
billion dollar in 2012 (Haenlein & Kaplan, 2009). According to study from 2000 to 2005
organizations invest 220 billion dollar in CRM (Payne, 2006).
Organizational more
concerned about their customers and it increased the importance of customer relationship
management.
Customer relationship management Capabilities were collection of different activities
such as identification, acquisition and retention of customers through customer interaction
management capability. Up-selling and cross selling were activities to customer relationship
upgrading capability. The other activities of re attracting and remake the relationship with
disagree or lost customer to get them back to the organization also important for customer
win-back capability (Yonggui Wang & Feng, 2012).
Technology revolution, particularly World Wide Web was the biggest opportunity for
the organizations to directly interact with their customers, customized their needs and provide
solutions to build, nurture and retain a strong long term relationship with them which was not
possible offline. Through web based interaction firms offer high quality services (Winer,
2001).
Organizational performance was not only the outcome it was continuous process of
different activities. Capabilities were the effort to do activities, which were the processes that
lead to the organizational performance. There were three standards points and balance score
were set as criteria to measure the organizational performance. First customer, second
internal business process (capabilities) and third learning and growth of the organization
(Kaplan & Norton, 1996). Balanced score were (1) financial perspective, revenue, ROA,
ROE, net income and cash flow. (2) Customer perspective includes acquirement, satisfaction
and their retention (3) internal business process perspective. Customer service process,
innovation and operation process. (4) Learning and growth perspective, invest in people,
facilities, product, information system, authority and fitness were the abilities of employees
to create long term growth (Dhewanto et al., 2012)
Customer relationship management was the key to increase revenue and profit by
making a strong and long term relation between company and customer. Customer
relationship management also establishes and increase trust between customer and company.
29
This trust was lead the satisfaction, loyalty, cross and up selling, repeat purchasing, lower
level of customer complaints, high market share, lower costs and profitability (Rapp, Trainor,
& Agnihotri, 2010). Trust was increase by repeated and convenient interaction with
customer. Customer relationship management capabilities were back bone of the
organizational performance and if the customer relationship management capabilities were
strengthens then automatically business performance was be increased. Organizations had
realized this fact and they were moving from traditional business to customer oriented.
Direct competitors in the market indicate the level of competition intensity. In highly
competition market organization were customer oriented. High competition intensity
motivates organizations to involve in corporate social responsibilities (CSR). Corporate
social responsibilities were activities impact on customer and organizational interaction. CSR
activities had a positive effect on the relationship between pricing, product differentiation,
marketing communication capabilities and firm performance (Kemper, Schilke, Reimann,
Wang, & Brettel, 2013).
In low competition intensity companies show their own behavior and they were not
interested in their customers desired. Organizations were not interesting in long term
relationship with customer. It was result as less customer satisfaction and decrease in sales.
So, if the competition intensity was high than it was be strengthen the relationship between
organization and customer. Customer, competition and company (3 Cs) were focused at a
time in this research. Through the internal organizational (customer relationship
management) capabilities can understand the customer needs. Competition had increased due
to globalization and organizations were competing to each other for their profit.
Organizations learn from one customer and facilitate other customers to make them loyal. So,
3 Cs playing their role by integrating to each other. It was impossible to perform better
without any one among them.
Statement of the problem
Customer relationship management was not only associated with technology. It was
combination of Human, technology and process at the same time. Organizations those think
that the customer relationship management was only sale force or technological driven
software leads fail to implement customer relationship management. Because they were not
fully understand customer relationship management. To understand CRM and its capabilities
fully was the key to business performance. Customer relationship management capabilities
influence on business performance positively. Competition intensity was also enhancing the
relationship between customer relationship management capabilities and business
performance.
The main problem statement of this study is to find out the relation between customer
relationship management capabilities and business performance in the presence of
competition. Therefore, the main focus of this study was to investigate the Impact of CRM
Capabilities on organizational performance by Moderating role of competition.
Research Questions
1. What was the impact of customer relationship management capabilities on business
performance?
2. How competition intensity effect the business performances?
3. What was the role of competition intensity on customer relationship management
capabilities?
30
Rationale of the study

Business performance was a complex and complicated concept (Venkatraman, 1989).
Business performance can assess through all the efforts were putting together to achieve the
business goals (Akal, 1992). Different dimensions can measure business performances;
market growth was the one of them. It was market share of the organization as compared to
competitors. And the other dimension was profitability. It was shows organizational financial
condition as compared to competitors(Xiaoying, Qianqian, & Dezhi, 2008).
Business performance was a vital in this competitive environment. Because in a
competitive environment unmeasurable factors cannot be controlled and uncontrolled factors
cannot be measured. So, Criteria to measure the business performance was required to
evaluate the business goals(Sebahattin Yildiz & Karakas, 2012 ). Business performance can
measure through qualitative or quantitative criteria (S. Yildiz, 2010).
Rationale of study was found from Customer relationship management Capabilities
Measurement Antecedents and Consequences by (Yonggui Wang & Feng, 2012). Their
study explores relation of CRM Capabilities and business performance in detail but they did
not consider the environmental factor of competition intensity which was playing a vital role
in customer relationship management capabilities and business performance.
In this study this gap was identify it to fulfill the gap of competition intensity from
previous study. So this research was be focused on the customer relationship management
capabilities effecting on organizational performance in the presence of competition.
Objectives of the study
1.
2.
3.
4.
The objective of this research was to find the relationship between the CRM
capabilities and organizational performance and also know, how competition intensity was
effecting on their relationship. It was evident that the customer relationship management was
the back bone of the organizational performance.
The specific objectives of this study was be:
To identify the Customer relationship capabilities.
To identify the organizational performance.
To find out the relationship between customer relationship management capabilities and
organizational performance.
To find out the effect of competition intensity on the relationship between CRM Capabilities
and organizational performance.
Literature Review
Customer relationship management was the chain process to identify, create
knowledge, build relationship and shape customer perceptions of the firm and its products
solution The Sales Educators (2006). A comprehensive strategy and process of acquiring,
retaining, and partnering with selective customers to create superior value for the company
and the customer was one strategic definition of Customer relationship management offered
by Parvatiyar and Sheth (2001)
31
Capabilities were the competencies of the organization. CRM capabilities based on

technology and knowledge (Plakoyiannaki & Tzokas, 2002). Customer interaction
management, customer relationship upgrading and customer win back capability were the
components of customer relationship management capability (Sofi, Bhat, & Rather, 2013).
Customer relationship management Capability was consists of four phases. First, Customer
interaction management capability (CIMC) second, customer relationship upgrading
capability (CRUC). Third, customer win-back capability (CWC) and last was (CKMC)
Customer knowledge management capability (Youngui Wang & Feng, 2008). In current
research only two Customer interaction management capability and customer relationship
upgrading capability was be focused.
Customer interaction management, customer relationship upgrading and customer win
back capability were the components of customer relationship management capability (Sofi et
al., 2013). Organization possess the capabilities of customer interaction management and
customer relation upgrading capabilities usually had the superior financial performance
(Krasnikov & Jayachandran, 2008).
Customer Relationship Management Capabilities
Capabilities were the competencies of the organization. CRM capabilities were based
on technology and knowledge (Plakoyiannaki & Tzokas, 2002). Customer interaction
management, customer relationship upgrading and customer win back capability were the
components of customer relationship management capability (Sofi et al., 2013).
Customer relationship management Capability was consists of four phases. First,
Customer interaction management capability (CIMC) second, customer relationship
upgrading capability (CRUC). Third, customer win-back capability (CWC) and last was
(CKMC) Customer knowledge management capability (Youngui Wang & Feng, 2008). In
current research only two Customer interaction management capability and customer
relationship upgrading capability was be focused.
Organizational capabilities were process, structural and employee abilities to build the
firm internal capabilities. This capabilities were helpful to build strategies for organizational
performance. It also make organizations to respond the external changes. Competition was a
big external change which can be handle through the organizational capabilities (Ulrich &
Lake, 1991).
Customer Interaction management capability
Customer relationship management was increase by the core capability of customer
interaction management capability. If the interaction was closed, organized, sequential verbal
and nonverbal strong communication then the customer interaction was in the user friendly
environment which was cause to increase the customer relationship management (Parvatiyar
& Sheth, 1994). Customer interaction management capability was enhanced through verbal
or nonverbal communication with customers through different channels. This was the pre
phase to establish relationship with their customers (Andersen, 2001). Without interaction it
was not possible to establish the relation with customer. When the long term and normal
communication start with customer, then this communication was change the behavior of
customers as well as make their trust on organization.
32
Two ways of customer interaction management capability were direct or indirect way.
It was also play an important role in interaction management capability of customer
relationship management capability. Direct relationship was more result oriented. Direct
relation was face to face or by telephonic to negotiation with customer (Dwyer, Schurr, &
Oh, 1987).
Customer Relationship upgrading Capability
Customer relationship upgrading capability can be measured through Up-Selling and
Cross Selling of the products. When the relationship with customer was upgraded then
customer was frequently visit to the organization. It was enhance organizational capacity of
selling more and different product to the customer (Up-Selling and Cross Selling). The
objective of customer relationship upgrading capability was to satisfaction, retention,
commitment and loyalty of the customer for cross selling and long term purchasing yield
(Anderson, Fornell, & Lehmann, 1994).
Different techniques were used for customer relationship upgrading. Cross buying
analysis was a technique which was helpful to understand the products which was bought
together (Barney, 1991). Cross tabulation form was designed to know about cross buying of
different products to understand the customer needs and customer retention (Jenkinson,
1995). Cross tabulation was useful when a company discount on a product, they know the
customer need and offer less discount on the most liked and important product by customer.
By the combination of the cross selling products.
Business performance
Business performance was a complex and complicated concept (Venkatraman, 1989).
Business performance can assess through all the efforts were putting together to achieve the
business goals (Akal, 1992). Different dimensions can measure business performances;
market growth was the one of them. It was market share of the organization as compared to
competitors. And the other dimension was profitability. It was shows organizational financial
condition as compared to competitors(Xiaoying et al., 2008). Compared
Business performance was a vital issue in this competitive environment. Because in a
competitive environment unmeasurable factors cannot be controlled and uncontrolled factors
cannot be measured. So, Criteria to measure the business performance was required to
evaluate the business goals(Sebahattin Yildiz & Karakas, 2012 ). Business performance can
measure through qualitative or quantitative criteria (S. Yildiz, 2010).
Customer Relationship Management Capabilities and business performance
Customer relationship management capabilities play an important role in enhancing
organizational performance and competition advantage (Barney, 1991). Organization possess
the capabilities of customer interaction management and customer relationship upgrading
usually had the superior financial performance (Krasnikov & Jayachandran, 2008). So,
customer relationship management capabilities and business performance had the positive
relationship with each other. If customer relationship management capabilities enhanced then
business performance automatically increased.
33
Outstanding customer relationship management capabilities leads to customer loyalty

and superior competition advantage (G.S. Day, 2003). Customer relationship management
capabilities capture customer pertaining needs at accurate time (JIT). Successful
implementation of customer relationship management was increase the business profit up to
270 percent (Ryals, 2005). It was also increase the stock price (Fornell, Mithad, &
Krwashnan, 2006), customer satisfaction and customer loyalty (Anderson, Fornell, &
Mazvancheryl, 2004).
Competition intensity
Competition intensity was the environmental hostility factor (Dess and Beard, 1984;
Zahra and Covin, 1995). Competition intensity was the situation in which a lot of
competitors were found and less opportunity for the organization to grow. In high
competition intensity organization had no their own behavior, organization was behave as the
competitor act.
When the competition intensity was low then the organization can fully transparent
his behavior. But if the competition intensity was high then the firm adopts his strategy
accordingly to his competitors. In high intensive market firms can take proactive activities
and also take risk. They break their price and promotions wars were also played in high
intensive markets (Zahra, 1993). Companies were innovative in both products and processes,
explore markets and make a difference from their competitors.
After the intensive literature review, it leads to research model given below.
Conceptual frame work
Competition Intensity
CRM Capabilities
Customer
Interaction
Management capability
Customer
Hypotheses relationship
upgrading capability
Organizational
Performance
The following hypotheses had been framed and was be tested:H1: Customer relationship management capabilities had positive impact on organizational
performance.
H2: Competition intensity had moderated effect between the relationship of customer
relationship management capabilities and business performance.
34
H3: Customer relationship upgrading capability had positive impact on organizational

performance.
Research Methodology
This research was based on inductive research approach, and the design for this
research was correlational. The reason to choose correlational research designs was that
customer relationship management capabilities were correlated with organizational
performance.
Data was be collected through online and offline questionnaires. Researcher was
interact maximum respondents to obtain data. Population was very important in any research
study. Therefore, the populations of this study was be the telecom sector in Pakistan. Simple
random sampling technique used to collect data. For data collection purpose, well-maintained
questionnaire was develop which hold the complete information relating to study. This was
consist of closed ended questions. Questionnaire was be pilot test for its feasibility and
validation on twenty respondents. Questionnaire result was be collected and analyzed to
know the relationship between CRM Capabilities and organizational performance in the
presence of competition intensity.
Population
Population means the whole field about which a researcher was going to conduct.
Population had much importance in any research study. The population of this study was
consist of telecom sector in Pakistan.
Sample
It was be quite impossible to study the whole population of the research. Sampling
was be taken by applying simple random sampling technique. Researcher had no list of all the
respondents of population and it was difficult to collect data from respondents thats why
simple random sampling technique was used because in this technique samples were selected
randomly which were easily available to respond. Expected sample size of 300 employees
from telecom organizations.
Tools of Research
While keeping in view the problem statement and proposed hypotheses, questionnaire
was be designed to obtain data for this study.
Questionnaire was be adopted. Instruments of CRM Capability, Customer interaction
management Capability, Customer relationship upgrading Capability and Organizational
performance for this study was adopt from Customer relationship management Capabilities
Measurement, Antecedents and Consequences (Yonggui Wang & Feng, 2012). The
Measuring instrument of Competition Intensity was adopted from Firm innovativeness and
business performance: The joint moderating effects of market turbulence and competition
(Tsai & Yang, 2013). Nine demographic factors were also asked in questionnaire. Detailed
questionnaire was also attached at annex at the end of this study.
35
Questions were seeking all the relevant information in Questionnaires. There was not
be any repetition of same or partially alike questions. Statement of questionnaire was be rated
on rating scale (Likert Scale).
The questionnaire was be tested to know the content and face validity. Reliability of
data was check through Cronbach's Alpha test. These was be improved on the basis of
feedback from the respondents.
Online questionnaire was also prepared for facilitation of respondents to submit their
responses at their free time.
Administration of the Tools
The questionnaire was be administered to draw out response from respondents from
selected offices. A clear instruction on how to fill the questionnaire was be provided to the
respondents by the researcher. The researcher was visit to maximum respondents covered by
the study.
Data Collection
The researcher was visit to respondents in order to distribute the questionnaires in
telecom companies. Personally request to the respondents to fill the questionnaire and return
it back to the researcher at the spot. At the same time an alternative way of online
questionnaire was also made for the facilitation of respondent to directly send their responses
to researcher. In case of their busy they was be allowed to fill it in free time. The respondents
was be reminded through telephone calls, reminders and emails etc. if researcher not receives
response from their side. Data collection process was be completed as soon as possible with
the cooperation of immediate officers of Pakistan Telecom Authority.
Table 1: Pearson Correlation for research variables.
Pearson Correlation (N=274)
Organizational
Performance
Organizational
Performance
Customer
relationship
Upgrading
Capability
Customer
Interaction
Management
Capability
CRM
Capabilities
Competition
Intensity
Customer
relationship
Upgrading
Capability
Customer
Interaction
Management
Capability
CRM
Competition
Capabilities Intensity
--.605
---
.612
.493
---
.704
.840
.886
---
.236
.166
.190
.207
36
---
In the above correlational matrix it was analyzed that organizational performance had
positive correlation with other research variables at highly significant variable 0.01. All the
variables had positively correlated to each other the value from 0.08 to 1.0 was highly
positive correlated, value from 0.4 to 0.8 were moderated correlated and the value between
0.1 to 0.4 were low correlated to each other.
Regression Analysis for Research Variables.
Regression table for customer relationship management capabilities, customer
relationship upgrading capabilities and organizational performance was given below.
Table 2: Regression for Organizational Performance and CIMC & CRUC
Model
R2
R2
T
Customer Interaction .374
.374
.612
12.759
Management
Customer
.496
.122
.401
8.095
Relationship
Upgrading
Customer
.496
.496
.704
16.347
Relationship
management
Capabilities
Dependent Variable: Organizational Performance
Sig.
.000
.000
.000
Regression analysis was used to analyze the dependent variable explained in

independent variable. Regression for customer interaction management capabilities and
organizational performance was tested. After that in model two customer relationship
upgrading capability and organizational performance was also analyzed. Results of regression
tests were for customer interaction management capability and organizational performance
was interpreted. Here R2 between customer interaction management capabilities and
organizational performance was .374 which was represents that 37.4 percent change. It
represent that customer interaction management capabilities explains the variance of
dependent variable organizational performance was 37.4 percent. R2 was represent that how
much change was be occurred in R2 when change was take place in customer interaction
management capabilities. . Here, the value of R2 was .374. was the standardized
coefficient between dependent and independent variable which was showing that 61.2 percent
variable was explain through this independent variable. T value was represent the change of
mean value between dependent and independent variable. Here 12.759 mean change was
occur in dependent and independent variable. At a highly significant level 0.00.
In model two, customer relationship up grading capability was test through regression
analysis by dependent variable organizational performance. Results of regression tests were
for customer relationship up grading capability and organizational performance was
interpreted. Here R2 between customer relationship up grading capability and organizational
performance was .496 which was represents that 49.6 percent change. It represent that
customer relationship up grading capability explains the variance of dependent variable
organizational performance was 49.6 percent. R2 was represent that how much change was
be occurred in R2 when change was take place in customer interaction management
capabilities. Here, the value of R2 was .122. was the standardized coefficient between
dependent and independent variable which was showing that 40.1 percent variable was
explain through this independent variable. T value was represent the change of mean value
37
between dependent and independent variable. Here 8.095 mean change was occur in
dependent and independent variable. At a highly significant level 0.00.
In model three, customer Relationship management capabilities was test through
regression analysis by dependent variable organizational performance. Results of regression
tests were for customer Relationship management capabilities and organizational
performance was interpreted. Here R2 between customer Relationship management
capabilities and organizational performance was .496 which was represents that 49.6 percent
change. It represent that customer Relationship management capabilities explains the
variance of dependent variable organizational performance was 49.6 percent. R2 was
represent that how much change was be occurred in R2 when change was take place in
customer interaction management capabilities. Here, the value of R2 was .496. was the
standardized coefficient between dependent and independent variable which was showing
that 70.4 percent variable was explain through this independent variable. T value was
represent the change of mean value between dependent and independent variable. Here
16.347 mean change was occur in dependent and independent variable. At a highly
significant level 0.00.
Moderated Regression Among Organizational Performance, CRM Capabilities And

Competition Intensity.
Moderated Regression table for customer relationship management capabilities,
Competition intensity and organizational performance was given below.
Table 3: Moderated Regression for Organizational Performance, CRM Capabilities and
Competition Intensity
Model
R2
R2
T
Sig.
Customer
.496
.496
.704
16.347
.000
Relationship
Management
Capabilities
Moderated
.504
.008
.140
2.092
.037
effect
IV * MV
Dependent Variable: Organizational Performance
In moderated regression, customer relationship management capability was test
through regression analysis by dependent variable organizational performance. Moderated
variable was competition intensity which was measured through interaction term of making
independent variable multiplied by moderated variable. Results of regression tests were for
customer relationship management capability and moderation effect was analyzed by
dependent variable organizational performance. Here R2 between customer relationship
management capability and organizational performance was .496 which was represents that
49.6 percent change. After effecting moderated variable it was changed from .496 to .504. It
represent that customer relationship management capability explains the variance of
dependent variable organizational performance was 49.6 percent. And after moderated
variable it was change from 49.6 to 50.4 percent. R2 was represent that how much change
was be occurred in R2 when change was take place in customer relationship management
capabilities. Here, the value of R2 was .496. And after moderated variable it was change
from .496 to .008. was the standardized coefficient between dependent and independent
variable which was showing that 70.4 percent variable was explain through this independent
variable. And after moderated variable it was change from .704 to .140.
T value was
38
represent the change of mean value between dependent and independent variable. Here
16.347 mean change was occur in dependent and independent variable. And after moderated
variable it was change from 16.347 to 2.092. At a highly significant level 0.00 to .037 which
was also significant. So, moderation was enhance the relationship between dependent and
independent variable.
Discussion & Conclusion
This chapter consists of discussion, conclusions, recommendations, limitations and
future direction for other studies.
Discussion
In this study it was expected that customer relationship management capabilities had
positive relationship with organizational performance. This relationship was tested through
Pearson correlation statistical tests. Results of Pearson correlation between customer
relationship management capabilities and organizational performance shows that, they had
the values of correlation was 0.704 which was positive. This positive value show that if
customer relationship management capabilities was increased then organizational
performance was increase automatically in positive manner and it had high positive
correlation with each other. So, this relationship was actually find after results as this
relationship was expected.
Second assumption of this study was that competition intensity had positively associated
with the relationship between CRM Capabilities and Organizational performance. This
expectation of relationship was tested through moderated regression between customer
relationship management capabilities, organizational performance by taking competition
intensity as moderator. It was analyzed in results that relationship between organizational
performance and customer relationship management capabilities without competition
intensity was 0.704 but after including competition intensity this relationship was increased
from 0.704 to 0.710 which was be more strengthen the relationship in positive manner
between organizational performance and customer relationship management capabilities.
This positive value show that if competition intensity was increased then customer
relationship management capabilities and organizational performance was increase
automatically in positive manner and it had high positive correlation with each other. So, this
relationship was actually find after results as this relationship was expected.
H1:
Customer relationship management capabilities had positive impact on organizational
performance.
Customer relationship management capabilities had positive relationship with
organizational performance and it was calculated through linear regression that R was 0.704.
This value indicate that customer relationship management capabilities and organizational
performance had positive relationship with each other and they were regressing on each other
and this was calculated through R2 which was 0 .496. This values clearly indicates that
customer relationship management capabilities had positive impact on organizational
performance. It means that if customer relationship management capabilities increase then
automatically organizational performance was increased. The results of this study also
support the previous literature. Because previous studies clearly indicates that if customer
relationship management capabilities increased then organizational performance was increase
automatically.
Customer relationship management capability was designed for customer service, marketing,
sales, data integration and external collaboration to increase organizational performance
(Jayachandran, Sharma, Kaufman, & Raman, 2005).
39
H2:
Customer interaction management capability had positive impact on organizational
performance.
Customer interaction management capability had positive relationship with
This value indicate that Customer interaction management capability and organizational
Customer interaction management capability had positive impact on organizational
performance. It means that if Customer interaction management capability increase then
support the previous literature. Because previous studies clearly indicates that if Customer
interaction management capability increased then organizational performance was increase
automatically.
Superior economic benefits can get through increase in revenue and profit by focusing
on characteristics of a customer during interaction which make long term relationship
between organization and customers (Ramani & Kumar, 2008). Important resources can
access (Harrwas, O'Malley, & Patterson, 2003) information about market, innovation and
positive outcome of products (Walter, Ritter, & Gemunden, 2001) which can achieved during
interactive relationship. It also leads to inter organizational innovation on the basis of
knowledge exchange (Chrwastiansen & Maltz, 2002).
Customer interaction management capabilities plays a vital role, to establish policies,
reliability, service quality and physical aspects (Vahzquez, Bosque, Dmhaz, & Ruiz, 2001).
However employees behavior was impacting positively on customer satisfaction (Ekinci,
Dawes, & Massey, 2008). Customer attraction also achieve during interaction process
because organization attract their customer through various ways (Schiele, Veldman, &
Huttinger, 2011). Loyalty programs, direct mail, websites, service centers, call centers, and
franchises were major interaction points to establish and develop relationship with customers.
Only customer instead of organization can determine either relationship had developed or not
(Gronroos, 2007 ).
H3: Customer relationship upgrading capability had positive impact on organizational
performance.
Customer relationship upgrading capability had positive relationship with
This value indicate that Customer relationship upgrading capability and organizational
Customer relationship upgrading capability had positive impact on organizational
performance. It means that if Customer relationship upgrading capability increase then
support the previous literature. Because previous studies clearly indicates that if Customer
relationship upgrading capability increased then organizational performance was increase
automatically.
Customer relationship upgrading capability can be measured through Up-Selling and
Cross Selling of the products. When the relationship with customer was upgraded then
customer was frequently visit to the organization. It was enhance organizational capacity of
selling more and different product to the customer (Up-Selling and Cross Selling). The
objective of customer relationship upgrading capability was to satisfaction, retention,
commitment and loyalty of the customer for cross selling and long term purchasing yield
(Anderson et al., 1994).
40
Customer relationship management capabilities had positive relationship with
This value indicate that customer relationship management capabilities and organizational
customer relationship management capabilities had positive impact on organizational
performance. It means that if customer relationship management capabilities increase then
automatically organizational performance was increased. When the competition intensity was
taken as moderated variable then the relationship between customer relationship management
capabilities and organizational performance was enhance from R was 0.704 to R was 0.710.
Also R2 was 0 .496 changed to R2 was 0.504. The results shows that when the competition
intensity was taken as moderated variable then relationship and impact between customer
relationship management capabilities and organizational performance was become more
strengthen. The results of this study also support the previous literature. Because previous
studies clearly indicates that if customer relationship management capabilities increased then
organizational performance was increase automatically.
Superior customer relationship management capabilities enable organizations to deliver
superior customers value and maintain a good relationship with them to make them loyal and
create a good competitive advantage also (Day, 2000; George S. Day, 2003). Customer
relationship management capabilities capture and fulfill customer needs to achieve first
mover advantage and respond to customers at real time for new product development or up
selling.
In advance countries competition intensity was high instead of developing countries
because in advance countries high technological and process innovations were implemented
as compare to developing countries (Singh, 2002). So, high competition intensity encourages
more innovation among competitors (Kim, 2007). In high competition intensity customer had
more choices to switch the organization freely at any time and organizations realize this fact.
Organization had more concerning about the requirements and hidden needs of their
customers and try to fulfill it early before their competitors. It was boost up organizational
performance (Cadogan, Cui, & Li, 2003).
Limitations of Study
The findings of this study had also certain limitations:
1.
First, the findings of this study depend on the biases of the responds, future studies
should attempt to use several sources to obtain more accurate data.
2.
Sample derived from telecom companies of Islamabad and Rawalpindi, in future more
diverse population should be used.
3.
Third, Competition Intensity had been investigated as a moderated variable, in future
other variables should be included.
4.
This was based on Cross-sectional data, in future longitudinal study should be
conducted.
This research was conducted to explore the impact of customer relationship
management capabilities on organizational performance in telecommunication organizations
in Islamabad and Rawalpindi. Being a researcher it was not easy to access wider area or more
cities and remaining two telecommunication companies of Pakistan. The other limitations of
this study were lack of time and budget resources. This academic research had a specific time
period to complete and submit the work and also had limited researcher resources to done it.
41
Availability of free time and availability of respondent was too much difficult during survey.
This research was limited to only three telecommunication companies in Pakistan.
Future Direction of this Research.
Telecommunication organizations can get maximum opportunities by considering the
main focus on customer relationship management capabilities and this was the key to
improve their organizational performance. For future research it was necessary to coordinate
between organizations and academic universities to investigate other attributes affecting
organizational performance. This research provides a plat form for future research. Four
major future directions were recommended by researcher.
First, this research was done only in two major cities Islamabad and Rawalpindi of
Pakistan but in future it was expand to other different cities of Pakistan. Second, this research
was covering only three telecom companies (U-fone, Zong and Mobilink) but in future
studies remaining two telecom companies (Warid and Telenor) was also be taken in future
studies. Third, in this research only two constructs (Customer interaction management
capabilities and Customer relationship upgrading management capabilities) of Customer
relationship management capabilities were taken, while in future other two constructs
(Customer Win back Capability and Customer knowledge management capability) was also
be considered under research. Fourth, other variables, age, Experience and Education can
consider as control or mediators in future research.
Recommendations
Telecommunication organizations should highly focus on their employees to provide quick
and participative services to their customers.
Telecommunication organizations should increase no of employees at all interaction points
(Call centers, Franchises and service centers) to increase the response rate from employees.
Telecommunication organizations must consider the importance of frequent training and
prosperity of their employees.
Employees should listen kindheartedly customer queries and solve them immediately with
experience and confident way.
All service requests from customer must be followed up.
There must be no hidden charges taken from customer.
Individual and personal attention should be given to all customers by customer services
representatives of telecommunication organizations.
In all franchises and service centers only highly skilled employees should be posted.
Printed information about different frequent queries should be available at service centers and
franchises as well as call centers of telecommunication organizations.
All organizations should keep eyes on their customer, they was try to be leader not follower
to make a competitive advantage.
Employees should understand specific needs of their customers.
Different strategies of customer relationship management should be followed to enhance life
cycle of their customers.
Interaction between employee and customer should be in language which was convenient to
customer instead of any specific language.
Employees should inform other packages and services offered by company to customers and
their benefits to customers also.
Practical and Theoretical Implications of Study
This research was practically implemented in the telecommunication industry for
improving organizational performance which can influence by customer relationship
management capabilities in an effective way. It was provide a plat form telecommunication
organization to improve their customer relationship management capabilities for making long
42
term relationship with their customers and make frequent and bundle sale of their products
and services to the customers. It is satisfy and make customer loyal to them which was take
financial and non-financial benefits to organization. The findings of this research was help
telecommunication industry to make their strategies of customer relationship management
capabilities for long term relationship with their customers to gain competitive advantage and
high market share by retention of existing and attracting of new customers.
Some other practical and theoretical limitations were given below.
This study was dynamic in nature and can implement Cross cultural and multi
industry by seeking other CRM processes and CRM Capabilities.
In order to enhance organizational performance, managers should identify
more aspects of customer relationship management.
Managers should provide friendly environment to interaction where both
customers and employees were more comfortable.
The results would be helpful for the customer relationship management of
telecom sector for increasing their organizational performance.
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47

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Arabian Journal of Business and Management Review (Nigerian Chapter) Vol. 3, No.

THE IMPACT OF CUSTOMER RELATIONSHIP MANAGEMENT

Muhammad Nouman Shafique

Key Words: Customer Relationship management, CRM Capabilities, Organizational

Rationale of the study

Capabilities were the competencies of the organization. CRM capabilities based on

Outstanding customer relationship management capabilities leads to customer loyalty

H3: Customer relationship upgrading capability had positive impact on organizational

Regression analysis was used to analyze the dependent variable explained in

Moderated Regression Among Organizational Performance, CRM Capabilities And

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