Academic journal article Asian Social Science

Customer Relationship Management (CRM) Technology and Organization Performance: Is Marketing Capability a Missing Link? an Empirical Study in the Malaysian Hotel Industry

Academic journal article Asian Social Science

Customer Relationship Management (CRM) Technology and Organization Performance: Is Marketing Capability a Missing Link? an Empirical Study in the Malaysian Hotel Industry

Article excerpt

Abstract

Due to the aggressive market competition in hotel sector, it is critical that hotels should adopt new strategy like CRM technology to assist hotel employees, serve customers better and improve organization performance. However, prior studies indicated that the relationship between CRM technology and organization performance is equivocal. These mixed results may be to a lack of understanding of the mechanisms that link CRM technology and organization performance. For this reason, the study used marketing capabilities (planning and implementation) as mediators between CRM technology and organization performance. The study surveyed a sample of 447 hotels firm in Malaysia and used correlation and regression for analyses and testing. The findings suggest that CRM technology is associated with the four dimensions of organization performance (i.e. financial, customer, internal process and learning and growth). In addition the findings reveal that marketing capabilities (planning and implementation) play a mediator role in the relationship between CRM technology and various dimensions of organization performance.

Keywords: CRM, marketing planning capability, marketing implementation capability, hotel performance

1. Introduction

With current advance of information technology, a new system can be used to enhance the power of organization toward reduction of internal costs, better relationship with the environment, which may consequently lead to economic profit in the long run. In this regard, it has been shown that different classes of hotels implement different Customer Relationship Management (CRM) systems (Moriarty-Jones, Rowley & Kupiec-Teahan, 2008).

In recent times, one of the most important strategies in hotel industry is how can hotels use their technology resources in marketing because it enables organizations to make the right decision based on the right information that collected from the right customers (Dev & Olsen, 2000). Thus, CRM technology is supposed to improve an organization's ability to maintain profitable customer relationships through facilitating integration and sharing information that is capable of influencing smooth and efficient organization-customer interactions, effective analysis of customer data, personalize and customize their products and services (Mukerjee & Singh, 2009).

Even though CRM technology has been linked to organizational performance, there is a lack of empirical research that investigates the relationship of CRM technology and various dimensions of hotel performance (Fan & Ku, 2010; Wu & Lu, 2012). Therefore, CRM is bound to constantly receive attention for future research in hospitality industry. Specifically, it was contended that there is research opportunity regarding hospitality industry, and thus scholars can contribute to theory development in that direction (Yoo, Lee & Bai, 2011; Line & Runyan, 2012).

As additional justification for future research regarding CRM technology and organization performance, past studies have showed inconsistent results regarding their relationship. Specifically, some of the past studies demonstrated a significant and positive effect CRM technology on organization performance (Akroush et al., 2011; Kasim & Minai, 2009), while others have reported non-significant association between CRM technology and organization performance (Ernst, Hoyer, Krafft, & Krieger, 2011; Jayachandran et al., 2005; Reigby, 2004; Yim et al., 2004). Furthermore, some studies demonstrated that CRM technology only had an indirect significant effect on organization performance through organizational factors (Garrido-Moreno & Padilla-Melendez, 2011). These mixed findings might have been a result of lack of understanding of the mechanisms that link CRM with organizational performance (Ernst et al., 2011; Reimann, Schilke, & Thomas, 2010). Consequently, further mediation research was suggested as crucial for assessing the role and impact of CRM technology in affecting organization performance (Ernst et al. …

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