_Doan Dinh Le Vu - The effect of CRM use om internal sales management control - An alternative mechanism to realize CRM benefits

In contrast to the relatively narrow focus on customer-related impact in prior research, this study addresses how effective sales management control is achieved through CRM, and why cont[r]

The effect of CRM use on internal sales management control: An alternative

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1 Introduction

Overthepastdecade,theapplicationofcustomerrelationship

management(CRM)hasexperiencedrapidgrowth.Between2000

and2005,organizationsspent220billiondollarsimplementing

CRMsolutions[35],toimprovecustomerservices,satisfaction,and

retention[40,46].However,priorresearchhasproducedequivocal

resultsontheeffectsofCRMonfirmperformance.Althoughsome

studies(e.g.,[9,40])haveprovidedevidenceofpositive

relation-shipbetweenCRMandperformance,manyacademicandbusiness

reportshaveshowndisappointingresults.Forexample,Hendricks

et al [22] analyzed a sample of 80 announcements of CRM

implementations,andfoundinsignificantimprovementon

long-termstockpriceandprofitability.Moreover,theGartnerGrouphas

foundthatapproximately70%ofCRMprojectsresultedineither

lossesornobottom-lineimprovementsinfirmperformance[45]

Toaccountfortheapparentdiscrepancybetweenthe

populari-tyofCRMimplementationandlackofconsistentresearchfindings

onCRMeffectiveness,thereisaneedtotakeacloserlookathow

CRMisusedtorealizeitsfullpotentialbenefits.Indeed,researchers

have recognized a lack of understanding of the mechanisms

through which CRM affects firm performance (e.g., [6,18,45])

There is a need for research that specifically examines the

mechanisms for achieving CRM benefits, and such qualitative studiesinparticular

Furthermore, priorconceptualizationof CRMimpacton firm performancetendstobenarrow,primarilyfocusedon financial terms and customer-related benefits (e.g., [27,29,40,46]) In contrast, far less attention has been paid to operation-related benefits[50].Similar tootherenterprise systems (ESs) suchas enterpriseresourceplanning(ERP),CRMhasmultipleimpactsona firm In particular, a CRM system involves thespecification of standardandreplicablebusinessprocesses,andtheautomationof theseprocesses[50].Thecentralizationofinformation, standardi-zation of processes, and transparency of employees’ work can satisfytheneedoffirmsforbettercontrollinginternalprocesses ThecontroleffectofCRMisimportantbecauseCRMisusuallyused

indepartmentswithexternalboundary-spanningresponsibilities, suchassales,marketing,andcustomerservices.Employeesinsuch sales-relateddepartmentstypicallyspendmostoftheirtimeinthe field This makes the job of monitoring and controlling these employeesdifficult[43].Therefore,itisimportantformanagement

toimprovetheircontroloverthesalesfunction.However,such control-related CRM benefits have been neglected in prior research As far as we know, no prior research has directly addressedcontrol-relatedCRMusage

Inthisexploratorycasestudy,weobservedaninterestingCRM applicationinasmallproviderofsystemintegrationservices.The firm’soriginalpurposewastousetheCRMtobettermanageclient informationandmakesureitstayedinthefirmratherthanbeing privatetothesalesrepresentatives.However,overtimeCRMuse

Keywords:

ThiscasestudyinvestigateshoweffectiveinternalsalesmanagementcontrolisachievedthroughCRM useand whyenhancedcontrol is beneficialto firms, which arelargely overlooked bythe extant literature.Themain theoreticallens isorganizationalcontroltheories.ResultsshowthatCRMuse strengthened formalcontroland informalcontrolsimultaneously.Formal controlwassignificantly boostedbyenhancedoutcomemeasurabilityandprocessvisibilityofsaleswork.CRMusealsofacilitated informalcontrol,byservingasthecarrierofnewinstitutionalprocessesandsalesphilosophy,which bolsteredclancontrol,andbyfunctioningastoolsforself-control

ß2012ElsevierB.V.Allrightsreserved

jiyemao@yahoo.com , jymao@ruc.edu.cn (J.-Y Mao).

ContentslistsavailableatSciVerseScienceDirect

Information & Management

j our na l ho me pa ge : w ww e l se v i e r com / l oca t e / i m

institutionalizingnewprocedures.Forexample,behaviorsofsales

representativesbecamemorecloselyalignedwiththeexpectation

ofthemanagement.Managerscouldmonitortheprogressofsales

continuous.Asaresult,notonlytheoutcomebutalsotheprocess

ofsalesbecamevisibletomanagement.Processesembeddedinthe

CRMprovidedamorestructuredapproachtoconductingsalesby

guiding sales representatives’ work and making them more

effective

ThiscaseoffersavantagepointtostudyCRMimpactoninternal

processes,andtobroadenunderstanding ofCRMeffecton firm

performance.SincetheextantliteratureofCRMimpactoffersno

comprehensive theoretical explanation for what we have

ob-served, there is a need todevelop a theoretical perspective to

accountfortheobservedphenomenon.Therefore,drawingupon

organizational control theories, this case study sets out to

investigate:(1)howiseffectivesalesmanagementcontrolachieved

through CRM use, and (2) why is control-related CRM usage

beneficial? ‘‘Effective’’ in research question (1) refers to either

enabling a previously non-existent control mechanism, or

substantiallystrengtheningan existingone, forachieving

man-agement objectives The meaning of ‘‘beneficial’’ in research

question(2)is twofold, instrumental toachievingmanagement

objectives at the organization level, and enhancing employee

performanceandcapabilitydevelopmentattheindividuallevel

Therestofthispaperisorganizedasfollows.First,wereview

organizationalcontrol theories toorient ourresearch We then

describethecasecontextandresearchmethods.Next,resultsof

dataanalysisarepresented.Lastly,wediscussthekeyfindingsand

implications

2 Theoreticalbackground

ToshednewlightontheoperationalbenefitsofCRMuseand

broadentheconceptualizationofCRMimpact,thissectionreviews

organizationalcontroltheories[15,25,42].Theyhavebeenwidely

adoptedbyresearchinsalesandmarketing(e.g.,[11]),information

systems(IS)development(e.g.,[31,49,51]),information

technolo-gy(IT)outsourcing(e.g.,[7,47]),andknowledgemanagement(e.g.,

[53])

2.1 Formalandinformalcontrols

Consistentwithpriorstudies,thisresearchviewscontrolina

behavioral sense (e.g., [25,31,47]), as formal and informal

processesof negotiation betweenorganizational members (e.g.,

managers and employees), in which various strategies are

developed toproduce desired outcomes [10] In general, there

are two major modes of control, formal control and informal

control[15,25]

Through formal control, management influences employees’

behavior and activities by establishing a set of procedures to

monitor,direct,evaluate,andrewardthem.Formalcontrolcanbe

furtherclassifiedintotwo specificmodes,outcome controland

behaviorcontrol.Theformerfocusesonwhetherinterimorfinal

outcomes are achieved without consideration to the process

Managementsetsperformancemetrics,evaluatestheresultsand

rewardsemployees formeeting those goals [3,11,25].Common

mechanisms for outcome control include explicitly specifying

desiredoutcomes and thenevaluating employees’ performance

basedonthespecifiedstandards.Examplesofthesemechanisms

for salesmanagement include bottom-line performance results

suchassalesvolume,grossmargin,andsalesexpense[1,2]

In contrast,thefocusofbehavior controlis onthemeansto

achievedesiredends.Managementprescribes specificrules and

procedures,thenmonitorsandevaluatesemployees’behavior,and

lastly rewards them based on the extent to which stated procedureshavebeenfollowed[3,11,47].Mechanismsfor behav-iorcontrol includeexplicitly defined rulesand procedures,and information systems to help monitor and evaluate whether employees’ behavior meets the specifiedrules and procedures Behavior control on salespeople can be achieved via constant monitoring, frequentcontact, and moresubjective performance metricssuchassalespeople’sefforts,activities,andthelike[2]

In general, informal controls emphasize social or ‘‘people’’ factors[32,42],includingclancontrolandself-control,toreduce divergentpreferencesbetweenorganizationalmembers.Thereare two specific modes First, clan control is implemented when managementpromulgatessharedexperiences,values,andbeliefs within a group of individuals [32] Through clan control, managementcan‘‘minimizethedifferencesbetweencontroller’s andcontrollee’spreferences’’ ([7],p 293)sothatmemberswill exhibitstrongcommitmenttotheclan.Clancontrolmechanisms include hiring and training practices, peer pressure, and team buildingactivities[31,49].Second,self-controlaimstoensurethat employees are intrinsically motivated and set task goals and proceduresfor theirown behavior[7].Examplesof self-control mechanisms include self-set goals, self-monitoring, and self-rewarding[30]

2.2 Antecedentsoforganizationalcontrols Priortheoriestendtofeaturethechoiceofoneparticularmode

ofcontroloverothers,insteadofsimultaneousexerciseofafull rangeofcontrol.Ithasbeensuggestedthatthechoiceofcontrol dependsupontaskcharacteristics,andthecontroller’sknowledge

ofthetransformationprocess[7,15,30,42].Morespecifically,task characteristics include behavior observability and outcome measurability If management has ability to specify and track desiredoutcomes,outcomecontrolismorelikelytobeexercisedto evaluateemployees’taskperformance[7,15,30].Iftheappropriate behaviorsofataskcanbespecifiedinadvanceandmanagement hastheabilitytogatherinformationaboutemployees’behavior, behavior control is more likely to be used to ensure that the prescribedtaskprocessisfollowed.Amanagerwhoclearlyknows thetransformationprocesswillbeconfidenttoexercisebehavior control and specify the rules and procedures that employees shouldfollow[7,30,33].Whenataskiscomplexandthestandards are difficult to set, management may exercise clan control or stimulateemployeestoperformself-control

2.3 Organizationalcontrolsenabledbyenterprisesystems

TogetabetterunderstandingofCRM-enabledsalesmanagement control,itcouldbehelpfultobrieflyreviewhowotherES(especially ERP)influencesorganizationalcontrol.AsEShasthepotentialto facilitate control through improved visibility of operations and standardized business processes, ES-enabled control has drawn attentionofprior research(e.g.,[4,17,24,41,48]) Several mecha-nismshavebeenidentifiedtoplayimportantrolesinrealizing ES-enabledcontrols.Forexample,surveillanceassociatedwithESuse affords‘‘panopticvisibility’’formanagement[17,28,48],whichis alsoreferredtoasthe‘‘informating’’powerofIT[56].ESuseisalso seenasadisciplinarytechnology[14].Ascarriersoforganizational processes, rules and regulations [21], ES embeds institutional elementsthroughthe design andimplementation [54] Inother words, assumptions about organizational processes and how organizational unitsshould function are builtinto ES, and thus theseassumptionsemergefromESuseandconstrainthebehaviorof organizationalmembers[41]

Therefore,itmakessensetoexaminetheeffectofCRMuseon controloveremployees.However, incontrasttopriorstudiesof

ofcontrol-relatedCRMusageand‘‘escapethedualismof‘control’

and ‘resistance’’’ ([13], p 606) Organizational control theories

havebeenchosenasthetheoreticallens.Theyinformthisstudyby

sensitizingourattentiontoissuesoftheoreticalimportance.More

specifically, they call for attention to a variety of control

mechanisms,which willbe identified and analyzed in relation

tooperationalbenefits

3 Researchmethods

Weemployedthecasestudymethod,whichfitsthisresearch

well for two reasons First, we focus on understanding how

control-related CRM usage was exercised and why it was

beneficial, and the case study method is ideally suitable for

‘‘how’’or‘‘why’’questions[55].Second,sincethereislittleprior

researchoncontrol-relatedCRMusage,thecasestudymethodis

appropriate[16]

3.1 Researchsetting

NodesCompany(hereinafterreferredtoasNodes)wasasmall

ChineseIT firm founded in 1996.It providedwireless network

products and totalsolutions for organizations, and itsbusiness

covereddistributionofhardwareproducts,systemintegration,and

softwaredevelopment.Along withthewide-spreadadoptionof

wireless network technology in China, Nodes’ sales increased

rapidlyatanannualrateof50%from1999to2004.Itssizealso

enlargedfromabout10employeesin1999tomorethan60.In

additiontotheheadquartersinBeijing,threeregionalofficeswere

setupinothermajorcities

Initsfirstfewyearsofoperation,Nodes’businessdevelopment

mainlyreliedonitsthreefounders,whowerethebossesinsidethe

firmandsalesrepresentativesandengineersoutsidethefirm.They

personallyundertookmanytasksandpossessedallthe

informa-tionsuchassalesdataandcustomerdata.Thefoundersessentially

kneweveryprojectandeverycustomer.AsNodesexpanded,the

foundersturnedtheirattentiontomanagerialwork.Management

problems gradually emerged For example, Nodes’ sales

repre-sentativesusedExcelspreadsheets,andpaperandpenstorecord

customer information These data were scattered in sales

representatives’personalcomputersandnotebooks.They

gradu-allybecamepersonalassetsratherthanorganizationalresources,

whichresultedinthelossofcustomerresources,souredcustomer

relationships, and poor services Moreover, Nodes’ executives

lackedmeanstomonitorthosewhoworkedinout-of-townoffices

Todealwiththeseproblems,Nodesdecidedtoimplementa

CRM system at the end of 2005 After several months of

implementation and three years’ actual use, the CRM system

proved to be effective in improving not only Nodes’ customer

servicebutalsointernalmanagement.Infact,manyorganizational

processesweremovedontotheCRMplatform,andallemployees

wererequiredtodocumenteachcustomer-relatedactivityinthe

CRMassoonastheygotachance.TheuseandimpactoftheCRM

weremuchbroaderthaninitiallyexpected,includingsignificantly

strengthenedsalesmanagementcontrolinparticular

Thisresearchsetting qualified asa revelatory case tostudy

accordingtoYin[55].First,theextensivecontrol-relatedusageof

CRM was quite unusual, and both Nodes’ management and

employeesbelievedthatCRM-enabledsalesmanagementcontrol

playedanimportantroleinsalesperformanceimprovement.This

waslikelybecauseNodeslackedwelldefinedworkprocessesprior

totheCRMimplementation, asdescribednext, whichoffereda

vantage point to observe CRM usage for internal operational

benefits that was not documented in prior studies Second, a

distinctfeatureoftheNodescasewasthatCRM-enabledcontrolhit

all fourmodes ofcontrol, i.e.,outcome, behavior, clanand self control,simultaneously,whichdepartedfromtheorganizational controltheories.Thesefeaturesofferedanidealopportunityforus

toinvestigatetheroleofCRMforsalesmanagementcontrol 3.2 Projectbackground

Thecontrol-relatedCRMusageinNodeswasinfluencedbythe organizationalcontextprior toitsimplementation,includingits inefficientinformationmanagement,smallfirmsize,andlackof process management and training on sales These contextual factorsmadecontrol-relatedCRMusageparticularlysalient and beneficial.Therefore,itcouldbeworthwhiletotakeacloserlookat them

First,Nodes’primitiveapproachtomanagingsalesinformation wastheprimaryreasontoimplementCRM.Itwasinconvenientfor salesrepresentativestoupdateinformationtimelyusingExceland papertomanagecustomerdata,anddoitinasystematicmanner More importantly, it was difficulttomake use ofsuch datato facilitatework.Asalesmanagerremarked:

‘‘It’stroublesomeinExceltocalculatedataortraceinformation Whenyouhavemoreandmorecustomers,it’sdifficulttofind things[inExcel].Customerinformationisalsochangingastime goes As data in Excel accumulates, you are prone to miss something.’’

Anothersalesmanageradded,‘‘documentscouldnotbeshared conveniently Itwasreallytroublesometo askfordocuments from eachotheralldaylong.’’Therefore,thegeneralmanagerinitiated theCRMprojectpersonally,andpickedthevicegeneralmanager forsalestobetheprojectmanager

Second,despiteitsrapidgrowthoverthepastfewyears,Nodes wasasmallfirm,operatingasaproductagent.Accordingtothe vicegeneralmanager,Nodes‘‘hadneithercoreproductsnorunique services,’’and‘‘itscorecompetencewasitscustomersandexperience.’’ What Nodes’ executives worried most about was the loss of customersandexperienceduetopersonnelturnover.Therefore, whenNodesdecidedtoimplementCRM,theirfirstconsideration was how to use such a tool to retain customers and work experience

Third,themanagementmaturityandskilllevelofNodes’sales representativeswereratherlowingeneralbecauseofthelackof training and experience There weretwo main sourcesof sales representatives Onewasfreshcollege graduates,andtheother was engineers who were rotated from technical or service positions.Thevicegeneralmanagerexplained:

‘‘Many of oursalesreps comefromourpre-salesengineers Thosewho lackprofessionaltrainings maystruggle atsome stagesduringthesalesprocess.Forexample,whatshouldIdo afterIhavecalledcustomers?HowshouldIpersuadethem? Theyhavenoideasaboutthat.’’

Therefore,Nodeshopedtobettermonitor,evaluate,anddirect sales representatives’ work The processes embedded in CRM providedastructuredprocessforsalesrepresentatives,basedon industry‘‘bestpractices.’’

3.3 Datacollection

Wecollecteddatafromtwomainsources,archivaldocuments andin-depthinterviews.Beforetheinterviews,wereadaninternal documentwrittenbythevicegeneralmanagerofNodes,whowas theleaderoftheCRMproject.Thedocumentwasabout50,000 wordslong,revealingdetailsof Nodes’history, thepre-existing managementproblems,theimplementationprocessoftheCRM

documentrepeatedlyandtalkingwiththevicegeneralmanager,

wegained understanding of theCRMapplication Furthermore,

thisdocumentfunctionedasanindependentdatasourceforusto

compareandcorroboratewiththeinterviewdata

Tworoundsofin-depthinterviewswereconductedin2009

Weinterviewedeightinformants,includingthegeneral

manag-er,thevicegeneralmanager,twosalesmanagersandfoursales

representatives,whowereallCRMusers.Eachinterviewlasted

betweenonehourandonehourandahalf.Theinterviewswere

conducted by both authors together.One of them followed a

semi-structuredinterview template [55], andthe other raised

relatedquestionsaimedatexploringincidental findings

Inter-viewers encouraged free reporting, and there was no forced

answer if the informants had no recollection The interviews

wererecordedandtranscribedforanalysis,resultinginatotalof

137pagesofsingle-spacedtextoftranscripts,comprisingabout

140,000words

The interview protocol consisted of three parts First, we

inquiredaboutthepersonalbackgroundoftheinformants.Then,

weaskedtheinformantsabouttheirCRM-relatedworkexperience

suchashowtheydidtheirdailyworkand howtheyinteracted

withcustomers,executives,orpeers.Lastly,weaskedreflective

questions,suchaswhatrolestheCRMplayedinthesalesprocesses,or

whatfunctionsoftheCRMweremosthelpfulintheirwork.Although

high cognitive capabilities might be needed to answer these

reflective questions, the informants were keenly interested in

themandgaveinsightfulcomments

Inourresearch,datacollectionanddataanalysisoverlappedas

prescribed for case studies [16,55] After each interview, the

authorsdiscussedtheirkeydiscoveriesimmediately,andthenread

throughthetranscriptscarefullytoadjustquestionsforthenext

one.Betweenbothroundsofinterviews,wewroteupateaching

caseandemailedittoinformantstoseekfeedback,andsharpen

our understanding After the second round of interviews, we

comparedtheresultsusinganiterativedataanalysisapproach,and

found that incremental learning was minimal Therefore, we

consideredthatthesaturationpointhadreached,anddecidedto

enddatacollection[16]

3.4 Dataanalysis

Our data analysis was largely based on the comparative

method,morespecifically,the‘‘before-and-after’’researchdesign

[19,38].Bydividingasinglelongitudinalcaseintotwosub-cases,

before and after an event of interest, this method permits

researcherstoachievecontrolledcomparisonwithinthe

sequen-tialdevelopmentofthecase.Sucharesearchdesignprovidesthe

opportunityto analyzehow and why pivotalevent affects the

changesunderstudy,andtheimpactofthecontext.Accordingly,

we divided the case into two stages of pre- and post-CRM

implementation.Fourstepsofdataanalysiswereundertaken,as

describedbelow

Step1:Identifyingsalesmanagementcontrolmechanismsof

pre-andpost-CRMimplementationrespectively.Bothauthorsreviewed

thearchivaldocumentandeachinterviewtranscriptseveraltimes

tograspitsmeaning.Thefirstauthormarkedoffallthetranscripts

relatedtosalescontrolactivitiesbeforeandafterCRM

implemen-tation,whichhelpedusdividethedataintomeaningfulchunksfor

analysis Our coding strategy was between the a priori and

inductiveapproaches[39].Organizationalcontroltheories

provid-edageneral accountingscheme forcoding TheywerenotCRM

usagespecific,butpointedtothegeneraldomainsinwhichcoding

couldbedevelopedinductively.Thisapproachwasconsistentwith

Kirsch[31]and Choudhuryand Sabherwal[7].Thefirst author

codedthetranscribednotessentencebysentencebasedon the

definition and classification of the four modes of control and establishedtheinitialcodingresult

Forexample,evidenceontheevaluationofsales representa-tives’performancethroughinterimresultsofeachsalesprocess stagecapturedintheCRMwerecodedasoutcomecontrolenabled

byCRMuse.Similarly,ifmanagersmonitored sales representa-tives’compliancewithsalesprocedures,throughaccessing ‘‘real-time CRM records,’’ this would be coded as behavior control enabledbyCRM.Furthermore,theuseofCRMtoconfigure‘‘work schedules’’ by sales representatives for prioritizing daily tasks wouldbecodedasself-control

The second author cross-checked the coding results and discussedwiththefirstauthortilltheyreachedagreement.We alsousedthetriangulationstrategy[55],retainingonlythecoding result thatwassupported by at leastthree informants(ortwo informantsand thearchivaldocument) After allthedatawere coded,were-examinedthearchivaldocumentandeachtranscript

toensurethatwehadnotomittedanyvaluablecontent Step 2: Identifyingthe effect of CRM on the evolution of sales managementcontrolmechanisms.Wecomparedthefourmodesof control, i.e., outcome, behavior, clan, and self control, and corresponding control mechanisms, and then identified their similarities anddifferences Followingthe approachof Cardinal

etal.[5],weidentifiedtheevolutionofcontrolmechanismsasto (1) whether a new control mechanism was established, (2) whether a previous controlmechanism wasdiscarded, and (3) whethera pervious controlmechanismwasretainedafterCRM implementationbutwasaugmentedorlessenedinintensity Step3:Identifyingtheeffectofcontrol-relatedCRMusageonsales representatives.Asoneofourresearchobjectiveswastoexplain whycontrol-related CRMusage wasbeneficial,we explored its impact on sales representatives We found evidencefrom two sourcesofdatathatemployees’professionalcapabilitieshadbeen improved.Onesourcewassalesrepresentatives’ownperception and anotherwastheir manager’sevaluation We extractedand triangulatedrelatedtranscribednotesandfoundthatitinvolved thefollowingaspects,i.e.,theimprovementoftheircapabilitiesto perform routine tasks and non-routine tasks, and to prioritize varioustaskstobemoreeffective.Wefurtherrelatedtheseaspects

toCRM-enabledcontrolmechanismsidentifiedatsteps1and2to infertheircausalrelationships

Step4:Drawingconclusions.We interpretedtherelationships between the identified control mechanisms,and the impact of control-relatedCRMusageonsalesrepresentatives

4 Results Thissectionpresentstheresultsofdataanalysis.Thefocusison

acomparisonbefore andafterCRMimplementationinterms of how CRM enabled or strengthened each of thefour modes of control,andtheimpactontheeffectivenessofsales representa-tives

4.1 Outcomecontrol PriortoCRM.Previouslyoutcomecontrolwastheprimarymode

of control in place before CRM use Management set annual performancetargetsforsalesrepresentatives,suchasthenumber

ofcontractssignedandtotalcontractvalue.Salesrepresentatives were also required to submit monthly activity reports for performance evaluation However, management felt that these mechanismswerenoteffectiveenough,becauseitwasdifficultto get information on sales work in great detail and in a timely mannerfornecessarymanagementintervention

CRM-enabledControl.AsabyproductofCRMuse,performance

ofsalesrepresentativeswasnotonlymeasuredbythenumberof

stagethroughoutthesalesprocess,suchastheamountofsales

leads created and sales opportunities upgraded These interim

resultswereadoptedasmetricstoassessemployees’performance

Inaddition,withthehelpofCRMrecords,notonlycouldmanagers

haveageneralunderstandingbutalsoquantitativejudgmenton

employees’workstatusandprojectprogression.Therefore,CRM

use significantly strengthened performance management by

improving thequalityand levelsof detail ofperformance data,

asthegeneralmanagerreflected:

‘‘Aftertheapplicationofsuchaplatform[CRM],wecanquantify

many more things when we evaluate sales representatives’

performance.Ineverystage,suchaseverymonth,werequire

themtocreateacertainnumberofnewsalesleads,orwewill

examinethe upgrading status of salesopportunities.If they

encounteranydifficulties,managerscantracerelateddatafrom

theCRM,whichisveryusefulforouradministration.’’

Clearly,CRMusestrengthenedoutcomecontrolbyenhancing

the measurability of sale representatives’ work Because the

interim results and details were kept in the CRM system,

managementcouldassesssalerepresentatives’performancemore

preciselyandtimely,suchasthenumberofcallstocustomers.In

particular,thefrequencyofsalesrepresentatives’interimresults

evaluationwasshortenedfrommonthlytocontinuously

4.2 Behaviorcontrol

PriortoCRM There wasno formal mechanismto specifyor

enforceprocessesandproceduresforsales.Infact,Nodesdidnot

havea clearly espousedsalesphilosophyorstructuredprocess

Therewasagreatdealofidiosyncrasyandinconsistencyinsales

activities.Managementreliedupon weeklymeetingsanddirect

observationsto collectinformation about salesrepresentatives’

behaviors At weekly meetings, sales representatives reported

theirworkbasedonExcelspreadsheets,andmanagersgavethem

feedback.Managersalsoparticipatedinsalesrepresentatives’field

work, which afforded opportunities to observe sales behavior

directly However, these mechanisms were inadequate for

propagating and enforcing the ‘‘best practices’’ of sales For

example, the amount of information and the level of detail

maintained in Excel spreadsheets depended on each sales

representative’s personal preference, intuition, ability and

self-consciousness.Importantcustomerandprojectinformationwas

sometimesomittedbyinexperiencedsalesrepresentatives

CRM-enabledControl.WiththeCRM,numerouscontrol

activi-ties were enabled in relation to the sales process Sales

representativeswererequiredtofollowtheproceduresembedded

intheCRMtoadvanceaproject.Eachsalesprojectwasdividedinto

severalstagesinsequence,whichwereprescribedasthestandard

process.BasedontheCRM,salesrepresentativesstartedfromsales

leads, then identifiedsales opportunitiesin them, and pursued

theseopportunitiestill contracts weresigned In essence, CRM

institutionalizedtheroutinesof saleswork,asaccountedbyan

informant: ‘‘Now the sales work [in CRM] is just like software

installation.Nextstep,nextstep,youproceedfollowingthenextstep

anditwillbeOK.’’Asalesrepresentativecommented:

‘‘Now some of the initial business processes are regulated

Interactionwithcustomers,forexample,isdividedintoseveral

sub-stages.We start withthe initialcontact stage,then the

solutiondesignstage,quotationstage,customers’evaluation

stage,contractstage,andsoon Wedealwithcustomersby

multiplestages.Thecurrentstatusofeachcustomerisreflected

intheCRMclearly.Wealsotakenotesaftereachstage,which

providelotsofreferencesforourbusiness.’’

Nodesrecognizedthe importanceof quality,timeliness, and completenessofdataintheCRMforprocesstracing.Therefore,all employees were required toupdate customer information and inputtheir‘‘actions’’intotheCRMsystemassoonastheygained accesstotheInternet.Managementmonitoredsales representa-tives’behaviorsbylookingovertheirCRMrecords.Adepartment manager said, for example, she usually logged on to her CRM accountandstayedonlinewhenshewasatwork.Besidesherown work,shealsokeptaneyeonthenewlyupdatedrecordsofher subordinates frequently.Asa result, it becamedifficult tohide things from her intentionally or unintentionally Another sales managersaid:

‘‘Idon’twatchthem[subordinates’CRMrecords]allthetime.I needtodomyownworkaswell.I’d,forexample,takealookat themeveryoneortwohours SometimesIchooseaspecific timetodoit,suchasafterfinishingmyworkintheevening,or beforestartingworkinthemorning.Duringtheday,Iusuallydo

itaccordingtomyschedule.’’

‘‘All your work is on it [CRM],’’ a sales manager explained

‘‘Every day’s workis on it [CRM] The information such as customer’ requirements and your solutions, the details you communicatewiththemandthedocumentsyouprovidetothem canbeseenveryclearly.WelistallofsuchinformationintoCRM.’’ The behavior control function of the weekly meetings was improvedbyCRMuse.ThemeetingswereconductedwiththeCRM system.Salesrepresentativesusedadataprojectortodisplaytheir CRM records on a big screen toreporttheir account activities Managersprovidedtheirevaluationandfeedback

In the event that management found an inconsistency in employees’ actual work processes or deviation from specified procedures,theymightintervenethroughtheCRMsystem.Such intervention occurred in two forms,directing or assistingsales representatives,andcoordinatingtheirwork Whensales repre-sentatives came across problems, managers had the necessary information toknowwhatkindofhelpwasneededina timely manner,suchashelpingdifferentiatebetweencustomersbasedon theirimportance,orprovidingadvicetoadvanceaproject,atkey stages A service manager explained how she helped her subordinatestobemoreeffective:

‘‘Icanhelpthemwithacertaintypeofwork.Iknowwhatkind

of help they needand what kindof information they want through the CRM Sometimes they are not willing to communicatewithmeface-to-facetoofrequently,andmaybe theycansolveproblemsbythemselves,buttheywouldneed muchmoretimethanundermyassistance.’’

In sum,CRM strengthenedbehaviorcontrolin thefollowing two ways First, compared to the absence of structured sales processes prior to the CRM, a new sales philosophy and its processesconfiguredintotheCRMpackagewereadoptedforsales representativestofollow.Second,CRMenhancedthevisibilityof thesalerepresentatives’work.Managementcouldmonitortheir behaviorthroughCRMrecordscontinuously,withmuchgreater details.Interestingly,CRM-enabledbehaviorcontrolwasbeneficial

to sale representatives for enhancing their effectiveness and capability Thebuilt-insalesprocess andtoolsin theCRM,and timelyinterventionbymanagementprovidedguidanceforthemto conductsalesmoremethodicallythanbefore.TheseCRM-enabled mechanismswereparticularlyhelpfulfornewemployees 4.3 Clancontrol

Prior to CRM Clan control was exerted primarily through training and oral communication Previously, there was little

largely through learning-by-doing They were given a list of

prospectivecustomers,andaskedtostarttheirjobsbycontacting

customers, although managers made known requirements and

proceduressuchasthefrequency ofcustomervisits.Newsales

representativeswereexpectedtogetfamiliarwiththebusiness

andimprovetheirsalesskillsthroughpractice.Theyreliedupon

their intuition,personality, and personalexperience toconduct

theirtasks

CRM-enabled Control.Theprocesses,procedures,andrelated

conceptsembeddedinCRMactedastrainingtoolsfor

employ-ees.TheCRM systembroughtinto Nodesa structuredprocess

andanewsalesphilosophyoperationalizedinconceptssuchas

‘‘salesactions,’’‘‘salesleads,’’and‘‘salesopportunities.’’Through

the application of CRM, not only were these concepts widely

adopted as standard of practice, but they also became

terminologies of daily communication and work The general

managerreflected:

‘‘Wedidn’thavesuchconceptsas‘actions’andnotionsabout

salesprocess BeforetheimplementationofCRM,wemight

promoteprojectsonlybycallingandvisitingcustomers.Now

westartwithsalesleads,andthendiscovermoreopportunities

Onecustomermayhaveseveralopportunities,andweupgrade

themstepbystepfollowingtheseconcepts.’’

Another conceptthatCRMintroducedwashowtodealwith

customersinbusiness,orthenotionof‘‘relationshipmarketing.’’

Based on the built-in functions of CRM, sales representatives

collected key customer contacts’personal information, suchas

theirhobbies,familyandchildren.Suchinformationwasusedto

strengthenrelationshipsininformalcommunicationand

interac-tions.Asalesrepresentativeindicated:

‘‘Youcangatherandstoreinformationsuchasthecustomer’s

hobbiesandfamilybackgroundintotheCRM.Maybeyouwill

contact the customer half a year later Then you know his

preference, for example, he enjoys smoking, drinking, or

basketball;oryoucanbuygiftsforhiskid.Satisfyingcustomers’

desirecanhelpuscarryoutourbusiness.’’

Furthermore,withtheCRM,theweeklysalesmeetingsbecame

more effective for employees’ sharing of ideas through

brain-storming With relevant information in their CRM accounts

projectedonthescreen,thedepartmentmanagerandotherteam

membersdiscussed and analyzed what todo in the nextstep

Throughsuchbrainstormingmechanisms,Nodesstrengthenedthe

atmosphereofmutualadvice-giving.Atthesametime,employees

couldalsofeelpeerpressure.IftheCRMrecordsofone’scolleagues

wereingreatdetailandfullofnewsalesleadsandopportunities,

whileone’sownrecordswerethin,thisindividualwouldbeunder

peerpressuretoworkhardertoexhibitbetterperformanceinthe

nextweeklymeeting

CRM also facilitatedcoordinationamongemployees

Some-timesdifferentdepartmentsin Nodesor differentsales

repre-sentativesinadepartmentdealtwiththesamecustomers.Inthis

case,sales opportunities might come from not only the sales

representatives,butalsotheservicerepresentatives,engineers,

or employeesof other departments The sharing of important

information was facilitated among employees using CRM to

promote joint sales projects Through the CRM, Nodes also

unifiedandenforcedbusinessrules,suchaspaymenttermsand

serviceresponsetime,toavoidcustomers’negativeimpression

arisingfrominconsistentbusinesspracticesindifferent

depart-ments

Insum,CRMstrengthenedclancontrolbyservingasthecarrier

ofanewinstitutionalizedsalesphilosophy,whichwas

instrumen-tal to minimizing undesirable performance variance among managers,seniorsalesrepresentatives,andnewemployees.Such institutionalizationwasfurtherreinforcedatweeklymeetingsby the extensive usage of CRM and emphasis on CRM-enabled concepts and processes Moreover, CRM also enhanced the coordination witheach otheramong individualsand organiza-tionalunits.Disruptiontoservicebyemployeeturnoveror sick-leaveswasalsoalleviated

SalesrepresentativesrecognizedthebenefitsofCRM-enabled information sharing and team coordination, which gradually becamepartoftheirworkroutine.Tothesalesrepresentatives, CRM-enabledclancontrolwasbeneficial,too,forenhancingtheir effectivenessandcapability.Inparticular,theyweremuchbetter equippedthanbeforetodealwithnon-routinework,torespondto emergency quickly, and to follow-through uncompleted tasks, becauseofimprovedinformationsharingthroughtheCRM 4.4 Self-control

PriortoCRM.Salesactivitiesusedtobelargelyindividualand personal, beyond the sight of management Therefore, sales representatives needed a highlevel of self-discipline and time management However, it was difficult to prioritize work and optimize time management, as there were a large number of contactstodealwith,uptoovertwothousandcontactsforsome senior sales representatives A sales representative gave an embarrassingexampleofaforgottenclientrequest:

‘‘OnceIspentthreeandahalfdaysofaweekworkinginthe field On the previous Friday a customer made an order, requestingdeliveryinsevendays.Thatweekpassedbyquickly

Inthefollowingweek,assoonasmysalesassistantandIarrived

atthatcustomer’soffice,sheremindedmesuddenlythatitwas thatdaytodelivertheequipment.Iwasgettingintoamuddle rightaway ’’

CRM-enabledControl.CRMprovidedaneffectivetoolforsales representativestoenableself-controlthroughthebuilt-inwork scheduleandtheknowledgebasefunctions.UsingCRM, employ-ees could arrange their work schedule based on an explicit differentiationof customers and ‘‘important taskversus urgent task.’’Morespecifically,theywereaskedtoarrangetheirtimetable

in relation to customers and tasks with varying levels of importanceandurgency,soastoconcentrateonthehigh-yield customers and tasks After explicitly classifying customers and workintheCRM,employeesfirstfinishedtasksthat wereboth importantandurgent,suchastenderbiddingandservicerequests Thentheyfocusedontasksthatwereimportantbutnoturgent Besidesworkscheduling,employeesalsosettaskremindersinthe CRM, alerting themselvesabout the need tocomplete planned tasksbeforethedeadline.Asalesrepresentativeexplainedabout thebeneficialinfluenceofCRMonhiswork:

‘‘WhenIlogontotheCRM,I’dexaminemy‘actions’toseewhat

Ishoulddotoday.I’dfirstfinishimportanttasks.ThenI’ddo thingstomaintainrelationshipswithcustomers.CRMcanrank customers according to their importance I may maintain relationshipswithimportantcustomersonceaweekandwith ordinarycustomersonceamonth.Allmyworkiscarriedout accordingtotheCRM.’’

Furthermore,employeescouldlearnabouttheexperiencesof their predecessorsandcolleaguesthroughtheknowledge man-agementfunctionofCRM.Thiswasespeciallyvaluable fornew staff.Whenemployeesencounteredproblemsorpuzzlesintheir work,theywouldfirstlookuprelatedexperiencesummaryarticles

intheknowledgebase.Anemployeeadded:

anewmember,they’dknowmuchmorethanme.Therearelots

oftheir articlesintheCRMabouttroubleshooting,whichare

summaries of their experience I can log in to read them

anytime,and then suchknowledge gets accumulatedin my

mindgradually.WhenIcomeacrossaproblemafterwardthatis

mentionedinthetroubleshootingdatabase,Iwillknowhowto

solveitandrespondquickly.Ineedn’tasksomebodyelsefor

helpandsolveitbymyself.’’

In sum,the CRMservedasan effectivetool for self-control

WithouttheCRM,althoughsalesrepresentativesmighthavebeen

motivatedtoexerciseself-control,theylackednecessarysupport

and tools Armedwith CRM,sales representatives could better

arrangetheirworkandimprovetheirprofessionalskills

5 Discussion

5.1 Keyfindings

Incontrasttotherelativelynarrowfocusoncustomer-related

impactinpriorresearch,thisstudyaddresseshoweffectivesales

managementcontrolisachievedthroughCRM,andwhy

control-relatedCRMusageis beneficial.Several interestingresultshave

beenfound(assummarizedinTable1 First,thestrengtheningof

formalcontrolsisthemostsalientfeatureofCRMusageinthis

case.ThroughCRMuse,Nodesdecomposedperformance

indica-torsforsalesrepresentatives,whichconstitutedoutcomecontrol

Asaresult,sales representatives’activitieswerebroughtunder

closer monitoring, and timely intervention became feasible

Moreover,CRM useestablisheda structuredsalesprocess with

specificrules and procedures,whoseadherence by sales

repre-sentativeswasmadetransparentby records intheCRM.These

CRM-enabled behavior control mechanisms were particularly salientandeffective

Moreover,throughCRMuse,Nodesalsosignificantlyboosted informal control over sales representatives Clan control was achievedthroughworkcoordinationbyinformationsharingand brainstormingbasedontheCRM,andmoreimportantlythrough institutionalizinganewsalesphilosophyincludingconceptsand thenotionofrelationshipmarketing.CRMusealignedtheways managersandteammembersbehaved,whilepromotingcommon beliefsamongemployees.CRMusealsoreinforcedself-controlby assistingemployeesinprioritizingtasksandjobscheduling Interestingly,the strengthenedcontrolwas beneficial tonot only management but alsoemployees Throughthe CRM,sales representativesdeepenedtheirunderstandingofsaleswork,and improvedtheircapabilitiesinperformingbothroutineand non-routinetasks.Theyalsogainedeasyaccesstotheircolleaguesand predecessors’ experiences accumulated in the CRM, which improved boththequalityof workin termsof consistencyand uniformityincustomerexperience

5.2 Theeffectofthecontext

TofullyaccountforthesalientandhighlyeffectiveCRMusefor managementcontrolinthisstudy,itisimportanttoconsiderthe organizationalandsocialcontexts,whichcouldberegardedasthe boundariesofourfindingsandtheoreticalexplanation.Intermsof the organizational context,as a small high-techstartup, Nodes clearlyhadreachedapointwhereithadatremendousneedfor more sophisticated management control, as evidenced by its inefficientmanagementofcustomerinformation,theabsenceofa structuredsalesprocessandphilosophy,andsalesrepresentatives’ lackof training.Therefore,CRMuseinclinedtowardaddressing theseproblems,i.e.,thelackofmanagementmaturityandeffective

records

Management

interventions

coordination

meetings.

Self-control

mediumsizedfirmsinemergingeconomies

ItisimportanttonotethattheCRMprojectwasinitiatedbythe

general manager, which is another key context factor She

personallychosetheparticularCRMproduct,andtooka

hands-on approach to the implementation Everyone in the firm

understoodthatshewasthedrivingforce,and herdeputytook

charge of the project Interestingly, the potential for internal

processcontrolwasnotanintendedobjective.Instead,theCRM

projectwaspromotedasaplatformforefficiency,sales

effective-ness, and elimination of repetitive manual data management

chores In the absenceof strong top management backing and

commitment,theextentandeffectivenessofCRMusemightnot

havebeenthesame

TheCRMusageforstrengtheningmanagementcontrolcouldbe

alsoassociatedwiththesocialcontext Culturaldifferencescan

leadtovaryingoutcomesinITapplications[34].Oneofthemost

commonly cited dimensions of cultural difference is power

distance [23] This case is situated in a high power distance

society,inwhichmanagementhasatendencytomaintaindecision

powerand toleaverelevantinformationselectively to

subordi-nates[12,36,37],whereasemployeesaremoreinclinedtodoing

whatareaskedtoandleavingthecontrolinformationanddecision

makingtotheirmanagers[44].Therefore,resistanceto

manage-ment’sinitiativetostrengthencontroltendstobeweak.Whereas

theorganizationalcontextcreatedNodes’needforstrengthened

managementcontrolandastructuredprocess,thesocialcontext

facilitatedtheacceptancebytheemployees.Inotherwords, the

organizationalcontextandsocialcontextsexplainedinpartthe

desirability and feasibility of major benefits of CRM use from

strengtheningmanagementcontrol

In fact, the implementation process was not problem-free

However,itisnotdiscussedbecauseitisbeyondthescopeofthis

research.TheeffectsofCRMonmanagementcontrolandemployee

effectivenessweregraduallyachievedlongaftertherolloutofthe

CRM.EmployeesdidnotunderstandthepotentialofCRMinitially,

nordidtheyembraceitenthusiastically.Forexample,somesales

representativesthoughtCRMwasaweb-basedversionofExcel,

without any understanding of its embedded sales process, as

explainedbyasalesrepresentative:

‘‘Weallfeltitwascumbersometousethesystem,sowewere

reluctant to use it However, once we started using it, we

realizeditindeedbenefitedourwork,fast,straightforward,and

efficient Therefore, we gradually accepted it, and the use

becameself-motivatedeventually.’’

5.3 Contributionsandimplications

Thisresearchhasseveraltheoreticalcontributionstoliterature

in both IS and marketing First, it illustrates an under studied

aspectofCRMusage,whichextendsourunderstandingofCRM

impactonfirmperformance.Morespecifically,wefocusedonCRM

useforstrengtheningsalesmanagementcontrol.Akeytheoretical

contributionisthatithasidentifiedanimportantmediator,

CRM-enabledcontrolover internalsalesprocess,forresearchofCRM

impactonfirmperformance.ThecontrolimplicationsofCRMuse

may help account for some of the equivocal findings in prior

researchon CRMimpact.Moreover, findings on control-related

benefitsofCRMusesuggestthatthemeasureofCRMimpacton

organizations should be broadened Future measures of CRM

impactshouldincorporatethesalesmanagementcontrol

dimen-sion.Inshort,thisresearchaddsakeymediatorintherelationship

betweenCRMuseandfirmperformance,andadimensiontothe

conceptualization of CRM impact Both of these additions

constitutetheoreticalcontributions[8]

Second,thisstudyhasenrichedorganizationalcontroltheories fromthestandpointofCRMuseintwoways Ontheonehand, although priorresearchhas indicatedthat formal and informal controls could be combined synergistically to influence the attainmentofobjectivesinan organization,thefocus ismostly

onthe‘‘choice’’ofonecontrolmodeversusothersbasedontask characteristics[20,52].In thisresearch,wedemonstratethat all four modes of control can be simultaneously activated or strengthened by CRM use On the other hand, by comparing controlmechanisms of pre-and post-CRM implementation, we alsoillustratehowthecombinationofdifferentmodesofcontrolin

anorganizationcanevolvefromalowcontrolsystemtoahigh controlsystem[26].ThishighlightsthatEScanplayanimportant roleinthecreationandevolutionoforganizationalcontrol,which wasrarelydiscussedintheextantresearch

Moreover, this research also contributes to the sales and marketingliterature.Wedeepentheunderstandingofsalesforce controlinpriorresearch.Ouranalysisshowsthatsales technolo-gies, suchas CRMsystems,canbeeffectivefor exercisingsales managementcontrol.Thereislimitedresearchonthisissueinboth

ISandmarketingliterature.Ourstudyhelpsclarifyhowandwhy suchIT-enabledsalesforcecontrolcanbeexercisedeffectively This research has important managerial implications for practice The most important one is that control-related CRM usageis a key dimension ofCRM impacton firm performance, especially in the Chinese business context and likely other emergingeconomies,inwhichfirmsexhibitsimilarcharacteristics

inmanagementmaturity Incase thereisalackofa structured sales processand visibility tomanagement, CRM usagecan be expected tobe highly beneficial in strengthening management control over sales process CRM-enabled control could partly compensateinsufficienttrainingandlowmanagementmaturity, and reduceidiosyncrasy and inconsistency in service In these firms, a CRM system’s payback could be significant in sales managementcontrol,andcomparabletoexternalbenefitsgained fromcustomerservice.Therefore,itisalsoimportanttobemindful

ofthecharacteristicsoftheorganizationalandsocial contextof CRMuse

Moreover,thisresearchhighlightstheneedfororganizationsto recognizethedualimpactofCRMuse,bothexternalandinternal Whereas theexternal gainsassociatedwithimprovedcustomer relationship management is widely recognized, the internal benefits on management control overall sales process have receivedrelatively littleattention.Itis, therefore,importantfor managers to target both customer-related and control-related CRMusageinimplementingandusingCRM.Firmsshouldaimto alignCRMusagewithbusinessrequirementsinsteadofnarrowly focusingoncustomer-relatedCRMuse,tobenefitfullyfromCRM investment

5.4 Limitationsandfutureresearch Thereareseverallimitationsinthisstudy,andmostofthemare relatedtothecontextualfactorsofthecase.First,thesinglecase designandthesmallsizeofNodesmayconstrainthe generaliz-abilityofourresearchfindings.Moreover,sincethisresearchwas conducted in China,an emerging economy in transition in the Asianculture,thefindingsmaybecontext-specificanddifferentin other cultural contexts It would be desirable to study the phenomenonandthescopeof CRMimpactindifferentcultural contexts.Second,thedataanalysiswasmainlybasedoninterview records,whichwereretrospectiveandsubjecttomemorydecay Archivaldataanddirectobservationwerehelpfulfor understand-ing the context, but the amount of such observation was not adequateforfulltriangulationdespiteoureffort.Lastly,restricted

bythespacelimit,wearenotabletoexploreanypotentialnegative

toomuchcontrolmight resultindiminishinggainsor negative

outcome.Itmaybeinterestingtoconductanothercasestudyto

investigatenegativeaspectsofcontrol-relatedCRMusageinthe

future.Itwouldalsobeinterestingtoevaluateinfutureresearchto

whatextentthefindingscanhelpusunderstandCRMimpactsin

general In conclusion, findingsof this researchoffer insight to

researchersandmanagersaboutcontrol-relatedCRMusageand

how to fully realize CRM benefit to achieve better sales

performance

Acknowledgements

This research is supported by the National Natural Science

Foundation of China (Project No: 70888001) and Fundamental

Research Funds for the Central Universities, and the Research

FundsofRenminUniversityofChina(10XNL014).Theauthorsare

grateful to Sue Newell and Lynne Markus for their insightful

comments on earlier versions of the paper and for their

encouragement

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