Interactive strategy formation_organizational_and_entrepreneurial_factors_related_to_effective_custo

Available online at www.sciencedirect.com

ent 37 (2008) 191–205
Industrial Marketing Managem
Interactive strategy formation: Organizational and entrepreneurialfactors related to effective customer information

systems practices in B2B firms

Debra L. Zahay a,⁎, Jimmy Peltier b,1

a Northern Illinois University, DeKalb, IL 60115, USAb University of Wisconsin-Whitewater, USA

Received 31 December 2004; received in revised form 27 February 2006; accepted 13 October 2006Available online 28 February 2007

Abstract

Interactive marketing requires that a firm learn about its customers and remember what the customer has said to personalize communications andcustomize product offerings to those customers. This type of marketing requires that customer information be actively managed because informationfrom and about the customer is the core of marketing decision-making. In-depth interviews with 17 managers in five firms identified specificorganizational and entrepreneurial factors pertinent to the strategic management of customer information. The research suggests that interactivemarketing require a company that can itself be interactive with its internal and external environment to create strategies that can succeed in a changingenvironment.

One exemplary company was compared to four others to uncover organizational issues and processes leading to effective management ofcustomer information. Using the Resource-Based View and the importance of the effective management of intangible assets as its starting point, thisresearch illuminated the processes involved with collecting and disseminating information and highlighted the firms' struggle with issues of inter-functional conflict. Perhaps most importantly, from a strategy-formation point of view, customer-centric strategies related to customer informationmanagement were found to be developed interactively, as a dialogue between middle and upper management, using customer data and competitivetrends.© 2007 Elsevier Inc. All rights reserved.

Keywords: Interactive marketing; Customer relationship management; Inter-functional coordination; Customer information management practices; Entrepreneurship

1. Introduction

The emergence of Customer Information Systems (CIS) andrelated data-driven technologies has heightened the ability tounderstand customers, particularly in terms of developingmutually beneficial relationships (Peltier, Schibrowsky, Schultz,2003; Reinartz, Thomas, & Kumar, 2005). In this paper, acustomer information system is defined as the processes bywhich firms learn about their customers by collecting, storing,

⁎ Corresponding author. Tel.: +1 815 753 6215.E-mail addresses: [email protected] (D.L. Zahay), [email protected]

(J. Peltier).1 Tel.: +1 262 472 5474.

0019-8501/$ - see front matter © 2007 Elsevier Inc. All rights reserved.doi:10.1016/j.indmarman.2006.10.004

moving and using customer data throughout the organization(Zahay & Griffin, 2003). The increased emphasis by firms inrecent years on CIS management has vastly amplified theamount of information available for decision-making, which inturn has upped the stakes for creating software applications thatfacilitate the ease in which customer data can bemanipulated andused to a firm's betterment. Diverse technology-based tools suchas sales force automation software (SFA), customer relationshipmanagement (CRM), data warehouses, and data mining appli-cations have all been deemed to be facilitated by an effective CIS(Avlonitis & Panagopoulos, 2005). Importantly, organizationsthat adopt and effectively utilize CIS technology have the op-portunity to create significant competitive advantages that en-hance firm profitability if they can deliver value-added services

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http://dx.doi.org/10.1016/j.indmarman.2006.10.004

192 D.L. Zahay, J. Peltier / Industrial Marketing Management 37 (2008) 191–205

that encourage high customer interactivity (Bonner, 2005;Reinartz, Krafft, &Hoyer, 2004; Robinson,Marshall, & Stamps,2005).

Despite this promise, it has become commonplace in theacademic literature and popular business press to claim thatCIS and the related concept of CRM have been at bestineffectual and at worst a financial nightmare.2 Growth-wise,through the latter half of the 1990s through early 2000,companies spent billions of dollars on CIS designed to trackand strengthen customer relationships. As has been commen-ted upon extensively in the literature, the majority of the firmsinvesting resources in CIS technology failed to garner theexpected benefits associated with getting close to customers.Many adopters of CIS technology grew frustrated and learnedfirsthand that becoming customer-centric requires a high levelof coordination between IT, marketing, and other functionalareas (Gulati & Oldroyd, 2005; Zahay, Griffin, & Fredericks,2004; Zahay, Peltier, Griffin, & Schultz, 2004). The lack ofinternal coordination that many organizations encountered andthe resulting negative impact on ROI contributed to a sharpdrop in CIS development. After rising 28% between 1999 and2000, CRM sales dropped by 5% in 2001, 25% in 2002, and17% in 2003 (Gartner Research, 2004).

Even as sales of CIS technology lagged, organizations werestill facing an exponential rise in the amount of informationneeded to meet data demands associated with managing elec-tronic commerce and supply chain applications (Gartner Re-search, 2000). In spite of past failures, recent investments in CIStechnologies have grown at an impressive rate. Part of thisresurgence can be attributed to the fact that beginning in 2002,CIS users started reporting increased satisfaction with theirinvestments (Bain & Company, 2005). This increased satisfac-tion can be traced to the use of a more focused CIS approachthat coordinates the transfer of customer information to orga-nizational entities responsible for interacting (i.e., salespeople,call centers, direct/interactive marketing, etc.) with customers(Rigby & Ledingham, 2004). Significantly, Bain & CompanyStudy (2005) reported that 75% of the global firms they sur-veyed are now using CIS. Forrester Research predicts that theCIS market will grow at more than an 11% annually pacethrough 2007 (Forrester Research 2002, 2004).

There is a growing consensus that CIS systems provide amechanism for effectively and efficiently serving customers.However, successful customer-driven CIS requires a commit-ment to understanding and implementing relational strategiesthat are based on the needs of individual customers across therelationship lifecycle, from the initial segmentation and targe-ting of prospects and new customers, through customervaluation and retention (Peltier et al., 2003; Rigby &Ledingham, 2004). Yet, gaining organization-wide acceptanceof CIS technology is no easy task and necessitates the sharingof information across functional boundaries (Robinson et al.,

2 The authors view Customer Information Systems and Customer Relation-ship Management Systems as relatively interrelated customer-based informa-tion and management technology. In this article we use CIS to place theemphasis on customer information.

2005). Unfortunately, the sharing of customer information iswhere many organizations fail in the pursuit of becomingcustomer-centric (Manning & Reese, 2002). Ultimately, theleveraging of multiple types of customer data acrossfunctional departments will require a cultural shift inorganizational philosophies and structure so that the sharingof information is more commonplace (Fredericks, 2005;Zahay & Griffin, 2004).

To date, CIS research has focused primarily on “installation”issues such as gaining sponsor support, IT infrastructure, andtraining (Wilson, Daniel, & McDonald, 2002) rather than onunderstanding organizational factors that influence when, how,and why firms “adopt” CIS and similar CRM information tech-nology (Kickul &Gundry, 2002; Mole, Ghobadian, O'Regan, &Liu, 2004; Peppers & Rodgers, 2003). Moreover, little is knownabout the organizational and strategy formation processesthrough which organizations can successfully harness customerinformation within and across firms (Peltier et al., 2003; Peltier,Schibrowsky, Schultz, Zahay, in press). Given the promise thatsuccessful CIS offers organizations desiring to get closer tocustomers, conceptual and empirical research are needed thatoffer insight for explainingwhy organizations succeed and fail inimplementing CIS (Avlonitis & Panagopoulos, 2005; Payton &Zahay, 2005).

Although research investigating how organizations evaluate,adopt, and implement CIS technology is in its infancy, the newproduct development (NPD) literature and related literature onentrepreneurial activities provide a strong theoretical and empi-rical foundation for studying its diffusion (Griffin, 1997). TheNPD literature is especially relevant for explaining how orga-nizations reassess, realign, adopt, and utilize CIS that matchinternal capabilities, meet resource allocations requirements,and that enhance firm profitability (Jayacharndran, Sharma,Kaufman, & Raman, 2005). Implementation of customer infor-mation management technology is a cross-functional, complexprocess integrating a multitude of individual and organizationalfactors. Therefore, literature from the Resource-Based View(RBV) of the firm also provides a conceptual foundation forexplaining how and why CIS adoption decisions are made andwhy certain firms are more effective in building information-intensive customer relationships (Fredericks, 2005; Theohar-akis & Hooley, 2003; Tian, Talai, & Wesley, 2005). Mergingthese rich and diverse literature bases, this paper presents thefindings from a study investigating organizational factors ne-cessary for successfully managing customer information.Acknowledging the importance of organizational factors incontexts involving cross-functional processes and strategyformation, the goal of this research is to answer the followingquestions:

1. What specific organizational factors are relevant to effec-tively manage customer information in the firm?

2. By what strategy-formation process can firms most effec-tively embark upon a strategy to integrate customer infor-mation into strategic processes?

3. What are possible differences between high and low per-forming adopters of CIS?

193D.L. Zahay, J. Peltier / Industrial Marketing Management 37 (2008) 191–205

2. Organizing framework: resource-based theory

The Resource-Based View of the firm is grounded on theprinciple that organizations possess a finite set of resourcesthrough which they attempt to cultivate competitive advantagesand superior long-term performance (Grant, 1991). Conceptu-ally, firms can secure and sustain competitive advantages in oneof two ways, by having significantly more resources that theircompetitors and/or by better utilizing them, especially whenthese resources are relatively scarce and cannot be easily copied,acquired or substituted (Barney, 1991; Rumelt, 1986). Empir-ical studies within the RBV literature have shown that financialperformance is variable across firms with disparate amount ofresources, underscoring the importance that individual, firm-specific resources have in maximizing organizational profits(Wade & Hulland, 2004). Furthermore, because performance isalso variable for firms with a relatively equal financial footing,organizations that better utilize their resources in a complemen-tary and mutually dependent fashion are likely to form betterbuyer–seller relationships (Xie, Song, & Stringfellow, 2003).

Overall, there is a paucity of conceptual and empiricalresearch investigating the strategic use and implementation ofCIS as an organizational resource, particularly with regard toviewing customers as an organizational asset (Zander & Zander,2005). The lack of theory and normative guidance regarding theeffective utilization of CIS have in part contributed to researchfindings showing that performance differences between firmsusing customer relationship management are smaller thanwould be expected (Avlonitis & Panagopoulos, 2005). Logi-cally, firms with a greater “information orientation” regardingthe management and utilization of customer informationtechnology across functional entities should expect superiorfirm performance. In fact, specific to the management of data,effective CIS practices using both relational and transactionaldata have been shown to contribute to organizational success(Zahay & Griffin, 2003, 2004; Zahay, Griffin et al., 2004;Zahay, Peltier et al., 2004). From a Resource-Based View of thefirm, integrating in-depth knowledge of customers into thedecision-making process is an underutilized organizationalresource and presents a distinct opportunity for long-termgrowth. Because buyers differ in the types of relationships theyseek, the segmentation and target-specific deployment ofinformational assets are crucial for ensuring deep and continualcustomer relationships (Peltier et al., 2007).

3. Organizing framework: new product developmenttheory

Although the RBV of the firm and CIS have received scantconceptual and empirical integration to date, the NPD literaturestudying entrepreneurial activities within firms offers a strongtheoretical foundation for investigating the successful adoptionand utilization of customer-based assets. In harmony with thenotion of customer information as an organizational asset, it iscritical for new product development teams to have access to awide range of internal (e.g., competencies) and externalinformation (e.g., customer needs) resources to develop and

successful launch innovations (Moorman, 1995). How theseinformational resources are supported and shared acrossfunctional areas is seen to be crucial to the success of CISand NPD efforts (Hayton, 2005; Wade & Hulland, 2004; Zahay& Handfield, 2004). Similar to the NPD context, the use ofcustomer information can be seen as an interactive processthrough which decision-makers make sense of what is occurringinternal and external to the organization and leveraging keyinformational assets to add value to the firm. To effectivelyutilize informational assets necessary for understanding andresponding to customers, an organizational culture must be inplace that supports the formation of knowledge depositoriesallowing access to multiple NPD teams and/or functionalgroups, and that creates an environment conducive to its use(Davenport, De Long & Beers, 1998; Zahay, Griffin, &Fredericks, 2004; Sherman, Berkowitz, & Souder, 2005;Yasuda, 2005).

Consistent with research objectives, the NPD literature wasexamined in detail as a means of (1) identifying organizationalfactors that influence the acceptance of CIS within and acrossorganizations, (2) determining organizational factors that mightbe important for effectively managing customer information, and(3) understanding strategy-formation procedures for integratingcustomer information into the strategic planning process. Al-though exploratory in nature and not exhaustive, Fig. 1 presentsthe organizational factors derived from the NPD literature forexplaining the successful adoption of CIS. These interrelatedorganizational dimensions, which are discussed below, include:Information quality, Communication, Cross-functional integra-tion, Conflict management, Teamwork, team rewards, co-loca-tion, and Top management support. The applicability of thesecategories to the context of CIS management is subsequentlytested through qualitative research methods.

3.1. Information quality

In a review of earlier NPD work, di Benedetto (1999)underscored the importance of information-gathering efforts tothe overall success of new product launches. More recently, vander Bij, Song, and Weggeman (2003) and Garcia (2005) equatedinformation quality to knowledge dissemination, positing that thesuccess of technology-based innovations is a function of thequality of the information received and utilized throughout theNPD process. In addition to its availability, Agün, Lynn, andByrne (2006) suggested that the extent to which NPD teams arereceptive to market and technology-based information directlyimpacts its perceived value. Specific to past data collectionefforts, Sherman et al. (2005) showed that the quality of infor-mation an organization has in its database regarding previousentrepreneurial product development efforts contributed to launchproficiency. Similarly, and consistent with effective CIS, Song,van der Bij, and Weggeman (2005) found that the quality ofknowledge transfer is directly related to information technologyexcellence. Focusing on the frequency and quality of informationreceived throughout the NPD, Maltz and Kohli (2000) noted anon-linear relationship exists between the two constructs, anindication that information quality is compromised when

Fig. 1. New product literature review summary, top organizational factors relating to NPD success.


decision-makers receive an inadequate amount of information orwhen a state of information overload exists.

Building on the NPD literature and the growing stream ofresearch on information technology, the perceived quality ofinformation generated through the adoption of CIS and how thatinformation is shared across an organization is expected tocontribute to organizational success (Zahay & Griffin, 2003,2004; Zahay, Griffin et al., 2004; Zahay, Peltier et al., 2004).How managers view the quality of information received fromCIS will likely be a function of how well available informationis coordinated and transferred to those individuals who areresponsible for interacting with customers (Rigby & Leding-ham, 2004; Zahay, Griffin et al., 2004; Zahay & Handfield,2004). Information quality and CIS management success arealso expected to be related to whether customer information iscollected from multiple functional areas within an organization(Calantone, Cavusgil, & Zhao, 2002) and whether the data havevalue to marketing and sales personnel (Payton & Zahay, 2005;Peltier et al., 2007).

Proposition 1. The perceptions of the quality of CIS informa-tion and how information is shared across the organization areexpected to positively impact CIS management success.

3.2. Communication

New product development involves the coordination of alarge amount of information in written, face-to-face, andelectronic form (Fisher, Maltz, & Jaworski, 1997; Ganesan,Malter, Rindfleisch, 2005; Kahn, 1996). Several studies havefound a positive relationship between market information useand various measure of business performance, includingoverall new product development success (Deshpande, Farley,& Webster, 1993; Moorman, 1995; Slater & Narver, 1995).However, this information coordination effort is complicated

by the fact that NPD has seen an increase in the number andsize of stakeholder groups (e.g., customers, suppliers), and theinformation needed is becoming more cross-functional acrossorganizational, cultural and geographic boundaries (Dahan &Hauser, 2001; Fleiss & Becker, 2006). NPD and entrepreneur-ial processes that minimize potential communication barriersinternal and external to the organization, particularly thoseinvolving information technology, are seen as having anincreased likelihood for success (Bond & Houston, 2003).Generating organizational awareness of a new technology,having frequent and genuine inter-functional and inter-organizational communications, and the use of formal andinformal communications techniques are all means by whichcommunication barriers can be lifted (Holland, Gaston, &Gomes, 2000; Jassawalla & Sashittal, 1998; Xie et al., 2003).Along these lines, Lam and Chin (2005) and Bstieler (2006)found that strong communications between participants in theNPD process lead to mutual trust and greater new productsuccess.

Communication problems seem to be especially challeng-ing with regard to the adoption and implementation of CIStechnologies, principally with regard to ongoing communica-tions between functional boundaries (Robinson et al., 2005;Zahay, Griffin et al., 2004; Zahay, Peltier et al., 2004). In manyways, organizational members must not only be convinced ofwhy they should accept CIS technology, they are also facedwith the dilemma of allocating time to learn about and thenintegrate this new way of doing business into their daily worklife (Avlonitis & Panagopoulos, 2005). CIS managementsuccess will likely be contingent on having a communicationnetwork in place that is collaborative, open, and allows users tointeract on a frequent basis (Nambisan, 2003). The process ofputting the customer database together and learning how theinformation held in the customer database will benefit allstakeholder groups though improved communication flow.


Proposition 2. The frequency and quality of internal andexternal communications are expected to positively impact CISmanagement success.

3.3. Cross-functional integration

There is an extensive stream of research investigating theimpact of cross-functional integration on multiple NPDperformance indices. The marketing literature in particular hasprovided strong evidence that allowing functional areas such asR&D, marketing, manufacturing, finance, and engineering toparticipate in the NPD process enhances the likelihood ofsuccess (Gupta, Raj, & Wilemon, 1985; Kahn, 1996; Leenders& Wierenga, 2002; Milson & Wilemon, 2002; O'Dwyer &O'Toole, 1998; Sethi, 2000; Srivastava et. al., 1999). Thebenefits of cross-functional coordination in entrepreneurialactivities have been conceptualized in terms of more effectiveproduct–technology transfers, better market timing, lowerprocess and marketing costs, greater access to new technologyoptions, enhanced product differentiation, and stronger, moresustainable competition advantages (c.f., Tatikonda & Stock,2003). There is also evidence that not all NPD team membersare equally adept at handling functional integration (Bond,Walker, Hutt, & Reingen, 2004), citing the need to identify NPDand CIS champions (Gupta, Cadeaux, & Woodside, 2005;Howell & Shea, 2001; Tomkovick & Miller, 2000) and forincreasing the diversity of cross-functional teams (Auh &Menguc, 2005). Importantly for CIS, cross-functional integra-tion has been shown to be superior when the organization isadept at recording, retrieving, and reviewing information frompast NPD projects (Sherman et al., 2005).

To date, there has been little academic work on the cross-functional integration and deployment of CIS technology forimproving customer information management practices (Rein-artz et al., 2005). In response, Payne and Frow (2005) empha-sized the need for a cross-functional approach to informationtechnology, one that positions CIS as a strategic priority forintegrating all aspects of the information management process.Despite this call, CIS integration across functional areas, parti-cularly between information technology and marketing, is dif-ficult in that customer data can and should be collected from amultitude of buyer–seller touchpoints and across all stages ofthe customer lifecycle, from the pre-purchase informationgathered by sales to the post-purchased information gathered bycustomer service (Payton & Zahay, 2005; Peltier et al., 2003,2007; Zahay, Griffin et al., 2004; Zahay, Peltier et al., 2004).Specific to CIS, we would expect that effective marketing/ITintegration is associated with superior customer informationmanagement success, especially with regard to the identificationof the types of customer information that should be collected,co-participation in the data collection process, ease of transitionto new software and customer management practices, and thefacilitation of ongoing interactions needed for maintaining andupdating the system.

Proposition 3. The quality of inter-functional integration isexpected to positively impact CIS management success.

3.4. Conflict management

The preceding discussion highlights the need in entrepre-neurial endeavors to develop an interface between marketing,R&D, and IT. Yet it is often the case that cross-functionalinteractions create conflict due to a fear to change the status quo(Pascale & Sternin, 2005), disparate and even incongruent goalsbetween functional areas (Xie et al., 2003), and a host ofpersonality and cultural differences that naturally arise throughbringing functional areas together with different ways of think-ing (Griffin & Hauser, 1996). Of significance to CIS, researchby Souder (1988) showed that marketing personnel feel thatR&D staff (similar to IT staff in an information processingsetting), are too scientific, lack an understanding of real worldissues, focus too much on facts and proofs rather than oncommon business solutions, and are difficult to understand. Incontrast, R&D personnel felt that their marketing counterpartsgive too little attention to technical details, are impatient, focuson temporary solutions and on symptoms rather than problems,and likewise are difficult to understand.

Regardless of why conflict surfaces in the NPD process,there is widespread evidence that its existence is detrimental tothe transfer of knowledge throughout an organization and thesuccessful development and launching of innovations (Bstieler,2006; Maltz & Kohli, 2000; Maltz, Souder, & Kumar, 2001).Although a variety of conflict resolution strategies have beenmentioned in the NPD literature, those that seem most closelyassociated with CIS adoption and implementation include crea-ting new multi-functional project management teams (Thieme,Song, & Shin, 2003), having a commitment to collaboration andopen communications between functional areas (Bstieler, 2006;Lam & Chin, 2005), having senior management support (Gupta,Raj, & Wilemon, 1986), and tying rewards to overall teamperformance (Keller & Chakrabarti, 1996).

As before, there is again relatively little research in thecustomer information management literature regarding theimpact conflict and conflict resolution have on CIS manage-ment success. One potential cause of conflict is whether amismatch exists between current and expected informationmanagement practices, and between the promised benefits ofusing customer information and the true capability of the CIS(Jayacharndran et al., 2005). This conflict might be intensified ifusers don't receive the proper training and technical supportneeded to transition to effective CIS management practices(Buehrer, Senecal, & Pullins, 2005). Information sharing is alsoa potential area for conflict, particularly with regard to thesharing of information between marketing and sales (Manning& Reese, 2002). The marketing–sales dilemma is further com-pounded by the fact that these two functional areas differ in howthey value specific types of customer data, with the salesorganization placing greater value on behavioral data ascompared to the marketing organization with its preferencefor relational data (Zahay, Griffin et al., 2004; Zahay, Peltieret al., 2004). As a result, disparate departmental goals impedethe ability of marketing and sales personnel to jointly pursue aneffective CIS that provides a cohesive and 360° view ofcustomers (Peltier et al., 2007). Strategically, cross-functional


conflict that surfaces through CIS adoption and implementationcan only be resolved through a process of communication andcollaboration that identifies how customer data can be utilizedby varied internal stakeholder groups (Lingreen, Palmer, &Wouters, 2006).

Proposition 4. Organizational conflict due to the adoption andimplementation of CIS is expected to negatively impact CISmanagement success.

3.5. Teamwork, team rewards, and co-location

Cross-functional teamwork in NPD is often viewed as onesolution to organizational conflict issues. In the NPD literaturethere are three related teamwork-oriented constructs, how teamswork together, the geographic proximity of team members, andhow team members are rewarded. While there is a burgeoningbody of literature showing that the creation of cross-functionalproject development teams is becoming commonplace in entre-preneurial organization and that the formation of these teamscontributes vital and value-added, knowledge-sharing activitiesto the NPD process, there is as yet no empirical consensus ofhow the constitution, social integration, and decision-makingstyles of these teams impact the successful completion of thenew product development task (Agün et al., 2006; McDonough,2000; Sethi, 2000). Notwithstanding, past research has shownthat the way in which cross-functional NPD teams resolveinternal conflict stemming from an inertia to change, vestedself-interests due to departmental and unit priorities, and theownership of resulting ideas, practices, and products, is animportant success criterion (Bstieler, 2006; Ganesan et al.,2005; Lu & Chyan, 2004; Milson & Wilemon, 2002; Sarin &Mahajan, 2001). Summarizing earlier NPD research related tosuccessful outcomes of cross-functional teamwork and cooper-ation, Griffin and Hauser (1996) concluded that “evidence isstrong, consistent, common across a variety of methodologies,and seemingly applicable in both service and products and inboth consumer and industrial markets” (p. 193).

3.5.1. TeamworkRecent conceptual and empirical research on NPD teams

offer insights for conceptualizing the successful implementationof CIS. Sarin and McDermott (2003) found that NPD projectleaders were more successful when using a democratic lea-dership style for determining appropriate project goals anddecision-making strategies. Similarly, Agün et al., 2006 notedthat NPD teams that were able to reach collective agreement asthe entrepreneurial process evolved experienced higher newproduct success. In complex task environments, Akgün, Byrne,Keskin, Lynn, and Imamoglu (2005) discovered that teamstability, team member familiarity, and interpersonal trust allpositively impacted speed-to-market and new product success.Ganesan et al. (2005) found that allowing the team to set projectgoals in a cooperative fashion, and then empowering teammembers to reach these goals through project ownership, weremost influential in generating team commitment and for achie-ving launch success. Likewise, Sethi et. al. (2001) showed the

importance of encouraging team members to take risks duringthe NPD process. Regarding information flow, Bstieler (2006)found that open and fair communications between team mem-bers lead to increased intra-team trust, more collaboration, lessegoistic behaviors, and greater new product success.

3.5.2. Team rewardsTo foster cross-functional unity, a spirit of entrepreneurship,

and innovativeness, organizations are increasingly turning to theuse of rewards linked to team-based performance (Keller &Chakrabarti, 1996; Sarin & Mahajan, 2001). Assessing andrewarding cross-functional performance place greater emphasison what the team is doing to successfully develop and implementinnovations rather than on individual participants (Bonner, Rue-kert, & Walker, 2002). Given the importance of cooperation,taking ownership in the entrepreneurial process, and minimizingcross-functional self-interests, the use of team-based rewards hasalso been found to be an effective mechanism for reducing goalincongruity across team members (Xie et al., 2003). Relevant toCIS, team-based rewards have also been shown to motivateincreased interactions with customers (Bonner, 2005), an impor-tant criterion for collecting and managing data.

3.5.3. Co-locationAn underdeveloped stream of research onNPD teams involves

the co-location or geographic proximity of project members andwhether distance negatively impacts entrepreneurial efforts.Based in part on the view that information sharing is a criticalprerequisite for new product development success, early NPDresearch found support that geographic proximity is positivelyrelated to the frequency and quality of interpersonal communica-tions between team members (Kahn & McDonough, 1997; Patti,Gilbert, & Hartman, 1997; Van den Bulte & Moenart, 1998).Leenders and Wierenga (2002) demonstrated that cross-function-al integration was enhanced by housing marketing and R&D inclose proximity to each other. Recently the NPD literature on co-location has expanded to include virtual media as a communi-cation device. Of interest, although Ganesan et al. (2005) foundthat close geographic proximity fostered increased face-to-facecommunications, there was no significant impact on knowledgetransfer. Conversely, those authors found that email communica-tions, which are boundary free, lead to greater creativity anddevelopment speed. These findings correspond to research bySchmidt,Montoya-Weiss andMassey (2001) showing that virtualNPD teams were superior to co-located teams.

Undoubtedly, up-to-date CIS technologies and human capitalare critical for developing efficient and effective buyer–sellerrelationships (Boulding, Staelin, Ehret, & Johnston, 2005).Based on the review of the NPD literature, we would expect thatfirms that manage customer information well have continuous,wide-spread, and positive interactions between CIS teammembers and organizational users, disseminating informationand integrating it across functional sources. Thus a dedicatedproject team and teamwork (Griffin & Hauser, 1996), a rewardsstructure for that team (Bonner et al., 2002; Griffin & Hauser,1996; Leenders & Wierenga, 2002; Sarin & Mahajan, 2001;Song, Neeley, & Zhao, 1996) and a team that is either co-located


to facilitate communication (Griffin & Hauser, 1996; Maltz &Kohli, 2000; Maltz et al., 2001) and/or that utilizes extensivevirtual communications (Ganesan et al., 2005; Schmidt et al.,2001), are expected to be critical organizational factors tocustomer information management success.

Proposition 5. CIS team unity is expected to positively impactCIS management success.

Proposition 6. Team-based rewards are expected to positivelyimpact CIS management success.

Proposition 7. Team proximity is expected to positively impactCIS management success.

3.6. Top management support

The role that top management plays in new product successand motivating a spirit of entrepreneurship is receivingconsiderable research attention in a variety of industries andproduct categories. As with most high level strategic businessdecisions, the general consensus within the NPD literature is thatinput from senior managers is critical to successful new productprograms, especially those in high risk environments (Griffin,1997; Henard & Szymanski, 2001). How great a role top mana-gement should have in the NPD process is as yet unresolvedgiven that some empirical evidence shows that centralizedauthority structures have a negative impact on team creativityand innovativeness, project completeness, and overall quality(Ayers, Dahlstrom & Skinner, 1997; Bonner et al., 2002).

NPD theorists have suggested a number of important waysthat top management should be involved in NPD, includingproviding a clear signal that innovation is critical to accom-plishing the organization's mission (Graber, 1996), identifyingNPD champions (Lester, 1998), serving as project screeners andevaluators at various NPD stages (Bonner et al., 2002), andparticularly in business-to-business environments, acting asfigureheads for conveying the organization's reputation withkey accounts (Wilson & Millman, 2003). There is additionalsupport for the facilitative role of upper management in newproduct development through vis-à-vis ‘interactive control.’ Forexample, Jelinek and Schoonhoven (1990) in a case study offive successful entrepreneurial firms found interactive involve-ment by senior managers in the NPD process contributed toNPD success. Imai, Nonaka, and Takeuchi (1985) found that aninteractive management style served as a catalyst for success.

Although positioned lower in the organizational hierarchy,middle managers can also be seen to be important to the NPDprocess since these managers act as facilitators for proposingobjectives, generating and evaluating options, functioning asproduct champions, mediating and building consensus duringboth implementation and strategy formation (Floyd & Woo-dridge, 1994; Hutt, Reingen, & Ronchetto, 1988; Parnell,Carrarher, &Holt, 2002). In the network view of the firm, middlemanagers utilize their connections to co-manage a strategy-formation process that cannot be completely controlled from atraditional hierarchy (Kodoma, 2005). In general, the more

participative the organization, the more likely it is that middlemanagers will be involved in strategy formation (Parnell et al.,2002). In strategic management parlance, firms with a highdegree of participation and involvement at all levels in theorganization are known as ‘interactive’ firms (Ackoff, 1981).

From a practical perspective, the organizational transition toa customer information management philosophy cannot be seenas a technology initiative, and instead needs to be guided by acustomer-centric vision nurtured by top management support(Kale, 2004). To this end, top management needs to develop abusiness strategy for determining how customer informationmanagement practices will be integrated into the organizationand how they should evolve over time (Payne & Frow, 2005).As such, management's support of cultural change is likely tobe one of the key ingredients to CIS management success(Zahay, Griffin et al., 2004; Zahay, Peltier et al., 2004).

Proposition 8.a) Top management support is expected to positively impact

CIS management success, andb) Participative management in terms of an interactive role

for middle management is expected to positively impact CISmanagement success.

Based on the review of the NPD literature, Fig. 1 summarizesthe directional hypotheses between NPD dimensions and CISsuccess. Although exploratory, we expect that data quality,communication effectiveness, cross-cultural relations, level ofteamwork, co-location, team rewards, and management supportwill positively impact CIS success and that conflict negativelyimpacts CIS success. Fig. 2 presents the NPD success factorsthat actually emerged from the qualitative research study.

4. Methods

Since little is known about the organizational processes andstrategy formation pertinent to the successful implementation ofCIS, we first conducted 17 qualitative interviews in five firms tohelp identify relevant theoretical issues to explore in detail. Thisfirst-phase exploratory study was designed to understand thestrategic formation of customer information management systemsand the organizational needs and processes related to the successfulimplementation of these strategies. It was hoped that specifictheories, constructs and operationalizations could be developedusing this grounded theory approach. Business-to-business (B2B)firms were the focus of the research because customer informationmanagement systems for B2B firms often involve more inter-organizational communication and coordination as compared toB2C firms. For example, the sales force, which communicatesdirectly with the consumer and which often holds the key toinformation about and from the customer, must be coerced orconvinced to share information so that such a system can function.

Business-to-business firms to interview were primarily selec-ted fromparticipants in a prior published quantitative study. Thesefirms had responded to a quantitative survey on strategy andcustomer information management with software and insurancefirms. The initial goal was to return to the prior respondents from

Fig. 2. Qualitative reviews summary, organizational factors relating to CIS success.


that study and, through interviews with firms that were identifiedas managing customer information well, to better understandorganizational and strategic factors in the customer informationsystems (CIS) management process.

To create a richer picture of successful CIS management,another B2B company in the office products and services industrywas contacted. This companywas selected because it had recentlywon a prestigious award in Customer Relationship Managementand is referred to in this research as the exemplar firm. Thiscompany was used as an extreme case for comparing the res-ponses of other companies in the study (Miles & Huberman,1994).

The ‘exemplar’was dubbed as such because its broad-reachinggoals were expected to encompass all of the best practices foundacross industries, as indicated in Table 1. Because the learningprocesses associated with customer information management arethe core processes that precede effective customer relationshipmanagement (Jayacharndran et al., 2005; Zahay & Griffin, 2004)this firm was a good choice for comparison purposes. In fact,during the interviews the exemplar spoke of the importance ofcodifying and managing customer information before the CRMprocess of identifying and segmenting customers could begin.

In that preliminary discussions indicated that less experiencedmanagers were less able to provide detailed insights, thestructured interviews with all companies were conducted withpractitioners who each had at least ten years of experience in theirrespective functional areas. The exemplar firm allowed sevenmembers of its topmanagement team to be interviewed, includingits general manager. Job titles ranged from “customer knowledgemanager” to general manager. Qualitative interviews wereconducted with these marketing practitioners in-person over asix month time frame. Interviews were recorded with permissionof the respondents and complete confidentiality was ensured. Astructured interview script (see Appendix) was developed in partbased on operationalizations of the CIS constructs from priorresearch on customer information management. These constructs

were rooted in RBV theory, with the firm seen as a learningorganization which in order to learn must get, store, move and use(share) information across the organization. Prior research foundthat there are eight sub-constructs involved in effective CISmanagement and that the differences in firm practices and per-formance can be distinguished by an emphasis on data quality andthe ability to share information in the organization. Therefore,data sharing and quality were emphasized in the structured inter-view script. Other questions centered about the use of customerinformation in a strategic decision the firm had recently made.

Practitioner respondents were asked about a recent change instrategy, and what information was necessary for that change.Not surprisingly, in light of the firms' efforts in the CIS area, inall cases the recent strategic change involved using customerinformation differently in the firm. While customer informationuse was emphasized, respondents also included informationabout their competitors. The sessions were taped and notes weretaken simultaneously. Each interview lasted typically thirty toforty minutes. The lead author listened to the tapes, transcribedand coded them, building an overall understanding of CISstrategy formation and implementation. Standard methods ofqualitative research analysis were used to analyze the data,including the creation of coding sheets based on frequency ofmention and the use of iterative processes of data analysis(Miles & Huberman, 1994). The analysis was also conducted ina manner consistent with the method of Yin (1994), wherebyoverall patterns in the data were identified and several rounds ofanalysis are necessary to achieve a complete picture. Severaldifferent iterations of the coding scheme were developed beforethe final scheme was selected. A detailed description of thecoding scheme is available upon request.

During the interview a pattern rapidly emerged whichshowed how customer information is integrated throughout theorganization that was in fact similar to the process by whichnew products are successfully managed within the organization.Co-location, teamwork and functional integration were

Table 1Reality versus the ideal in managing customer information

Organizational capability “Ideal” company Reality

Communication Company exchanges written, oral, electronic informationabout and from customer throughout the organization;uses a separate CIS ‘language’ which includes termslike customer valuation, lifetime customer value, touch points

Company exchanges some information about andfrom the customer throughout the organization

Systems/data integration (shareability) Company is organized to integrate data, the highest form ofknowledge management, using appropriate systems,relational as well as transactional data is emphasized

Informational ‘silos’ and multiple systems abound andnot all systems can talk to each other; no central datarepository or way to access data, emphasis is onintegration of transactional data

Teamwork Company uses a dedicated team to develop a newapproach to managing customer information in the firm;people are given leave from their jobs to work on team

Team may be established but is not dedicated; people tryto create new vision while working in current positions

Co-location Organizational size and structure allows for all functionalareas to work in close proximity; CIS team may be co-located

Organizational functions are dispersed physically andgeographically and/or the team responsible for CISmanagement is not co-located

Information quality managementprocesses

Organization speaks the language of data and dataquality and quality data is an organizational priority,with processes in place to manage; data dictionary in place

Organization complains about data quality but doesnot have processes to manage data and to create quality;no data dictionary

Functional integration Different functional areas work together to managecustomer information

Customer information management is responsibilityof each functional area

Top management vision/support Top Management supports effort and is able to understandand translate CIS needs to upper management

Top management has little understanding of theneed to manage customer information in the organization

Inter-functional conflict Organization is aware of the need to manage theconflict in the organization revolving around the collectionand management of customer information

Organization does little from the top to manageorganizational conflicts regarding CIS

Middle management input to strategyformation

Middle management has strong input to strategy function,bringing the need for customer information managementto top management’s attention; interactively,they create customer-based strategy

Middle management is not involved in decision-makingin terms of bringing customer information managementneeds to the attention of upper management andprimarily implements the solution


recurring themes. However, there appear to be some organiza-tional differences unique to the management of customerinformation. The similarities and differences of the CIS processto the NPD process is the organizing structure of the resultssection of this paper.

5. Results

Interviews were analyzed by type and frequency of mentionand results were compared in tabular format and then groupedaccording to category. The qualitative data were coded on thedimensions that were developed from the NPD literature, aswell as other items frequently mentioned in the interview data.The results of the analysis are summarized in both Table 1 andFig. 2. In general, the posited propositions were supported, withsome exceptions.

When items were not mentioned that were anticipated fromthe earlier literature review, that item was removed from thecoding scheme. For example, although the NPD literature sug-gests that both cross-functional teams and organizational con-trols mechanisms, such as team-based rewards, keep teams ontrack, the interviewees did not emphasize rewards structures(see Fig. 2). Only the software company briefly mentionedrewards structures as regards to working with its sales force.However, all firms noted that software and data integrationissues were critical to CIS implementation success so that factorwas substituted for rewards in the summary in Fig. 2. Similarly,in the customer information management context, participa-

tiveness by middle managers seemed to play a stronger role thanis usually emphasized in the NPD literature, so, consistent withproposition 8b, participativeness was added to the explanatorygraphic in Fig. 2. The importance of a dedicated team emergedas more important than teamwork skills so teamwork skills wereremoved for the final graphic in Fig. 2.

In addition, companies varied significantly in terms of howthey integrated the use of customer information into their com-pany strategy and how they managed that information. All firmsto some extent embarked upon changes in their customer infor-mation management strategy as a result of declining profits orcompetitive pressures; interacting with their environment meantchanging the firm in terms of customer information management.The firms were categorized into three differing levels of sophis-tication, by category, exemplar, software and insurance.

The exemplar had the broadest range of the customer infor-mation management ideal practices as noted in Table 1, such asdata quality, communication, data and functional integration,teamwork, top management support and middle managementinput. The software firm focused on data integration issues tounderstand its customers better and the insurance firms focusedmore on data integration issues for operational efficiencypurposes. Therefore, the software and the insurance firms eachlooked a bit like the exemplar in some aspect CIS practices, sincethe exemplar sough both operational efficiency and customerunderstanding. Although the differences between the softwareand insurance firms are discussed specifically, the characteristicsof the exemplar are discussed in depth because that firm provided


a holistic approach to the organizational factors relating tocustomer information management.

Many of the success factors in implementing a customerinformation management system were indeed similar to thosefrom the NPD literature. Common threads and themes acrossthe three types of companies, exemplar, software and insuranceincluded the importance of a dedicated project team, top ma-nagement support, company vision, process integration, infor-mation quality and physical proximity or co-location. In allfirms inter-organizational conflict was a challenge in effectiveCIS management.

In the exemplar organization, not only was communicationan important factor as noted in Table 1 (written communicationwas especially important in the form of a blueprint of theinteractions between the firm and its customers to which all inthe organization could refer), the individuals in this organizationspoke an entirely different language, dubbed for this research as‘the language of CIS.’ At all levels people in the organizationreferred to the following terms with ease and there was a sharedunderstanding:

• Retention rate• Lifetime customer value• Consistently value customers• Touch point (interaction point) integration• Customer knowledge• Customer relationships• Data dictionary• Interactions vs. transactions• Integrated service mode

None of the other organizations interviewed had such a depthof understanding of the language of CIS as did the exemplar.

Also, in the exemplar firm the organizational focus was notjust on capturing transactional information from and about thecustomer, but collecting relational information (customerinteractions) as well. Customer service interactions wereconsidered particularly notable. While the team assigned tocreate the new customer data management system was notspecifically co-located in the organization, there was a dedicatedproject team assigned to the effort. As noted under teamwork inTable 1, members of this team were given leave from their jobsfor as long as a year to work on a newCIS system in a completelydedicated effort.

Another striking process in the exemplar firm and to someextent the software firm was the way in which the customerinformation management strategy was conceived and integratedinto the organization. In the exemplar company, strong middlemanagement was responsible for the conception of the strategybehind the “One Customer” concept, which involved integratingdisparate databases to get one view of the customer in theorganization. Middle management then brought the idea to topmanagement, who approved of the idea and refined it and gavethe concept back to middle management to implement, while atthe same time staying deeply involved in the process. In theexemplar, it was useful that top management had a sales andservice background and understood the importance of the new

customer information strategy. In Table 1 and Fig. 2, thesepractices described above are captured by functional integrationand the category of top management vision/support. Top ma-nagement vision/support is modified from the NPD environmentas depicted in Fig. 1 to top management support/participative-ness as found in the CIS environment in Fig. 2 to capture middlemanagement's involvement in CIS development.

As in new product development and entrepreneurial success,top management was able to lend its support and maintain thevision, but in the case of the exemplar the program succeededonly through interaction with a strong-minded middle manage-ment. In other words, successful customer information manage-ment seems to require an approach that is close to the customerso that management can understand the gaps in the currentsystem. This approach has been dubbed ‘interactive strategy’and is the title of this paper. The idea of bottom-up managementapproaches is not new (Bower, 1986). However, one of theorganizational factors in the successful implementation ofcustomer information management systems in the organizationis the ability of middle and upper management to collaborateand interact both to form and implement the new direction. Anarticulate middle management that took an active and inter-active role in strategy formation distinguished the exemplar, andto some extent the software firm, from the insurance companyenvironment.

As in the NPD context, all firms struggled with conflict,particularly surrounding systems and data integration issues andthe integration of sales force data. However, these data inte-gration problems were particularly noticeable for insurancefirms, presumably because these firms were older and con-fronted older, legacy systems. Data integration issues arise, forexample, when sales maintains information about customers, butthat information resides in a specialized sales system, inacces-sible to other functional areas. In addition, marketing may haveinformation about customer needs in a relational database, how-ever that database is not accessible to those in customer service,who must meet personally with the marketers to get access to thedatabase. The resulting “information silos” frustrate marketingefforts and hampered the ability of these insurance firms, inparticular, to respond to customer needs by offering new under-writing solutions.

The software company was somewhat in the middle in termsof CIS implementation success factors and in terms of customerinformation strategy formation. Key motivations for changingcustomer information management practices in this firm wereincreased competition, declining profits and a desire for compe-titive differentiation. This firm hoped to distinguish itself fromthe competition by understanding the customer better than thecompetition and thus providing superior customer service. Therespondents from this firm stated that they needed to learn aboutthe customer, instead of ignoring the customer, which is com-mon in boom times within the software industry. Althoughmiddle management in the software firm was less active thanthe exemplar in strategy formation, it was clear that the idea forreorganizing customer information in the firm came frommiddle management. As with all firms in the software industry,systems and data integration issues were critical to success.


The software firm was aware that it needed to change certainaspects of its culture in order to achieve data integration andtherefore CIS management success. The software firm was alsomore willing to adopt a self-described ‘learn as you go’ cultureand was more willing to create what might be called a learningorganization when compared to the insurance firms. Perhaps thiswillingness to change, which is a common trait in entrepreneurs,and to be open to learning comes from the desire to funda-mentally change from a product orientation to a customer-orientation and to emphasize customer service. To make thesechanges it was necessary to learn about the customer more fully.The software firm was the only firm that explicitly remarked thatthe firmwasmoving from an undifferentiated marketing strategyto a differentiated one based on customer service and looked toits databases to support that process.

On the other hand, the insurance firms were somewhat lessmotivated by the outside environment when they had parti-cipated in the previous study. Insurance companies interviewedwere doing quite well financially during the qualitative inter-view process. The primary concerns of these firms in terms ofcapturing customer information were to integrate disparatedatabases, to improve segmentation and to make better strategicdecisions as a result, and not necessarily to provide a betterunderstanding of customer needs for improving service and thecustomer experience.

In both the insurance and software companies interviewed theorganizational structure allowed most department heads to beco-located on the same floor of a particular building, allowingfor easier resolution of issues involving data sharing andintegration. Co-location, an issue often important in new productdevelopment efforts, appears to be important in managingcustomer information processes as well. This co-location waspredicted in Proposition 7 and is outlined in Table 1; however,the physical proximity of department heads appeared to be moreimportant for CIS management than for NPD.

Individuals in most companies interviewed had an ex-tremely well-rounded understanding of each functional area.This understanding was helped in part by the fact that thecompanies visited were either small firms or smaller divisionsof larger companies. In the insurance firms in particular,communication and information-sharing appeared to be faci-litated not just by co-location of the project team but by co-location of the various functional areas. Co-location of under-writing, sales, accounting and control functions appeared tofacilitate information sharing.

Details that capture these different levels of sophistication asdescribed above include the following:

Exemplar ⇒ Formed customer information strategy as result ofdeclining profits.

⇒ Spoke the ‘language of CIS,’ communicate wellbut use specific language differently than otherfirms interviewed.

⇒ Had central data repository which allowed formore systems, data integration, although stillstruggled with those issues, used ‘mini-marts’ tocreate illusion of data integration when necessary.

⇒ Gave dedicated project team time off their regularjobs to work on CIS effort.

⇒ Encouraged articulate middle management totake lead role with upper management in strategyformation.

⇒ Struggled with inter-functional conflict, particu-larly with the sales force, data quality problems,systems/data integration.

Software ⇒ Formed customer information strategy as resultof competitive pressure in a specific attempt toform differentiation strategy in highly competi-tive market.

⇒ Had central data repository allowed for moresystems, data integration, although still struggledwith those issues.


⇒ Encouraged articulate middle management totake lead role with upper management in strategyformation.

Insurance ⇒ Formed customer information management strat-egy as a result of changing business environment,creating need to manage customer information forstrategic purposes.

⇒ Sought to integrate databases primarily toimprove segmentation, improve operations.

⇒ Communication facilitated by co-location of fun-ctional areas.


6. Discussion, future research and limitations

Just as information management in the NPD process extendsfar beyond incorporating customer wants and needs informationinto the project, the picture of the management of customerinformation that emerges is of a complex process that involves anumber of different organizational and strategic factors (Fig. 2and Table 1). This article's contribution is not only to identify theorganizational factors important in customer informationmanagement, but also to highlight the strategic process bywhich companies change their orientation and attitude towardcustomer information. Using the extreme example of the ex-emplar firm and its directed vision of how to manage customerinformation to support its strategic goals highlighted the contrastbetween that firm and the rest. Most of the firms interviewedwere at a more preliminary level of sophistication in managingnot just customer information, but information of all types.

Interestingly, as suspected, there are striking similaritiesbetween the cross-functional new product development processand the process of implementing an effective customer infor-mation management system in an organization. It is thereforenot surprising that to be successful both processes requirecommunication, functional and systems integration, teamwork,co-location, top management involvement and minimal inter-


organizational conflict. However, there are also differencesbetween managing a CIS and an NPD effort.

Overall, The CIS seems to require a higher degree ofsystems/data integration than the NPD effort. A single newproduct development effort might involve collecting data acrossthe organization for a single set of customers. However, atypical CIS involves collecting, moving and using informationthroughout the entire organization for all sets of customers.

Whereas in NPD the proximity of the project team membersto each other is important, with the CIS it seems also that theproximity of the operational and functional areas aids infor-mation collection and sharing. As noted in Table 1, middlemanagement also plays a more important role in translating theorganization's needs for managing customer information toupper management. Effective CIS management requires a rolefor middle managers as those who interpret and explain to uppermanagers what needs to be done within the organization for thefirm to reach its strategic goals.

Additionally, whereas NPD requires strong communication,language is seen as a barrier to success (Griffin & Hauser,1996), not a facilitator. In contrast, CIS management requiresnot only communication but an entirely differently language tobe spoken throughout the organization. Communication isfacilitated by developing a data dictionary of CIS terms that isshared and understood throughout the organization.

Given these findings, quantitative research is needed thatinvestigates organizational and strategic factors related tosuccessful customer information management practices, in-cluding multiple performance variables. The ability tocommunicate within the organization, particularly using adetailed ‘language of CIS,’ is expected to predict success inthe management of customer information systems. In addition,systems/data integration as well as overall functional integra-tion and organization-wide data quality management processesalso are predicted to be important in successfully managingcustomer information. Finally, a dedicated project team,teamwork and co-location of the functional areas as well asthe co-location of a dedicated project team will facilitate CISmanagement. Inter-functional conflict, by contrast, is predictedto have a negative impact on customer information manage-ment success (Fig. 2).

Finally, as relevant as all these organizational factors appearto be in the prediction of success customer informationmanagement, it might be the interactive strategy-formationprocesses that truly distinguish those firms that managecustomer information well from those that do not, as indicatedby the last row of Table 1. In addition to the top managementinvolvement and a commitment to an overriding vision, thecustomer information management strategy as formed in theexemplar and software firm emanated primarily from the‘middle.’ A strong middle management took a leadership role,interacting with upper management and employees below themto create an ‘interactive strategy’ for customer informationmanagement success.

Most importantly, the strategic process in CIS managementis interactive. Success involves not only top managementvision and support, as in NPD, but a close connection between

top management and middle management. Middle managementtranslates the detailed need for CIS management in the formof an easy to understand message, i.e., the “One Customer”concept used by the exemplar. In this scenario, top manage-ment interacts with middle management to build a sharedvision. The traditional view is that strategic management iscontrolled by upper management, with middle managementinvolved in implementation. This research supports theemerging line of thought that addresses the notion of bottom-up management approaches to strategic decision-making andsuggests that a bottom-up approach involving an entrepreneur-ial middle management team is more effective than ahierarchical approach where customer data management issuesare involved.

Appendix A. Interview Questions

Think back to a major change you have made recently instrategy. Describe the process by which you make strategicdecisions.

⇒ Which information is the most useful in this decision?Where did you get it?

⇒ What customer information do you need to make yourstrategic/marketing/financial/underwriting decisions?

⇒ How do you determine if you have enough customerinformation to make your strategic decisions?

⇒ Let's work through an example by thinking back to themost recent product you have introduced. What was it?

⇒ What prompted the change? Did it represent a majorchange in strategy or an incremental one?

⇒ What information (about customers, competitors, suppli-ers) did you need to make the decision?

⇒ Did you have to gather new information or change theway you process information to make the decision?

⇒ Which information is the most useful?⇒ Which information do you lack?⇒ How do you know when you have enough?⇒ How do you share such information in your organization?⇒ How do you ensure its quality?⇒ Where is it stored? What system?⇒ Who is responsible for collecting it?

A.1. For Upper management

To summarize, describe the overall process whereby youmake strategic decisions

⇒ What customer information do you need to make yourstrategic/marketing/financial/underwriting decisions?

⇒ To the extent that you have information about the custo-mer, how do you incorporate this information into yourstrategic/marketing/financial/underwriting?

⇒ How do you determine if you have enough customerinformation to make your strategic decisions?

⇒ What impedes your ability tomake good strategic decisions?⇒ What facilitates your ability to do so?


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Dr. Zahay is the Acxiom Corporation Professor of Interactive Marketing atNorthern Illinois University in DeKalb, Illinois, where she heads the InteractiveMarketing Area of Study. Dr. Zahay researches how firms can facilitatecustomer relationships, particularly using customer information and haspublished in journals such as Decision Sciences, Industrial MarketingManagement and Journal of Advertising Research. Some current researchtopics include customer information management for competitive advantage,data warehousing in CRM environments and email personalization.

Dr. Peltier is the Irvin L. Young Professor of Entrepreneurship and Professor ofMarketing at the University of Wisconsin-Whitewater. He is also President ofAPR Research and the Director of Research for Knupp and WatsonAdvertising, Marketing and Public Relations Inc. In addition to publishingover 50 articles, Dr. Peltier has won more than 20 international, national, andregional research awards. Dr. Peltier has supervised over 200 research projectsin the commercial, not-for profit, and governmental sectors of the economy, andspecifically with regard to internal marketing and employee rewards.

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