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Research in Specifics of Network form of Business organization in Developing Countries: Forming Customer Relationship

Priority areas of development: management

Customer orientation is often considered as a modern source of competitive advantages on advanced market.  The research questions are: “Do companies from BRIC countries really have customer orientation? What specific form it has and if it can be considered as the source of competitive advantage” .

The object of this study is inter-firm interaction and customer orientation. The goal was to explore customer orientation within inter-firm networks in BRIC countries (Brazil, India, China, Russia) with particular attention paid to the economic and institutional specifics which can influence customer orientation and inter-firm networking in these markets. In particular, the following tasks were considered:

  Analysis of customer orientation patterns within the inter-firm networks in BRIC countries;

  Elicit specifics of management model within the inter-firm networks to enhance customer orientation; and to evaluate the possibility of the implementation  of metrics and methods developed for advanced markets to enhance customer orientation in emerging markets;

  Analysis of customer relationships within the value chain in BRIC countries in the context of enhancing customer involvement into the value creation process.

The research project used a wide range of methods, including inductive and deductive methods, the case study method, in-depth interviews and participant observation as a data collection method, statistical methods of analysis, and modeling.

For all the points mentioned above, meaningful results were obtained.

The first part of the research is aimed at finding the economic causes of the comparatively low level of customer orientation of firms in the BRIC countries. To generate hypotheses on the causes, the market environment and conditions for doing business, and management practices and entrepreneurial activity in BRIC are compared based on studies by the World Economic Forum, the World Bank and the Global entrepreneurship monitor consortium. Conclusions regarding the consumer product markets and firm market strategies in emerging countries are generated on the basis of academic literature reviews in comparative strategic management and expert views on management in emerging countries. The outcome of the research is a number of propositions on the economic determinants of gaps in the level of customer orientation in developed and emerging markets.

The concepts of "customer orientation" were analyzed in detail and represented by the variety of their interpretations. Different metrics for customer orientation were classified and criticized in terms of the possibility of using them in practice.  The benefits of value chain thinking were highlighted. As a result, a conceptual approach was developed to visualize the links between the conditions of customer orientation existence with an innovative component and inter-firm interactions preserving direction, coordinating and customer orientation developing.

New results were obtained in an analysis of the innovative component of customer orientation and IT systems which help to manage customer relationships.

On the basis of statistical materials from the database of the World Bank, characterizing some of the results of knowledge production (number of publications, patents), their use in the economy (the share of high-tech products in exports), as well as economic conditions and factors of production (GDP, number of researchers, research and development costs) we conducted a quantitative analysis on the impact of various factors on the observable results of the production of knowledge and innovation in a sample of the major developed and developing countries.

The results of the analysis confirmed the assumption that the relatively small contribution of Russia in the global production of knowledge in part, characterized by the number of patents and published articles, can be largely explained by insufficient funding for research and development, rather than lack of management.

For the first time, on the basis of generalizing from the results of the analysis of the 70 projects on adaptation, implementation, maintenance and updating of SAP and Open Text products, with a module of CRM (customer relationships management) systems, the problems and peculiarities of interaction with clients were emphasized. Also the role of companies - integrators in transfer of knowledge at implementation of CRM systems in the Russian B2B market were analyzed.

Based on the analysis of the system of indicators (a sample of 150 enterprises) the lack of a special control of customer orientation was identified, both internal and external (inter-organizational) in the activities of companies. The results of the analysis of cross-organizational interactions on different levels of integration confirmed and specified the earlier conclusions on the causes of low customer orientation among companies in the Russian market.

The results of the study of customer orientation in network forms of business organization in BRIC countries provide the opportunities for the development of future directions for research in this area, including a more in-depth study of the network coordination mechanism, successful business models which can be analyzed with the respect to specifics customer relationships and inter-firm interaction in emerging markets.



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