A negative side of outsourcing marketing functions and market-based learning process

Abstract

In today's business environment, companies are driven to conduct a few functions in-house and to obtain the rest from other sources through aggressive outsourcing. Recently, many firms have outsourced their customer relationship management (CRM) tools or systems (e.g. CRM programs, loyalty programs, and sales management) to consulting firms and other system developers. While CRM outsourcing may seem attractive at the management level considering investment cost and expertise, serious hazards are often encountered when they face serious losses in organizational learning for their markets and customers. This study contributes to marketing research by examining the importance of providing information concerning the impact of management's strategic decisions, such as the decision to outsource marketing functions. Additionally, the current study complements and extends extant outsourcing and organizational learning research aimed at identifying the underlying determinant of outsourcing, examining the relationship between outsourcing and the marketing learning process, and exploring the outcomes of an effective marketing learning process.

Keywords:

• organizational learning
• marketing capability
• outsourcing
• customer relationship management