CRM dimensions and performance of SMEs in Yemen: the moderating role of human capital
| DOI | https://doi.org/10.1108/JIC-05-2020-0175 |
| Published date | 16 November 2020 |
| Date | 16 November 2020 |
| Pages | 516-537 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Nagwan Abdulwahab AlQershi,Sany Sanuri Mohd Mokhtar,Zakaria Bin Abas |
CRM dimensions and performance
of SMEs in Yemen: the moderating
role of human capital
Nagwan Abdulwahab AlQershi
Faculty of Technology Management and Business,
University Tun Hussein Onn Malaysia, Johor, Malaysia, and
Sany Sanuri Mohd Mokhtar and Zakaria Bin Abas
College of Business, Universiti Utara Malaysia, Sintok, Malaysia
Abstract
Purpose –This paper examines the interaction of human capital and CRM on the performance of SMEs
in Yemen.
Design/methodology/approach –The study used a quantitative approach in investigating the interacting
effect of human capital on the relationship between CRM and SMEs’performance in Yemen. The PLS-SEM
analysis was performed to test the hypotheses.
Findings –It was observed that key customer focus, technology-based CRM and CRM knowledge
management were effective drivers of SME performance, but not CRM organization tools. It was also
ascertained that human capital has no moderating effect on the key customer focus and knowledge
management relationships with perf ormance, although it does moderate the rel ationships between
performance and CRM organization and technology-based CRM respectively.
Research limitations/implications –Because this study is limited to manufacturing SMEs in Yemen, the
results cannot be generalizedto other types of industry suchas services, whose structure andvision differ from
those of manufacturing SMEs. While the current results may be appropriate for SMEs in other developing
countries, the researcher believes they are unsuitable for SMEs in advanced economies with different financial
structures and employee and management cultures.
Practical implications –The empirical insights of this study are valuable for the owners, managers and
professionals in the SMEs manufacturing sector in developing countries, to enrich their organizational
performance through CRM adoption, while considering the moderating effect of human capital.
Originality/value –This is the first empirical work to confirm way the main drivers of human capital,
including in the analysis the impact of CRM dimensions and SME performance, in the context of the
manufacturing sector. In support of an original conceptual model, the insights contribute to the literature on
CRM, SMEs in the manufacturing sector, human capital and emerging economies.
Keywords Human capital (HC), Customer relationship management (CRM), Yemeni manufacturing SMEs,
Performance
Paper type Research paper
1. Introduction
Performance is the lifeblood of organizations, since decisions are based on it (Li et al., 2018;
Mosalakae, 2007) and efficacious management ensured (Katzenbach and Smith, 2015). It is
important in providing a definition of the effectiveness of the organization (Mone et al., 2018;
Steers and Lee, 2017;Brockman et al., 2017;Borman and Motowidlo, 1997); in its wider role
(Haseeb et al., 2019), the topic has been hailed as one of the most controversial of current
research issues. It has been described by Carter et al. (2018) as one of the most extensively
empirically and conceptually investigated topics in the field of business studies (see also
Ferraris et al., 2018;Makri et al., 2017).
The term performance is often used to represent the success of an organization, in light of
the achievement of its goals and objectives (Macedo et al., 2016;Jones et al., 2016). Although
use of the word performance, in all its facets of management (performance management, firm
performance, performance measurement, performance assessment and performance
JIC
23,3
516
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1469-1930.htm
Received 1 June 2020
Revised 18 July 2020
Accepted 15 September 2020
Journal of Intellectual Capital
Vol. 23 No. 3, 2022
pp. 516-537
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-05-2020-0175
evaluation) can be traced back over many years (Schaltegger and Wagner, 2017), a universal
meaning of the term is still elusive.
A major issue in Yemeni SMEs’poor performance is inadequate customer relationship
management (CRM). This includes insufficient data required to clarify and establish the
needs of customers; the lack of records concerning the names and addresses of the customers
making purchases; and the lack of quality, transparency and data analysis in the industry
(AlQershi et al., 2018;Al-Nashmi and Al-Kholidy, 2016).
For Yemeni manufacturing firms, the challenges presented by CRM include the
establishment of customer contact centres, where critical information about customers
from online sources is digitized and stored; and the limitations in marketing (Yemeni Ministry
of Industry and Trade, 2017;Al-Nashmi and Al-Kholidy, 2016). Staff issues originate from
lack of key customer focus, knowledge management, CRM organization and CRM based on
technology (Khodakarami and Chan, 2014;Kebede and Tegegne, 2018;Sin et al., 2005).
According to several studies (e.g. Jaber and Simkin, 2017;El-Gohary et al., 2013), CRM
should be adopted by every industry, particularly manufacturing, but it is still lacking in the
manufacturing sectors of Arab countries, including Yemen. The significant gap in the
literature on this topic remains ripe for investigation (AlQershi et al., 2018;Al-Nashmi and Al-
Kholidy, 2016). The majority of works dedicated to CRM in the Middle East are limited to the
service sector, for example Iriqat and Daqar (2018);Jaber and Simkin (2017) and Khasawneh
and Abu-Shanab (2012).
In the manufacturing industry of Yemen, foreign firmshave become dominant through
their quick market entry and introduction of brands; as a result, they generate most of the
total industry revenues, with their products preferred by customers over their domestic
rivals’. Moreover, multinational firms have established a niche in the Yemeni market,
while domestic firms lag behind with their insufficient CRM practices, and the lack of
innovation and human capital to enhance their performance (Al-Nashmi and Al-Kholidy,
2016). In the face of the dynamic foreign presence in Yemeni industry, domestic firms have
no recourse but to imitate them to improve their own performance and achieve a robust
market competitive advantage (Yemeni Ministry of Industry and Trade, 2017;Yemeni
Ministry of Technical Education and Vocational Training, 2016;Sky News, 2012;
Aljazeera, 2012).
Although SMEs dominate the Yemeni manufacturing sector, their GDP contribution
remains negligible (World Bank, 2015a,b). The marked decline in the price of oil should
convince Yemen to strengthen its manufacturing sector, creating jobs for the 13% of youth
who were unemployed in 2015 (The Global Economy, 2015), and 12.81% in 2019 (Statista,
2019). This unemployment problem could be greatly reduced if manufacturing SMEs
improved their performance, requiring them to take on more staff.
With the large number of SME manufacturing firms in Yemen (Yemeni Ministry of
Industry and Trade, 2017), it is surprising that they contribute so little to the country’s GDP
and it is therefore crucial to investigate the low performance of the sector. The World Bank
blamed the poor performance of the manufacturing sector on the low level of innovation
(World Bank, 2015a,b; Global Innovation Index rankings, 2015, 2016, 2017). Yemeni SMEs
also face numerous problems, such as poor infrastructure, inadequate technical support,
problems in securing and adopting new technologies, an inadequate supply of skilled
workers, and lack of opportunities for financing (Yemeni Ministry of Industry and Trade,
2017;Yemeni Ministry of Technical Education and Vocational Training, 2016).
The World Bank report also showed an actual reduction in the contribution of the
manufacturing sector to the national GDP, from 19% between 1990 and 1994 to 15% between
2005 and 2010. This decline is further evidence of problems in this sector which need to be
investigated. The World Bank (2015a,b, p. 15) is very clear on the problem: “The small size
and lackluster performance of manufacturing are at the heart of the weak growth
CRM
dimensions and
performance
of SMEs
517
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