Technology in Society 67 (2021) 101725

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Technology in Society
journal homepage: www.elsevier.com/locate/techsoc

Innovation capability: The impact of e-CRM and COVID-19 risk perception

Nguyen Thi Khanh Chi
Foreign Trade University, 91 Chua Lang, Hanoi, Viet Nam

A R T I C L E I N F O A B S T R A C T

Keywords: The e-CRM application has currently offered benefits for companies in different business sectors, especially in
Customer orientation hospitality industry. The objective of this paper is to investigate the impact of e-CRM components (i.e.
Knowledge management technology-based CRM, knowledge management and customer orientation) on firms’ innovation capabilities.
Risk perception
Data was collected through a structured questionnaire survey conducted in Vietnam. The dataset consists of 213
Innovation capability
Technology-based CRM
valid responses by managers. Correlation analysis and structural equation modeling (SEM) were employed to
Hotel sector examine the causal relationships among technology-based CRM, knowledge management, customer orientation,
long-term relationships and innovation capability. The results show that knowledge management, customer
orientation and technology-based CRM have positively influence on long-term relationships and innovation
capability. Covid-19 risk perception has the role in enhancing the link between long-term relationships and
innovation capability. From these findings, this study provides an improved understanding of how knowledge
management, customer orientation and technology affect on innovating activities. This study also provides
several implications for practice.

1. Introduction an uncontrollable factor for firms, it has led to increased pressure on

business operations. Consequently, firms (especially service firms) need
The global economy has recently been driven by information tech­ to manage this risk to innovate their business activities. Several studies
nology (IT) development. However, it has also been negatively influ­ concern the impact of COVID-19 risk perception on the behavioural
enced by the COVID-19 pandemic [1,2]. These issues force firms in intention towards tourism [8], environmental awareness [9], and
different industries to innovate their business operations [3] because knowledge management (KM) during COVID-19 [10]. However,
innovation capabilities promote higher firm profits (Tidd et al., 1997). research on the impact of COVID-19 risk perception on firms’ innovation
Particularly, businesses in the hotel sector require technology to over­ capability remains scant.
come the current challenges. Consequently, this study contributes to the Although e-CRM has been well evidenced in the literature [11,12],
digital service in the hospitality industry by examining innovation research that examines the effects of technology-based CRM (CRM (IT)),
capability under the impact of electronic customer relationship man­ customer orientation, and managing customer knowledge technology on
agement (e-CRM) and COVID-19 risk perception. innovation capability is unclear. Recently, firms have implemented
Innovation capability has become a new field of interest for many e-CRM efforts, having realised the critical role of e-CRM in their business
scholars [4]. As effective innovation enables firms to meet the demands operations [13], based on technology and KM. e-CRM focuses on rela­
of a highly unpredictable competitive market, their innovation capa­ tionship marketing with the goal of improving long-term relationships
bilities are the most crucial factor for competitive advantage [5]. [14]. Firms’ adoption of e-CRM helps innovate their products, services,
Regrettably, despite these important advances, research on innovation and marketing activities, which constitutes their innovation capability
capability under the impact of technology and pandemics in the service [15]. Consequently, understanding how e-CRM can affect innovation
sector is scant, especially in the hotel sector. For example, Tang et al. [6] capability is necessary for firms in an uncertain business environment.
only refer to service innovation in the hotel industry in the context of Several recent studies have examined the impact of technology,
social capital and knowledge sharing, while Pascual-Fernadez et al. [7] customer orientation, and KM on firm performance in the e-CRM
address marketing innovation in the hotel industry. framework [15,16]. For example, Nguyen et al. [16] proposed a new
One potential antecedent that has, thus far, been neglected in tech­ framework to investigate the impact of critical factors (organisation,
nological innovation is risk perception. Since the COVID-19 pandemic is technology, customer orientation, CRM strategy, and KM) on e-CRM

E-mail address: [email protected].

https://doi.org/10.1016/j.techsoc.2021.101725
Received 13 May 2021; Received in revised form 19 August 2021; Accepted 20 August 2021
Available online 2 September 2021
0160-791X/© 2021 Elsevier Ltd. All rights reserved.
N.T.K. Chi Technology in Society 67 (2021) 101725

success. Meanwhile, Migdadi [15] examined the impact of KM on firm Thus, based on these studies, CRM (IT), customer orientation, and KM
performance, measured by marketing innovation, process innovation, are three key components of e-CRM adoption.
and service innovation. The existing research on e-CRM is mostly con­ CRM (IT) is viewed as the factor relating to the soft and hard aspects
ceptual, and includes empirical studies confirming the impact of tech­ of CRM implemented [27]. Therefore, technological systems are sug­
nology and KM on CRM innovation [17]. Reflecting on prior studies gested as a key component in e-CRM solution deployment [28]. Chen
related to CRM, this study proposes that CRM (IT), customer orientation, and Ching [29] suggested that one of the key components of e-CRM
and KM may be linked to innovation capability. implementation was IT. Other studies [27,30] have also confirmed the
Nevertheless, the empirical evidence on the interrelationship be­ role of technology in implementing e-CRM. Thus, CRM (IT) refers to a
tween e-CRM, long-term relationship with customers, and firms’ inno­ system that includes software and hardware in adopting e-CRM.
vation capability, in conjunction with COVID-19 risk perception, has Customer orientation is considered as an employee disposition or
enjoyed little attention. To bridge this gap, this study develops a new, tendency to meet customer needs in an on-the-job context [31].
integrated framework that examines these interrelationships. The re­ Customer orientation, critical for business success in the service industry
lationships are tested empirically, using data collected from Vietnamese [32], has two components: the need and the enjoyment. The need
hotel managers. These service firms were chosen because, in a devel­ component demonstrates employees’ belief in their ability to meet
oping country such as Vietnam, emerging hotels generally follow high customer demand, while the enjoyment component describes em­
standards based on international best practices. ployees’ enjoyable interactions with customers [33]. Based on these
This study contributes both theoretically and practically. First, it is aspects, customer orientation is defined as a set of behaviours that pri­
among the first studies to shed light on how e-CRM implementation oritises customer interests and provides high customer value.
leads to innovation capability. The study highlights the impact of KM, KM refers to the sum of actual and potential resources embedded
CRM (IT), and customer orientation on innovation capability. It shows within, available through and derived from the network of relationships
how, and to what extent perception of the COVID-19 risk regulates the possessed by a social unit [34]. Wong and Wong [35] viewed KM
causal relationship between long-term relationships and innovation capability from a balanced socio-technical perspective, by focusing on
capability. Second, it offers meaningful practical implications. Given the technology, structure, and culture. Moreover, KM is a combination of IT
impact of the COVID-19 pandemic on the global economy, managers and knowledge related to business ownership and exchange between IT
need to respond to this impact by innovating their business operations. executives and functional managers [36]. Many studies have demon­
strated the effect of KM on IT adoption, generally, and on CRM specif­
2. Literature review and hypothesis development ically. Armstrong and Sambamurthy [37] suggested that IT and business
knowledge led to effective technology application. In detail, Mata et al.
2.1. Innovation capability [38] identified KM as a critical predictor in successfully adopting IT
systems for obtaining strategic benefits. Consequently, based on the
According to the Oslo Manual (2005), innovation is the adoption of literature, KM, in this study, is seen as managing knowledge resources to
new business processes, marketing methods, improved service quality, facilitate access and reuse of knowledge in using advanced IT.
or external relations. Innovation capability can be developed by new
operational practices to obtain a novel technology (Wong et al., 2011), 2.3. Hypothesis development
because it is a source of firm performance [18]. Innovation capability is
an important source for firms in the hospitality industry for modern­ 2.3.1. E-CRM and innovation capability
isation and competitiveness. According to Migdadi [15]; innovation KM is considered one of the critical processes in determining a firm’s
capability has five components: product innovation (product physical ability to learn and innovate (Salmodor & Bueno, 2007). Therefore, the
change), service innovation (the effectiveness of service processes), most important purpose of KM is to improve innovativeness and
process, marketing, and administrative innovation. Innovation capa­ responsiveness, which includes marketing innovation, process innova­
bility has become a means for firms to increase their competitive tion, and service innovation [39]. Some studies have found KM to be
advantage, respond to customer satisfaction, and increase revenue [19]. knowledge sharing [40] and knowledge creation [41], with a positive
In this vein, innovation capability addresses changes in service inno­ influence on marketing innovation [15]; Xu et al., 2021). Firms can
vation (customer service, after-sales service, and delivery service) and in utilise KM to facilitate marketing innovation because tacit knowledge
marketing and process innovation (quick response to customers, part­ can be transferred to the innovative marketing process [42]. Dabić et al.
ners, and stakeholders). From this perspective, this study considers [43] emphasise the importance of the intellectual agility of staff in
service firms’ innovation capability as their ability to implement new SMEs, which is a key determinant in successfully innovating a business.
business processes, improved service quality, and marketing methods. Managing the application of knowledge can expand employees’ crea­
tivity and generate creative ideas, which, in turn, lead to innovative
2.2. e-CRM marketing and services [44]. Dost et al. [45] found that knowledge from
internal sources facilitated the generation of process innovation, while
In their study, Frow and Payne [20]; p.11) found that ‘CRM is a Xu et al.’s (2021) recent findings suggest the importance of KM in
cross-functional strategic approach concerned with creating improved innovating new products. In this vein, with effective KM, firms can
shareholder value through the development of customer relationship’. improve service development, create innovative marketing strategies,
However, with the development of information technology, CRM has and innovate their business processes. Therefore, the following hy­
currently developed into e-CRM [21]. Melović et al. [22] defined e-CRM pothesis is proposed:
as a strategy for firms to provide good quality, achieve long-term re­
H1a. KM positively impacts innovation capability
lationships, and increase business profit. Drawing on these prior studies,
e-CRM, in this study, is viewed as a technology strategy to maintain Regarding a firm’s orientation towards its customers, the evidence
customer relationships and achieve business success. on the impact of customer orientation and innovation capability in the
Several studies have considered e-CRM from various perspectives, hotel sector is not clear-cut. Tajeddini [46] found no significant rela­
including as a tool for creating long-term relationships via IT [23], and tionship between customer orientation and process innovation in 156
as a strategy based on technology for innovation capability [24,25]. hotels in Germany and France. In contrast, Tajeddini and Trueman [47]
According to Pushkala et al. [26]; a successful e-CRM needs to integrate observed that employees focused on innovation after attending to cus­
information technology, information resources (customer database and tomers in terms of their wants and needs in the retail industry in
good interaction with customers), as well as knowledge management. Switzerland. Similarly, Domi et al. [48] found that an enhanced

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N.T.K. Chi Technology in Society 67 (2021) 101725

experience was key in attracting tourists and promoting tourism SME their job performance, but also exhibit long-term relationships with
innovation in Albania. Some studies examine the relationship between customers [66]. Customer orientation is an essential force for building
customer-centricity and firm performance in manufacturing firms [49, customer loyalty [67] because businesses that are oriented towards their
50]. Fewer studies investigate the link between customer orientation customers acquire deep knowledge about their partners, both individ­
and innovation capability in general service sectors [15,48]. The rela­ ually and in groups [68]. Consequently, firms that seek to enhance their
tionship between customer orientation and innovation capability in the relationships with customers should consider customer orientation as a
hotel sector has remained relatively unexplored, yet the available evi­ key strategic option [69] since it directly affects firm performance [16].
dence points to a positive link between them. In this study, it is argued A long-term relationship with customers retains them, thus facilitating
that customer orientation will positively affect the innovation capability an understanding of their needs and demands, which consequently
of hotel providers. Hence, the following hypothesis is proposed: promotes marketing innovation [70]. Firms not only implement inno­
vative strategies, but also adopt various changes to their organisational
H2a. Customer orientation positively impacts innovation capability
factors, infrastructure, and technology to create new firm innovation,
Thanks to the adoption of new technology, firms can achieve the such as in marketing and processes (Maheshwari et al., 2006). In this
benefits of e-CRM implementation [51]. They can share information respect, the current study proposes a positive relationship between
throughout their organisations, which, in turn, enhances firm innova­ customer orientation and firms’ innovation capability, which is trans­
tion [52]. Furthermore, empirical research has suggested the positive lated through a commitment to long-term relationships. Therefore, the
influence of CRM (IT) on marketing innovation. For example, Groznik following hypothesis is proposed:
et al. (2008) first showed that CRM (IT) improved firm’s efficiency,
H2b. Long-term relationships positively mediate the relationship be­
productivity, and customer services. In this vein, CRM (IT) has a
tween customer orientation and innovation capability
significantly positive impact on marketing innovation [53]. Nazari–­
Shirkouhi et al. [54] demonstrated that technology was an effective tool According to Melović et al. [22]; e-CRM develops firms’ relationships
in improving firms’ competitive advantage because it enabled firms to with their customers, which consequently requires firms to innovate
create quick responses to customer requests for marketing innovation. their business strategies and technical platforms. Several studies have
An IT platform improves firms’ service quality by enabling them to suggested a mediating role for long-term relationships between CRM
respond to buyers faster, at a lower cost [55]. Recently, Chege and Wang and firms’ innovation in various sectors. For example, Muro et al. Muro
[56] addressed the influence of technology on SME innovation in Kenya, et al. (2013) showed that adopting CRM in the banking industry
while Lew et al. [57] suggested a relationship between technology and strengthened the loyalty relationship with customers and banking ser­
innovation in the payment process in the hospitality industry. Therefore, vice innovation (Muro et al., 2013). Iriquat and Abu Daquar (2017)
Dabić et al. [58] suggest a roadmap for firms that focuses on technology found an impact of e-CRM on firms’ long-term relationships and their
in their business innovation. Drawing on the above findings, this study employees’ behaviour in the service sector in Palestine. Aldaihani et al.
suggests a positive relationship between CRM (IT) and innovation [71] recently revealed the role of customer empowerment in the rela­
capability in the service sector. Thus, the following hypothesis is tionship between CRM and customer intention. Based on this finding,
proposed: they suggested that service firms should innovate technology in their
business process. Drawing on prior research, this study proposes that
H3a. CRM (IT) positively impacts innovation capability
e-CRM implementation has some links with firms’ innovation capability,
through building strong long-term relationships with customers.
2.3.2. The mediating role of long-term relationships
By identifying customers’ needs and demands, e-CRM can reinforce
Long-term relationships refer to a long-lasting desire to uphold a
and upgrade service quality. For example, with the support of CRM (IT),
valued relationship [59]; p. 316), and to a firm’s commitment to its
firms can obtain customers’ information and segment the market. Frow
partners [60]. Although the benefits of long-term relationships are un­
and Payne [20] suggested that using the validated tool in CRM assess­
deniable, not all companies can endure their relationships with their
ment would help companies identify how they need to change if they are
partners [61]. As e-CRM is concerned with the relationships between
to achieve more sophisticated relationships with their customers. Many
organisations and both potential and current customers [62]; p. 445),
firms that adopt e-CRM without awareness of customers’ data and suf­
overcoming such inherent challenges to build long-term relationships
ficient technology do not innovate [72]. In this vein, long-term re­
requires firms that adopt e-CRM to focus on value creation for their
lationships are enhanced when firms utilise IT from channel touchpoints
partners.
as well as their innovations. Therefore, the following hypothesis is
Wang et al. (2018) demonstrated that KM improved firms’ innova­
posited:
tion performance. Moreover, Lin and Su [63] first noted the important
role of KM in supporting firms to improve long-term relationships with H3b. Long-term relationships positively mediate the relationship be­
their customers and enhance customer satisfaction, which all led to firm tween CRM (IT) and innovation capability
innovation. Furthermore, previous studies have found an association
between e-CRM adoption, firms’ channels, firms’ partners, and their 2.3.3. The moderating role of COVID-19 risk perception
innovation. For example, Sen and Sinha [64] first suggested that failure Risk perception is seen as value judgments that relate to uncertain
in implementing e-CRM could be prevented when e-CRM components situations that arise from a particular risk (Bauer, 1960). Many studies
were linked with firms’ channels, employees, and partners. Long-term have investigated the concept of perceived risk (Dillard et al., 2012).
relationships, which are the results of CRM adoption, have positively Risk perception includes two dimensions (Brug et al., 2004): cognitive
impacted innovation in organisations [15]. This is consistent with Ode and affective. The cognitive dimension focuses on individuals’ perceived
and Ayavoo’s [65] findings that KM improves customer relationships susceptibility to risk and its severity, while the affective dimension fo­
and firm performance in their process innovation. In this respect, this cuses on individuals’ anxiety about their exposure to risk (Sjöberg,
study also suggests that the positive relationship between KM and 1998). Risks can be divided into different types, including financial,
innovation capability is translated through long-term relationships with social, time, and psychological risks (Lai-Ming Tam, 2012). A firm’s risk
customers. Thus, the following hypothesis is proposed: perception is considered to be its assessment of the risk inherent in a
situation [73]. Under the COVID-19 pandemic, hotels will perceive the
H1b. Long-term relationships positively mediate the relationship be­
uncertainty and unpredictability of this situation as it pertains to their
tween KM and innovation capability
business operations.
Firms that have a customer orientation strategy not only increase Regarding innovation capability, Pascual-Fernández et al. [7] show

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the impact of the COVID-19 pandemic on sustainable competitive translation quality (Brislin, 1970). Some 100 hotels were randomly
advantage. Therefore, firms’ perceptions about COVID-19 require them chosen, using the proportionate stratified random sampling (SRS)
to innovate their businesses. As the severity of the COVID-19 pandemic method, from 357 hotels that had all implemented CRM and e-CRM. SRS
has significantly impacted the tourism and hospitality industry, the produces the least bias of restricted sampling designs, and is more effi­
disease has drawn widespread attention [8]. Rosenstock (1974) cient than the simple random sampling design; additionally, SRS pro­
considered perceived risk as a critical component in predicting customer vides better representation of each important segment of the population,
behaviour and firm performance. It may be concluded that hotel man­ and generates more valuable and differentiated information (Sekaran &
agers’ COVID-19 risk perception is likely to enhance the association Bougie, 2009). The sample was drawn from the firms (population) that
between long-term relationships and innovation capability. had implemented e-CRM, followed by a random selection of subjects
from each stratum.
H4. COVID-19 risk perception positively strengthens the relationship
Initially, each hotel’s general manager was personally contacted and
between long-term relationships and innovation capability.
provided with an information sheet about the study, which explained
the need and significance of the research. Since the hotel managers had
3. Research method agreed to participate, they each provided a list of the heads of each
department for data collection purposes. The questionnaires were
3.1. Measurement distributed to approximately 400 hotel managers, for each one of which
four managers were approached. Five assistants were recruited to
The current study employed a structural equation model (SEM) to launch the questionnaires. The trained assistants visited each hotel to
test the proposed hypotheses. A five-point Likert scale was used to assess explain the significance of the study and the survey procedures to the
the degree of KM, customer orientation, CRM (IT), risk perception, long- participants. The managers knew that the collected data would be kept
term relationships, and innovation capability. KM comprises four items confidential, and would be processed in aggregate form. The completed
adapted from Sin et al. [74] and Mahawrah et al. [75]. The CRM (IT) questionnaires were returned directly to the researcher by post or in
scales, with four items, were developed based on Nguyen et al. [16] and person. On receipt of the completed questionnaires, those that had
Sin et al. [74]. Long-term relationship comprises four items, as adapted incomplete or disengaged responses were discarded, while only com­
from Werner et al. (2005) and Nguyen et al. [16]. Innovation capability, plete questionnaires were used for data analysis. Having collected the
with four items, was validated by reference to Hammer (2004) and data, the completed questionnaires were inputted, cleansed, and
Migdadi [15]; while customer orientation, with four items, was adapted assessed, to ensure good quality. Proper ethical procedure was followed:
from Nguyen et al. [16]. COVID-19 risk perception was measured using all the participants’ answers were kept confidential, while complete
five items, following Zhao et al. [73]. anonymity was ensured.
The large-scale survey was launched from 22 September to
3.2. Population and sample December 16, 2020. The valid responses totalled 213, or a response rate
of 53.3%. Regarding the respondents’ information, the survey was
The data for this study were collected from hotel managers in Hanoi, completed exclusively by first-line managers (84.5%), middle managers
Danang, and Ho Chi Minh City, where there is a high concentration of (13.2%), and top managers (4.3%). Specifically, regarding participants’
hotels. The questionnaire was translated from English into Vietnamese, positions in the banking and hospitality sectors, the highest frequency of
and then back into English, by two bilingual experts, to guarantee exposure was observed in the customer relations department (49.4%),

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N.T.K. Chi Technology in Society 67 (2021) 101725

followed by the technology department (37%). Table 1

Measurement-scale items for variables.
3.3. Data analysis Item Item description Source
code
To test the proposed model, a three-stage approach was employed. Knowledge management-KM
First, confirmatory factor analysis (CFA), recommended by Hair et al. KM1 We provide channels that enable Sin et al. [74];
(2010), was used to validate the measurement scale. Second, SEM, continuous two-way communication with Mahawrah et al. [75]
following Anderson and Gerbing (1988), was used to assess the rela­ key customers
KM2 We have established processes to gather
tionship between e-CRM and innovation capability, using the AMOS customer knowledge
21.0 software. The model fit indices, including χ2/df, goodness of fit KM3 We can make quick decisions with the
index (GFI), TLI, normed fit index (NFI), comparative fit index (CFI), and knowledge of our customers
root mean square error of approximation (RMSEA), were examined, KM4 We can provide real customer information
that allows for quick and accurate
with the following criteria: 1 to 5 for χ2/df, above 0.90 for GFI, TLI, and
interaction with them
CFI (Kline, 2005), and below 0.08 for RMSEA (Bollen, 1989). Third, Technology-IT
‘Process’ macro in SPSS 21.0 was employed for analysing the moder­ IT1 We have a dedicated engineering team to Sin et al. [74]; Nguyen
ating impact of COVID-19 risk perception. provide technical support for using e-CRM et al. [16]
technology in building customer
relationships
4. Research findings IT2 We have the right hardware to serve our
customers
4.1. Measurement model test - validity and reliability IT3 We have the right software to serve our
customers
IT4 Our information systems are integrated in
The correlations between the items in the total and exploratory
different functional areas
factor analysis were analysed to evaluate the scales. To check the val­ Customer orientation
idity of the structures, CFA was conducted to evaluate the scale. The COR1 My business objectives are focused on Nguyen et al. [16]
analysis results revealed that the model achieved an acceptable overall meeting customer demand
fit to the actual data (Chi-square/df = 2.638; GFI = 0.902; CFI = 0.932; COR2 My business strategies are established to
increase customer value
TLI = 0.920; RMSEA = 0.055). The load factor for each item in the COR3 I frequently measures customer
structure (>0.5) showed that the components in the first-order structure satisfaction
had achieved convergence values. Cronbach’s Alpha and the coefficient COR4 I focus great attention on after-sales
of synthesis (>0.7), as well as the mean-variance (>0.3) indicated that service
COR5 I closely control and assesses the level of
the model was sufficiently reliable (Table 1).
commitment in serving customers’ needs
As shown in Tables 2 and 3, the factor analysis results satisfied the COVID-19 risk perception
criteria for construct validity, including both convergent validity (ei­ RIS1 I am worried about COVID-19 occurring Zhao et al. [73]
genvalues greater than 1, item loading greater than 0.5) and discrimi­ in my business
nant validity (cross-loading of items less than 0.5). The factor loadings of RIS2 There is a high likelihood of acquiring
COVID-19 compared to other diseases
items in each construct were higher than 0.5, which indicated that the RIS3 The founder stands to lose dearly
first-order constructs reached convergent validity. Convergent validity financially
and discriminant validity were therefore demonstrated. RIS4 There is considerable uncertainty when
predicting how well the business will do
RIS5 The probability of failure is high
4.2. Hypothesis testing
Long-term relationships
RE1 Our relationship with customers will be Werner et al. (2005)
Table 4 shows the hypothesis testing results using SEM on the whole beneficial and Nguyen et al. [16]
sample. Clearly, from Table 5, our baseline model has a good fit (Chi- RE2 Maintaining long-term customer
square/df = 1.669; CFI = 0.952; GFI = 0.902; TLI = 0.945; IFI = 0.952; relationships is important to us
RE3 We focus on long-term goals in our
RMSEA = 0.044), while the proposed relationships are all statistically customer relationships
significant and positive. RE4 We care about the long-term success of
The results in Table 4 show that KM has the highest impact on our customer relationships
innovation capability, of the three factors (technology and customer Innovation capability
INC1 My business needs to have marketing Hammer (2004),
orientation, 0.425; CRM (IT), 0.129). It may thus be inferred that
innovation Migdadi [15]
managing knowledge is important for managers in the hospitality in­ INC2 My business needs to have process
dustry, to innovate their business process, service, and marketing. innovation
Further, CRM (IT) is found to have a stronger effect on long-term re­ INC3 My business needs to have service with
lationships with customers (0.324) than KM and customer orientation. superior quality
INC4 My business needs to have administrative
To assess the total impact of all the factors in the model on e-CRM innovation
implementation, the direct, indirect, and total effect analyses were INC5 My business needs to have new
examined. The results (Table 5) report the direct and indirect effects of combinations of marketing, services, and
all the variables on innovation capability. KM, customer orientation, and information
CRM (IT) have not only a significant direct effect on innovation capa­
bility, but also an indirect impact on firm innovation, through long-term
relationships and innovation capability. Therefore, H4 is supported.
relationships. The total effect of KM on innovation is the strongest
Table 6 shows that COVID-19 risk perception plays a moderating role
(0.436), followed by CRM (IT) (0.147), while the total impact of
to enhance the relationship between long-term relationships and inno­
customer orientation is the lowest (0.120). Thus, H1a, H1b, H2a, H2b,
vation capability. It can thus be concluded that firms’ COVID-19
H3a, and H3b are supported.
pandemic perception is important for establishing long-term relation­
To examine the moderating effect of COVID-19 risk perception, the
ships with their customers to innovate their business operations.
‘Process’ macro in SPSS 21.0 was employed. The results show that
COVID-19 risk perception enhances the relationship between long-term

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N.T.K. Chi Technology in Society 67 (2021) 101725

Table 2
Reliability and convergent validity.
Construct Factor Loading Standard Standardised Factor Loading t-value Cronbach’s Alpha CR AVE
Error

Knowledge management (KM) .891 .799 .593

KM1 1.000
KM2 1.035 0.088 11.739***
KM3 0.977 0.09 10.910***
KM4 0.917 0.088 10.420***
Technology-based CRM (IT) .856 .799 .735
IT1 1.000 0.846
IT2 1.006 0.06 0.892 16.899***
IT3 0.834 0.056 0.828 14.937***
IT4 1.035 0.065 0.862 15.964***
Long-term relationships (RE) .820 .799 .526
RE1 1.000 0.679
RE2 1.035 0.122 0.746 8.482***
RE3 1.009 0.113 0.681 8.891***
RE4 1.06 0.121 0.79 8.786***
Customer orientation
COR1 1.000 0.707 .811 .833 .506
COR2 0.815 0.091 0.670 8.926***
COR3 0.830 0.102 0.606 8.112***
COR4 1.264 0.115 0.886 10.96***
COR5 0.820 0.101 0.892 8.110***
COVID-19 risk perception .805 .830 .579
RIS1 1.000 0.741
RIS2 0.942 0.097 0.719 9.679***
RIS3 0.923 0.095 0.726 9.757***
RIS4 0.972 0.099 0.732 9.837***
RIS5 0.843 0.099 0.634 8.554***
Innovation capability .897 .832 .550
INC1 1.000 0.675
INC2 0.876 0.093 0.721 9.412***
INC3 0.999 0.101 0.767 9.928***
INC4 1.035 0.104 0.771 9.968***
INC5 1.067 0.107 0.769 9.948***

Table 3
Discriminant validity.
Constructs Technology factors Knowledge management Customer orientation Long-term relationship Risk perception Innovation capability

Technology factors 0.857

Knowledge management 0.642 0.770
Customer orientation 0.704 0.643 0.711
Long-term relationship 0.698 0.484 0.692 0.725
Risk perception 0.704 0.593 0.709 0.655 0.761
Innovation capability 0.703 0.614 0.706 0.685 0.711 0.741

Table 4 Table 5
The result of SEM analysis. Direct, indirect, and total effect coefficients.
Hypothesis Path P Path Direct Indirect Total
Coefficient effect effect effect

Knowledge → Innovation capability 0.425 *** Knowledge → Innovation 0.425 0.011 0.436
management management capability
Customer orientation → Innovation capability 0.114 0.04 Customer → Innovation 0.114 0.006 0.120
Technology-based CRM → Innovation capability 0.129 0.03 orientation capability
Knowledge → Long-term 0.154 0.02 Technology- → Innovation 0.129 0.018 0.147
management relationship based CRM capability
Customer orientation → Long-term 0.246 ** Knowledge → Long-term 0.154 0.000 0.154
relationship management relationship
Technology-based CRM → Long-term 0.324 *** Customer → Long-term 0.246 0.000 0.246
relationship orientation relationship
Long-term relationship → Innovation capability 0.508 *** Technology- → Long-term 0.324 0.000 0.324
based CRM relationship
Note: *** <0.001, ** <0.01 Chi-square/df = 3.253; CFI = 0.912; TLI = 0.930; Long-term → Innovation 0.508 0.000 0.408
GFI = 0.912; RMSEA = 0.052. relationship capability

5. Discussion
(2021) research, which suggested the KM path in building better
First, this study found a positive impact of KM on long-term re­ customer relationships. KM has become an important component for
lationships. This finding is consistent with Migdadi’s [15] and Xu et al.’s CRM success [43]. Managing knowledge has a direct effect on e-CRM in
various business sectors [75]. However, findings by Garrido-Moreno and

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Table 6 indirectly. The new insight lies in understanding the important role of
The results of the moderating effect of social networks. facilitating and using knowledge in adopting advanced IT, which should
Path ß t p LLCI ULCI Moderation be employed throughout an organisation to create firm value. Third,
CRM (IT) is found to be the second most important factor in firm
H5: RIK x RE → INC 0.151 0.853 0.036 0.093 0.210 Yes
innovation capability. This finding sheds light for hotel providers in
Note: β = standardised regression weight, t = t value, LLCI = Lower limit of developing countries on the urgent need to exploit technology in their
confidence interval, ULCI = Upper limit of confidence interval, and RIK x RE = business process. By understanding their firms’ technological capabil­
interaction between risk perception and long-term relationship.
ities and the influence of technology on innovation, decision-makers in
corporate and government agencies can make better strategic decisions
Padilla-Meléndez’ [76] suggested that KM only had an indirect effect on that enhance the innovation capability needed to address the techno­
CRM success, through enhancing customer relationships. Particularly, logical and convergent industrial changes under the COVID-19
the research findings address the important role of KM in marketing pandemic. Fourth, the study provides clear support for marketing
innovation. This result is consistent with Huang and Li [77]; who sug­ strategy that incorporates a customer orientation focus. This is key to
gested that managing knowledge would facilitate firms’ innovation attracting and retaining customers, and ultimately enhancing firm
since it transformed tacit knowledge into innovative marketing activ­ business performance. In other words, these findings provide an
ities and services. Herman et al. [40] also confirmed that KM strength­ enhanced understanding of how KM, customer orientation, CRM (IT),
ened the impact of knowledge-oriented leadership on innovation and long-term relationships influence innovation capability. The study
capability. Therefore, it can be concluded that the significantly positive can be used to plan key components of e-CRM application, and high­
effect of KM on long-term relationships and innovation capability has an lights the implementation issues and processes that need the most
important implication for companies in achieving their business goals. attention in the hospitality industry. Therefore, it offers a new
Second, the research revealed a positive impact of CRM (IT) on long- perspective: the adoption of e-CRM helps companies gain an edge in
term relationships and innovation capability. Based on these results, the their business innovation.
current study differs slightly from previous research. For example, Several implications can be derived from this study. First, by raising
Chege and Wang [56] showed that the technological factor had the most the importance of KM on firm innovation, the study warns managers to
impact on e-CRM implementation. Nguyen et al. [16] also confirmed the encourage their employees to share their knowledge about ideas for
high impact of technology on airline performance, while Dabić et al. R&D or new products/services; managers should support employees to
[58] suggest the important role of technology in firm innovation. improve their knowledge about technological change through training
However, the study’s finding is similar to those of Nazari–Shirkouhi courses. In the context of the COVID-19 pandemic, firms can consider
et al.’s [54] and Liu and Huang’s [55]; who believed that CRM (IT) establishing or buying online courses to train their staff. To optimise
improved firms’ service quality by enabling them to respond to buyers technology and resources, knowledge-sharing strategies should be
faster, at a lower cost. For example, through CRM (IT), firms obtain developed for all firm operators in their decision-making process. Sec­
precise customer information and then meet customer demands and ond, service firms, especially hotel providers, must focus not only on
offer better services. Therefore, CRM (IT) has a significantly positive providing high value for customers by prioritising their preferences, but
impact on marketing innovation [53]. Consequently, it is suggested that also on considering them primarily as personal partners, because
CRM (IT) is an important tool for companies to build long-term re­ customer information is an important source of customised services and
lationships with customers and create innovative service and marketing process development. Therefore, it is necessary for managers to design
activities. customer-oriented programmes that are more comprehensive in their
Third, the study found a positive impact of customer orientation on innovation. Moreover, social networks may be an effective channel
long-term relationships and innovation capability. This finding is through which service firms can communicate new offers and provide
consistent with Babakus et al.’s [66] and Sa et al.’s [50] results. These unique experiences to their customers. Third, firms must focus on the
authors showed that firms with customer concentricity had good re­ intensive use of information and communication technology, which
lationships with customers in the long-term and raised their perfor­ enables them to target different consumer segments. Furthermore, to
mance. The current study also showed a positive impact of long-term implement e-CRM, service firms should carefully consider two options:
relationships on marketing innovation, which was consistent with (1) they may develop their own e-CRM system, or (2) they may purchase
several studies [48]. The authors suggested that a long-term relationship a full e-CRM package from a third party (e.g. Microsoft Dynamics, Oracle
with customers increased customer retention, thus facilitating an un­ Sales Cloud, Nimble, Zoho, Insightly, etc.). Finally, under the impact of
derstanding of customers’ needs and demands, which consequently the COVID-19 pandemic, it is suggested that government policy should
promoted marketing innovation. support firms in the hospitality industry by reducing tax.
Finally, the moderating role of risk perception in terms of the COVID-
19 pandemic has also been shown to be an important factor in enhancing 7. Limitation and future research
innovation capability. This finding is similar to Pascual-Fernández
et al.’s [7]. Firms need to factor the COVID-19 pandemic into their This study has some limitations. First, this study did not compare the
process, marketing, and service innovation. efficacies of two different measures, the service and process items, in the
marketing innovation construct. Therefore, this is a possible improve­
6. Theoretical and managerial implications ment in future research. Second, the study does not discuss the in­
terrelationships among other factors that influence firms’ innovation
This study’s findings can be employed to draw various insights for capabilities. Consequently, future studies should fill this gap. Third, the
the information management literature as well as for practitioners. demographic characteristics were not explored; different sectors may
There are four main theoretical contributions. First, this is one of the few perceive innovation differently. Thus, the effect of different services
empirical studies that examine the association of e-CRM, COVID-19 risk should be investigated in future studies. Additionally, the scale of the
perception, and long-term relationships with innovation capability in innovation capability construct is a limitation, as this research used a
the service sector, especially in the hospitality industry. Innovation structured questionnaire. Future research might consider open-ended
under the COVID-19 pandemic is a topical issue in marketing research, questions, reconsider the Likert-scale rating, and employ both quanti­
especially in developed countries [78,79]; however, it seems to have tative and qualitative methods. Finally, this study was conducted in
attracted less interest in developing nations. Second, this study finds a Vietnam, and not in different countries. Future research could address
significantly positive impact of KM on firm innovation, both directly and this limitation.

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