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Electronic business (e-business) brings many new opportunities as well as several challenges to business organizations. Many organizations have turned to customer relationship management (CRM) to leverage their market orientation, customiz e their products and services, and build loyalty programs. However, capitalizing on the opportunities will require organizational investments in information technology (IT) and absorptive capacity. This study examines the effects of investments in IT (IT intensity) and absorptive capacity on CRM practices, particularly market orientation, customization and loyalty programs. The results suggest that a positive relationship exists among them. Thus, organizations should devote resources toward developing their IT investments and absorptive capacity to benefit from their CRM practices.