J. Basic. Appl. Sci. Res.

, 3(2)1292-1296, 2013 ISSN 2090-4304

Journal of Basic and Applied
© 2013, TextRoad Publication
Scientific Research
www.textroad.com

The Relationship between Bureaucratic Leadership Style

(Task-Oriented) and Customer Relationship Management (CRM)
Mohammad Taheri Rouzbahani1, Darab Alibakhshi2, Shahpour Ataie3, Ali koulivand4,
Mehrdad Moazami Goudarzi5
1
Ph.D. Faculty Member of Islamic Azad University, Borujerd Branch, Iran, 2,3 M.A. Students of Islamic Azad
University, Borujerd Branch 4 M.A. Students of Islamic Azad University, Malayer Branch,
5
Member of Young Club Research, Borujerd Branch Iran.

ABSTRACT

The aim of this study is to investigate the relationship between bureaucratic leadership style (task-oriented) and
customer relationship management (CRM).This study is an applied research and its method is descriptive correlation
type. Statistical population of this study is all Formal and informal employees of Tejatat Bank in Lorestan province,
including staff and operation employees, which is about 388 persons and from this category 78 persons are working
in staff divisions and 351 persons are formal employees and 37 persons are informal employees. To calculate sample
size, which is in this research equal to 388 persons, by using Morgan Table it was realized that to gain reasonable
and logical results, the sample size should be 196 persons. Based on the number of employed persons and their
percentages in population, these percentages are calculated from selected sample and questionnaires were distributed
in departments. So196 questionnaires were distributed. Calculated reliability of 20 Questionnaires for CRM was
0.855 and for leadership style was 0.714. The Pearson correlation coefficient is used to establish a relationship
between two variables. Correlation is a criterionof two variables’ relationships. Correlation Coefficient shows the
severity and type of relations between variables. Because these questions are standard, we use Pearson's correlation
coefficient and we use SPSS software for data analysis. The results of this study indicate that based on examined
factors there is a weak relationships between bureaucratic leadership style of managers and CRM.
KEYWORDS: Bureaucratic Leadership Style, Task-Oriented, Management, Customer Relationship, Structure
and Culture.

INTRODUCTION

Today all areas of life are surrounded by large organizations. And social and economic operations are carried
out by the organizations and without organizations any operations of any is impossible. And obviously the success
or failure of an organization depends on these organizations’ leadership (ForoughiAsl, 2000). In the past
two decades, the world has witnessed the emergence of new influential forces which has been created following the
economic and organizational communities’ transformation and intensifies major changes in corporate strategy.
These forces are provided by globalization, emphasis on product and service quality, new technologies, changes in
political and economic structures, changes in regulations and competition for new generation of skilled customers
who have changed common needs and expectations. This new customer generation if properly harnessed, could
distinguish a company from its competitors (Fathian, et al, 2006). In these circumstances the only competitive
advantage for organizations is customer. CRM is a Business strategy to attract, retain and promote customer. By
CRM implementation, Companies will be able to perform their functions at a lower cost and retain their main
competitive advantage, surely customers. And an age of globalization and having more than million customers this
would not be possible without use of information and communication technologies (ICT).
ICT is a tool for implementing CRM. And organizations have relationships with individual customers so that
the customer is the only customer (Fathian et al, 2006, 102). Customer relationship management is an important
business approach and its goal is individual marketing. This Relatively simple concept states that different
customers require different products and use individual customer marketing instead of mass organizational and
persons marketing. In this person by person approach, information of each customer (such as previous purchases,
their requirements) is used to structure the offered product or service and it would increase the likelihood of
its acceptance. This approach is a result of advances in information technology (Elahi&Heydari, 2005).
Interestingly, in all CRM studies, the focus is on key customers. The base of customer relationship
management success is focusing on key customers. Today marketing is moving beyond sale and product concept to

Corresponding Author: Mohammad Taheri, PhD. Faculty Member of Islamic Azad University, Borujerd Branch, Iran.
Email: [email protected]. Phone: +989122053722

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marketing concept. Marketing concept is a market driven, customer-focused and integrated marketing effort with the
aim to provide customer satisfaction as the key to satisfying organizational needs ( Arnould, Price & Zinkhan ,
2004).

RESEARCH BACKGROUND

Leadership is the art of influencing people to achieve defined goals by their own desire (Moshbeki, 1998).
Leadership processis using influence without force to conduct and coordinate members of a group to achieve goals.
And as an attribute is sum of specificities attributed to members using this influence. (Moorhead, Griffin 1997).
“Leadership style is leader's behavior to conduct organization members in the proper way.”(Feizi, 2004).
Leadership style is a function of their understanding of human nature and the human being. It is natural that if they
consider human as a lazy, indulgence and without sense of responsibility and recognize his main motivations as
welfare and worldly, of course, selected style of leadership is consistent with such a phenomenon. On the other
hand, if he consider human as active, responsible, interested in trying and with moral incentives, certainly he will
use another way to drive employees (Mir Sepasi, 2001).
Bureaucratic Leadership Style: Along with the charismatic and transitional leader, the bureaucratic leadership
style was first described by Max Weber in 1947. The bureaucratic style is based on following normative rules, and
adhering to lines of authority. The characteristics of this style aligned with Weber's description of transactional
leaders.
Weber was the first to distinguish between transactional leaders, such as bureaucratic leaders, and
transformational leaders, such as charismatic leaders. The transactional leader motivates followers through
systematic rewards and punishments. Weber also believed that most leaders exhibited characteristics of all three
styles.
The characteristics of the bureaucratic style include:
 Leaders impose strict and systematic discipline on the followers, and demand business-like
conduct in the workplace
 Leaders are empowered via the office they hold: position power
 Followers are promoted based on their ability to conform to the rules of the office
 Followers should obey leaders because authority is bestowed upon the leader as part of their
position in the company

Bureaucratic leader, like authoritarian leader, tells people what to do and how to do. But the bases of all his
orders are solely organizational policies, procedures and guidelines. Rules are absolute for bureaucratic leaders. He
really works by job description and his job as a manager is more like a judge and he wouldn’t accept any exception
in rules even in special technical issues. This leader gives people little or no freedom (SeyedJavadin, 2007).
Customer in traditional view is who buys company's products. This definition, in today business world is no
longer accepted and customer defined as one which organization wants to affect his behavior by creating values.
Value is something resolved a customers’ requirement and fulfill his needs (Aghayar, 2007). Mahatma Gandhi said:
“customer is the main visitor in our field; he is not dependent on us, we are dependent on him, he do not disturb us,
he is our working goal, he is not an outsider in our business, he is part of it, we're not doing him a favor on his right,
he will grace us with providing this opportunity.”(Aghayar, 2007).
"Customer relationship management" is a comprehensive and systematic approach which has an important role
in achieving development and maintaining customer satisfaction, increasing profitability and creating economic
value added (in organizations) by integrating customer relation principles, namely marketing, sales and after-sales
services (FirouzAbadi, 2007). Organizations try to establish long term relations with customers, base on value
creation for both sides and this is one of the main customer relation management goals. In other word, the aim of
customer relation is to offer advantages through mutual transaction and promise into action (Elahi and Heydari,
2005).
Customer relationship management is a comprehensive business and marketing strategy, which integrates
technology, processes and all business activities around customer( Fjermestad & Romano , 2003). Customer
relationship management consists of four dimensions: key customers focus, CRM organizing, knowledge
Management and CRM technology.

Key customer focus: focus on key customers means an intense focus on customer and deliver ongoing value to
selected key customers by providing personalized/customized products. The main dimensions of key customer focus

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are: customer-centric marketing, key customers lifetime value, customization and interactive marketing ( Sin, Tse
and Yim , 2005).
CRM Organization: Is a fundamental change in organizing method and business processes based on CRM
process (Hoffman . & Kashmeri, 2000).
Knowledge management:Based on the knowledge-based view, the mission of organization is to create, transmit
and apply knowledge. Managing customer knowledge to obtain, share and developing knowledge in order to benefit
customers and organizations (Sin, Tse & Yim , 2005).
CRM Technology: Based on Information Technology, CRM is an integrated enterprise-wide system which
coordinates organizational technologies like data warehousing, web sites, intranets, extranets, accounting, sales and
marketing ( Stefanou, Sarmaniotis & Stafyla , 2005).
Tanveer Ahmedin his Master's thesis entitled Electronic Customer Relationship Management in Online
Banking in Lulea University of Technology in February 2009, performed a qualitative study comprising two cases
of banks, one from Sweden and second from Denmark, which using E-CRM performance and methods to mass
customization, customer identification, one to one interaction and automatic locks in flow of financial data like
security prices. RoyaRahimi in his Master's thesis entitled "Study and practical application of customer relationship
management in the hotel industry” at the University of Technology (Lulea ) in February 2008 notes her article
reviews the practical application of customer relationship management (CRM) on guest satisfaction, loyalty and
retention and survival showed that this implementation on the form of gathering information for personalization of
services, using one to one marketing plans, improving guest services and support and using IT for giving more
services in hotels will increase guest satisfaction, loyalty and retention.
Seyed Mohammad Bagher Mirhadiin his master's thesis, customer relationship management in Refah bank,
in 2006 in Tarbiat Modarres University came to the conclusion that by improving customer satisfaction level, we
could increase satisfaction, loyalty, and quality of services. Marguerite Bartain his master thesis on customer -
oriented culture and customer relationship management in online training institute in Kaplan University in
February 2009 stated that: this qualitative study is an applicable study of ethnographic, current organizational
structure, customer orientation and CRM status in Commonwealth University. And by using a change-oriented
approach and perspective helps to our recognition and understanding of customer relationship management to
overcome a strongly established and quality-oriented issue.

RESEARCH METHODOLOGY

The aim of the present study is descriptive and its description method is correlation. Static population of this
study is all formal and informal employees of Tejatat Bank in Lorestan province, including staff and operation
employees, which is about 388 persons and from this number 78 persons are working in staff divisions and 351
persons are formal employees and 37 persons are informal employees. To calculate sample size, which is in this
research equal to 388 persons, by using Morgan Table it was realized that to gain reasonable and logical results, the
sample size should be 196 persons. Based on the number of employed persons and their percentages from
population, these percentages are calculated from selected sample and questionnaires were distributed in
departments. So196 questionnaires were distributed. Calculated reliability of 20 Questionnaires for CRM was 0.855
and for leadership style was 0.714. The Pearson correlation coefficient is used to establish a relationship between
two variables. Correlation is a criteria for two variables’ relationships. Correlation Coefficient shows the severity
and type of relations between variables. Because these questions are standard we use Pearson's correlation
coefficient and for data analysis we use SPSS software.

DATA ANALYSIS

First hypothesis: there is a significant relationship between bureaucratic leadership style with customer relationship
management.
H0: there is no significant relationship between Bureaucratic leadership style and customer relationship management
strategy.
H1: there is a significant relationship between Bureaucratic leadership style and customer relationship management
strategy.

Table 1: Pearson test for first hypothesis

SIGNIFICANCE LEVEL NUMBER PEARSON
0.011 196 0.267

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According to the five percent significance level of test, the null hypothesis is rejected and therefore the
opposite hypothesis is verified. So there is a significant relationship between bureaucratic leadership style and CRM
strategy.

Second hypothesis: there is a relationship between bureaucratic leadership style and customer relation management.
H0: there is no significant relationship between bureaucratic leadership style and customer relationship management
structure.
H1: there is a significant relationship between bureaucratic leadership style and customer relationship management
structure.

Table 2: Pearson test for second hypothesis

SIGNIFICANCE LEVEL NUMBER THE PEARSON
0.003 196 0.358

According to one percent significance level of test, the null hypothesis is rejected and therefore the opposite
hypothesis is verified. So there is a significant relationship between bureaucratic leadership style and CRM
structure.

Third hypothesis: there is a relationship between bureaucratic leadership style and customer relation management
planning.
H0: there is no significant relationship between bureaucratic leadership style and customer relationship management
planning.
H1: there is a significant relationship between bureaucratic leadership style and customer relationship management
planning.

Table 3: Pearson test for third hypothesis

SIGNIFICANCE LEVEL NUMBER THE PEARSON
0.024 196 0.411

According to five percent significance level of test, the null hypothesis is rejected and therefore the opposite
hypothesis is verified. So there is a significant relationship between bureaucratic leadership style and CRM
planning.

Fourth hypothesis: there is a relationship between bureaucratic leadership style and customer relation management
culture.
H0: there is no significant relationship between bureaucratic leadership style and customer relationship management
culture.
H1: there is a significant relationship between bureaucratic leadership style and customer relationship management
culture.

Table 4: Pearson test the fourth hypothesis

SIGNIFICANCE LEVEL NUMBER THE PEARSON
0.001 196 0.437

According to one percent significance level of test, the null hypothesis is rejected and therefore the opposite
hypothesis is verified. So there is a significant relationship between bureaucratic leadership style and CRM culture.

CONCLUSION

This study examined the relationship between bureaucratic leadership style (task-oriented) and customer
relationship management (CRM). Pearson correlation test has been used to evaluate the hypothesis of the study.The
results suggest there is a relationship between bureaucratic leadership style and customer relationship management
strategy, although Pearson Value is less than 0.5 (0.267), but its positive value represents this relation. There is a
relationship between bureaucratic leadership style and customer relationship management structure, although
Pearson Value is less than 0.5 (0.358), but its positive value represents this relation.

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There is a relationship between bureaucratic leadership style and customer relationship management planning,
although Pearson Value is less than 0.5 (0.411), but its positive value represents this relation. There is a relationship
between bureaucratic leadership style and customer relationship management culture, although Pearson Value is less
than 0.5 (0.437), but its positive value represents this relation.
In addition, generally, results of this study indicate that average Pearson between bureaucratic management and
CRM strategy, CRM structure, CRM planning, CRM culture factors is 0.368, which shows bureaucratic
management has a weak relation with these factors and therefore bureaucratic management has a weak effect on
these factors.

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