THE EFFECT OF TOTAL QUALITY MANAGEMENT ON THE PERFORMANCE OF THE BANKING INDUSTRY IN NIGERIA

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RESEARCH INFORMATION

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This study, THE EFFECT OF TOTAL QUALITY MANAGEMENT ON THE PERFORMANCE OF THE BANKING INDUSTRY IN NIGERIA contains concise information that will serve as a framework or guide for your project work. The project study is well-researched for academic purposes and are usually provided in complete chapters with adequate References.

Keywords: THE EFFECT OF TOTAL QUALITY MANAGEMENT ON THE PERFORMANCE OF THE BANKING INDUSTRY IN NIGERIA

RESEARCH BODY

TABLE OF CONTENTS

CHAPTER ONE

1.0     INTRODUCTION

1.1     BACKGROUND OF THE STUDY

1.2     STATEMENT OF THE PROBLEM

1.3     OBJECTIVES OF THE STUDY

1.4     RESEARCH QUESTIONS

1.5     SIGNIFICANCE OF THE STUDY

1.6     SCOPE OF THE STUDY

1.7     LIMITATION OF THE STUDY

1.8     DEFINITION OF TERMS

CHAPTER TWO

2.0     LITERATURE REVIEW

2.1     CONCEPTUAL CLARIFICATION

2.1.1  ORIGINS OF TQM

2.1.2  TOTAL QUALITY MANAGEMENT

2.1.3  CUSTOMER SATISFACTION

2.1.4  THE PILLARS OF TQM

2.1.5  ELEMENTS OF TQM

2.1.6  RELEVANCE OF TQM

2.1.7  BARRIERS TO TQM

2.1.8  BRIEF HISTORICAL BACKGROUND OF DIAMOND BANK PLC

2.2     THEORETICAL FRAMEWORK

2.3     EMPIRICAL REVIEW

2.4     SUMMARY OF LITERATURE REVIEW

CHAPTER THREE

3.0     RESEARCH METHODOLOGY

3.1     RESEARCH DESIGN

3.2     AREA OF STUDY

3.3     POPULATION OF THE STUDY

3.4     RESEARCH SAMPLE AND SAMPLING TECHNIQUE

3.5     INSTRUMENT FOR DATA COLLECTION

3.6     VALIDITY OF THE INSTRUMENT

3.7     METHOD OF DATA COLLECTION

3.8     METHOD OF DATA ANALYSIS

CHAPTER FOUR

4.0     DATA ANALYSIS AND PRESENTATION

CHAPTER FIVE

5.0     SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION

5.1     SUMMARY

5.2     CONCLUSION

5.3     RECOMMENDATIONS

5.4     LIMITATION

5.5     SUGGESTION FOR FUTHER STUDY

REFRENCE

APPENDIX

CHAPTER ONE

  • INTRODUCTION

1.1              BACKGROUND TO THE STUDY

Total Quality Management (TQM) has become an accepted technique to ensure performance and survival in the modern economies according to Katller and Armstrong (2004). Deming (2005) had earlier asserted that the success of quality management efforts depended upon the effective integration of various management subsystems. TQM integrates fundamental management techniques, resources, and its implementation stands as a challenge and support to top management. Recent studies have claimed that the successful implementation of TQM could generate improved products and services, as well as reduced costs, more satisfied customers and employees, and improved financial performance (Hendricks & Singhal, 2001). The ever improving global competition and increasing requests for more qualified products by customers have caused organizations to understand that the only way of survival in the market is to deliver better quality products to meet customers’ needs. Many organizations, therefore, spend considerable amounts of their funds in activities related to improving products and services. The vast applicability of Total Quality Management (TQM) has made it to earn recognition as one of the most popular continuous improvement systems for quality. TQM increases customer’s satisfaction through the participation of all personnel (Demirbag et al, 2006). The main aim of TQM is to implement a management system and organizational culture that ensures the customer satisfaction since customers who are more sensitive to quality standards improve their expectations continuously (Eriksson and Hansson, 2002).

The banking sector is the bedrock of any developed and developing economy. A nation’s economy is an aggregate expression of all activities of its citizen devoted to the production of goods and services in one form or the other. By extension, this refers to activities and processes geared towards the production of wealth for individual benefits and the society at large. The importance of banks in the economy therefore derives largely from their active role being the bastion of the financial system in promoting efficient allocation of resources. This all-important role is clearly depicted in the primary activities of banks in accepting deposit and on-lending these to borrowers in the course of these activities. The pace of economic development depends on the volume and direction of investment provided by savings. The ability and propensity of banks, more than any other segment of the financial system, to mobilize savings and channel these funds toward investment needs of the economy, therefore mark them out as critical agents of economic growth and development. Without banks and other financial institutions, arrangement of savings and investment will not only be inefficient, but more importantly may lead to less than optimum resources allocation.

Today every organization has to study what customer demand is. Who is our customer? How do we delight our customers? What do customers wish to experience when dealing with us? What do customers frame in their mind about us? All these questions should be taken into consideration hence it is the customer who defines quality (Arora 2006:1). Quality is fast becoming an essential aspect of banking, and in the coming years it would form a basic requirement for the survival of the industry. It is indeed worthy of note that quality needs to be natural through positive attitude and quality culture in an organisation. At a time when the deregulation of financial services and consequent ready access to funds produced a new competitive environment, both the commercial and merchant banks in the country then were competing with finance and mortgage houses, insurance companies and stock brokers. The new competition brought about successes for some and spectacular failure for others. In the new millennium, banking has gone even beyond expectation, and for the surviving banks, competition has just began. The financial service sector has not been immune from or ignored the era of quality revolution. New products sought initial competitive advantage, new attractive interest rate, turnaround time, all in the bid to attract more customers.

In the service sector, we have non-invertible products. Demand for service is variable. Service sectors are hospitals, banks, transportation and public utility e.t.c. In the early 1990s, there was a sea of change in the banking industry that sent many Chief Executives of the industry back to the drawing board to find new ways to compete. At this time, the top management of the industry learned the fundamental lessons that customers were willing to pay a price premium for products and services that consistently meet high standard of quality. Customers now perceive that they have the right to demand for good services, since they pay for it. As the service industries are setting promises, all that the customer wants is for the promises to be kept. According to Arora (2006:50), Reputation is either built or lost through satisfying or dissatisfying customers. What does it take to satisfy a customer today? The customer will have a need which we are trying to fulfill. This may be weakly articulated or very vague. Either way, it is our responsibility to identify the need as precisely as possible and meet it. If we do this, then the customer is satisfied.

The loss of a customer can be devastating, although we may be blissfully unaware of it, each customer who walks away, takes away future years of repeat revenue. We do not sell to customers today, they buy. That is, they call the tune, they have the choice of banking with any bank of their choice (with the advent of a stable capital base for the existing banks). They will only bank with a particular bank if that bank makes it easy or special. Excellence in services can be achieved through ISO 9000, ISO 14000, 18000, TQM, team work, Quality Assurance. Arora (2006:3). Customer satisfaction can only be achieved when the bank defines customer needs from the customer point of view and not from its own point of view. For this, the customer must be the center of all the activities carried out in the organization. According to Arora 2006.9, quality of a product throughout its lifespan is total Quality. All personnel of the organization are committed to quality by doing the right thing the first time and every time by employing the organization’s recourses to provide value added quality to the customers. Total quality accomplishes the business goals by designing and supplying products and services to achieve customer satisfaction at an economic level.The term TQC (total quality control) was conceived by A. V. Freignbaum 2003, Japan, TQC later became TQM. It is a corporate business management philosophy which recognizes that customer needs and business goals are inseparable. Arora (2008:11). Management must be able to recognize that TQM will not happen by accident. TQM is a managed process which involves people, system and supporting tools and techniques. Quality should begin to permeate financial institutions as a way of life and it should begin with employee satisfaction. TQM, though a recent phenomenon is important in the banking sector. It has evolved as a management concept out of the need by organizations for continuous quality improvement and critical importance of increased profitability and survival in the face of competitive challenges in the banking industry. This starts with the customers by learning to identify and meeting their basic requirements and then empowering staff by giving them the tools they need to perform excellently.

TQM practices in service firms have been discussed in many studies, but there are always disagreements as to „how to best cut the TQM cake‟ into factors or elements (Samson & Terziovski, 1999). Each firm relies on a set of practices depending on the nature of that firm as there are a variety of TQM practices and a diversity of dimensions (Bon & Mustafa, 2013a). Bon and Mustafa (2013b, p. 519) identified the following seven practices of TQM; top management leadership, employee involvement, employee empowerment, customer focus, training, information analysis, and continuous improvement. Other studies such as Zehir et al. (2012, p. 275) focus on the eight dimensions of TQM; leadership management, employee management, customer focus, factual approach to decision making, supplier management, continual improvement, system approach to management and process management. In this research, the TQM practices that were selected for banking sector are: top-management commitment, customer satisfaction, training and education, continuous improvement, and teamwork. These practices have been identified as the key practices of TQM in service industries, and in the promotion of service quality. (Sweis et al., 2013, p. 274).

1.2     STATEMENT OF THE PROBLEM

Banks being financial intermediaries are the backbone of any economic system involved in channeling funds from those having surplus to those having its shortage. The objective of this fund channeling is to earn profit. In order to reach maximum number of customers, banks develop a network of branches. Branches are the points where banks offer their products. Banking products are almost the same in any country but what matters is the way the product is offered and the quality aspects associated with those products. Total Quality Management (TQM), a buzzword phrase of the modern age is based on the assumption that quality can be managed in every aspect of a company’s business. Total Quality Management is viewed as virtually a new organizational culture and a way of thinking. So the approach has an intense focus on customer satisfaction, accurate measurement of every critical variable in business operations, continuous improvement of products, services and processes and on work relationships based on mutual trust and teamwork, (Pearce & Robinson 2005:24). Total Quality Management is a structured system for satisfying internal and external customers and suppliers by integrating in the business environment, continuous improvement, and breakthroughs with development, improvement, and maintenance cycles while changing the whole organizational culture, (Cole & Mogabi 2009:35). This is the 15 comprehensive approach towards quality management covering all areas of business. Like other industries, quality improvement is taking place at a revolutionary pace in the banking sector, (Rana, 2005: 15). Keeping in view the competitive environment in the banking sector where bank officers are trying their best to offer high quality services to their customers, there is great need to develop a TQM model for commercial banking branch operations, highlighting the different departments in the branch and the application of TQM principles to such departments with proper assessment of the extent of practice of TQM principles in our chosen bank of research, which in this case is Diamond bank plc. There is no such comprehensive model available in the body of knowledge covering all departments of commercial banking branch.

1.3     OBJECTIVE OF THE STUDY

The main objective of this study is to find out the effect of Total quality management on the performance on the performance of the banking industry in Nigeria, specifically the study intends to:

  1. Ascertain the level of awareness of TQM among staff of Diamond bank, Plc
  2. Assess the level of adoption of TQM practice by staff of Diamond bank plc
  3. Determine the extent to which members of staff are involved in the practice of TQM in Diamond Bank, Plc
  4. Find out the extent the practice of TQM affect customer’s service and care in Diamond Bank Plc
  5. identify the major limitations of TQM practice in Diamond Bank, plc

1.4     RESEARCH QUESTIONS

The following questions were formulated to guide the study to guide the study so as to arrive at a valid conclusion:

  1. What is the level of awareness of TQM among staff of Diamond Bank Plc?
  2. What is the level of adoption of TQM practice by staff of Diamond bank plc?
  3. To what extent are members of staff of Diamond Bank plc involved in the practice of TQM?
  4. To what extent does the practice of TQM affect customer’s service and care in Diamond Bank Plc?
  5. What are the major limitations of TQM practice in Diamond Bank plc?

1.5     RESEARCH HYPOTHESIS

Ho: there is no significance effect of TQM on customer’s service and care in Diamond Bank Plc

Hi: there is a significance effect of TQM on customer’s service and care in Diamond Bank Plc

Keywords: THE EFFECT OF TOTAL QUALITY MANAGEMENT ON THE PERFORMANCE OF THE BANKING INDUSTRY IN NIGERIA


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Keywords: THE EFFECT OF TOTAL QUALITY MANAGEMENT ON THE PERFORMANCE OF THE BANKING INDUSTRY IN NIGERIA

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