CHAPTER ONE
INTRODUCTION
1.1Background of the Study
Banks
play their significant role in any economic system. They are intermediaries
involved in transfer of funds within and outside the country. The banking
sector is getting more competitive everyday, quality speed efficiency,
innovation are the main joints on which quality programs are designed. All
banks are engage in the same basic banking activities but it is the way of
delivery of service that distinguishes one bank from another. All banks
worldwide are considering quality in the strategic management.
Quality
Management (QM), which is about total customer service and continuous customer
satisfaction, is capable not only in the manufacturing industry but in service
industry as well, where the customer is just as important. In fact, customers
in the service industry are more sensitive to service quality and service
delivery than in manufacturing industry because they are always in contact with
the front-line service personnel, which is not the case with factory workers.
These points of purchase contact or moments of truth” decide whether the
customer will come back or shift to the next door competitors.
The
banking industry, often the biggest service industry in any country stands to
benefit from Quality Management for one
basic reason: Banks depend on the customer satisfaction and loyalty for their
survival, but these service indices should be audited as regularly and as
conscientiously as the banks’ internal auditors audit cash flows, transactions
and balances. To aggravate the problem, head offices rate and promote branch
managers based on sheer business the branch generates; loan released, interest
earned and deposits generated; they seldom evaluate the success of the
activities of the branch managers on customer’s satisfaction, service and
complaints. It is no wonder that branch
managers do not pay attention to
customer service since it doesn’t affect their performance evaluation. Most
banks therefore do not have a system to handle errors or customer complaints
whether verbal or written.
1.2Statement of the Problems
The
banking sector is getting more competitive every day. In order to be successful
in the field. Quality Management ought to be the integral part of their
strategic management. The research is designed to investigate the level of the
implementation of Quality Management in various commercial banks.
Most
bankers would like to believe that banks are in the finance industry and not in
the service industry. Thus they tend to compete in terms of financial prowess
rather than service quality. People, resources, time and ironically, very few
really pay much attention to the plight of their clients - before, during and
after sales.
Many
banks are managed by finance people, with little or no training in customer
service. Good service does not happen naturally or by accident. Good service is
planned and managed. Without planning, bad service is the natural state of
affairs. As the guru Edwards Denning (1986) put it, to improve service quality,
one has to have profound knowledge of the service delivery system bankers tend
to think that money, not the customer, matters. In general, the bigger the
bank, the ore inferior the service because of complacency and bureaucracy which
stifle both innovation and efficiency in customer service. The big bank can
lose customers because of bad slow service but can easily replace them with new
and even bigger customers, thus hiding the service problem. Presently, banks
are ranked; bench marked and judged based on their success by sheer size,
financial resources and other quantitative measures which hardly indicate
customer service quality assets base, number of ATMs (automated teller
machines), number of transactions, number of depositors, amount of loans
released etc. banks executives re mainly involved in asset management (the
bigger the better) cash flow management, spread management ( the wider the
better), asset/liability management and financial ratio analysis systems re
devoted more to managing assets and cash rather than managing customers and
services. In fact, most banks are designed to control customers rather than
satisfy customers, products and procedures are set up for the convenience of the
bank rather than that of the customer. A big bank may have as many as three of
vice presidents responsible for guarding its assets, but no one to take care of
customers service and complaints. Banks usually give customer service and
satisfaction lower priority and accordingly, assign to it a low level, if not a
lowly paid manager. Few or none of the bank’s elaborate systems and structures
is designed to monitor and maintain customer loyalty.
In
spite of this fact, customers are yet
to experience a drastic improvement in service rendered by the bank. The
waiting time in banks is yet to reduce significantly, processing of
transactions is still at a low level. More so, managers complain of lateness of
reports, constant breakdown of computer machines and computer fraud. Top
executives of most banks also find it difficult to take a decision on further
investment in information technology because the return on investment of
previous one has been discouraging. In other words, managers sometimes find it
difficult to measure the contribution of information systems but the rampant
cases of information systems and the management of some banks in general.
Because of the huge investments, managers are incurring in information systems,
it is expected that a good return on investment should be realized.
In
view of the above, the study tends to seek whether there is a significant
relationship between quality management and organizational performance and the
banking industry.
1.3Research Question
The
research questions for this study are based on the following:-
1.
Is there any significant relationship
between quality management and organizational performance of First Bank of
Nigeria Plc
2.
What impact or effect does quality
management has on the organizational performance of First Bank of Nigeria Plc.
3.
Has information technology properly managed
to ensure successful performance of the management information system in First
Bank of Nigeria Plc?
4.
Has quality Management improved customer
relations, management in First bank of Nigeria plc?
5.
What are the contributions of quality
Management in the first Bank of Nigeria Plc?
1.4 Objective
of the study
The
main objective of the study is to examine the impact of TQM on organizational
performance, a case study of first Bank Plc. The specific objectives are as
follows:-
1.
To evaluate if there is a significant
relationship between total quality management and organizational performance of
First Bank of Nigeria Plc.
2.
To examine the impact or effect of total
quality management on the organizational performance of first Bank of Nigeria
Plc.
3.
To evaluate the management of information
technology towards a successful performance of the management information
system in First Bank of Nigeria plc.
4.
To assess the impact of quality management
on customer relations management in First Bank of Nigeria Plc.
5.
To examine the contributions of total
quality management in the banking industry in First Bank of Nigeria Plc.
1.6 Statement
of Hypothesis
In
order to achieve the objectives of the study, the following hypothesis are
formulated as follows:-
1.
Ho : There is no significant relationship between Quality
Management and organization’s performance in First Bank Plc.
H1 : There
is a significant relationship between
quality Management and banking organization’s performance in First Bank plc.
2.
Ho : There is no positive impact
of total quality management on organizational
performance in First Bank of Nigeria Plc.
H1 : There is positive impact of Total Quality
Management and banking organization’s performance in First Bank Plc
1.4 Significance
of the study
The
study is relevant and important to the policy makers, stakeholder, researchers
and the government. Policy makers will find the study relevant because it will
help in formulating policies in the banking sector and also in advising
government in an efficient and effective way by which policy formulated could
be implemented. The study will also benefit the policy makers in further
deliberations on Quality Management in the banking industry and studying the
tends of the banking sector in Nigeria.
Stakeholders
will find this study very relevant and important because it will assist them in
their deliberations and discussions on effective Quality Management system in
the banking industry and in proffering possible policy recommendations that
will help both the government and the administrators of policies.
Government
will also benefit from the study because it will guide in effective policy
implement in the banking sector reforms and Management in banking industry. It
is recognized like other analysis. This is the value to policy and decision
makers, leaders in private and public sectors and as a basis for developing
appropriate policy and decision making particularly for the economic growth and
development. Above all, it is holed that this study would contribute to
knowledge and be useful as reference material for scholars and researches in
the field of study.
1.7 Scope
and limitation of the Study
This
study covers the impact of Quality Management on organizational performance in
First Bank of Nigeria Plc from 2008 to 2011. The basis for covering this period
of time is to show whether there have been any significance and contributions
of Quality Management in First Bank Plc in Nigeria. A study of this nature
cannot be complete without the researcher experiencing some constraints.
The
major limitation of the study experienced by the researcher is lack of time.
This is due to the fact bother academic course work and the study was taking
place simultaneously.
Lastly,
for an in-depth work to be carried out in the study, sourcing out data has not
been easy. The researcher had to visit several academic libraries and
non-academic data banks in Abuja in search of data.
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