ABSTRACT

 

 

It is hardly news any longer that the service industry the world over is coming to terms with the fact that THE CUSTOMER IS KING, and the customers’ satisfaction now forms part of the aims and objectives of any business in order to survive.

 

 

In the light of the above, this research work seeks to show the impact of the implementation of Total Quality Management (TQM) on the performance of the banking industry using First Bank Plc, and its impact on customer satisfaction and profitability.

 

 

The primary and secondary sources of data collection were adopted in the research methodology.

 

 

One hypothesis was raised and tested, using simple percentages and the Chi Square method.

 

 

Findings: this research work is to study The Impact of Total Quality Management in the Banking Industry, taking First Bank as a case study. Findings show that its implementation has enabled the bank improve its performance in many service areas. From the questionnaires distributed and answered, a large percentage of respondents (employees) agree that the implementation of TQM has improved the

 

 

 

6

 

quality of their service delivery. A large percentage of customers attest to an improvement in the bank’s satisfaction of their needs. The bank’s market share has also improved as a result of the implementation of TQM. Most of the customers agree that the bank’s services now look beyond their immediate needs.

 

 

The conclusion from the findings is that the adoption of TQM has been a step in the right direction for FIRST BANK PLC. It has improved the lot of the bank by increasing their income through an increase in patronage and an increase in the bank’s capital base through the purchase of its shares by the general public, indicating growing confidence in the bank.

 

 

One of the recommendations is that government should also get involved in the implementation of TQM in all its agencies, ministries and parastatals. This would help drag the public and private sectors forward into the 21st century and enable workers compete favourably with their colleagues elsewhere in the world.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

TABLE OF CONTENTS

 

 

 

Certification………………………………………     ii

 

Approval…………………………………………….   iii

 

Dedication…………………………………………...  iv

 

Acknowledgement…………………………………..   v

 

Abstract…………………………………………….     vi

 

 

CHAPTER 1:   INTRODUCTION

 

1.1  Background to the study…………………

1

 

1. Statement of the problem…………………….    3

 

1.3	Objective of the study……………………….	4
1.4	Formulation of the hypotheses……………	5
1.5	Significance of the study……………………	5
1.6	Research methodology……………………..	7
1.7	Scope and limitation of the study………	7
1.8	Definition of terms…………………………..	8

 

 

CHAPTER 2:   LITERATURE REVIEW

 

 

 

2.1	Conceptual framework of TQM……………	10
2.2	The Quality Gurus………………………….	14
	2.2.1 The Early Americans…………………	15
	2.2.2 The Japanese…………………….	17
	2.2.3 The new Western Wave……………..	19

 

 

 

 

 

8

 

2.3	Commitment to quality…………………….	23
	2.3.1Managerial components of TQM……	24
2.4	The merits and obstacles to TQM………..	27
2.5	Implementation of TQM…………………….	28
2.6	TQM and the Nigerian Culture……………	30
2.7	The problems of implementing TQM in Nigeria 31

 

 

 

CHAPTER 3: RESEARCH METHODOLOGY

 

 

 

1. Introduction…………………………………. 33

 

3.2	Population……………………………………	33
3.3	Sample size………………………………….	34
3.4	Data Collection……………………………..	34
	3.4.1 Primary Sources…………………….	34
	3.4.2 Secondary Sources………………..	35
3.5	Statistical techniques for Data Analysis…	35

 

 

 

CHAPTER 4: DATA PRESENTATION AND ANALYSIS

 

 

 

1. Introduction………………………………. 37

 

1. Presentation………………………………. 37

 

1. Analysis……………………………………. 43

 

1. Summary………………………………….. 46

 

 

 

 

 

 

 

 

 

 

 

9

 

CHAPTER 5: SUMMARY, CONCLUSION AND

 

RECOMMENDATION

 

 

 

5.1  Summary………………………………..                        48

 

1. Conclusion……………………………… 48

 

1. Recommendations……………………. 49

 

 

 

BIBLIOGRAPHY…………………….	50
APPENDIX I…………………………	52
APPENDIX II………………………	54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10

 

CHAPTER 1: INTRODUCTION

 

 

 

1. BACKGROUND OF THE STUDY

 

 

 

Management activities in the business world are directed towards achieving an ample share of the industry and ultimately control of, if possible, the direction towards which the industry moves. Towards achieving this, various managerial techniques have to be put in place. The business world is highly competitive. Thus all businesses must strive towards putting in place, policies that would greatly increase sales volume while maintaining quality and the quality of service delivery.

 

 

This trend has been in existence for generations and would continue to be. It has been largely responsible for the various challenges facing captains of industry world-wide; the scramble to ensure that the various goods and services offered by them achieve the highest standard of quality and cost effectiveness. This becomes more critical in light of technological advances that have put before the customer, an array of goods of very high quality.

 

 

Every investor expects dividend from their investor, just as customers expect value for their money. Due to ever

 

 

 

 

 

11

 

increasing alternatives, it is pertinent for producers to ensure that qualitative and cost effective goods are produced in order to increase patronage and generate more income. These may however not be possible without a qualitative management technique; hence the adoption of Total Quality Management (TQM) becomes pertinent.

 

 

 

TQM became a source of unification of visions and ideas across the organization to ensure the successful execution of the mission, even though TQM at that time was a novel idea to the organization.

 

 

 

 

 

 

TQM as adopted by FIRST BANK  Plccan be described as the navigational aid for the successful berthing of FIRST BANK  Plcat the pinnacle of New Generation Banks in Nigeria.

 

 

1. STATEMENT OF THE PROBLEM

 

 

 

For a long time now, business institutions in Nigeria have been faced with various problems, top of which are mismanagement and lack of top quality goods. These problems resulted in for instance, the failure of many banks from the late 1980s into the early 1990s. Customers lost deposits many had worked all their lives for. Other sectors, like the manufacturing sectors have also been affected by the scourge of mismanagement and disregard for quality. Many of these organizations especially those in the banking industry reorganized themselves after the problems they faced during this period. But they also had to put structures in place to ensure that what caused their initial demise did not reoccur. One of the strategies adopted was Total Quality Management (TQM). The focus was now on the customer and what to do to satisfy them, rather than the ‘bottom line’. The adoption of TQM has gone a long way towards improving management processes and service delivery and has helped restore the confidence of the populace in the banking industry.

 

 

 

 

 

1. OBJECTIVE OF THE STUDY

 

 

 

The objective of the study is to:

 

First of all evaluate the impact of TQM in the Banking industry, using FIRST BANK  Plc as a case study and to facilitate awareness of TQM in order to help managements of service organizations to focus on the nature and scale of quality service delivery.

 

 

Secondly to evaluate the merits of implementation of TQM and to assist management by offering advise on the desirability of the implementation of and ways of achieving the objectives of TQM.

 

 

Thirdly, to determine the contribution of employees towards the implementation of TQM and determine whether the merits justify the implementation of TQM.

 

 

And lastly make objective recommendation based on the findings of the investigation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14

 

1. FORMULATION OF THE HYPOTHESES

 

 

 

The following hypotheses shall be tested in the course of the investigations:

 

 

Ho: There is no significant relationship between the application of TQM in FIRST BANK  Plc on the increase in its market share and customer satisfaction.

 

 

H1: There is a significant relationship between the application of TQM in FIRST BANK  Plc on the increase in its market share and customer satisfaction.

 

 

1. SIGNIFICANCE OF THE STUDY

 

 

 

The primary objective of any business is to create and keep a customer. To this end, TQM can be defined as, “the processes, methods and systems that organizations use to delight customers and at the same time, help reduce costs, increase revenue and empower employees. These methods are not fixed in stone. They grow and develop with time” (MacDonald, J. 1993).

 

 

TQM is a relatively new management technique that has revolutionized business management and a return to

 

 

 

 

 

some of the most fundamental ideas of management effectiveness. It is a tool that should serve to enhance the profitability of an organization, with emphasis on total quality from the bottom to the top of management.

 

 

The significance of the adoption of TQM as observed by the researcher indicates improved performance by identifying Service Quality Indicators (SQIs) i.e. those things that ‘irritates’ customers and streamlining their operation in order to eliminate those ‘irritants’.

 

 

It is the intention of the researcher to highlight problems of service delivery in the banking industry and proffer solutions to these problems through the application of TQM. The researcher intends to create awareness about TQM, how it is being applied in the chosen organization, and its effects on customers and employees alike. The effect on staff welfare, motivation, promotion etc will also be highlighted. The researcher expects that the research work will aid in finding headway out of the scourge of mismanagement.

 

 

The researcher hopes the study shall serve as a useful tool for any organization that seeks to implement TQM.

 

 

 

 

 

 

 

1. RESEARCH METHODOLOGY

 

 

 

The data to be to be used for the research shall be collected from Primary and Secondary sources. The primary sources are those that are collected from original sources, in this case, the staff and customers of the bank. The data shall be collected using questionnaires to be issued to a selected number of respondents who have a direct relationship with the bank. For convenience sakes, the researcher intends to give questionnaires to 60 respondents (30 customers irrespective of income level, and 30 employees cutting across all levels of management).

 

 

The secondary source of data comprises of ready-made information on the subject under study. These include journals, seminar materials, textbooks and the Internet.

 

 

1. SCOPE AND LIMITATION OF THE STUDY

 

 

 

Though relatively new, TQM as subject matter is very wide. For the purpose of this research, the study is restricted to FIRST BANK PLC Plc. The researcher would have liked a

 

 

 

 

 

 

more  elaborate  research  if  not  for  the  following

 

constraints:

 

1. time constraints with regards to when the work will be due for submission;
2. the researcher’s work schedule;

 

1. TQM is a relatively new field of management and literature on the subject is fairly limited. The researcher hopes this can serve as one of the few;

 

1. Finance. The researcher would have wanted to collect as much data as possible but had to restrict himself due to the expenses incurred in printing a copy of the project for vetting before printing an approved copy.

 

1. DEFINITION OF TERMS

 

1. Cause and Effect Diagram. Also known as Fishbone or Ishikawa diagram. This is a graph showing relationship between cause and effect. It is used to identify, explore and graphically display in detail all of the possible causes related to a problem or condition so as to discover its root cause(s).

 

1. Control Chart: A graph of the process character that is used to determine how much process variability is due to random variation and how much is due to unique events.

 

 

 

 

 

18

 

1. Customer: Whoever acquires inputs to be able to complete a job to an agreed minimum level or standard. The employee is the internal customer of the bank while those they serve are the external customers.

 

1. Customer focus: Caring about the external customer, knowing who the key customers are and how they feel about products and services.

 

1. Flow chart: An information model that allows one identify the actual flow or sequence of events in a process that any product or service follows.