1

TITLE PAGE

TOTAL QUALITY MANAGEMENT IN THE BANKING INDUSTRY

A CASE STUDY OF ZENITH BANK NIGERIA PLC

BY

IFEANYI IYIDA C

REG. NO. PG/MBA/11/60313

A RESEACH WORK SUBMITTED IN PARTIAL FULFULLMENT OF THE

REQUIREMENT FOR THE AWARD OF MASTERS IN BUSINESS

ADMINISTRATION (MBA) IN MANAGEMENT

PRESENTED TO THE

DEPARTMENT OF MANAGEMENT

FACULTY OF BUSINESS ADMINISTRATION

UNIVERSITY OF NIGERIA, ENUGU CAMPUS

2012

2

i

CERTIFICATION

I, IFEANYI IYIDA C., a Postgraduate student in the Department of

Management with Registration Number PG/MBA/11/60313 has satisfactory

completed the requirements of the course and research work for the award of

Masters Degree in management.

This work embodied in this report is original and has not been submitted in

part or full for other Diploma or Degree of this or any other University.

………………………………. ……………………………… IFEANYI IYIDA C. Date RESEARCHER

3

ii

APPROVAL PAGE This project is approved for the department of management, University of Nigeria Nsukka for the fulfillment of the requirements for the award of Masters Degree in Management:Total Quality Mnagement,a case study of Zenith Bank Plc ………………………………. ……………………………… DR. V. A. ONODUGO Date SUPERVISOR ………………………………. ……………………………… PROF. EZIGBO Date HEAD OF DEPARTMENT

………………………………. ……………………………… EXTERNAL EXAMINER Date

4

iii

DEDICATION

This work is dedicated to God Almighty for giving me life and good health to

carry out this project.

5

iv

ACKNOWLEDGEMENT

I want to acknowledge my Supervisor, Dr. V. A. Onodugo for his support and

encouragement given to me by way of going through the manuscript and offering

suggestions for improvement thereafter. To him I say I am most grateful.

I also sincerely thank the management and staff of Zenith Bank of Nigeria Plc for

allowing me access to their staff and documents of vital information.

My thanks also goes to my wife Mrs. Loretta Iyida and my entire family for their

love and support. Also to my friends Engr. Afam Ngene, Mike Okeke, Barr.

Obiora Eneh and Prince Sunny Nwodo who entertained my endless questions,

ideas and troubles.

Above all, I give thanks to God Almighty for the opportunity he gave me to

participate in this valuable academic exercise.

6

v

ABSTRACT

The topic of this project is “Total Quality Management in the Banking Industry.

(A case study of Zenith Bank of Nigeria Plc) The major objective of the study is to

ascertain the level of awareness and adoption of TQM practices among staff of

Zenith Bank in Enugu metropolis and also determine the major limitations of the

TQM practice in the bank. Instrument for data collections are questionnaires and

research questions, which formed the course of primary data, while materials

from various published articles, textbooks, journals and newspapers formed the

secondary data. The method of analysis is the use of tables, percentages and chi

square. The major finding of the research is that all staff of Zenith Bank are aware

of the TQM elements and are fully involved in the practice of TQM in their day to

day business. The study recommends that since the practice of TQM improves

customer service and care, there is need for constant training of all staff on TQM

practices on a continuous basis. Employees and subordinates should be given

opportunity to participate in decision making using the element of TQM practice

and culture.

vi

7

TABLE OF CONTENT

Pages

Title Page - - - - - i

Certification - - - - - ii

Dedication - - - - - iii

Acknowledgement - - - - - iv

Abstract - - - - - v

Table of Contents - - - - - vi

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study - - - - 1

1.2 Statement of the Problem - - - - 5

1.3 Objectives of the Study - - - - 6

1.4 Research Questions - - - - 7

1.5 Research Hypotheses - - - - 7

1.6 Scope and Limitations of the Study - - 8

1.7 Significance of the Study - - - - 9

1.8 Definition of Terms - - - - 9

Reference - - - - 11

vii

CHAPTER TWO: LITERATURE REVIEW

8

2.1 Introduction - - - - 13

2.2 Origins of TQM - - - - 13

2.3 Overview - - - - 16

2.4 Total Quality Management - - - - 22

2.5 Elements of TQM - - - 26

2.6 TQM Enablers - - - 28

2.7 Relevance of TQM - - - 29

2.8 Role of Management in - - - 30

2.9 Barriers to TQM - - - 30

2.1 Brief Historical Background of Zenith Bank Plc - 31

Reference - - - 44

CHAPTER THREE:: RESEARCH METHOLOGY

3.1 Research Design - - - 46

3.2 Location of the Study - - - 46

3.3 Sources of Data - - - 47

3.4 Population - - - 47

3.5 Sample Size Determination - - - 47

3.6 Data Collection Instrument - - - 48

3.7 Techniques for Processing and Analyzing Data 50

Reference

viii

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.1 Presentation and Analysis of Data - - 53

9

4.2 Test of Hypothesis - - - 62

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary of Findings - - - 68

5.2 Conclusion - - - 69

5.3 Recommendation - - - 69

Bibliography - - - 71

Appendix - - - 73

Questionnaire - - - 74

10

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study:

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,

11

new attractive interest rate, turnaround time, all in the bid to attract more

customers. Macdonald (1998:13).

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.

12

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 centre 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.

13

The term TQC (total quality control) was conceived by A. V. Freignbaum

1983, 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.

It is in this regard that this research work is aimed at assessing the practice

of Total quality management by Zenith Bank Plc.

14

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,(Luckett,1994:36). 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 & Mogab1 999:35). 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 Zenith bank plc. There is no such

comprehensive model available in the body of knowledge covering all

departments of commercial banking branch.

1.3 OBJECTIVES OF THE STUDY

The objectives of the study are;

1 To ascertain the level the level of awareness of TQM among staff of

zenith bank, Plc

2 To assess the level of adoption of TQM practice by staff of zenith

bank plc

3 To determine the extent to which members of staff are involved in

the practice of TQM in Zenith Bank, Plc

16

4 To identify the major limitations of TQM practice in Zenith Bank,

plc

1.4 RESEARCH QUESTIONS;

The following research questions will be addressed in this Study;

1 what is the level of awareness of TQM among staff of zenith Bank

Plc

2 what is the level of adoption of TQM practice by staff of Zenith bank

plc

3 To what extent are members of staff of zenith Bank plc involved in

the practice of TQM?

4 To what extent does the practice of TQM affect customers service

and care in Zenith Bank Plc?

5 What are the major limitations of TQM practice in Zenith Bank plc?

1.5 HYPOTHESES.

The following hypotheses are formulated for this study;

1 H0; the level of awareness of TQM among Zenith Bank‟s staff is not

high

H1; the level of awareness of TQM among zenith Bank‟s staff is high.

2 H0; the level of adoption of TQM practice by staff of zenith Bank is

not high

H1; the level of adoption of TQM practice by staff of zenith Bank is

17

High

3 H0; members of staff of zenith bank are not involved in TQM

practice to a large extent

H1; members of staff of Zenith Banks are involved in TQM practice

to a large extent

4 H0; the practice TQM does not significantly affect customer service

and care in zenith Bank, Plc.

H1; the practice of TQM significantly affect customer service and

1.6 Scope and Limitations of the Study:

The study will assess the practice of TQM in Zenith Bank Plc , a service

organization. It therefore stands to reason that the principles and practices

this study espouses will be applicable to the service sector only.

Due to economic and time constraints in terms of huge amounts of money

involved in carrying out the study extensively to cover all branches of

Zenith Bank Plc, plus the urgency needed in the early submission of the

research result, the study has been limited to cover only the Zenith Bank

Presidential Road Branch.

The project was also limited by the constraint of securing primary data

from the bank coupled with the lukewarm response from respondents who

had to be persuaded to complete and return questionnaires on time.

1.7 Significance of the Study

18

The research study is useful to Zenith Bank Plc as a means of identifying

and criticizing effectively the knowledge and experiences gained in the

implementation and application of TQM as a newly developed

management technique aimed at achieving higher productivity.

This research will help top management determine the areas in the

organization that needs to be improved upon and adequate measures to be

taken as a means of achieving higher productivity through Total Quality

Management.

1.8 Definition of Terms:

TQM – Total Quality Management

The following are some definitions of TQM:

(i) TQM is a way of managing to improve the effectiveness, flexibility

and competitiveness of a business.

(ii) TQM is an integrated organizational approach in delighting both

external customers by meeting their expectations on a continuous

basis through every one involved with the organizational working

on continuous improvement in all products, services and

procedures along with proper problem solving methodology.

(iii) TQM is an approach for effective management of an enterprise

through forms on its people and processes by organization with

customer driven leadership.

19

(iv) TQM is a fundamental shift, the systematic analysis and blue

printing of operation, process of habitual improvement where

control is embedded within and is driven by culture of the

organization. Managing quality is the job of each and every member

of an organization.

(v) TQM is a cost effective system for integrating continuous quality

improvement efforts of people at all levels in an organization, to

deliver products and services which ensure customer satisfaction.

(vi) TLC another name for TQM.

T - Total customer focus and satisfaction

L - Leadership, setting values, vision, mission, goals, objective

C - Continuous improvement of key processes.

ISO standards: ISO is the international organization for standardization. It

is made up of national standard institutes from countries large and small,

industrialized and developing, in all regions of the world. ISO develops

voluntary technical standards which add value to all types of business

operations. They contribute to making the development, manufacturing

and supply of products and services, more efficient, safer and cleaner.

ISO standards serve to safe guard consumers and users in general, of

products and services.

ISO 9000: ISO 9000 and 14000 are known as generic management system

standards. Generic means that the same standards can be applied to any

20

organization, large or small, what ever its products – independent or

whether it is a product or a service – in any sector of activity.

ISO 9000 is primarily concerned with quality management. The definition

of quality is ISO 9000 refers to all those features of a product or service

which are required by the customer. ISO 9000 is a basic building block of

TQM setting the frame work for a culture that nourishes TQM. It is a

method of maintenance of standards facilitating TQM.

Quality Assurance

Assurance means insurance. Quality assurance means quality insurance.

The main purpose of quality assurance is to assure that the product is fit

for use. In the quality assurance concept, qualified independent auditors

examine the quality of the product and issue a certificate that the product

is fit for use.

Quality is conformance to requirements or specifications or standards. It

can also be defined as fitness for the purpose of use.

REFERENCES

Arora K. C. (2009) Total Quality Management 3rd ed, (Delhi: S.K. Katara & Sons). Cole, W. E., & Moyab. J. W. (1999). TQM in action New Delhi: Beacon Books. Luckett, d.G. (1994) Money and Banking New York: McGraw Hill Inc. Macdonald, John (1998): Quality and the Financial Service Sector: The Journal of

Total Quality: Vol 1, No 2 Pg. 13. Pearce, J.A. & Robinsons, R.B. (2005). Strategic Management, New York: Mc Graw

Hill.

21

Rana, I.A. (2005). TQM Paradigm in banking. Retreived April 4, 2010 from

www.dawn.com

22

CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction:

Total Quality Management (TQM) refers to management methods used to

enhance quality and productivity in organizations, particularly businesses.

TQM is a comprehensive system approach that works horizontally across

an organization, involving all departments and employees and extending

backward and forward to include both suppliers and clients/customers.

TQM is only one of many acronyms used to label management systems

that focus on quality. Other acronyms that have been used to describe

similar quality management philosophies and programs include CQI

(Continuous Quality Improvement), SQC (Statistical Quality Control), QFD

(Quality Function Deployment), QIDW (Quality in Daily Work), TQC

(Total Quality Control), etc. Like many of these other systems, TQM

provides a framework for implementing effective quality and productivity

initiatives that can increase the profitability and competitiveness of

organizations.

2.2 Origins of TQM

Although TQM techniques were adopted prior to World War II by a

number of organizations, the creation of the Total Quality Management

philosophy is generally attributed to Dr. W. Edwards Deming. In the late

1920s, while working as a summer employee at Western Electric Company

23

in Chicago, he found worker motivation systems to be degrading and

economically unproductive; incentives were tied directly to quantity of

output, and inefficient post-production inspection systems were used to

find flawed goods.

Deming teamed up in the 1930s with Walter A. Shewhart, a Bell Telephone

Company statistician whose work convinced Deming that statistical

control techniques could be used to supplant traditional management

methods. Using Shewhart's theories, Deming devised a statistically

controlled management process that provided managers with a means of

determining when to intervene in an industrial process and when to leave

it alone. Deming got a chance to put Shewhart's statistical-quality-control

techniques, as well as his own management philosophies, to the test during

World War II. Government managers found that his techniques could be

easily taught to engineers and workers, and then quickly implemented in

over-burdened war production plants.

One of Deming's clients, the U.S. State Department, sent him to Japan in

1947 as part of a national effort to revitalize the war-devastated Japanese

economy. It was in Japan that Deming found an enthusiastic reception for

his management ideas. Deming introduced his statistical process control,

or statistical quality control, programs into Japan's ailing manufacturing

sector. Those techniques are credited with instilling a dedication to quality

and productivity in the Japanese industrial and service sectors that allowed

24

the country to become a dominant force in the global economy by the

1980s.

While Japan's industrial sector embarked on a quality initiative during the

middle 1900s, most American companies continued to produce mass

quantities of goods using traditional management techniques. America

prospered as war-ravaged European countries looked to the United States

for manufactured goods. In addition, a domestic population boom resulted

in surging U.S. markets. But by the 1970s some American industries had

come to be regarded as inferior to their Asian and European competitors.

As a result of increasing economic globalization during the 1980s, made

possible in part by advanced information technologies, the US

manufacturing sector fell prey to more competitive producers, particularly

in Japan.

In response to massive market share gains achieved by Japanese

companies during the late 1970s and 1980s, U.S. producers scrambled to

adopt quality and productivity techniques that might restore their

competitiveness. Indeed, Deming's philosophies and systems were finally

recognized in the United States, and Deming himself became a highly-

sought-after lecturer and author. The "Deming Management Method"

became the model for many American corporations eager to improve. And

Total Quality Management, the phrase applied to quality initiatives

proffered by Deming and other management gurus, became a staple of

25

American enterprise by the late 1980s. By the early 1990s, the U.S.

manufacturing sector had achieved marked gains in quality and

productivity.

2.3 Overview:

Newman & Cowling (2005:43) conducted an empirical study as major

quality improvement initiatives undertaken by two British banks. Tool for

data collection was developed on the basis of SERVQUAL model. The

model measured 10 aspects of service quality: reliability, responsiveness,

competence, access, courtesy, communication, credibility, security,

understanding or knowing the customer and tangibles. It measured the

gap between customer expectations and experience. The study indicated a

considerable improvement in service quality and that was evidence in

support of the SERVQUAL model.

A TQM study by Burton & Philip (2005:15) discovered if the organization

had a track record of effective responsiveness to the environment, and if it

had been able to successfully change the way it operated, the TQM will be

easier to implement. Implementing TQM essentially involved

organizational transformation: beginning to operate in new ways,

developing a new culture. The study also concluded that implementation

of TQM would inevitably face resistance, to be addressed directly by

change agents coming up according to the expectations of external

customers. The study concluded that leadership styles and organizational

26

culture must be congruent with TQM. TQM is a powerful technique for

unleashing employee creativity and potential, reducing bureaucracy and

costs, and improving service to clients and the community.

Saffran & Vogt (2006:45) studied the implementation of quality

management system based on ISO 9000 at Deutsche Bank AG. To establish

the quality system, a structural plan was divided into four steps:

Determination of tasks and responsibilities; studies; implementation and

certification. A major component of the second step was the quality

manual, the creation of which followed three guidelines: simple language,

understandable illustrations, and focusing on the essentials. Guidelines for

this documentation included: outcome-based planning, uniform methods

of describing procedures, readability and employee focus. Documentation

was the basis for evaluation during the registration audit, which found no

nonconformities. Therefore, Deutsche Bank earned a three-year registration

without limitation. Implementation of the quality management system cost

Deutsche Bank about 3,975,000 DM, not including registration costs.

Benefits of implementation included improved clarity and motivation for

employees, increased customer satisfaction, and higher productivity.

Success of the Deutsche Bank quality system initiative was based on factors

such as employee involvement, open communication, customer

orientation, and flexibility in adapting the system to new requirements.

27

Edwards & Smith (2001:12), conducted a research on TQM in Banking

focusing on quality performance standard setting, measuring and

monitoring. The study concluded that customer care programs, action

teams and improved communications were the first step; the next step in

maintaining the competitive edge was the establishment of quality

performance standards, and devising systems for measuring and

monitoring their effectiveness. The best way to institute quality into an

organization, particularly a bank, was to train employees to do their job

better through a top down training structure.

Brah et al. (2000:23), conducted a research on TQM and business

performance in service sector in Singapore. Clear evidence was found that

TQM implementation improved business performance in the service sector

of Singapore. The study found that while accrued benefits could be

attributed to some of the tools of TQM, such as, customer focus and quality

improvement rewards, the key to the success of TQM lied in its intangible

and behavioral features such as top management support, employee

empowerment and employee involvement.

A TQM study by Tsang & Antony (2001:13) analyzed TQM practices in

UK. The results focused on 11 critical factors of quality management.

Continuous improvement, teamwork and involvement, customer focus,

top management commitment and recognition, training and development,

quality systems and policies, supervisory leadership, communication

28

within the company, supplier partnership or supplier management,

measurement and feedback and cultural change. It was found that

customer focus is the most successful driven factor for TQM programs in

UK service organizations.

Joseph (2001:36) examined the implications of Total Quality Management

approaches for various manufacturers in the State of Maine, USA.

Information was gathered through a written questionnaire. The research

utilized various quality tools such as measurement of external customer

satisfaction, employee involvement and team building. The data strongly

indicated that the larger firms were more likely to have a quality initiative

in place. The study suggested further areas of inquiry, indicating a need for

additional information and including training for small firms regarding

application of a quality program.

Zia ul Haq (2005:23) conducted a study on TQM Implications in Financial

Sector, focusing on change management issues that addressed quality

management practices in the service sector, difficulty in taking a holistic

approach to Total Quality Management (TQM) implementation in the

service environment, and the challenges of delivering organizational

reform through TQM. The study employed a quasi -qualitative case study

methodology. Twenty service companies from health care, insurance,

consulting, banking and financial services were studied over a period of

two years to assess their change management practices for implementing

29

TQM. The study found that unrealistic expectations of employee

commitment, absence of process focus, lack of information flow, holes in

education and training and failure to create a continuous improvement

culture contributed significantly towards failure. The study concluded that

when real and actual approaches to change management follow academic

models and techniques of change management, the ability to develop and

implement organization-wide change progresses more smoothly.

Gupta (2005:45) conducted a study on Quality Management in service

firms: sustaining structures of total quality service. The research proposed

a conceptual model may be developed that may be used in understanding

the relationships between sustaining structures that support the total

quality service (TQS) philosophy and customer satisfaction. Integrating the

SERVQUAL instrument and other work in the service quality literature,

especially the Deming management model, the investigation developed a

model for understanding the interactions between customer satisfaction

and sustaining structures. This model developed three constructs:

leadership, organizational culture and employee commitment, which are

very important in achieving total quality service objectives. The proposed

model linked these three constructs with business processes and total

quality service. This study provided an important conceptual framework

for evaluating the relationships between customer satisfaction and

sustaining structures.

30

Samat & Saad (2006:12) conducted a study on TQM practices, service

quality, and market orientation. The main purpose of this study was to

explore the relationship between Total Quality Management (TQM)

practices and service quality as well as the relationship between TQM

practices and market orientation. Structured questionnaires were

distributed to managers of 175 service organizations in the northern region

of Malaysia. The results showed that employee empowerment, information

and communication, customer focus, and continuous improvement had a

significant effect on service quality whereas only employee empowerment

and customer focus had a significant effect on market orientation.

The review helped the researcher in developing the understanding that

• After the successful implementation of TQM in manufacturing, it is

now the turn of service industry.

• TQM implementation is a cultural change aiming at employee

creativity, reducing costs and improving services to clients and the

community.

• Success of TQM program in financial sector is associated with

strong leadership emphasizing strategic and tactical planning.

• The top-down training programs need to be started in order to

attain desired quality level in banking industry.

• Service quality standards in banking sector need to be set logically

first then their measurement and controlling requires attention.

31

• TQM implementation with commitment of top management and

employee empowerment improved customer services successfully.

• TQM application is possible in larger firms as they have established

processes and procedures, further the academic TQM models along

with the techniques of change management facilitate organization

wide change progress. In this scenario, the customer becomes the

focus and the most successful driven factor for TQM program in

banking sector. There is a need to develop a TQM conceptual

framework for application to real life banking business. What could

be a TQM Model equally applicable in all commercial banks for

their branch banking operations?

2.4 Total Quality Management Model Bank:

Literature review indicates that whatever model is available in order to

measure quality implementation is either about management and

employees or quality issues related to customer services. And they are

general in nature. The proposed model combined simultaneously:

a. TQM principles Nagware et al (2006:42).

b. Branch banking departments: Account Opening, Funds Transfer,

Cash, Lockers, Foreign Trade, Advances, Accounts and Admin, and

Customer Services.

c. Attributes of service quality presented by Zeithaml & Bitner

(1996:18).

32

2.4.1 Department-wise Application of the TQM Model to Commercial Branch

Banking Operations

The Leadership in Commercial Branch Banking

Branch Manager is the leader, responsible for the smooth running of day to

operations and also for the business growth at branch level. He should

present himself as a dedicated and committed role model to be followed by

other staff members. He should be able to

• motivate staff for quality services;

• encourage innovation

• promote group decision making and

• supervise the satisfaction level of both internal and external customers.

Account Opening Department

The Officer In charge of Account Opening Department is responsible of

opening new accounts and activating the dormant ones. He should be able

to

• serve the customers promptly;

• make the account opening process the pleasant experience

• exercise relationship marketing

• leave no stone unturned to satisfy customers

• Efficient record keeping and

• Error free processing.

33

Accounts Department

The Officer In charge of Accounts Department is responsible for book

keeping (profit/loss accounts, accruals, depreciations etc.) of the branch

transactions and also for budgetary aspects. He should be able to

• base his work on facts which means having more realistic approach

towards branch activity and business growth;

• develop procedures resulting full monitoring and control over

branch activity; and

• manage records efficiently

Remittances (Inwards and Outward), Clearing and Collections (Inward

and Outward).

The Officer In charge of Remittances Department is responsible for

processing customer‟s requests for funds transfer. He should be able to

• maintain efficient documentation

• Speedy and error free processing

• serve customers with smile

• Reply promptly to corresponding branches and Head Office and

• adhere to laid down procedures of Central Bank

Cash Department

The Officer In charge of Cash Department is responsible for cash receipts

and payments. He should be able to

34

• serve customers with smiling face and due courtesy

• process cash receipts and withdrawals accurately and efficiently

• make additional arrangements on cash tills in case of long queue

and

• dispose off excess cash on hand as per the laid down policy of the

bank converting the non performing asset into a profit generating

one.

Term Deposits – Issuance and Encashment

The Officer In charge of Term Deposits is responsible for the issuance and

encashment of Term Deposits. He should be able to

• process the applications timely

• Exercise due vigilance while disbursing profit on deposits

• Work on the processes and procedures to lessen the time required

for the issuance and encashment of term certificates and

• zero defect production.

International Trade and Credit Operations

The Officer In charge is responsible for Import, Export and Credit

Operations. He should be able to

• follow the relevant industrial bench marking;

• Work with required professional autonomy and spontaneity;

• improve continuously procedures for quicker and accurate

processing of transactions;

35

• Timely deliver debit – credit advice to customers; and

• update the departmental processes and record keeping according to

latest international industrial practices.

Diagnostic Nature of the Proposed Model

The proposed model is diagnostic in nature and has the capacity to

diagnose problems in the following areas:

• While taking the model as operationalization of TQM in banking,

the level of implementation may be checked with an appropriate

scale.

• The model may be taken as an independent variable. Strict

adherence to TQM principles may lead towards higher customer

satisfaction (dependent variable) and financial performance

(dependent variable).

2.5 Elements of TQM:

Following are the elements of TQM

i. Top management has to demonstrate its commitment to TQM and

provide strategic direction to the movement – strategic outlook.

ii. Customer involvement/satisfaction, customer driver‟s quality

iii. Shares vision (suppliers/Vendors, Employees, Employer)

partnership.

iv. Teamwork consensus.

v. Process orientation – Process ownership.

vi. Continuous quality improvement attitude

vii. Products and services to be delivered at lowest social cost.

36

viii. Cultural change at all levels

ix. Value based decision making

x. System thinking has to be developed.

xi. Innovation is must for survival

xii. Employees Empowerment.

Criteria TQM Approach

i. Orientation Improvement of means

ii. Improvement Workforce skill, motivation, innovation

iii. Emphasis Quality, productivity, process performance

iv. Strength Knowledge, adaptability, flexibility, change

v. Motivation To build competence

vi. Driving force Truth, beauty and God

vii. Mindset Process oriented

viii. Strategy Proactive, dynamic, continuous change

ix. Organization Rational networking

x. Long term effect

System optimization

Management by facts, suggestions for improvement

challenge workforce

sustained achievement

TQM

Business process Re-engineering

Technology Process improvement

37

2.6 TQM Enablers:

TQM enablers are:

i. Turn employees from skill holders to disseminators

ii. Emphasis process

iii. Get people to perform machine centered activities with full quality

focus.

iv. Measure key parameters of all activities.

v. Use technology efficiently

vi. Build in continuous learning and improvement process.

vii. Get the workforce to manage himself.

viii. Use cross-functional people and cross-functional teams.

ix. Use customers and competitors to drive all decisions.

x. Use sincerity and trust as a basis for all dealings. Saying = doing.

xi. Deploy the whole work-force

xii. Use scientific methods

xiii. Benchmarking data

xiv. Use facilitation mediate structure

xv. Compensate for weakness inherent in culture

xvi. Maintain at all times, focus on objective to satisfy the customers

better than competitors do.

38

2.7 Relevance of TQM:

TQM is needed

i. For the development of the best organization

ii. To build a happy bright place

iii. To display human capabilities fully by drawing infinite possibilities.

iv. To reduce cost continuously

v. To improve quality continuously

vi. To develop problem solving skill

vii. To develop organizational transparency

- Customer managed corporation, customer aided design

- Middle up down management, Kansi engineering.

viii. For cognitive competitiveness, cognitive quality of work, social

democratic quality, met-cognitive organization, democratic,

scientific management etc.

ix. For fuel saving

x. For cleanliness, lesser space utilization, better housekeeping;

xi. For orderliness, improvement in system

xii. For standardization of work routine and quality process

xiii. To reduce inventories

xiv. To decrease the receivable debtors

xv. For the respect of humanity.

39

2.8 Role of Management in TQM:

First of all management should be educated, trained in TQM. If

management agree to implement TQM then it is possible to implement

TQM.

Requirement Criterion of TQM is concerned with increasing management‟s

physical and financial control over procedures, documentation, systems of

people.

Management continues to adopt inconsistent approaches such as

attempting to control costs and employees while espousing the importance

of the customers and the need for a trust based culture.

2.9 Barriers to TQM

Following are barriers to TQM:

a. Failure to appreciate TQM as a cultural revolution.

b. Failure of top management to have a long term vision. Excessive

emphasis on the short run.

c. lack of exemplified top management commitment.

d. Fear of senior Management losing control.

d. Lack of Z theory application. In Z theory, there is an in depth trust

and understanding among the employees of an organization. They

have a common heritage and cultural background. Everyone in the

organization trusts every other person. Trust has in depth

40

understanding of their fellow employees (subtlety), has a common

heritage and cultural background (intimacy). The use of ideal goals,

the focus in people, work directly on manufacturing the product

and the need for continuous improvement is needed.

f. Lack of employees commitment.

g. Attempting to produce at capacity

h. Outdated accounting system.

2.10 Brief Historical Background of Zenith Bank Plc.

2.10.1 Corporate Profile:

Zenith Bank Plc is one of the biggest and most profitable banks in Nigeria

with total assets of N1.66 trillion as at the end of December 2009.

The bank was established in May 1990 and started operations in July same

year as a commercial bank. It became a public limited company on June 17,

2004 and was listed on the Nigerian Stock Exchange on October 21, 2004.

The bank presently has a shareholder base of about one million, an

indication of the strength of the Zenith brand.

The operating results of the bank since it went public in 2004 indicate an

impressive performance on all parameters. Total assets grew by 759 per

cent from N193.3 billion as at the end of June 2004 to N1.66 trillion in

December 2009. Within the same period, shareholders funds rose from

41

N15.6 billion to N337.8 billion, indicting an increase of 2065 per cent while

total deposit jumped by 830 per cent from N131 billion to N1.2 trillion.

Recent financial performance has been equally impressive with results for

the fifteen months ending December 2009 showing gross earnings of N277

billion and profit before tax of N35 billion. Profit after tax for the period

was N20.6 billion.

Operating from its head office located at 87, Ajose Adeogun Street, Victoria

Island, Lagos, Nigeria, with over three hundred and fifty (350) branches

and business offices nationwide, Zenith Bank has presence in all the state

capitals, the Federal Capital Territory (FCT) as well as major cities and

towns in Nigeria. The bank also maintains a strong presence along the

West Africa Coast with subsidiaries in Accra, Ghana (Zenith Bank, Ghana),

The Gambia and Freetown, Sierra Leone (Zenith Bank Sierra Leone) as well

as in Europe through Zenith Bank UK Limited. This is addition to a

representative office in Johannesburg, South Africa.

At Zenith Bank, speed, efficiency and flexibility are abiding watchwords.

The bank‟s customer-focused approach to service delivery consistently

reinforces its value creation processes towards assisting customers in

achieving their goals and aspiration. The bank has over the years

strategically invested in and deployed cutting edge technology and

infrastructure of improve service delivery. At Zenith Bank, products and

42

services are designed to suit the demands of corporate and individual

customers. The expertise developed over the years enables Zenith Bank to

provide efficient financial services including but not limited to, Corporate

and Commercial Banking Services, E-business Solutions including local

and international cards, Treasury and Cash Management Services, Foreign

Exchange and Trade Finance Services, Funds/Assets Management, Private

Banking, Investment Banking and Financial Advisory Services.

The bank‟s array of specialized financial services is delivered through its

subsidiaries, including Zenith Capital (the investment banking arm);

Zenith Securities Limited (a securities trading and asset management

company); Zenith Registrars Limited (share registration services); Zenith

General Insurance Company Limited (an insurance and risk underwriting

company) and Zenith Pensions Limited (a pension‟s custodian

management company).

Zenith Bank has pioneered several e-products and services to satisfy the

yearnings of its teeming customers. Such products include Zmobile, a

service which allows customers transact their banking businesses using

their mobile phones. Alertz, a message alert system which enables

customers monitor all transactions on their accounts via short text

messages delivered to their mobile phones. For Zenith Bank excellent

service delivery and development of superior asset quality, strong capital

base, professionalism and corporate governance have provided the

43

grounds for consistently high returns to stakeholders. The bank maintains

sound corporate governance culture in line with global best practices.

The impressive growth pattern and performance over the years have

earned Zenith Bank excellent ratings from local and international agencies.

Standard and Poor‟s currently rates the bank ngA/-/ngA1 on Nigeria

National Scale and B+/Negative/B on counterparty Credit Ratio. Fitch

Ratings currently rates Zenith Bank AA-(nga) on National Scale and

B+/Long-Term IDR.

In January 2009, Zenith Bank was named „Best Bank in Private Banking in

Nigeria‟ (2009) by Euro money. The bank was also named „Best Bank in

Nigeria‟ for 2008 by the same publication. It also emerged the „Best Global

Banking Champion‟ at the 2009 This Day Award for Excellence. Also in

January 2009, the bank was adjudged the „Most Customer-focused Bank in

Nigeria (corporate) from a survey conducted by foremost consulting firm,

KPMG. The survey, which focused on corporate customers of banks,

including companies in a variety of sectors, found that they were most

satisfied with the services rendered by Zenith Bank. In June 2009 Zenith

Bank was recognized as the bank with the „Best Asset Quality in Nigeria‟

by Financial Standard newspaper. Earlier in October 2008, Zenith Bank

was named Africa‟s Best Global Bank by the African Banker at an

impressive ceremony held at the IMF/World Bank meeting in Washington

44

DC. In 2007, Zenith was recognized by the Council of the Nigerian Stock

Exchange (NSE), as the „Quoted Company of the Year‟.

2.10.2 Corporate Strategy:

Over the years the Zenith branch has become synonymous with the use of

information and Communication Technology (ICT) in banking and

generally increasing the performance standards in the Nigerian banking

industry. The bank‟s main service delivery channels remain its business

offices (branches and cash offices), which currently stand at over 300 while

also offering electronic banking services and channels, such as internet

banking, bills payment platforms, and telephone banking services

amongst others. These business offices are located in prime business and

commercial cities in each state of the federation and they are easily

accessible to the 22 Central Bank of Nigeria‟s clearing zones all over

Nigeria.

Within the first decade of commencing operations, the bank made its mark

in profitability and al other performance indices in Nigeria and has

maintained this position to date, just behind other banks that commenced

businesses several decades ago.

Vision and Mission

From inception, Zenith Bank clearly set out to distinguish itself in the

banking industry through its service quality, drive for a unique customer

45

experience and the caliber of its customer base. Today, it is easily

associated with the following attributes in the Nigerian banking industry:

Innovation

Good financial performance

Stable and dedicated management team

Highly skilled personnel

Leadership in the use of information and communication

technology

Strategic distribution channels

Good asset quality.

The Vision

“… to build the Zenith brand into a reputable international financial

institution recognized for innovation, superior customer service and

performance while creating premium value for all stakeholders”.

The Mission

“… establish a presence in all major economic and financial centre‟s in

Nigeria, Africa and indeed all over the world; creating premium value for

all stakeholders”.

The key strategies used to drive the vision above are as follows:

Delivering superior service experience to all our customers at all

times.

46

Develop deeper and broader relationship with all clients and strive

to understand their individual and industry peculiarities with a

view to developing specific solutions for each segment of our

customer base.

Optimally expand our operations by adding new distribution

channels and entering into new markets where opportunities exist.

Maintain our position as a leading service provider in Nigeria,

while expanding our operations internationally in West Africa and

the financial capitals of the world.

Strive to be a leading service provider in Nigeria by continuing to

build on longstanding relationships, capabilities and the strength of

our brand and reputation.

Expand our business through the establishment of key subsidiaries

for the provision of non-bank financial services to accentuate the

service offerings and experience of our customers.

Continually enhance our processing and systems platforms to

deliver new capabilities and improve operational efficiencies and

achieve economies of scale.

2.10.3 Excelling Through Excellent Service Delivery

Zenith Bank, from inception places a high premium on the pivotal role of

exceptional service delivery in its drive to consistently exceed customer

expectations. Thus, the bank has not only put in place appropriate

47

strategy to meet and surpass customer expectations, but also ensures that

such a strategy is being constantly honed and fine-tuned in line with the

changing taste and sophistication of the customer. The underlying

philosophy is for the bank to remain at all times, a customer-focused or

customer-centric organization, with a clear understanding of its market

and environment.

The vision had at various times in the life of the bank, led to assigning

critical and pervasive roles to Total Quality Management (TQM),

Customer Service Ambassadors, Operation Service Excellence Teams

among others. Thus, at all times, all structures and processes are fashioned

to drive consistent improvement in the quality of service delivery. Any

lapse at any stage of the service delivery chain is viewed seriously as

„service obstruction‟ and attracts appropriate sanction.

Zenith Bank, as a child of the „Information Age‟, laid the foundation of its

structures and processes on cutting-edge Information and

Communications Technology (ICT) infrastructure. This ensures that every

operation/transaction is carried out via a medium that makes for speed,

utmost flexibility, accuracy and convenience for the customer. Thus, in

Zenith Bank, all activities are anchored on the E-platform, ensuring service

delivery through the electronic media to all customers irrespective of

place, time and distance. This has aided the achievement and sustenance

48

of deeper and broader relationship with all clients, the peculiarities of their

individual or industry needs not-withstanding.

Today, Zenith Bank has taken customer satisfaction to a height where

encomiums, accolades and laurels come in droves as testimony to

exceptional quality of the bank‟s services. Thus, a recent industry-wide

survey conducted by KPMG Professional Services on customer service

quality among Nigeria banks, showed Zenith Bank as the “Most

Customer-focused Bank” in the country. This goes to affirm a tradition of

superior services quality that has become a heritage of Zenith Bank.

As a pathfinder in ICT-enabled banking in Nigeria, Zenith Bank has

leveraged its in-depth understanding of the local business environment

and global financial markets to develop unique e-solutions to meet specific

customer needs. The unique deployment of ICT to customer service

delivery has made the Zenith franchise synonymous with e-banking.

2.10.4 Zenith bank’s E-products

The bank‟s e-products range covers virtually all services and fall into three

broad categories:

- Payment/collection solutions

- Card solutions and

- Reporting tools

49

2.10.4.1 Payment/Collection Solutions:

Electronic Point of Sale, an alternative electronic funds collection

channel for customer – merchants who currently collect cash for goods

and services.

Sal-Pay Solutions for our corporate customers who do not require

multiple levels of authorizers to effect their employee salary payments.

Zenith ATM is an electronic payment platform for basic banking

transactions.

Zenith Flow line Application is an automated cheque writing solution

that eliminates physical cheque writing thus enhancing corporate

payment system.

Zenith Automated Direct Payment System (ADPS) is an electronic

payment solution for corporate customers that eliminate manual

writing of many cheques and the associated delays.

Zenith Corporate Pay is a product for corporate customers to handle all

classes of payments including salary, multiple utilities payments and

payments to third parties generally.

Zenith Mobile Commerce: with the use of the mobile phone, customers

can perform various financial transactions on-line such as:

- Airtime purchase

- Banking

- Bill payment

- GSM postpaid

50

- Pay DSTV etc.

This service is made available to customers currently on the ETRANZACT

platform.

2.10.4.2 Card Solutions:

E-transact Card is an online card for use not only on Point of Sale (POS)

and internet but also mobile phones.

Zenith Swift pay is a payment solution on which the key distributor

schemes are anchored. The product is targeted at manufacturers and

their key distributors.

Zenith Automated School Solutions is an electronic solution through

which students‟ administration and registration procedures are

captured seamlessly and efficiently. The product is deployed in

partnership with our technical partners, Socketworks Limited.

Z-SAVE CARD is an online debit/Photo ID Card for Zenith savings

account holders. It is an electronic means of withdrawing money,

making purchases and checking balances in an account. It can be used

to make payments or withdrawals from any of the channels on the

Interswitch network – ATM, POS and Web channels.

Zenith Credit Card is a member of the Master Card brand for Zenith

account holders, offering an approved line of credit with up to 45 days,

interest free. There are three main categories: CLASSICRED, GOLD

and PLATINUM.

51

Zenith Charge Card, another member of the Zenith MasterCard family

created for non-Zenith account holders and having the same benefits of

a credit card except that it requires collateral.

Web Surfer Card is a MasterCard brand exclusively for internet

payments. It is a prepaid reloadable card for use only on the internet,

providing extra security for Zenith card holders.

Zenith Travelex Cash Passport is an electronic replacement of the

traveler‟s cheque the way you know it!

Zenith Easy Card is an online debit card for Zenith bank current

account holders, providing an electronic platform for all types of

payment and ATM withdrawals on the Interswitch network.

V-pay Card is a local VISA debit card with the same characteristics and

features as our EasyCard

EasyPay/Easy Trade is a special merchant service for customers

(merchants) who want to collect electronic funds for their goods and

services via the web.

2.10.4.3 Reporting Tools

Zenith Notification Suite is a wide range of electronic notification solution

which includes the following:

i. Notification of withdrawals and deposit transactions

ii. Notification of deposits only

iii. Other transaction notifications

52

Shipping Documents

BC Notification Bills for Collection

LC Notification Letter of Credit

Form M Notification (Approval & Scanning Stage)

RAR Notification (Risk Assessment Report)

Monthly Statements Notifications

The notifications are delivered via email or mobile SMS technologies.

Zenith Internet Banking affords customers a wide range of transaction

activities which include the following:

Check account balances and access transaction history

Cheque book and Draft request

View and download account statements.

Cheque Confirmation

View real time transactions activity especially for corporate customers

Bulk Payment (one to many)

Download monthly statements

Self to self transactions

Inter (You to anybody in Zenith); Intra (You to You)

Bill payment

View Master Card transactions

Zenith Telelink and Mobile banking products anchor our range of mobile

banking transactions and enquiries using both land and mobile phones.

53

REFERENCES Antony, J. (2006). Six sigma for service processes. Journal Business Process

Management, 12 (2). Bhatia, L., & Goyal, N. (2002). Improving financial services through TQM: A case

study. New York: Best Practices Report. Brah, A. S. et al. (2000). TQM and Business Performance in Service Sector.

International Journal of Operations and Production Management, 20 (11). Burton, G. et al. (2005). TQM and organizational change and development. Albany,

New York: Rockfield College Press. Cole, W. E., & Mogab, J. W. (1999). TQM in action. New Delhi: Beacon Books. Edwards, S., & Smith, S. (2001). TQM in banking. The TQM Magazine (Vol. 2). Gupta, A. et al. (2005). Quality management in service firms: Sustaining structures

of total quality service. Managing Service Quality, 15 (4), 389-402.

Janakiraman, B., & Gopal, R. K. (2006). Total quality management: Text and cases.

New Delhi: Prentice Hall of India Pvt. Ltd. Joseph, J. M. (2001). Productivity and total quality management: Application in

Maine manufacturing. The University of Maine, 3 (1).

K. C. Arora (2009) Total Quality Management 3rd Edition New Delhi S.K. Sataria

and Sons. Luckett, D. G. (1994). Money and Banking. New York : McGraw Hill Inc. Montes, F. J. et al. (2003). The analysis of the relationship between quality and

perceived innovation: The case of financial firm. Journal Industrial Management and Data System, 23 (8).

Newman, K., & Cowling, A. (2005). Service quality in retail banking. International

Journal of Bank Marketing, 14 (6).

Ngware, M. W. et al. (2006). Total quality management in secondary schools in

Kenya. Quality Assurance in Education, 14 , 339-362.

Pearce, J. A., & Robinsons, R. B. (2005). Strategic management. New York: McGraw

Hill.

54

Rana, I. A. (2005). TQM paradigm in banking. Retrieved April 4, 2007, from www.dawn.com.

Management at Deutsche Bank AG; Management Systems, Inc., Wilmette, IL.

Annual Quality Congress, 53(0). Retrieved October 1, 2007, from http://qic.asq.org/perl/search.pl? item=10793.

Saffran, N., & Vogt, U. (1999). Case study; ISO 9000; Implementation; Quality

system; Total Quality Samat, N. et al. (2006). TQM practices, service quality and market orientation.

Journal Management Research News, 29 (11).

Sarang, S. (2005). The implementation of TQM in retail banking sector. University of

Johannesburg, South Africa. Saunders, A. (2000). Financial institutions management – A Modern Perspective. New

York: McGraw Hill Inc. Sinkey, J. F. (1998). Commercial banking financial management. New Jersey: Prentice

Hall Inc. Tsang, H. Y. J., & Antony, J. (2001). TQM in UK Service Organizations. Managing

Service Quality.11 (2). Zenith Bank Plc, Group Annual Report and Financial Statement 2009. Ziethmal, A. V., & Bitner, M. J. (1996). Services Marketing. Singapore: McGraw Hill Inc.

55

CHAPTER THREE

RESEARCH METHODOLOGY

In this chapter, the methodology of this study is stated and explained. This

includes the research design sources of data and method of data

presentation and analysis

3.1 Research Design

Research design is the strategy or approach adopted in conducting a

scientific inquiry. It is the plan type of scientific inquiry to be conducted. In

this study, the descriptive survey research method was adopted. The

survey approach involves studying a sample of elements taken from the

study population for the propose of primary collection

The method was considered appropriate since data would be collected

Through personal contact with those concerned with the study. Such data

best address the research questions

3.2 Location of Study

This study was carried out in zenith Bank of Nigeria, plc presidential Road,

Enugu.

3.3 Sources of Data

Data were sourced from both primary and secondary sources.

56

a) Primary sources:

These are sources of data collected through questionnaires and oral

interview. They are original data which have not been used or

published in any previous studies. The primary sources were, thus,

the respondents to the questionnaires.

b) Secondary sources:

These are sources of data that are second-hand. Such data are not

original because they have been used or emanate form previous

studies. The sources include textbooks, journals and other published

work.

3.4 Population

This consisted of management and staff of Zenith Bank plc,Enugu

metropolis. The present total number of staff is three hundred (300).

3.5 Sample Size Determination

The sample size can be determined statistically or by the rule of thumb. For

the Purpose of this research, the sample size was determined by using the

statistical formula shown below;

N = N 1+N(e)2 Where n = Sample size

N = Total population of the bank staff.

1 = constant Figure

57

e = Level of significance

let e = 0.016

therefore:

n = 324 1+324(0.05)2

= 324 1+324(0.00025)

= 324 1+ 0.081

= 324 1.081 = 299.7

Approximately, a total of three hundred (300) questionnaires were

distributed to different categories of staff and department, out of which 270

were completed and returned which represents 90% of the total

questionnaires product. Out of the 270 questionnaires that were returned 7

was rejected due to wrong completion. Thus, only 263 questionnaires that

were properly filled were used in the analyses.

3.6 Data Collection Instruments

Questionnaires:

The principal instrument of data collection for this research work is the use

of carefully designed questionnaire. The questionnaires probed into the

demographic variable of the respondents like sex age educational

qualification, marital status and present status in the organization. The

58

respondents names were not required in order to eliminate the fear of

being victimized should the respondents views be against the management

or the immediate boss. This aspect constituted section A of the

questionnaires.

Section B of the questionnaires was carefully designed taking cognizance of

the hypothesis of this research work. The “Yes/No” type of question and

“open ended” question were asked. The first type gave the respondent to

express their objectives and sincere opinion about certain issues in order to

enhance the validity and reliability of answers to open-ended questions

and coding them so as to enhance its analysis in the computer.

Furthermore, in order to check the sincerity of respondents, many counter

check question were included. The researcher, therefore, has no doubt on

the validity of answers given thus a reliable data. The questionnaires used

for this study is the appendix.

Personal interview:

Apart from the questionnaires distributed to all categories of staff, the

researcher also designed discussion question for top managers and

members of management staff of the bank such as the Branch Head and

Head of Operations etc in order to have their views on hypothesis related

issues like the effects of Total Quality Management on the operations of the

bank since its employed. The result of the personal interview brought to

59

focus the management attempts to solving various problems associated

with the implementation of Total Quality Management (TQM) system in

the bank.

From the foregoing, what will be presented and analyzed in the next

chapters (i.e chapter 4 and 5) will serve as an ideal objective, valid and

reliable research output capable of standing the test of time.

3.6 Techniques for Processing and Analyzing Data

The data received will be analyzed by the use of computer, principally

because of the error associated with manual method of analyzing data.

Thus a reasonable degree of accuracy is guaranteed.

The method of analysis would be based on descriptive statistic using

percentage to express and analyze the collected data. The percentage of

responses give to each question would be calculated and this would form

bases for analyzing the questionnaire. The percentage will indicate the

degree to which the measurement variable answers the research questions.

The last five years financial summary if the bank starting from year 2008 to

year 2011 shall be presented to reveal the financial performance of the bank

since the adoption TQM.

However, for some information that could not be expressed in percentages

such as some replies received during the interviews, notes and narratives

would be used to analyze such information.

60

The chi-square statistic method will be used in testing the hypotheses

where necessary. The researcher is of the opinion that these three methods

of statistical analysis shall bring to bear the subject matter of the study and

invariably guarantee users of the information and recommendation a

certain degree of confidence.

The chi-square (x2) techniques involves using observed and expected data

to compute the value of X2 as follow;

X2 = ∑ (Oi - Oe)2 Oe

Where Oi = Observed data

Oe = Expected data

The computed X2 would then be compared with its critical value

Determined at 5% significance level and an appropriate degree of freedom

(df)

Decision – Rule

Reject H0 and accept H1 if the computed value of X2 is more than its critical

value, and vice versa.

REFERENCE

Azika N, (1997) “Research Methodology in the Behavioral séances” (Lagos Longman

Nig Plc)

61

Onwe, O. J.(1998): Element of Project and Desertification Writing A Guide to

Effective Desertification Report (Lagos: Impressed Publishers.)

62

CHAPTER FOUR

DATA PRESENATION AND ANALYSIS

In this chapter, the researcher presented and analyzed the data collected through

administration of questionnaires and also tested the hypotheses formulated in

chapter one.

4.1 Presentation and Analysis of Data

Table 4.1 Distribution and return of questionnaires

S/No Options Frequency Percentage

1 Total Distribution 300 100

2 Total Returned 270 90

3 Total Not Returned 30 10

4 Total Discarded 7 2.3

5 Total Analyzed 263 87.6

Source: Field Survey 2012

Table 4.1 shows that 90% of the total questionnaires distributed were returned.

10% were not returned. 2.3% were discarded due to mutilation and illegibility.

Thus, 87.6% of the distributed questionnaires were analyzed.

Table 4.2 Sex Distribution of Respondent

Options Frequency Percentage

Males 180 68.5

Female 83 31.5

Total 263 100

Source: Field Survey 2012

63

From table 4.2, it can be seen that 68.5% are males while 31.5% were females. This

implies that more males than females were randomly taken into the study.

Table 4.3 Age Distribution of Respondents.

Options Frequency Percentage

Under 20 years 0 0

20 – 29 years 29 11.0

30 – 39 years 60 22.8

40 – 49 years 98 37.3

50 – 59 years 76 28.9

60 years and above 0 0

Total 263 100

Source: Field Survey 2012

With respect to the ages of the respondents the table indicates that none was less

than 20 years old. 11% were within 20 – 29 years age bracket 22.8% were within 30

-39 years of age. 37.3% were within 40- 49 years of age. 28.9% were within 50-59

years old while none were up to 60 years or above. This implies that most of the

respondents were within years 40-49 age bracket.

Table 4.4 Marital Distribution of respondents

Options Frequency Percentage

Single 98 37.3

Married 150 57.0

Others 15 5.7

Total 263 100

Source: Field Survey 2012

64

Table 4.4 indicates that 37.3% were single. 57% were married while others

constituted 5.7%; these included divorcees, widows and widowers.

This implies that most of these respondents were married

Table 4:5 Educational Distribution of Respondents

Options Frequency Percentage

F S L C 0 0

W A SC/ Equivalent 0 0

NCE/ OND 29 11.0

HND / First Degree 143 54.4

Masters Degree 76 28.9

Others 15 5.7

Total 263 100

Source: Field Survey 2012

From table 4.5, it can be seen that none held only first school learning certificate or

SSCE. 11% held NCE or OND, 54.4% held HND or First Degree in various

disciplines. 28.9% held Masters Degree in various disciplines, while 5.7 % held

other professional qualifications.

65

Table 4.6 Categories of Respondents

Options Frequency Percentage

Management 53 20.1

Supervisory 60 22.8

Other senior 83 31.6

Junior staff 67 25.5

Total 263 100

Source: Field Survey 2012

Table 4.6 shows that 20.1% were management staff. 22.8% were supervisory staff.

31.6% were other senior staff while 25.5% were junior staff.

Table 4.7 Responses on awareness of TQM practice in the bank

Options Frequency Percentage

Yes 263 100

No 0 0

Total 263 100

Source: Field Survey 2012

From the above table, it can be seen that all the respondents agreed that they are

aware of TQM practice in the bank. This implies that all the respondents are

quality conscious in Zenith Bank Plc.

66

Table 4.8 Extent of awareness of TQM by staff

Option Frequency Percentage

Large extent 248 94.3

Little extent 15 5.7

Not At All 0 0

Total 263 100

Source: Field Survey 2012

Table 4.8 shows that 94.3% indicated that staff are aware of TQM to a large extent

in the bank. 5.7% indicate that they are aware to a little extent. None indicated

Not At All. This implies that there is a high level of awareness of TQM among

staff of Zenith Bank Plc

Table 4.9 Responses on extent to which TQM practice has been adopted.

Options Frequency Percentage

Large extent 240 91.3

Little extent 23 8.7

Not At All 0 0

Total 263 100

Source: Field Survey 2012

Table 4.9 shows that 91.3% indicated TQM practice has been adopted in Zenith

Bank Plc to a large extent. 8.7% indicate that it is to a little extent. None indicated

Not At All. This implies that the bank is largely focused on providing high quality

service to its customers.

67

Table 4.10 Responses on staff involved in the practice of TQM

Options Frequency Percentage

Management staff 15 5.7

Supervisory staff 15 5.7

Other senior staff 15 5.7

Junior staff 7 2.7

All of the above 211 80.2

Total 263 100

Source: Field Survey 2012

Table 4.10 shows that 5.7% indicated that management staff are the ones involved

in the practice of TQM in the bank. 5.7% indicated supervisory staff, 5.7%

indicated other senior staff 2.7%, indicated junior staff. 80.2% indicated all of the

above. This implies that all the staff is involved in the practice of TQM in the

bank.

Table4.11 Extent to which members of staff are involved in the practice of TQM

Options Frequency Percentage

Large extent 248 94.3

Little extent 15 5.7

Not At All 0 0

Total 263 100

Source: Field Survey 2012

68

Table 4.11 shows that 94.3 % indicated that members of staff are involved in the

practice of TQM to a large extent while 5.7% indicated to a little extent. None

indicated Not At All.

This means that there is a high level of staff involvement in the practice of TQM in

Zenith Bank Plc.

Table 4.12 major element of TQM practice in the bank.

Options Frequency Percentage

Continuous quality improvement 15 5.7

Compulsory innovations 15 5.7

Value based decision-making 15 5.7

Reduced cost of product and Service deliver

15 5.7

Cultural change at all level of the organization

15 5.7

Team work spirit 15 5.7

Customer satisfaction/ involvement 15 5.7

All of the above 158 60.1

Total 263 100

Source: Field Survey 2012

On the major elements of TQM practice, 5.7%, 5.7% and 5.7% indicated

continuous quality improvement, compulsory innovations and value – based

decision, 5.7%, 5.7%, 5.7% and 5.7% indicated reduced cost of product and service

delivery, cultural change at all levels of the organization, teamwork spirit and

69

customers satisfaction/ involvement respectively. 60.1% indicated all of the

above.

This implies that TQM involves continuous improvement in product/ service

quality, innovations, and changes that involves every one in the bank. This

demands teamwork spirit and would lead to reduced cost of service delivery,

efficiency and customer satisfaction.

Table 4.13 Responses on whether TQM practice improves customer services

and care.

Options Frequency Percentage

Yes 248 94.3

No 15 5.7

Total 263 100

Source: Field Survey 2012

Table 4.13 shows that 94.3% agreed that the practice of TQM improves customer

services and care in Zenith Bank Plc while 5.7% disagreed. This implies that in the

practice of TQM in the bank, continuous quality improvement ensures

improvement in customer services and care for customers. Thus, customers‟

satisfaction through improved service delivery is at the core of TQM

70

Table 4.14 Extent to which TQM improves customers’ services and care.

Options Frequency Percentage

Significantly 255 97.0

Insignificantly 8 3.0

Not At All 0 0

Total 263 100

Source: Field Survey 2012

Table 4.14 shows that 97.0% agreed that practice of TQM improves customer

services and care significantly while 3.0% indicated insignificantly. This implies

that the practice of TQM improves the services and care given to customers to a

large extent.

Table 4.15 Major limitation of TQM practice in zenith Bank, Plc

Options Frequency Percentage

Lack of constant training in TQM 68 25.9

Inconsistent approaches 60 22.8

Irregular evaluation of TQM practice 75 28.5

Short-run vision 60 22.8

Total 263 100

Source: Field Survey 2012

On the major limitation of TQM practice in the bank, 25.9% indicated lack of

constant training of TQM. 22.8% indicated inconsistent approaches to TQM.

71

28.5% indicated. Irregular evaluation of TQM practice while 22.8% indicated

short- run vision.

4.2 Test of Hypotheses.

In this section we shall apply the techniques explained in chapter 3.7 to test

the hypothesis in chapter 1.5.

Hypothesis 1

Ho; the level of awareness of TQM among Zenith Bank staff is not high

H1; the level of awareness of TQM among Zenith Bank‟s staff is high

Table 4.8 Extent of awareness of TQM by staff

Options Frequency Percentage

Large extent 248 94.3

Little extent 15 5.7

Not At All 0 0

Total 263 100

1. Degree of freedom (df):

df =(C – 1) (R – I)

Where C = No of columns

R = No of Rows

: df =(2 – 1)(3 – 1)

= 1x 2

= 2

72

2 level of signification = 5%

3 critical value of X2 at 5% Significance level and 2 degrees of freedom is

5.994

4 Expected value of X2 (Oe);

Oe = 248+15 = 263 = 131.5 2 2

5 Computation of X2

X2 = (248 – 131.5)2 + (15– 131.5)2 131.5 131.5

= (116.5)2 + (- 116.5)2 131.5 131.5

= 13,572.25 + 13,572.25 131.5 131.5

= 103.2 + 103.2

= 206.4

Result; 206.4 > 5.994

Decision; Based on the decision rule, we accept H1 and reject H0

Hypothesis 2

Ho; the level of adoption of TQM practice by staff of Zenith Bank is not high

H1; The level of adoption of TQM practice by Staff of Zenith Bank in high

73

Table 4.9 Responses on extent to which TQM practice has been adopted.

Options Frequency Percentage

Large extent 240 91.3

Little extent 23 8.7

Not At All 0 0

Total 263 100

1. df = (3-1)(2-1) = 2x1 = 2 2. Level of significance = 5% 3 Critical Value of X2 = 5.994 4 Expected value (Oe); = 131.5 5 Computation of X2

X2 = (240 - 131.5)2 + (23 – 131.5)2 131.5 131.5 = (108.5)2 + (- 108.5)2 131.5 131.5 = 11,772.25 + 11,772.25 131.5 131.5

= 89.52 + 89.52 = 179.04

Result; 179.04 > 5.994 Decision; Based on the decision rule, we accept and reject H0.

74

Hypothesis 3

H0; Member of staff of Zenith Bank are not involved in TQM Practice to a large

extent

H1; Members of staff of Zenith bank are involved in TQM practice a large extent

Table 4.10 Responses on staff involved in the practice of TQM

Options Frequency Percentage

Management staff 15 5.7

Supervisory staff 15 5.7

Other senior staff 15 5.7

Junior staff 7 2.7

All of the above 211 80.2

Total 263 100

1. df = ( 5 – 1)(2 – 1 )

= 4x1

= 4

2. Level of significance = 5%

3. Critical value of X2 at 5% Significance level and 4 degrees of freedom is

8.442

4. Expected value (Oe)

Oe = 15+15+15+7+211 = 263 2 2 = 131.5

75

5. Computation of X2

X2 = (15- 131.5)2 + (15 – 131.5)2 + (15 – 131.5)2 + (7 – 131.5)2 + (211 – 131.5)2 131.5 131.5 131.5 131.5 131.5 = (-116.5)2 + (-116.5)2 + (-116.5)2 + (-124.5)2 + (79.5)2 131.5 131.5 131.5 131.5 131 .5 = 13,572.25 + 13,572.25 + 13,572.25 + 15,500.25 + 6,320.5 131.5 131.5 131.5 131.5 131.5 = 103.21 + 103.21 +103. 21 + 117.87 + 48.06 = 475.56

Result ; 475.56 > 8.442 Decision ; Based on the decision rule, we accept H1 and reject H0.

Hypothesis 4

H0; the practice of TQM does not significantly affect customer services and care

in Zenith Bank Plc

H1; The Practice of TQM significantly affects customer services and care in

Zenith Bank Plc

Table 4.13 Responses on whether TQM practice improves customer services

and care.

Options Frequency Percentage

Yes 248 94.3

No 15 5.7

Total 263 100

76

1. df = (2 – 1)(2 – 1)

= 1 x 1

= 1

2. Level of significance = 5%

3. Critical value of X2 at 5% significance level and 1 degree of

Freedom is 3.64

4. Expected Value (Oe);

Oe = 248 +15 = 263 = 131.5 2 2 5. Computation of X2

X2 = (248 – 131.5)2 + (15 – 131.5)2 131.5 131.5 = (116.5)2 + (- 116.5)2 17.5 131.5 = 13,572.25 + 13,572.25 131.5 131.5 = 103.21 + 103.21 = 206.42 Result; 206.42 > 3.64 Decision; Based on the decision rule, we accept H1 and reject H0.

77

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary of Findings

-Total quality management (TQM) is in practice in Zenith Bank Plc and

almost all the staff are aware of it. This implies that members of staff have

adopted TQM. Every staff is involved in the practice.

-The major elements of TQM practice in the bank include;

Continuous quality improvement

Compulsory innovations

Reduced cost of service delivery

Cultural change at all levels of the organization

Teamwork spirit

Customer satisfaction/ involvement

-The practice of TQM affects or improves customer services and care. This

is as a result of continuous improvement in quality.

-the major limitations of the practice of TQM in the bank are lack of

constant training in TQM, inconsistent approaches and irregulation of

TQM practice.

78

5.2 Conclusion

There is high level of awareness of TQM among staff of Zenith Bank Plc.

TQM practice has been adopted to a large extent by the staff and they are

largely involved in the practice as well. The practice of TQM significantly

improves customer service delivery and care. This implies that TQM is a

customer – oriented practice which calls for steady improvement in service

quality so as to meet the expectations of the customers. To this, innovations

are inevitable.

5.3 Recommendations

1. Management of Zenith Bank Plc should ensure that the current level

of awareness of TQM among the staff does not fall. Rather they

should create more awareness by ensuring that specific structures

that will support TQM practice are created.

2. There should be constant training and education of staff in TQM

practices. This will ensure changes in employees‟ beliefs, behaviour

and attitude to quality.

3. There should be constant evaluation of TQM practices so as to

ensure constant improvement in quality.

4. Employee input to quality should be encouraged so as to evoke the

total commitment of employees in the operational end of total

service delivery.

79

5. Employees should be rewarded and recognized for their quality

improvement efforts.

6. It is imperative to control the processes and improve quality

systems. The emphasis should be on the prevention of deficiencies

and not on corrective measures.

7. All employees should be assigned roles and responsibilities of total

quality operations. This will ensure that employees are accountable

for deficiencies.

80

BIBLIOGRAPHY

Antony, J. (2006). Six sigma for service processes. Journal Business Process Management, 12 (2).

Arora K. C. (2009) Total Quality Management 3rd ed, (Delhi: S.K. Katara & Sons). Azika N, (1997) “Research Methodology in the Behavioral séances” (Lagos Longman

Nig Plc) Bhatia, L., & Goyal, N. (2002). Improving financial services through TQM: A case

study. New York: Best Practices Report. Brah, A. S. et al. (2000). TQM and Business Performance in Service Sector.

International Journal of Operations and Production Management, 20 (11). Burton, G. et al. (2005). TQM and organizational change and development. Albany,

New York: Rockfield College Press. Cole, W. E., & Mogab, J. W. (1999). TQM in action. New Delhi: Beacon Books. Edwards, S., & Smith, S. (2001). TQM in banking. The TQM Magazine (Vol. 2). Gupta, A. et al. (2005). Quality management in service firms: Sustaining structures

of total quality service. Managing Service Quality, 15 (4), 389-402.

Janakiraman, B., & Gopal, R. K. (2006). Total quality management: Text and cases.

New Delhi: Prentice Hall of India Pvt. Ltd. Joseph, J. M. (2001). Productivity and total quality management: Application in

Maine manufacturing. The University of Maine, 3 (1).

K. C. Arora (2009) Total Quality Management 3rd Edition New Delhi S.K. Sataria

and Sons. Luckett, D. G. (1994). Money and Banking. New York : McGraw Hill Inc.

Macdonald, John (1998): Quality and the Financial Service Sector: The Journal of

Total Quality: Vol 1, No 2 Pg. 13. Management at Deutsche Bank AG; Management Systems, Inc., Wilmette, IL.

Annual Quality Congress, 53(0). Retrieved October 1, 2007, from http://qic.asq.org/perl/search.pl? item=10793.

81

Montes, F. J. et al. (2003). The analysis of the relationship between quality and perceived innovation: The case of financial firm. Journal Industrial Management and Data System, 23 (8).

Newman, K., & Cowling, A. (2005). Service quality in retail banking. International

Journal of Bank Marketing, 14 (6). Ngware, M. W. et al. (2006). Total quality management in secondary schools in

Kenya. Quality Assurance in Education, 14 , 339-362. Onwe, O. J.(1998): Element of Project and Desertification Writing A Guide to

Effective Desertification Report (Lagos: Impressed Publishers.) Pearce, J. A., & Robinsons, R. B. (2005). Strategic management. New York: McGraw

Hill. Rana, I. A. (2005). TQM paradigm in banking. Retrieved April 4, 2007, from

www.dawn.com. Saffran, N., & Vogt, U. (1999). Case study; ISO 9000; Implementation; Quality

system; Total Quality Samat, N. et al. (2006). TQM practices, service quality and market orientation.

Journal Management Research News, 29 (11). Sarang, S. (2005). The implementation of TQM in retail banking sector. University of

Johannesburg, South Africa. Saunders, A. (2000). Financial institutions management – A Modern Perspective. New

York: McGraw Hill Inc. Sinkey, J. F. (1998). Commercial banking financial management. New Jersey: Prentice

Hall Inc. Tsang, H. Y. J., & Antony, J. (2001). TQM in UK Service Organizations. Managing

Service Quality.11 (2). Zenith Bank Plc, Group Annual Report and Financial Statement 2009. Ziethmal, A. V., & Bitner, M. J. (1996). Services Marketing. Singapore:

McGraw Hill Inc.

82

APPENDIX

Department of Business Administration University of Nigeria Enugu Campus June, 2012 Dear Respondent, I am a student in above named institution carrying out a study to asses the

practice of total Quality Management in Zenith Bank, Plc. I want you to complete

this questionnaire for me. The purpose of this study is academic and so the

information you provide will be treated with strict confidentiality.

Thanks for your cooperation

I am,

Yours Faithfully,

Iyida, Ifeanyi

83

QUESTIONNARIE

INSTRUCTION; Please, tick √ in the box that depicts your choice of answer.

Otherwise, answer the questions where necessary.

SECTION A

(PERSONAL PROFILE)

1 Name (optional) --------------------------------

2 Sex; a) male [ ] b) female [ ]

3 Age; a) under 30 yrs [ ] b) 30 – 39yrs [ ] c) 40 – 49 yrs [ ]

D) 50 – 59 yrs [ ] e) 60 yrs and above [ ]

4 Marital status; a) single [ ] b) married c) others (special) [ ]

5 Educational qualification.

a) FSLC [ ]

b) SSCE/GCE

c) OND / NCE [ ]

d) HND/ first Degree [ ]

c) Master Degree [ ]

d) Others (specify)

6 To which of the following categories of staff do you belong?

a) Management Staff [ ]

b) Supervisory staff [ ]

c) Other staff [ ]

d) Junior staff [ ]

84

7 Are you aware of TQM practice in this bank?

a) Yes [ ] b) No [ ]

8 To what extent are the staff aware of TQM in this bank?

a) A large extent [ ]

b) A little extent [ ]

c) Not At All [ ]

9 To what extent do you think that TQM practice has been adopted by

Staff?

a) A large extent [ ]

b) A large extent [ ]

c) Not at All [ ]

10 Who are involved in the practice of TQM in the bank?

a) Management staff [ ]

b) Supervisory staff [ ]

c) Other senior staff [ ]

d) Junior staff [ ]

e) All of the above [ ]

11 To what extent are members of staff involved in the practice of TQM

In the bank?

a) A large extent [ ]

b) A little extent [ ]

c) Not at all [ ]

85

12 What are the major element of TQM practice in the bank ?

a) Continuous quality improvement attitude [ ]

b) Compulsory innovation [ ]

c) Value based decision –making [ ]

d) Lower cost of product and service delivery [ ]

e) Cultural change at all levels of the organization [ ]

f) Teamwork spirit [ ]

g) Customer satisfaction/ involvement [ ]

h) All of the above [ ]

13 Do you agree that the practice of TQM improves customer services

and care?

a) yes [ ] b)No [ ]

14 If „ yes‟ to what extent ?

a) Significantly [ ]

b) Insignificantly [ ]

c) Not at all [ ]

15 What are the major limitations of TQM practice in Zenith bank

- - - - --- - - - - - - - - - - - - -- - - - - - - -- - - - - - - - -- - -- - - - - - - - -

- - - - - - - - - - - - - - - - - -- - - - -- - - - -- - - - - - - - - - - - - - - - - - - --