TOTAL QUALITY MANAGEMENT IN THE BANKING INDUSTRY A CASE STUDY OF ZENITH BANK NIGERIA PLC
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.
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, 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.
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 theZ organization are committed to quality by doing the right thing the first time and every time by employing the organization’s recourses to provide value added quality to the customers.
Total quality accomplishes the business goals by designing and supplying products and services to achieve customer satisfaction at an economic level.
The term TQC (total quality control) was conceived by A. V. Freignbaum 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.
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 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.