ABSTRACT
The topic of
this research is the application of Total Quality Management in the banking
industry, (A study of UBA Plc and First Bank of Nigerian Plc).
The major
objective of the study is to enquire into problems encountered in the provision
of good quality services to customers in commercial banks with focus on UBA Plc
and First Bank Plc and to determine specifically the impact of the application
of TQM on the services of UBA Plc and First Bank Plc to the banking public.
The
instrument of data collection is questionnaire and research questions, which
formed the source of primary data, while materials from various published
articles; textbooks, journals newspapers and annual report and statement of
account of UBA and First Bank as well as mateials from internet formed the
secondary data.
The method
of analysis is the use of tables, percentage and chi-square. The major finding
of the research is that problems encountered in the provision of services in
UBA Plc and First Bank Plc includes finance, manpower, Technology among others.
The study recommended subordinates and employees be given equal opportunity to
participate in decision making the study concluded that there is a bright and
abundant prospect for the use of Total Management in the Banking Industry.
TABLE OF CONTENTS
Title
page – – – – – – – i
Certification – – – – – – – ii
Dedication – – – – – – – iii
Acknowledgment – – – – – – – iv
Abstract – – – – – – – v
Table
of contents – – – – – – – vi
CHAPTER ONE
INTRODUCTION
- Background of the study – – – – 1
- Statement of the problem – – – – 9
- Objective of the study – – – – 11
- Research questions – – – – 12
- Research hypothesis – – – – 13
- Scope and limitation of the study – – – 14
- Significance of the study – – – – 15
- Historical background of the Banks – – – 16
- Definition of terms – – – – 27
CHAPTER TWO
REVIEW OF RELATED LITERATURE
- Commercial Banking in Nigeria – – – 30
- Introduction to Total Quality Management – 34
- Definition of Total Quality Management – – 42
- The core concept of Total Quality Management – 48
- TQM focus/Drivers – – – 52
- Total Quality Management in Banking Industry – 53
- Advantages/Benefits of TQM to Banking Industry – 60
- Promoting the efficiency in Banking Industry in
Nigeria (Focus on UBA Plc and First Bank Plc) Way forward) – 63
- Comparing six sigma and TQM – – – – 65
- Problems of Total Quality Management – – 68
- Guide to TQM Implementation in Banking Industry 71
- Steps in managing transition to TQM – – 73
CHAPTER THREE
RESEARCH METHODOLOGY
- Research design – – – – 81
- Sources of data: Primary and secondary Data – 82
- Data collection instrument – – – – 83
- Population of the study – – – – 83
- Area of the study – – – – 84
- Sample and sampling Techniques/Procedures – 84
- Validation of the instrument – – – – 86
- Reliability of the instrument – – – – 87
- Method of data analysis – – – – 88
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
- Data presentation and analysis – – – 91
- Test of Hypothesis – – – – 103
CHAPTER FIVE
SUMMARY, RECOMMENDATIONS AND
CONCLUSION
- Summary of findings – – – – 110
- Recommendation – – – – 111
- Conclusion – – – – 113
- Suggestions for further studies – – – – 115
Bibliography
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
It is
apparent that modern Nigeria cannot exist without the financial service
industry. In the recent past, this study has experienced tremendous growth and
undergone great changes. In the country, varying forms of deregulation,
competition, more demanding customers and drive to exceed customer’s
expectation have created an environment significantly different from that which
existed long ago.
Udegha
(1999:) observes that Nigerian banks are regarded as the most important
custodians of the liquid asset of most Nigerian citizens, foreigners, groups,
organization and government, they receive money in the form of deposits,
transfers or payment from these individuals, social or economic units and
government for safe keeping, transfer and so on and are obliged to make sure
funds available to their clients on demand. Banks also provide loans to various
groups, organizations, and government agencies. Although these functions of the
Nigerian banking industry appear simple in outlook, they have very important
social and economic ramifications like other banks world wide.
The discreet
services used at one time or another include routine financial transaction,
provisions of long term loans, insurance, investments and savings, to mention
but a few. These services are provided by distinct sectors of the industry such
as banking, insurance and brokers. They mobilize funds that would have
otherwise laid idle by making what is entrusted to them available for
productive purpose, thereby funds entrusted to them by the citizenry, banks
provide needed security and peace of mind to the citizens (Shoroye, 1990;1).
At a
time, 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 stockbrokers. The new competition brought about
successes for some and spectacular failures for others. In the new millennium,
banking has gone even beyond expectation, and for the surviving banks,
competition has just began. According to Macdonald. “The financial service
sector has not been immune from or ignored the quality of revolution. New
products sought initial competition advantage, new attractive interest rate,
strategies, automation, electronics banking, quicker turnaround time, all in
the bid to attract more customers to them, but were step by step rapidly marked
by competition.
Udeaha
(1999:2) contended further that before 1986, banks were forced with little or
no challenges. The issue of proper bank management did not receive enough
attention resulting in arm chair banking. Today, the situation is different as
competition in the banking industry in growing fast. The competition was
occasioned by the structural adjustment programme, which pared way for the
licensing of more banks. The competition in the industry heightens banks no
longer feel safe to play arm chair role to their customers, as was the case
before. In the early 1990’s there was a sea of change in the industry that sent
many chief executives of the industry back to the drawing board to find new
ways to compete. At the time, the tope management of the industry learned the
fundamental lesson that customers were willing to pay a price premium for
products and services that consistently met high standard of quality. Customers
now perceive that they have the right to demand good service, since they pay
for it. As the service industries are selling promise, all the customer want is
that the promise is kept.
The
successful banks were those that change their processes and empowered their
staff through total quality management principles and techniques. The top
management of the banking industry also learnt the good quality of services
rendered to customers has been an important part of operating practices that
successful business demand excellent service from all employees and excellent
service imply customer delight with the courtesy, responsiveness, product
knowledge, integrity, honesty and trust demonstrated by the staff.
Akpeyi
(1996:10) observes that successful financial service industry especially the
new generation banks have responded to increased international competition by
striving harder to improved quality. This has increased the forces on service
quality as a differentiator between competitive product and service as well as
price and design, many organizations have recognized this trend and have
increased their company’s commitment to high services quality in order to
compete successfully and service.
The
emergence of the “new generation” bank/bankers. That had to open even on
Saturday, and go the extra mile. If it would attract “the customer”. Crosby
(1989) observes with total commitment to customer service, a new style of
management is required in the banking skills and recruiting knowledgeable
people at all levels throughout the organization. Also, it should be a style
based on clear standards. It is worth to understand that customer service is
much more than being nice to those who patronize the organization. It is
primarily about satisfying their legitimate needs in a manner, which is
effortless on their part. It requires people to interact more efficiently.
According
to Akpeyi (1996:16) in the bid to improve the quality of service delivery and
to maintain their own share of the market; banks must embark on aggressive
strategies of improving on its services, which can be achieved by adopting the
concept of total quality management (TQM) in banking industry. The concept
integrates basic management techniques and is directed towards increased
customers satisfaction, company’s survival and success in the business.
The
quality initiatives in the banking industry in Nigeria, fall short of the
following greater objectives of TQM as”
- Most lack an
executive-driven service improvement vision or strategy.
- The
initiatives are delegated to lower level and rarely involve management
- Implementation
of the visionalised quality management becomes only a dream.
- Organizational
and internal business objectives take precedence over customer needs
- Most are short
term programs rather an ongoing process of improvement.
- Quality is not seen as an integral part of
overall business improvement
In essence TQM process is concentrated on elements
such as
- Management
commitment
- Quality
awareness at all levels of the organization
- Integration
and teamwork
- Focusing on
products and process
- Focusing on
prevention rather than inspection
- Long-term
commitment by the employees to continuous improvement
“Total quality management is a philosophy that
strives to continually improvement in quality and customer service while
simultaneously pushing dawn costs” Underlying TQM is a process of continuous
improvement to ensure that the industry continues to meet its customers rising
needs and expectation.
In elaborating on t he subject of Total Quality
Management, Macdonald (1995:6) explains TQM as follows;
Total means that everyone in the organization is
involved in the final product or service to the customer.
Quality does not mean luxuriant. We need a
describing quality that leaves no room for subjective opinion. Precisely,
quality means conformance to requirement.
Management recognizes that TQM will not happen by
accident. TQM is a managed process which involved people, system and supporting
tools and techniques.
Quality should begin to permeate financial
institution as a way of life and it should begin with employee’s satisfaction.
The TQM concept through a recent phenomenon is important in the banking
industry. Unlined Traditional quality concept, TQM emphasis is basically
commercial oriented, Quality as a means of gaining competitive advantages in business.
TQM is the natural way, it recognizes the internal customer, and TQM 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 market. This starts with the
customers, by learning to identify and meet their basic requirements, and then
empowering staff by giving them the tools they need to perform the way you need
them to.
It is in this regard that the research is
interested in investigating and evaluating total quality management in the
banking industry (A case study of United bank for Africa Plc and First Bank of
Nigeria Plc).
1.2 STATEMENT OF THE PROBLEM
APPLICATION OF TOTAL QUALITY MANAGEMENT IN THE BANKING INDUSTRY A STUDY OF UNITED BANK FOR AFRICA PLC AND FIRST BANK OF NIGERIA PLC
