IMPACT OF TOTAL QUALITY MANAGEMENT ON CUSTOMERS SATISFACTION (A STUDY OF GUARANTEE TRUST BANK)


Content

 

ABSTRACT

The research work is an empirical study of Total Quality Management (TQM) and its impact on customers’ satisfaction emphasizing on GT Bank Plc in UNILAG and LASU. This study is aimed at determining the significance of TQM, its impact on customers’ satisfaction and also to examine the way it benefits GT Bank customers. The research work reviewed relevant literatures on TQM and customers’ satisfaction.

Survey research design was used to carry out the study. The researcher used regression analysis and chi-square statistical tools through SPSS data editor to test the hypothesis put forward in the study.

The researcher concluded that TQM is of high significance to customer’s satisfaction, thus, it should be properly conceived, planned and implemented by organizations. The study recommends that GT Bank Plc should utilize TQM strategies effectively to activate positive perception about the company into the minds of their customers.

 

 

 

 

TABLE OF CONTENTS

Titles                                                                               Pages

Cover page                                                                           i

Certification                                                                                 ii

Dedication                                                                          iii

Acknowledgment                                                                 iv

Abstract                                                                               v

Table of Content                                                                  vi

CHAPTER ONE: INTRODUCTION

1.0              Background To The Study                                               1     

1.1                      Statement Of Problem                                              9

1.2                      Research Objectives                                                 10

1.3                      Research Question                                                   11

1.4                      Research Hypothesis                                                       11

1.5                      Significance Of The Study                                                12

1.6                      Definition Of Terms                                                 13

 

Chapter Two: Literature Review

2.0                      Introduction                                                             17

2.1              Contemporary Issues In Marketing Of Banking Service18

2.2           Rationale for Marketing of Banking Services           21

2.3           Evolution of Total Quality Management                   23

2.3.1                Meaning and Definitions of Quality                         25

2.3.2        Meaning and Definition of Total Quality Management 26

2.4           Total Quality Management Philosophies                  27

2.4.1                A Conceptual Framework for TQM Implementation

In a Service Operational Setting                               29

2.4.2                Theoretical Framework of Total Quality Management 30

2.4.3                Total Quality Management Dimensions                   31

2.4.4                Total Quality Management Model                            32

2.4.5                Reasons for Failure of TQM Practices                      34

2.5           Critical Success Factor for TQM Implementation     35

2.6           Meaning and Definition of Customer Satisfaction    37

2.7           Relationship between Customer Satisfaction and

Total Quality Management                                       38

2.7.1        Conceptual Framework of the Relationship Of

TQM Practice and Customer Satisfaction                  40

2.8          Enrichment of Customer Satisfaction through

               TQM Techniques                                                       40   

2.9          Summary of the Major Issues in the Review of

               Literature                                                                  43

 

CHAPTER THREE: RESEARCH METHODS

3.1          Introduction                                                              51

3.2          Research Design                                                       51

3.3          Restatement of Research Question                           52

3.4          Data Collection Instrument                                       53

3.4.1       Questionnaire Assumption                                               54

3.4.2       Questionnaire Administration                                  55

3.5          Validity of the Research Instrument                          55

3.6          Reliability of the Research Instrument                      57

3.7          Sample size and sampling techniques                      57   

3.8          Restatement of Research Hypothesis                                58

3.9          Method of Data Analysis                                           58

 

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATIONS

4.1   Introduction                                                                     61

4.2    Presentation of Respondents Bio-Data                           61

4.3   Operational (Key) Variables                                              64

4.4   Presentation of Individual Responses

to the Questionnaire                                                                66

4.5   Descriptive Statistics of TQM and Customers’

Satisfaction                                                                     82

4.6     Reliability Test                                                                        84

4.7   Test of Research Hypotheses                                           85

 

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION               

5.0   Introduction                                                                     89

5.1   Summary                                                                         89

5.2   Summary of Findings                                                      91

5.3   Conclusion                                                                      91

5.4   Recommendations                                                           92

5.5   Suggestions for Further Studies                                      93

Bibliography                                                                   

Research Questionnaire                                                  

 

CHAPTER ONE

INTRODUCTION

 

1.0  BACKGROUND TO THE STUDY

The information super-high way has turned the world a global village. Organizations are facing the kind of competition that was not envisaged a few years ago. They have to compete with goods and service from all over the world and satisfy a more deviated and sophisticated customer. What is satisfactory to the customers today may not be regarded as such tomorrow as their expectations are continuously changing. In addition, there has been consistent breakthrough in scene and technology over the last couple of decades. This has also affected information dissemination and management, as things earlier thought impossible now look ordinary.

Moreover, the fall-outs of a deregulated global competition have offered customers choice among various alternatives. Today, customers demand high quality and low price. Since no one organization can boast of holding franchise to the development and delivery of quality product/ services, many organizations have embraced the total quality Management concept as a way of survival.

One tent of this management philosophy, which many organizations have adopted as a fundamental business strategy, is the concept of continues improvement. NO organization can afford to be competitive if it does not continuously improve on its product/services, process and people.

There is therefore, an urgent need for an organization-wide approach and commitment to quality improvement. In addition, there is the need for quality improvement to be a continuous exercise or phenomenon. Over the years, this realization has led to the development of the: Total Quality Management Concept”

This is especially the case in the banking industry in Nigeria, where competition as been very tensed among the players in the industry. The competition and the battle for the heart of customers came with the emergence of third generation banks in Nigeria among which we have Guaranty Trust Bank as one of them for this third generation banks to drive and compete effectively with existing first and second generation banks, with already large customer base as well as huge financial back bone, they will have to do things differently as against the status-quo maintained by this first generation banks. Hence this calls for the adoption and development of new methods of doing business with customers as a first point of reference.

Guaranty Trust Bank Plc operates from branches across Nigeria with several bank and non-bank subsidiaries spread across Anglophone West Africa and the United Kingdom. It’s a foremost Nigeria financial institution with vast business outlays spanning Anglophone West Africa and United Kingdom. The bank presently has Asset Base of over 2trillion Naira, shareholders funds of over 230 billion naira and employees over 5,000 people in Nigeria, Cote D’ivore, Gambia, Ghana, Liberia, Sierra Leone and the United Kingdom.

The bank has a corporate banking bias and strong service culture that have enabled it record consistent year on year growth in clientele base and key financial indices since its inception in 1990. Its operation style, staff convert and service delivery models are built on 15 core principles.

Guaranty Trust Bank Plc was incorporated as a limited liability company licensed to provide commercial and other banking services to the Nigeria public in 1990. The bank commenced operations in February 1991, and has since then grown to become one of the most respected and service focused banks in Nigeria.

In September 1996, Guaranty Trust bank Plc became a publicly President’s Merit award that same year and subsequently in the year 2000,2003,2005,2006,2007,2008 and 2009. In February 2002, the bank was granted a universal banking license and later appointed a settlement bank by the Central bank of Nigeria (CBN) in 2003.

Guaranty Trust Bank undertook its second share offering in 2004 and successfully raised over N11billion from Nigeria investors to expand its operations and favourably compete with other global financial institutions. This development ensured the bank was satisfactory poised to meet the N25billion minimum capital base for banks introduced by the Central bank of Nigeria in 2005, as part of the regulating body’s efforts to sanitize and strengthen Nigeria banks. 

Post consolidation, Guaranty Trust Bank Plc made a strategic decision to actively pursue retail banking. A major rebranding exercise followed in June 2005, which saw the bank emerge with improved service offerings an aggressive expansion strategy and his vibrant orange identity.

In 2007 the bank entered the history books as the first Nigeria financial institution to undertake a vs 350 million regulation Vrobond issue and a vs 750million global depositary receipts (GDR) after. The listing of the London stock exchange in July that year made the bank the first Nigeria Company and African bank to be listed on the main market of London stock exchange.

In December 2009, Guaranty Trust Bank successfully completed the first tranche of its N200 million corporate bonds targeted at increasing the depth of its operations in West Africa and Europe in the next couple of years.

The bank’s culture is tied eight guiding principles called the orange Rules: simplicity, professionalism, service, friendliness, excellence, Trustworthiness, social Responsibility and innovation. Its value system is hinge den professionalism, ethics, integrity, and superior customer service. It maintains a culture of excellence and goes to great length to actualize the popular phrase, the customer is king and deliver to its customers at all times:

The bank operates a very competitive environment, where people can learn its corporate culture and apply themselves in all they do. Employees are addresses by their first names from entry level through the Managing Director- no: Sirs or Madams:. In addition it operates an open door policy to foster a feeling of equality amongst staff and ensure everyone is accessible at all times

Guaranty Trust Bank Plc provides a full range of commercial, investment and retail banking products services to its discerning corporate, commercial and retail customers and this products can be divided under three types of banking in GTB namely:

A.    Personal Banking

Ø  Current Account

Ø  Domiciliary Account

Ø  GT save-saving account

Ø  Gt crea 8

Ø  Fixed and tenured Deposits

Ø  GT mortgages

Ø  Smart kids save (SKS)

Ø  Max advance

Ø  GT Max account

Ø  Salary advances

Ø  GT Auto

 

B.     Business Banking

ü  Current account

ü  Call account

ü  Travelers cheques

ü  Bankers acceptances

ü  Domiciliary account

ü  Loan syndication

ü  founds and portfolio Management

ü  Cheque writing

ü  Money market instrument

 

C.     E- Banking

·        Debit master card

·        MasterCard prepaid

·        Online bills payment

·        GT pay

·        GT bank electronic Notification

·        GT bank point of sales (POS)

·        standard master card

·        MasterCard prepaid branch locator

However, despite the foregoing, there are still many pertinent issues in the banking sector in Nigeria that deserves attention. They are issues relating to long queues in the banking hall, unavailability of enough cash to care for customer’s transaction, Automated Teller Machine (ATM) deficiency, poor customer relation by front line staffs and the genuineness and integrity of promotional activities to mentions but a few. All this are Jermaine issues confronting customers and other publics in the banking industry in Nigeria

Hence this research work deals with Total Quality Management practices and dimensions as they relate to customer satisfaction and at the long run relating to customer loyalty with special emphasis on Guaranty Trust Bank Nigeria PLc. It’s therefore means that this research work deals with Total Quality Management tools and capabilities employed by banks and its resultant effect and delivering superior value to customers

 

1.2   STATEMENT OF PROBLEM

The research problem solved in this study invoice Total Quality Management strategies of banking firms and its effects on customer satisfaction. New competitive strategies have rapture established management doctrines and rendered conventional absolute. Competition has become so high in all fronts that the time is now when organizations will only survive by making a difference.

While the rule of the game today in all industry segments is continuous improvement of processes, systems and skills, many organizations do not posses a teen sense of urgency required to reinvent the needs of the current business model. Quality improvement and service delivery is still seen by many organizations toady, not as a way of several but as optional extras. Even on occasion where a good number of organizations attempt improvement efforts, they merely focus on catering up to competitors instead of focusing on those activities that will create new advantages to their goal. They make quality improvement efforts only as a benchmark to bridge the competitive edge enjoyed by others.

In brief, using GT Bank as a point of reference the research is intended to ascertain how much TQM when fully practiced will lead to customer satisfaction.

 

1.3   RESEARCH OBJECTIVES

Many studies have been conducted in the area of Total quality Management this touching many aspect of the concept. However, less research work have been conducted on impact of Total Quality Management it relates to customers stratifications.

The primary objective of this research is to identify the various dimensions of Total Quality Management that will serve a great deal to ensure that customers needs are duly catered for in order to build and maintain mutually beneficial relationship with customer (both individual and firms) in the banking sector. Point-wise, the objective of this study includes.

Ø  To ascertain whether there is a significant relationship between Total Quality Management practices and customers satisfaction

Ø  To investigate the impact of Total Quality Management on customers satisfaction

Ø  Determine whether Total Quality Management practices of banking firms in any way benefits customers and enhances their satisfaction.

 

1.4 RESEARCH QUESTION

Ø  Is there a significant relationship between Total Quality Management and customers satisfaction

Ø  does Total Quality management have effect on customers satisfaction

Ø  To what extent does Total Quality management practices of banking firms  benefit customers and enhance their satisfaction

 

1.5 RESEARCH HYPOTHESIS

Ho:       There is no significant relationship between Total Quality Management and customer’s satisfaction

Hi:        There is significant relationship between |Total Quality Management and customer Satisfaction

Ho:       Total Quality management practices of banking firms does not benefit customers and enhance their satisfaction

Hi:        Total Quality Management practices of banking firms benefits customers and enhance their satisfaction

 

1.6 SIGNIFICANCE OF THE STUDY

The significance of this study is aimed at contributing theoretically to Total Quality Management as a concept. The study provides a bias for closer consideration of the Total Quality Management practices of banks in Nigeria as it affect have their customers are satisfied.

Hence, it is expected that the study will broaden the horizon of future academics, researchers, business consultants topics in future.

The finding and recommendations of this study will also beneficial to stakeholders in Nigeria banking sector, especially deposit money banks (commercial banks_ customers and regulatory agencies etc.

 

 

1.7 DEFINITION OF TERMS

Customer: Is a party, a person, or an organization that receives or consumes product (goods or services) and has the ability to choose between different product and suppliers. A customers can also be called a buyer.

There are two distinct types of customers i.e. external and internal customers.

Customer Satisfaction: This is not an objective statistics but more of feeling or attitude. Customer satisfaction is a business term, is a measure of how product and services supplied by a company meets or surpass customer. This can also be defined as the degree of satisfaction provided by the goods or services of a company as measured by the number of repeat customers.

This can also be defined as the degree of satisfaction provided by the goods or services of a company as measured by the number of repeat customers.

Continuous Improvement: This is a commitment to constantly make things better one step at a time. There are three principles of never ending improvement:

 

Ø  Focusing on the customer

Ø  Understanding the process

Ø  All employees committed to quality

Quality: This has a direct impact on product or service performance, this it is closely linked to customer value and satisfaction. In the narrowest sense, quality can be defined as freedom from defects. It can also be defined in terms of creating customer value and satisfaction.

Management: This concept does not have any universally accepted definition, however, there are two (2) prospective to if. They are: Firstly it can be defined as the efficient and optimum utilization of available resources (human and material) in order to achieve predetermined objectives. It entails the performance of certain functions like controlling, coordinating, staffing planning, directly etc.

Secondly the concept of management refers to certain individual who are in charge of the administration and control of an organization they take charge of policy formulation and maintained of overall affairs to the organization.

Total Quality Management: This can be defined as a journey to excellence in which everyone in the organization is focused on continuous process improvement directed toward increase customer satisfaction. This is also a set of management process and system that create delighted customer through empowered employees, leading to higher revenue and lower cost.

Order Complete Project