1.1 BACKGROUND TO THE STUDY
quality management practice is a firm-wide management philosophy of
continuously improving the quality of the products/services/processes by
focusing on the customers’ needs and expectations to enhance customer retention,
satisfaction and firm performance. There are mixed results about the
relationship between total quality management practices and customer retention,
satisfaction and performance. However, this study will examine the impact of
total quality management practices on customer retention and satisfaction.
A growing number of organizations use total
quality management as a strategic foundation for generating a competitive
advantage (Reed, Lemak, &Mero, 2000) and improving firm performance
(Hendricks &Singhal, 1997; Lemak& Reed, 1997) and customer retention
and satisfaction (Samson &Terziovski, 1999). Firms that have won quality
awards generally outperform other firms with respect to both income measures
(Hendricks &Singhal, 1997), customer loyalty and stock market value
(Lemak& Reed, 1997). It is no surprise that the links among market
orientation, total quality practices, and performance have attracted the
attention of marketing and operations management researchers’ alike
(Ettlie& Johnson, 1994; Flynn, Schroeder, &Sakakibara, 1994;
Kohli&Jaworski, 1990; Narver& Slater, 1990; Samson &Terziovski,
Total quality management practices have
been shown to enhance organizational performance for both product and service
organizations (Powell, 1995). However, there is relatively little research on the
differences between product and service offered by companies with respect to
the impact of quality practices on customer retention and satisfaction. We know
little about how these two different types of organizations view what they do,
how well they do it, and its consequences.
The concept of total quality management
practice has been developed as a result of intense global competition.Organizations
with international trade and global competition have paid considerable
attention to philosophies of total quality management, procedures, tools and
techniques. According to Juran (2001), international competition requires
higherlevels of quality achievement by organizations. Total quality management
is the popular area of research inmanagement. Total QualityManagement has been practiced
in diverse manufacturing industries andnow there is a growing interest in the
service sector, even from non-profit organizations (Nwabueze, 1998). Butthe
service industry differs from the manufacturing industry in a number of ways,
such as service intangibility,simultaneity of production, delivery and
consumption, perishability, variability of expectations of the customersand the
participatory role of customers in the service delivery but the main aim by
both sector is to achieve customer retention and satisfaction. Several authors
have proposed models of total quality management.However, most of the models
are based on theories and practices that are primarily derived from
themanufacturing industry where this has been effectively practices in the
Furthermore, total quality management
has become the buzz word in the management practice. It has been defined in
manydifferent ways. The International Standard ISO 8402, Quality Management and
Quality Assurance-Terminologyhas defined total quality management as the ―management approach of an
organization, centered on quality, based on theparticipation of all its members
and aiming at long-term success through customer satisfaction, and benefits
toall members of the organization and to society(Ljungstrom&Klefsjo, 2002).
Temtime and Solomon (2002)said that total quality management seeks continuous
improvement in the quality of all processes, people, products, and services
ofan organization. Total quality management is also a systematic approach to management
that aims to enhance value to customers bydesigning and continually improving
organizational processes and systems (Kartha, 2004). The emphasis is onemployee
involvement and empowerment along with customers and customer satisfaction as
the focal point.
The tenets of total quality are
continuous improvement, top management leadership commitment to the goal
ofcustomer satisfaction and retention, employee empowerment, and customer focus
(Ugboro&Obeng, 2000). Total quality management means thatthe organization‘s
culture is defined by and supports the constant attainment of customer retention
and satisfaction through anintegrated system of tools, techniques and training
(Sashkin& Kiser, 1993).
1.2 STATEMENT OF THE PROBLEM
Many researchers think that total
quality management is old news, many of the new continuous improvement
initiatives are based on total quality management philosophies. Total quality
management encompasses a number of different initiatives.Juran (2001) wrote
that the benefits and goals of total quality are lower costs, higher revenues,
delightedcustomers (as seen in customer retention and satisfaction), and
empowered employees. Costs can be lowered by reducing errors, reducing rework,
and reducingnon-value added work. Higher quality can also equate to higher
revenues through satisfied customers, increasedmarket share, improved customer
retention, more loyal customers, and premium prices. Customers continue
todemand higher quality goods and services. Delighted customers purchase over and
over again, advertise goodsand services for the company, and check first when
they are going to buy anything else to see what is offered bythe company they
are loyal to.
However, it is not easy for management
to implement total quality management, because it means a cultural overhaul
(Rao,Youssef, & Stratton, 2004). Deming (1981) also attested that the
benefits of better quality through improvementof the process are thus not just
better quality and the long-range improvement of market-position, but alsogreater
productivity and profit. Improvement of the process increases uniformity of
output of product, reducesmistakes, and reduces waste of manpower,
machine-time, and materials. Kaynak (2003) suggested that apositive
relationship exists between the extent to which companies implement total
quality management and performance as a result of satisfied customers.
1.3 OBJECTIVES OF THE STUDY
following are the objectives of this study:
examine the impact of total quality management practices on customer retention
examine the approaches to the philosophy of total quality management.
determine the factors affecting the practice of total quality management in
1.4 RESEARCH QUESTIONS
is the impact of total quality management practices on customer retention and
are the approaches to the philosophy of total quality management?
are the factors affecting the practice of total quality management in
There is no significant relationship between total quality management practices
and customer retention and satisfaction.
There is significant relationship between total quality management practices
and customer retention and satisfaction.
1.6 SIGNIFICANCE OF THE STUDY
following are the significance of this study:
findings from this study will educate the managements of companies on the
approaches to the practice of total quality management and its subsequent
effect on customer retention and satisfaction.
research will be a contribution to the body of literature in the area of the
effect of personality trait on student’s academic performance, thereby
constituting the empirical literature for future research in the subject area.
1.7 SCOPE/LIMITATIONS OF THE STUDY
study will be conducted on some selected companies in Edo State. This study
will also cover the method of total quality management practice adopted by the
selected company so as to ascertain its effect on customer retention and
Financial constraint- Insufficient fund tends to impede the efficiency of the
researcher in sourcing for the relevant materials, literature or information
and in the process of data collection (internet, questionnaire and interview).
constraint- The researcher
will simultaneously engage in this study with other academic work. This
consequently will cut down on the time devoted for the research work.