AN ASSESSMENT OF TOTAL QUALITY MANAGEMENT (TQM) IMPACTS ON BANKS PERFORMANCE IN NIGERIA (A CASE STUDY OF FIRST BANK NIGERIA PLC.)

ABSTRACT

The purpose of this study is to gain a better understanding of the theoretical and empirical relationship between Total Quality Management and some measure of Banking performance. (Profitability, Speed Service Delivery, Customer Satisfaction, Lower Cost, Short and Long Term Objectives) of Nigeria Banks. A survey research design was adopted, while data were generated by means of structure questionnaires administered to members and staff of First Bank Plc. In Lagos Metropolis: The study generated a ninety percent (90%) response rate from eight questionnaire that were given out. Response from the survey were statistically analyzed using simple frequency percentage, correlation and regression analysis with the aid of SPSS. Result of the study indicate that the studied banks were (TQM) oriented to a very large extent. It is apparent form the findings that the attached great importance to their performance and responding appropriately in order to gain competitive advantage. The study also revealed that Total Quality Management (TQM) of the banks have significant correlation with aforementioned performance measures. Finally, conclusion, recommendation and suggestions for further studies were highlighted to demonstrate the generation of the result of the study.

TABLE OF CONTENTS

Title Page                                                                                                    i

Certification                                                                                                ii

Dedication                                                                                                   iii

Acknowledgment                                                                                        iv

Abstract                                                                                                      v

Table of Content                                                                                          vi

CHAPTER ONE

INTRODUCTION

1.0     Background of the Study                                                                1

1.1     Statement of the Problem                                                               3

1.2     Research Question                                                                           3

1.3     Research Hypothesis                                                                       4

1.4     Objective of the Study                                                                     4

1.5     Significant of the Study                                                                   5

1.6     Scope of the Study                                                                           5

CHAPTER TWO

LITERATURE REVIEW

1.0     Introduction                                                                                     7

2.1     Historical Background of Total Quality Management TQM        7

2.2     Definition of Concepts                                                                    9

2.3     Definition of Total Quality Management                                       15

2.4     School of thought in Total Quality Management                          21

2.5     Total Quality Management, Organizational Change and

Human Resources Management                                                    25

2.6 Total Quality Management And Organizational Culture                  26

2.7 Total Quality Management And Human Resource Management     28

2.8 Total Quality Management And Financial Service                             31

2.9 Management Theories And Practices Contribution To Total

Quality Management                                                                      33

2.10        Improving Total Quality Management In An Organization         33

2.11        Current Status Of Total Quality Management In Nigerian Companies                                                                                       36

2.12        Failure Of Total Quality Management                                           36

2.13        Summary                                                                                         38

CHAPTER THREE

RESEARCH METHODS

3.0 Introduction                                                                                          42

3.1 Research Design                                                                                   42

3.2 Re-Statement Of Research Question                                                    43

3.3 Re –Statement Of Research Hypotheses                                             44

3.4 Population Of The Study                                                                     44

3.5 Sample Size                                                                                          45

3.6 Data Collection Method                                                                       46

3.7 Method Of Data Analysis                                                                    46

3.8 Limitations Of The Study                                                                    47

CHAPTER FOUR

DATA ANALYSIS PRESENTATION AND INTERPRETATION

4.0 Introduction                                                                                          49

4.1     Data Analysis                                                                                  49

4.2     Test of Hypotheses                                                                          61

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.0 Introduction                                                                                          68

5.1     Summary of Major Finding                                                            68

5.2     Conclusion                                                                                       68

5.3     Recommendation                                                                            68

Reference 

Bibliography
 CHAPTER ONE

INTRODUCTION

1.0             BACKGROUND TO THE STUDY

Nigeria’s political and business terrain between 1983 and 1989 was one of biting economics hardship, great uncertainties and instability.

Banks and other financial institutions were doing well especially through exploitation of fore allocation formula up to 1990 to survive or grow through huge profits which critics termed “paper profit” as time went by when the ruler changed in 1990, following CBN prudential guideline and the federal governments banks and other financial institutional degree (BOFID) in addition to a worsening economic downtown increasing in serviced debt stock with growing sophistication in customers clientele and motivating staff competition. These situations and some other one’s precipitated the liquidation of as much as 31 banks by 1990.

This situation necessitated the need for organization to adopt practice of continuous improvement in the face of increasing competition and challenging operating environment. The potential contribution of enhanced product and service quality to competitive advantage and financial, performance notably through impact on cost and ability to charge premium prices has motivated several organization to be involved in TQM (Total Quality Management) activity and general attitude of business improvement.

There had been inference of linkage between TQM business result and organization performances.

A positive attempt by organization to improve structural, infrastructure, attitudinal behavioural and methodological ways of developing to the end customers with emphasize on constituency, improvements in quality competitive enhancements all with the aim of satisfying or delighting the end user, which his been paramount in the current clamor for the implementation of TQM.

According to Aboto, E.M (1998) one management tool that has played a leading role in the restricting exercises in the banking industry is total quality management (TQM).

 TQM as phenomenon started spreading like wildfire across the globe in the early 1980s and had been spurred on by the fierce competition ranging between companies of Japan, North America and Europe. Japanese whose land was devastated by atomic bomb in the second world war, rose from the rubbles of rubbers of deactivation in Nagashaki and Hirosina to become over the world industrial the world market like collosions. It was found out that Japan’s miraculous economics glory was a resultant effect to TQM. Japan produced goods and able to sell at a price which was lower than what it was costing the Americans and Europeans to produce them just-in-time (JIT) system enables then to produce and sell their product without incurring any cost of warehousing, “Ringi system” and like-long employment tatic were some of the component of the total quality management technical to economic success (Fapounda, 1997).

1.0             STATEMENT OF THE PROBLEM

1. Banks may not have products that could meet the needs and aspiration of the customers.
2. The process of banking operation in Nigeria may be considered cumbersome and below customers expectation.
3. People in the banking industry may be presumed not adequately trained and equipped to render core banking services.
4. Decline in the number of customers due to poor quality of products and services offered.
5. Customers are generally dissatisfied with the mode of banking operation in Nigerian this stems from the need to perceived bank as an institution that may be lacking the TQM concept hence below performance.

1.2             RESEARCH QUESTION

1. Does the implementation of total quality management techniques enable banks to off products that could meet needs and satisfaction of their customers?
2. To what   extent can the implementation of total quality management improve banking operation in Nigeria?
3. Does the implementation of total quality management affect the cost of training and productivity in the Nigeria baking industry?
4. Can be implementation of total quality management technique result in the number of customers due to poor quality of products and services offered?
5. To what extent can banks be perceived as an institution that may be locking the TQM concept and hence how performance?

1.3             RESEARCH HYPOTHESIS

H₁: Continuous service improvement and employee training/ development have a significant relation on total quality management.

H₀: Continuous service improvement and employee training/ development no significant relation on total quality management.  

1.4             OBJECTIVE OF THE STUDY

The objective of this research work are:

1. To establish the extent to which TQM at first bank of Nigeria (FBN) achieved corporate objectives.
2. To determine the extents to which quality and speed of service deliver has been enhanced.
3. To determine the level of adoption of TQM concept in the banking industry in Nigeria.
4. To advance recommendation for appropriate usage of TQM.
5. To contribute towards increasing the existing body of knowledge (literature) in the adoption and implementation of TQM concept.

1.5             SIGNIFICANCE OF THE STUDY

The study will identify the effects of TQM on First Bank of Nigeria Plc performance that has led to mutual satisfaction of all the stakeholders in the relationship.

Again the finding of this study could explored as inputs for planning and in the formulation of relevant policies coming to employees in the bank and other business concerns. The effect is that improved performance can be ensured from employee translating into higher returns on investment thereby ensuring the giving concerns status and continue existence of the bank.

1.6             SCOPE OF THE STUDY

The scope of this study covers the banking industry in Nigeria, but specific attention will be on First Bank of Nigeria Plc. The period covered by this study is a period of term year (1985 – 1995) and her performance since the implementation of the process 199602007/2008.