tqm and online banking

Project Report on:

TQM and Online Banking

Submitted To:

Mam Fadia Naz

Submitteb By:Aamir Ali Roll No 01BBA Hons 2012-2016

Management Sciences

2 | P a g e Report On Online Banking & TQM

Certificate

The Project entitled “Online Banking in Pakistan, Opportunities and Challenges with

TQM” is accepted and approved in partial fulfillment of the requirements for the

degree of BBA(Hons).

Supervisor:

Mam Fadia Naz _____________________

Submitted by:

Aamir Ali _____________________

Dated: _____________________


Preface

The primary function of this report is to share the process of learning and knowledge

which I underwent during my research on this project. The purpose of this project is

to find out the growth opportunities of online banking in Pakistan and the major

challenges the banking sector faces in its adoption. The main reason behind choosing

this project was to enhance my personal knowledge and skills about this technological

advancement in the banking sector of Pakistan and the problems it faces in its

adoption and growth.


Executive Summary

Bachelor Of Business Administration is a professional degree. According to the

requirement of our project which is a credit one, the research is being undertaken on

“Online Banking in Pakistan: Opportunities and Challenges”. Online banking allows

customer to conduct financial transactions online on a secure website or through

electronic devices.

Banking industry is transforming itself from traditional to online banking not only for

the convenience and ease of its customers but also for getting a competitive edge over

other banks. Online banking provides not only an opportunity for banking sector but

also there arise many challenges which hinder its adoption in Pakistan. So what

causes the online banking not fully adopted in Pakistan? What factors influence its

adoption? How to overcome that?

The factors which hinder its adoption are: economical factors, awareness of

customers, ease of use, security, and technological.

This research covers all the aspects which became constraints for online banking

adoption and ultimately the outcomes that help to bridge the digital divide by

providing awareness about convenience and ease of online banking.

Such as after the completion of this research it is found that these factors influence the

use of online banking in Pakistan. Such as: economical factor has a negative influence

on the adoption of online banking, while the other factors have a positive influence on

its adoption. The factors which highly influence the adoption of online banking are

security issues and awareness of the customers. So the banking sector should not only

fully transform its structure but also provide technical assistance to its customers and

assure them about their privacy confidentiality. “Experience is not what happens to you,

it is what you do with what happens to you.”-Aldous Huxley


Table of Contents

S. No List of Topics Page No

1 Abstract 06

2 Introduction 08

3 Literature Review 15

4 Theoretical Framework 35

5 Data Analysis 38

6 Limitations 66

7 Findings 67

8 Recommendation 68

9 Conclusions 69

10 References 70

11 Appendix 77


1. Abstract

Total Quality Management (TQM) has been practiced in diverse industries from

manufacturing to services. But its important in banking sector has attracted only a few

researchers. By providing the best service quality in banks higher organizational

performance will be expected. There is intense competition between Public sector,

Private sector and foreign banks in Pakistan. So customer satisfaction plays a major

role to survive in the intense competition. The present research attempts to close the

research gap of relationship between TQM and Customer satisfaction. So the

objective is to find out the association between the multidimensionality of TQM and

Customer satisfaction in the banking industry in the Pakistan context. This research

will provide constructive information that helps the practitioners to precisely identify

areas of concerns and take corrective measures to enhance their level of customer

satisfaction. Knowledge in this area will allow managers of the banking organizations

to direct their resources adequately in improving the more important contributors of

Customer satisfaction.

1.1 Keywords are TQM, Customer Satisfaction, Banking: This paper represents a review of the literature on critical success factors (CSFs) of

Total Quality Management (TQM) and supported by various philosophies of TQM.

Such factors are considered as conducive to the success of TQM implementation.

Critical Success Factors (CSFs) are internal or external factors that can seriously

affect the firm for better or worse. They provide an early warning system for


management and a way to avoid surprises or missed opportunities. In the context of

TQM, it is essential that the organizations identify a few key critical success factors,

which should be given special attention for ensuring successful implementation of

TQM program.The present study will guide the researchers in selecting the reliable

set of CSFs for empirical studies. Industries can benefit by adopting the results of this

study for effective implementation of TQM. Purpose – The purpose of this paper is to

investigate the relationship between total quality management (TQM) practices and

customer satisfaction (CS) as perceived by managers' perspectives in banks.

Design/methodology/approach – The data are collected from 30 managers and

employees of Rahim Yar Khan banks. The structural analysis is conducted to test

the hypotheses in this report.

Findings – Results reveal that leadership, customer focus, information and analysis,

and human resource focus are found to have significant and positive association with

CS as perceived by Malaysian service sector's managers.

Research limitations/implications – There are a few limitations for this research. First,

the time sequence of the relationships between the variables could not be determined

since cross-sectional data are used. Second, this research is confined only to banks.

Lastly, this research is only focused on managers and few employees.

Practical implications – This research serves as a valuable guideline for top

management to review their TQM programs and conduct assessments on a regular

basis in order to facilitate CS within their banks.

Originality/value – This research shows the importance of TQM and CS within the

banks context which is not often studied in many past researches. This research only

looks at TQM practices from the Rahim Yar Khan banks.


2.0 Introduction

Banking sector has undergone intense competition and a change in customers‘

expectations over the last few years especially after the recession .The importance and

increasing attention to service quality in financial institutions is fully justified by the

socio-political changes that have arisen. Amongst these changes, we can point to the

economic globalization, which has brought about a reversal in consumer habits for

banking services. Amongst the knock-on effects of these changes, which constitute a

new form of bank customer behavior, we can point to greater demands and financial

culture. These behaviors generate attitudes amongst customers with regard to the

banks, which in turn affect these customers‘ assessment of the Banking services and

products offered. At this juncture, the quality of service will be the dominant primary

factor in ensuring the survival of the service provider in the global market. The onset

of economic reforms has opened of Pakistani banking sector to private sector and

foreign players. These firms with the state of art service systems and high service

quality pose a real threat to the Government owned public sector banks. In such a

situation organizations have to adopt a more pragmatic, market orientated approach if

they have to succeed in winning and retaining customers. At this juncture, the quality

of service will be the dominant primary factor in ensuring the survival of the service

provider in the global market. The customer-centric services have the paradigm shift


in the service industries. This has given an impetus to the concept of total quality

management in the service sector (Saravanan and Rao, 2006).

Banks play their significant role in any economic system. They are financial

intermediaries involve in transfers of funds within and outside the country.






The concept of total quality management (TQM) has been developed as a result of

intense global competition. Organizations with international trade and global

competition have paid considerable attention to TQM philosophies, procedures, tools

and techniques. According to Juran, international competition requires higher levels

of quality achievement by organizations. Total quality management is the popular

area of research in management. Total Quality Management (TQM) has been

practiced in diverse manufacturing industries and now there is a growing interest in

the service sector, even from non-profit organizations (Nwabueze, 1998). But the

service industry differs from the manufacturing industry in a number of ways, such as

service intangibility, simultaneity of production, delivery and consumption; perish

ability, variability of expectations of the customers and the participatory role of

customers in the service delivery. Several authors have proposed models of TQM.

However, most of the models are based on theories and practices that are primarily

derived from the manufacturing industry.

The banking industry is the largest industry in the service sector which caters to the

needs of the different categories of people. Notably, the service quality of commercial

banks tends to play a dominant role in high involvement industries (Anger et al.,

1999; Elango & Gudep, 2006). Indeed providing the best service quality is viewed as

the pre requisite for the success of service organizations like banks (Roger, 2002).

The organizational performance of commercial banks is significantly and positively

linked with the internal service quality (Vanniarajan, 2007). And to provide both

internal and external service quality in commercial banks, the total quality service is

highly essential (Kassem, 1998). McCabe et al. (1994) indicated that ‗more than 90

percent of banks, building societies and insurance companies at present are

implementing some form of quality initiatives‘.

On the other hand, researchers on the service marketing and management studied

service quality by identifying the factors that influence customer‘s expectation and

perception of service quality, and investigating their impact on customer satisfaction.

Financial service sector including bank are no different. Banks are struggling to

improve service and proclaim that they are customer focus. Financial institutions have

undergone intense competition and a change in customers‘ expectations over the last


few years (Cheng et al., 1996). The importance and increasing attention to service

quality in financial institutions is fully justified by the socio-political changes that

have arisen (Cowling & Newman, 1995). Amongst these changes, we can point to the


banking services. Amongst the knock-on effects of these changes, which constitute a

new form of bank customer behavior, we can point to greater demands and financial

culture. These behaviours generate attitudes amongst customers with regard to the

banks, which in turn affect these customers‘ assessment of the financial services and

products offered. In this study we developed the concept of relationship between the

critical success factor of Total quality management for service model in banking

sector and customer satisfaction. As a consequence studying the linkage between

TQM and Customer satisfaction is necessary as it provides a theoretical as well as a

practical platform to the Banking organizations in the efforts to gain sustainable

competitive advantage.

2 . 1 What is Bank ? Banks play their significant role in any economic system. They are financial


2.2 Competition in Online Banking:Banking sector is getting competitive every day. Quality, speed, efficiency,

innovation are the main points on which quality programs are designed. Banking

sector has undergone intense competition and a change in customers‘ expectations

over the last few years especially after the recession .The importance and increasing

attention to service quality in financial institutions is fully justified by the socio-

political changes that have arisen. Amongst these changes, we can point to the


banking services.

Amongst the knock-on effects of these changes, which constitute a new form of bank

customer behavior, we can point to greater demands and financial culture. These

behaviors generate attitudes amongst customers with regard to the banks, which in

turn affect these customers‘assessment of the Banking services and products offered.


At this juncture, the quality of service will be the dominant primary factor in ensuring

the survival of the service provider in the global market.

2.3 Online Facilities:

Online facilities involve the use of internet in all the banking operations. Remember

the use of internet should be safe and sound. these facilities involve the internet and

IT from security to all the processes of banks. this all facilities are according to and in

the best interest of customer i.e. ATM rebilling Statements internet banking.

2.4 Online Being Used as a Medium of Banking Act:Now for the best interest of the customers all the banks are adopting this internet

banking as it is the requirement of banking act. Means banking sector as a largest

service sector is trying to update itself and want to maintain its largest position.

2.5 Rationale Behind Study:The main purpose of this research study was to investigate the relationships between

TQM practices and CS as perceived by managers from the TQM certified banks in

Rahim Yar Khan. The findings provided empirical evidence that TQM have

significant and positive association with CS. Finally, the findings revealed that the

dimensions of LD, CF, IA,CI as well as HR were positively associated with CS.

Predominantly, it was found that HR as well as IA were perceived as the dominant

TQM practices as they have strong association with CS. Quality is an integral

part of organizational attachment exercised from organization’s inception. Quality is

unique from organization-to-organization. From a holistic, multi-faceted

perspective, total quality management (TQM) is founded on involvement

mechanisms. Total quality management (TQM) is a continuum that requires

the application in integrating all function, processes and elements of the business

despite the actual cost. The working principle is that quality suffers when dissatisfied

customers grow, decline in loyal customers and increased in complaints as inputs and

outputs are lessened, making quality correlation to productivity.


A common strategy that contemporary organizations are embracing is the total quality

management (TQM), and this model is developed from a pluralistic point of view,

meaning it can be implemented on several companies regardless of the scope, size,

scale and structure of business. As such, TQM applies in virtually all business sector

and industry and the banking industry in Pakistan is not an exemption. How TQM is

approached in and by commercial banks in Pakistan is not yet known hence this

study.

2.6 Research Aims and Objectives:The main aim of the study is to explore the implement ability and the effectiveness of

TQM implementation in Pakistani commercial banks. In lieu with this, the following

research objectives will be addressed.

Study the implementation levels of TQM among Pakistani commercial banks Determine how such implementation improved the quality of products and

services offered by Pakistani commercial banks

2.7 Structure of Study:

2.7.1 Introduction:

The working title of the study is initially drafted

as: Total Quality Management in Banking Sector. In particular, the research will focus

on the implement ability of total quality management (TQM) in commercial banks in

Pakistan. TQM is a customer-driven, top-down, actions-based and proactive

process.The paper discusses in detail the research proposal of the topic. In this

research proposal, the background and problem of the study are presented; the

objectives of the study are formulated. Here, vital concepts, questions and

assumptions are stated. Finally, the methodology to be used is discussed.

2.7.2 Literature Review:

In recent decades, TQM has become the buzz word in the

management practice. It has been defined in many different ways. The International


Standard ISO 8402, Quality Management and Quality Assurance-Terminology has

defined TQM as the ―management approach of an organization, centered on quality,

based on the participation of all its members and aiming at long-term success through

customer satisfaction, and benefits to all members of the organization and to society

(Ljungstrom & Klefsjo, 2002). Temtime and Solomon (2002) said that TQM seeks

continuous improvement in the quality of all processes, people, products, and services

of an organization. TQM is also a systems approach to management that aims to

enhance value to customers by designing and continually improving organizational

processes and systems (Kartha, 2004). The emphasis is on employee involvement and

empowerment along with customers and customer satisfaction as the focal point. The

tenets of TQM are continuous improvement, top management leadership commitment

to the goal of customer satisfaction, employee empowerment, and customer focus

(Ugboro & Obeng, 2000). TQM means that the organization‘s culture is defined by

and supports the constant attainment of customer satisfaction through an integrated

system of tools, techniques and training (Sashkin & Kiser, 1993).

2.7.3 Research Methodology:

In this section, we discuss sample and data collection procedures and

operational measures of variables used in the study as well as the statistical tests used

to evaluate the multidimensionality of TQM practices and its relationship with CS.

The research strategy that the study will utilize is the descriptive method. A

descriptive research intends to present facts concerning the nature and status of a

situation. It is also concerned with relationships and practices that exist, beliefs and

processes that are ongoing, effects that are being felt, or trends that are developing. In

addition, such approach tries to describe present conditions, events or systems based

on the impressions or reactions of the respondents of the research (Creswell, 1994).

This research is also cross-sectional because of limited time. This research is a study

of a particular phenomenon (or phenomena) at a particular time. Accordingly, cross-

sectional studies often employ the survey strategy, and they may be seeking to


describe the incidence of a phenomenon or to compare factors in different

organizations.

In this study, primary and secondary research will be both incorporated. The reason

for this is to be able to provide adequate discussion for the readers that will help them

understand more about the issue and the different variables that involve with it. The

primary data for the study will be represented by the survey results that will be

acquired from the respondents. A structured questionnaire will be designed for this

study. The study will survey 25 commercial banks about their TQM processes. On the

other hand, the literature reviews to be presented in the second chapter of the study

will represent the secondary data of the study. The secondary sources of data will

come from published articles from books, journals and theses and related studies.

2.6.4 Findings & Recommendation s:

Top management is very serious in TQM practices and establishing it it all

their departments and they has set up it as a separate department. Even it is given

under the control of auditor. So there is an eagle eye of the auditor on it. Top

management should conduct seminars and workshops for its employees to make the

sense,awareness and benefits of the TQM.there should be trainee programs for the

staff.

2.6.5 Conclusion:

TQM practices are too much valid and necessary for banks to compete in

toady’s fierce competition. Now a days top management have started to take full

interest in the TQM department for the success of their business & bank. Customers

are the real asset of any business either it is a manufacturing or service sector but it is

very important in service sector. So there is an intense need of TQM in the service

sector organization.


3. Literature review

3. 1 Brief Overview: In recent decades, TQM has become the buzz word in the management

practice. It has been defined in many different ways. The International Standard ISO

8402, Quality Management and Quality Assurance-Terminology has defined TQM as

the ―management approach of an organization, centered on quality, based on the

participation of all its members and aiming at long-term success through customer

satisfaction, and benefits to all members of the organization and to society‖











system of tools, techniques and training (Sashkin & Kiser, 1993).

3.2 Overall


3.2. 1 Total Quality Management :

In recent decades, TQM has become the buzz word in the management practice. It has

been defined in many different ways. The International Standard ISO 8402, Quality

Management and Quality Assurance-Terminology has defined TQM as the

management approach of an organization, centered on quality, based on the

participation of all its members and aiming at long-term success through customer

satisfaction, and benefits to all members of the organization and to society











system of tools, techniques and training (Sashkin & Kiser, 1993). Even though many

think that TQM is old news, many of the new continuous improvement initiatives are

based on TQM philosophies. TQM encompasses a number of different initiatives. For

example, Six Sigma, which is popular today, is a methodology within TQM, not an

alternative to it (Klefsjo, Wiklund, & Edgeman, 2001). Lean Sigma is another

methodology that is widely used today that is included within TQM. TQM also

includes initiatives such as ISO 9000 and the Malcolm Baldrige National Quality

Award (MBNQA). Regardless of the different perspectives, the underlying theme

common to all frameworks is that TQM is based on a prevention work process that

strives to increase quality and efficiency, improve productivity, and enhance customer

satisfaction (Waldman & Addae, 1993). The core values and beliefs that are essential

in implementing a TQM process include the following elements: (1) quality

information must be used for improvement, not to judge or control people; (2)

authority must be equal to responsibility;(3) there must be rewards for results; (4)


cooperation, not competition, must be the basis for working together; (5) employees

must have secure jobs; (6) there must be a climate of fairness; (7) compensation

should be equitable; and (8) employees should have an ownership stake (Sashkin &

Kiser, 1993). Kassicieh et al. (1998) studied the impact of TQM training, performance

evaluation and rewards on the success of TQM implementation. Aksu (2003)

examined the preparedness of manufacturing industries to implement the TQM

practices. Kassicieh et al. (1998) studied the impact of TQM training, performance

evaluation and rewards on the success of TQM implementation.


3.2.2 Benefits of TQM:

Juran (2001) wrote that the benefits and goals of total quality are lower costs, higher

revenues, delighted customers, and empowered employees. Costs can be lowered by

reducing errors, reducing rework, and reducing non-value added work. Higher quality

can also equate to higher revenues through satisfied customers, increased market

share, improved customer retention, more loyal customers, and premium prices.

Customers continue to demand higher quality goods and services. Delighted

customers purchase over and over again, advertise goods and services for the

company, and check first when they are going to buy anything else to see what is

offered by the company they are loyal to. Empowered employees have the means to

measure the quality of their own work processes, to interpret the measurements, and

compare these measurements to goals and take action when the process is not on

target. These empowered employees also understand who their customers are; what

the customers need, want, and expect; how to design new goods and services to meet

these needs; how to develop the necessary work processes; how to develop and use

the necessary quality measurements; and how to continuously improve these

processes. Similarly Chin and Pun (2002) stated that the implementation of TQM can

generate improved products and services, reduced costs, more satisfied customers and

employees, and improved bottom line financial performance. Other benefits include

improved company image, improved certainty in operations, improved morale,

improved management, and committed customers (Davies, 2003). However, it is not

easy for management to implement TQM, because TQM means a cultural overhaul

(Rao, Youssef, & Stratton, 2004). Deming (1981) also attested that the benefits of

better quality through improvement of the process are thus not just better quality and

the long-range improvement of market-position, but also greater productivity and

profit. Improvement of the process increases uniformity of output of product, reduces

mistakes, and reduces waste of manpower, machine-time, and materials. Kaynak

(2003) suggested that a positive relationship exists between the extent to which

companies implement TQM and firm performance. The three TQM practices that

have direct effects on operating performance (inventory management and quality


performance) are supplier quality management, product/service design, and process

management.


TQM deals with both individual and collective behaviors that can create customer

satisfaction through continuous improvement (Claver, Gasco, Llopis, & Gonzalez,

2001). Each company should develop its own individual framework for TQM that fits

its situation and available resources. TQM involves teamwork and commitment on the

part of the employees and management. Well-conceived training, mentoring, and

feedback systems have demonstrated that they serve important roles in mitigating

employee resistance to change (Jun, Cai, & Peterson, 2004). If TQM succeeds in

improving performance, the organization's customers may gain through lowered

prices or improved satisfaction; its shareholders gain through improved returns on

investment and management gains through higher compensation (Beer, 2003). A

study by Prajogo and Sohal (2003) found that TQM significantly and positively

contributes to innovation performance, in terms of product and process. They found

that there was a positive and significant relationship between quality performance and

innovation performance, particularly process innovation. Zhang (2000) identified the

significant positive impact of quality management methods on the products quality

and business performance. TQM can have a dynamic role in strategy formulation, in

addition to the more tactical role of strategy application and deployment (Leonard &

McAdam, 2003). Those organizations that applied TQM at a strategic level were

found to have robust TQM programs with greater longevity as a result of using

frequent regenerative approaches (Leonard, McAdam, & Reid, 2002).

3.2.3 Obstacles to TQM:

TQM has many different obstacles and barriers. As per managers five barriers to

TQM are inadequate human resources development and management; lack of

planning for quality; lack of leadership for quality; inadequate resources for TQM;

and lack of customer focus. The most significant obstacle was found to be inadequate

resources, followed by inadequate human resources development, and then lack of

planning (Sebastianelli & Tamimi, 2003). A primary reason for TQM failure in

organization is due to half-heartedly implemented TQM. Many organizations are not

willing to undertake the total cultural transformation that TQM requires (Ugboro &

Obeng, 2000). As per Nwabueze (2001), nobody knows exactly what culture change

is and how best to approach cultural transformation, which is argued to be the most


essential ingredient if TQM is to succeed. Other often-cited problems include getting

everyone in the organization to move in the same direction, the lack of goals,

insufficient knowledge, poor planning, lack of management commitment, lack of

proper training, failure to use the right framework, lack of resources, lack of effective

management, and incompatibility of attitudes of top management and workers. Some

companies are already in poor health at the time during which TQM is implemented.

TQM demands that resources be available to sustain the organization over the full

period of implementation and beyond, and it could prove to be too demanding for the

weak (Nwabueze, 2001).

Beer (2003) stated that TQM fails due to failures in implementation, not in TQM

theory and method. Top-down programs undermine the unit leaders' commitment and

their capacity to lead a TQM transformation in their unit. It is management's lack of

capacity to explore the gaps between the TQM program and the reality of actual

practice—the very process of inquiry, analysis, and action embedded in TQM—that

causes TQM implementation failure. The missing ingredient in unsuccessful TQM

transformations is a total quality management process for assessing and developing a

high quality of management at every level (Beer, 2003). A study by Ljungstrom and

Klefsjo (2002) determined that the six areas for obstacles to TQM are management,

continuous improvement, quality methods and tools, work development, process

orientation, and unions. Unions have seldom been discussed in TQM literature, but

they have a great deal of influence in many organizations. Efforts to achieve TQM

that unions are often resistant to include reduced hierarchies, integration of work,

increased responsibility and authority on the shop floor, membership in projects and

design processes, and competence development. Lack of senior management

commitment is seen as an important obstacle (Soltani, Lai, & Gharneh, 2005).

Reasons for this include lack of knowledge about what TQM is, ineffective internal

communication between management and employees, and low engagement of other

levels of management within the organizations. So, top executives need training that

will help them to understand the philosophy and benefits of TQM, along with how to

implement it effectively.


Juran (1993) suggested that many companies have failed at TQM initiatives because

CEOs do not know which quality strategy is best for their company and their choices

have been a gamble and there was a laissez-fair attitude, that is, managers were not

trained in the process of managing for quality. Critics of TQM have suggested that

TQM entails excessive retraining costs, consumes huge amounts of management time,

increases paperwork and documentation, demands unrealistic employee commitments

levels, emphasizes process over results, and fails to address the needs of small firms,

service firms, or non-profits. Failures of TQM have been attributed to factors that

conflict with the philosophy of TQM, which include lack of cooperation and

excessive time and financial commitments (Chin & Pun, 2002). The review of

literature showed that the most common obstacle to TQM is lack of management

support and commitment. Other prevalent obstacles were lack of proper and adequate

training and resistance to change from all involved.

3.2.4 TQM From Manufacturing to Services:

Developed during the era of manufacturing, both the US and Japanese TQM gurus

focused and addressed their work primarily to manufacturing, and hence the

application of TQM in service was only given secondary attention. Still many

researchers worked for TQM application in service industry (Sureshchandra et al.,

2002; Sit et al., 2009). Aksu (2003) examined the preparedness of manufacturing

industries to implement the TQM practices. Suresh chandra et al. (2002) identified 12

dimensions of Total Quality Service (TQS) as being critical for effective

implementation of quality management in service organizations. Among these 12

dimensions, it is Service Culture which is unique. Today, the Pakistani customers

have a wide choice of service providers in the market and the more knowledgeable

and discerning among tend to opt for the best in terms of quality and reliability and

are at par with international standard. At this juncture, the quality of service will be

the dominant primary factor in ensuring the survival of the service provider in the

global market. The customer-centric services have the paradigm shift in the service

industries. This has given an impetus to the concept of total quality management in

the service sector (Saravanan and Rao, 2006). Brah et al. (2000) surveyed 176 service

companies in Singapore and found that top management support, customer focus,


employee involvement and employee empowerment were positively correlated with

financial and operating performance. So there is no lack of studies proposing that

TQM can be transferable to the service environment. Still, there is an obvious need

for empirical research to demonstrate that TQM applies equally to both service and

manufacturing setting.

3.2.5 Model for Evaluating TQM Implementation in Services:

Suresh chanda et al. (2001) in a research study in the banking sector of a developing

economy identified that critical dimension of TQS can be broadly categorized under

three groups as follows:1.Dimensions of manufacturing used in service sector- Top

management commitment, Human resource management, Design and management

process, Information and analysis, Benchmarking, Continuous improvement,

Customer focus, Employee satisfaction. 2.Those dimension that are seldom used in

the literature both in manufacturing and service organization are Union

intervention ,Social responsibility 3.Finally those factors that are unique to the service

sector are Services capes-the man made physical environment and Service culture. Al-

Marri et al. (2007) identified sixteen factors that were found to be critical to TQM

implementation success. The factors are top management support, strategy,

continuous improvement, benchmarking, customer focus, quality department, quality

system, human resource management, recognition and reward, problem analysis,

quality service technologies, service design, employees, services capes, service

culture and social responsibility. Khamlah and Lingaraj (2007) survey of managerial

perceptions of the implementation of total quality management (TQM) in small

service businesses in the US. The study addresses the employment of TQM, tools

used, successes, failures, benefits, and problems encountered in small firms. Using a

structured instrument, they surveyed 550 small businesses from various types of

services in northeastern Indiana and obtained 306 usable responses. Whereas the

majority of the respondents indicate top management commitment towards TQM,

most have not instituted formal TQM programs or quality-enhancing activities.

Training of employees in quality is not commensurate with top management

commitment to TQM. Further, the majority of the firms do not reward or recognize


employees who successfully apply TQM. There may have been ambiguity in the

minds of respondents about the meaning of TQM.

Lenka and Suar (2008) based on the review of literature, this study has identified six

core concepts, for the realization of TQM in service sector such as hotels and

banks.These are:

(a) transformational leadership,

(b) customer orientation,

(c) HRM,

(d) organizational culture,

(e) continuous improvement

The underlying assumption is that realization of these core concepts is facilitated

through the implementation of the peripheral, supporting precepts. One of the

peripheral precepts is measurement of customer satisfaction dominant theme in

services marketing literature, with the aim of increasing customer loyalty and

retention.

Selvaraj (2009) researched about Pakistani banking industry and found that top

management commitment, human resource management, technical and important

systems, customer focus, employee satisfaction, service culture, social responsibility

and services capes are important commercial factors in commercial bank. His research

showed that TQM is most successfully implemented in foreign banks followed by

private and public sector banks. The important discriminant TQM factors among the

three groups of banks were found to be customer focus and top management

commitment.

3.2.6 TQM and Organization Performance:

Zeithaml (2000) summarized about the relation between TQM and profit. His findings

showed that both positive effect in some studies and no effect in other. But unlike the

variability in profitability impact of TQM, the relationship between TQM and

quality/operating performance is well established and empirically confirmed (Lee et

al., 1999; Roa et al., 1999). With popularity of TQM, there is a growing awareness of


importance of linking business drivers with other organizational issues such as

leadership, strategic quality planning, service design, people and process management

(Pannirselvam & Ferguson, 2001). There is a significant practitioner interest in this

area and the adoption of quality award criteria as TQM framework tends to proliferate

(Black & Porter, 1996; Hua et al., 2000). These awards stress the importance of total

quality, customer satisfaction and management process to the attainment of superior

competitive position. Many authors have highlighted the dangers of managers‘

mistaking the implementation of TQM for quality accreditation. Critiques of quality

awards are also well rehearsed in the literature, calling into question the ubiquity and

completeness of these awards (Bounds et al., 1994). Award-based framework is meant

mainly for organizations seeking to be recognized as leaders in the quality

management field, and it assumes that an organization has reached a mature level of

TQM implementation (Yusof & Aspinwall, 2000). According to Botorff (2006),

―From the economics of quality, we know it is much cheaper to prevent failure than

to let it happen, catch it, and then try to fix it. If organizations would practice ethics as

the logic based discipline and quality problem it is, they would achieve higher levels

of accuracy, repeatability, and performance. This, in turn, would result in better moral

and economic outcomes for all involved, including themselves.

A considerable body of empirical evidence suggests that TQM implementation

improves organizational performance. Using a random sample of 950 companies in

Singapore, Brah et al. (2000) determined how an organization could benefit from

TQM implementation in terms of improved financial and operating performance.

Kunst and Lemmink (2000) investigated the relationship between quality

implementation and organizational performance in hospitals and discovered that TQM

leads to higher business performance, which indicates efficiency, cost effectiveness,

and higher perceived service quality by patients. In the Netherlands, Zhang (2000)

reached almost similar conclusions. He found that quality implementations have a

positive impact on product quality and TQM has much better effects on the overall

business performance than ISO 9000. TQM improves many aspects of performance

such as customer satisfaction and business performance (Martinez-Lorente et al.,

2004; Parzinger & Nath, 2000). In the UK, Soltani and Lai (2007) found that

International Organization for Standardization (ISO) series and other total quality


management (TQM) models were seen as helping organisations in the journey

towards business excellence.

In contrast, there are some researchers who found that the implementation of TQM

did not improve performance. For example, Dow et al. (1999) showed that some

TQM factors, such as employee commitment, shared vision and customer focus,

contribute to superior quality outcome and factors such as benchmarking, work teams,

advanced manufacturing technologies and closer supplier relationships do not

contribute to superior quality outcomes. This is also supported by Beaumont and

Sohal‘s (1999) investigation which showed that the use of quality management

practices was not correlated to profit levels. Singles et al. (2001) studied the effect of

certification in the ISO 9000 series and found that ISO certification itself did not lead

to an improvement in the performance of organisations. But Naser et al. (2004)

investigated ISO 9000 registered companies in Malaysia and found positive links

between ISO 9000 registered companies and firm performance. This is similar to a

study conducted in Greece by Dimara et al. (2004), who found a moderate

relationship between ISO 9000 registered companies and firm performance. So

importance of TQM in raising organization performance cannot be ignored. European.

3.2.7 TQM in Banking Sector:

Banking services are perhaps the largest industry that caters to the needs of various

segments of the population, reflecting the diversity of society. Moreover, perceived

service quality tends to play a significant role in high-involvement (high interaction

between customers and service providers) industries like banks (Angur et al., 1999).

Also, banks often have long-term business relationships with customers. In addition,

the banking sector is large enough to capture and represent almost all the critical

features of customer-perceived service quality and the critical dimensions of

excellence that management may encounter in order to effectively manage a service

organisation.

Authors such as Ahmed (2002), Lewis (1990), Anderson et al. (1994), Neyer (2000)

and Sureshchandar et al.(2002) have suggested the need for this kind of study to

underpin how banks perform in developing countries and what best practices need to

be implemented to improve the financial performance and economies of this part of


the globe. Banks can also benefit from TQM‘s emphasis on employee training. As

Mary Walton observes in The Deming Management Method: ―It is not enough to

have good people in your organization. They must be continually acquiring the new

knowledge and the new skills that are required to deal with new materials and new

methods of production. Education and retraining are an investment in people that is

required for long term planning‖ .Some banks eschew training due to cost or time

considerations, or inadequate appreciation of its value. However, Sovereign Bank, a

cutting-edge financial institution, has shown that it is possible to estimate the return

on training dollars (Engel & Kapp, 2004). Mellahi & Eyuboglu (2001) on his research

on Turkey banking sector find that successful TQM implementation requires:

management‘s unwavering commitment to TQM and enthusiasm; formal national

bodies to introduce organizations to TQM and provide assistance during and after

TQM implementation; and a highly educated and competent management team. Curry

and Kkolou (2004) found that CRM has revealed many aspects that closely resemble

the total quality management (TQM) approach. Su, Tsai and Hsu (2010) proposed a

concept of ‗total customer relationship management‘ (TCRM). Since ISO 9000 QMS

(International Organization for Standardization 9000 Quality Management System) is

always available and useful in the field of TQM implementation, it is introduced

offering the framework with five components. Issues and content pertaining to CRM

literature are classified and lodged into these components as elements. Five

components are Customer-related process, Management responsibility, Resource

management, Product or service realisation, Measurement, analysis and improvement.

While investment returns varied by the type of training, the yields were eye-opening.

For example, one of Sovereign Bank‘s core training programs – business banking –

was found to have a net ROI of 471 percent for the first year alone. The bank also

noted a number of intangible results, including an above-average reputation for

knowledgeable service, empowered employees, and greater sales opportunities (Engel

and Kapp, 2004). These consequences of training are not unique to Sovereign Bank,

as will be discussed in the following section. Total quality management is essential to

the banking sector in particular to sustain competitive advantage (Al-Marri et al.,

2007). Al-marri et al. (2007) in his empirical study of the UAE banking sector

identified sixteen factors were found to be critical to TQM implementation success.


The factors are top management support, strategy, continuous improvement,

benchmarking, customer focus, quality department, quality system, human resource

management, recognition and reward, problem analysis, quality service technologies,

service design, employees, services capes, service culture and social. He also

summarize that summarize, total quality management is essential to the banking

sector in particular and other service-oriented organizations in general to sustain

competitive advantage.

Selvaraj (2009) in his study TQM in the Indian banking sector found that there is

significant differences between the three groups of banks in respect of these factors

have been investigated in all its dimensions. The public sector banks fare better in

employee satisfaction whereas the private sector banks are good in service culture and

Human Resource Management. The foreign banks perform better in top management

commitment, customers focus and servicescapes. The important discriminant TQM

factors among the three groups of banks are customer focus and top management

commitment. satisfaction can be defined in various ways. According to Kotler et al.

(1996), satisfaction is ―the level of a person‘s felt state resulting from comparing a

product‘s perceived performance (or outcome) in relation to the person‘s

expectations.‖ In brief, satisfaction level simply is a function of the difference between

perceived performance and expectation (Stahl, 1999). Unlike the quality of goods,

which may be tangible and measured objectively by using indicators such as

performance, features, reliability etc, service quality, however, is not tangible and is

thus defined in terms of ‗attitude‘, ‗interaction‘, and ‗perception‘. Thus, service

quality is judged by what a customer perceives rather than what a provider offers. To

yield highly satisfied and loyal customers, organizations throughout the world are

striving to produce products and services of superior quality. For decades, Customer

satisfaction is considered to be the key success factors for every profit-oriented

organization as it affects companies‘ market share and customer retention. In addition,

satisfied customers tend to be less influenced by competitors, less price sensitive, and

stay loyal longer (Dimitriades, 2006). Oakland (1986) defined quality of a banking

service as the degree to which it meets the requirements of the customer. So the total

quality programme has to be started by obtaining the customers' perception of the

service delivered and their expectation of the service to be provided by the company.


It can also be learned from the internal feedback relationship created between the

internal customer and supplier. These are the quality chains (Oakland, 1993). These

will provide substantial contributions to enhance the process. No matter how efficient

the administrative system of a company, it can produce zero defects only if the

customers (internal and external) provide sufficient and accurate details to enable the

quality process to meet their needs and expectations.According to the study of Yang

(2006), TQM along with human resource management significantly affected quality

performance, especially with regard to customer and employee satisfaction.

According to Vora (2002), customer and employee satisfaction and streamlined

processes together produce improved operational and financial results which will

eventually lead to business Excellence.

Agus (2004) in his study in Malaysia service sector finds that there is a strong and

positive association between TQM and customer satisfacation. Saravanan and Rao

(2006) found the statistically significant correlation between the implementation of

TQM practices and customer satisfaction and business. Service quality promotes

customer satisfaction, stimulates intention to return, and encourages recommendations

(Nadiri and Hussain, 2005). Customer satisfaction increases profitability, market

share, and return on investment (Stevens et al., 1995; Legoherel, 1998).Tanninen et al.

(2010) on his empirical study prove that the TQM approach affected the customer

satisfaction results positively, so the business units that had started to apply TQM

earlier had more satisfied customers than their less experienced counterparts

3.2.7Customer Satisfaction:

CS can be defined in various ways. According to Kotler (1996), satisfaction is “the

level of a person's felt state resulting from comparing a product's perceived

performance (or outcome) in relation to the person's expectations.”

In the contemporary global economy and highly competitive business environment, it

is fatal for a business organization to be non-customer oriented .Since early 70s some

important developments in theory and research on consumer satisfaction have been

made by different studies Satisfaction, conceptually, may be considered as an

outcome of purchase and use which is the outcome of customer’s comparison of the

benefits and costs involved in acquiring any product or service experience in relation


to the expected outcomes, whilst, in operational terms, satisfaction is similar to the

attitude whereas it can be evaluated as the accumulated satisfaction experiences with

the different attributes of the product. Later, in 80s, addition of "an emotional

response to the experiences provided by, associated with particular products or

services purchased .. However, further development customer satisfaction research

during 90s and also at the inception of year 2000, dominated by model built on

“confirmation/disconfirmation” paradigm to describe customer satisfaction (. Where

satisfaction, or dissatisfaction determined by the difference between customer

expectations of the product or service and their actually percieved performance.

3.2.8Critical Success Factors of TQM:

The extent review of the literature suggested that there are numerous TQM( practices

in the literature) that can be identified as being crucial to the successful

implementation of TQM.They identified eight factors: top management leadership,

role of quality department, training, product design, quality management, process

management, quality information analysis, and employee relations with customer This

covered service industries as corporate quality culture; quality improvement

measurement systems; communication of improvement information; strategic quality

management; teamwork; structure, people/customer management; operational quality

planning; customer satisfaction orientation. They are: compensation, benchmarking,

training management, empowerment, technology management, assessment, process

management, participation, teamwork, and training and outcome measurement.

3.2.9 TQM Factors Links With CS:

3.2.9.1 Leadership:

LD can be defined as the process of influencing others towards achieving some kind

of desired outcome and it is one of the essential elements of TQM .The achievement

of this principle depends much on the commitment of the top management to allocate

resources and encourage actions. In an empirical study investigated the relationships

between the CS and TQM philosophy towards leadership. The results from this


research signified that LD was significantly (either directly or indirectly) affected CS.

Further illuminated that effective LD in TQM is a requirement to earn customer trust.

Thus, the following hypothesis was proposed.

LD has a significantly positive association with CS

3.2.9.2 Strategic Planning:

SP can be defined as the process managers use to formulate and implement strategies

for providing the best value to the stakeholders and achieve the stipulated goals of the

organization. Ideally, it involves the mapping of long- and short-term organizational

goals. Particularly, there is lack of empirical studies that examines the effects of

organization's vision on CS. SP has a significantly positive association with CS.

3.2.9.3 Customer Focus :

CF is referred as the degree to which an organization continuously satisfies customer

requirements and expectations and it is considered to be one of the basic building

blocks of TQM. In the highly competitive business environment, one of the most

vociferous pressures on management in all types of organization is to focus on

customer needs . The key to quality management is maintaining a close relationship

with the customers, so that customers' needs can be fully understood and those needs

are being met can be received . In the efforts to pursuit CF, information about

customers' needs and wants, complaints, level of satisfaction, etc. are gathered and

analyzed.

Only those firms who are able to satisfy customers' needs and requirements are able to

survive and compete effectively in the cutthroat business playing field. To be

successful, firms should recognize the need to put customer first in every decision

making or perhaps, adopt a customer-focus or customer-centered culture. Thus, the

following hypothesis is formulated: CF has a significantly positive association with

CS.

3.2.9.4Process Management:

A process is a systematic approach for converting inputs into outputs; it is the way in

which all the resources of an organization are used in an effective and efficient


manner to achieve its goals. A relatively new area of such improvements is “business

process management. Since business processes are considered to be the horizontal

linkages between key activities that impact the customer, managing these “end-to-

end” processes should be a continuing effort if the companies are to meet customers'

specific needs and requirements. It is not surprising that the findings endorsed BPM

as a means to achieving business excellence (i.e. improved relationship with

customers, better cross-functional working, and a change in organizational culture).

Eventually, CS is established as well. The ultimate goal of such business excellences

will undoubtedly, result in CS. Much research has shown that effective PM.

PM has a significantly positive association with CS.

3.2.9.5Information and Analysis:

This TQM principle covers a wide range of subjects pertaining to information and

knowledge management, and measurement and analysis of organizational

performance. Thus, fulfilling customer needs and expectations are considered to be

the baseline for any kind of businesses. When customers' needs and expectations are

met, satisfaction is established. Benchmarking is the process of comparing

performance information, both internally and externally and measuring an

organization's operations or its internal processes against those of a best-in-class

performer from inside or outside its industry.

. Information and analysis (IA) has a significantly positive association with CS.

3.2.9.6Human Resource Focus:

Human resource management (HRM) can be defined as “the policies and practices

one needs to carry out the ‘people’ or human resource aspects of a management

position including recruiting, screening, training, rewarding and appraisals”

systematically studied the impact of HRM practices on the implementation of TQM

within the high-technology firms and the empirical results of the study found that

HRM practices can have significant effects on CS. Eight HRM activities were

developed and measured in the study, namely personal development plan, job-related

training, annual performance review, employee involvement, protocol for labor-


shortage, predictable work schedules, transparent management style, and supportive

management style. Conversely, employee satisfaction was correlated primarily with

the management style of the unit manager, and to a lesser degree affected by

performance reviews and predictable work schedules

HR has a significantly positive association with CS.

3.2.9.7 Continuous Improvement:

A stable process may be improved by applying a kaizen continuous improvement

programmed. A dramatic step-change in performance may be achieved by radical re-

engineering. It is suggested that each of these phases has its own characteristics which

should be taken into account when determining performance metrics and designing

approaches to process monitoring and control.

Theoretical Framework

4.1 Introduction of Chapter:Theoretical framework shows the whole frame work and methods which describes the

whole research and the ways of findings and analysis which describes the whole

research and shows best result.

4.2 The Descriptive Approach Method:

The Eight-Step Process in the Descriptive Method

1. Problem and observation

2. Identify of information

3. Development of data gathering instrument

4. Identification of population and sample

5. Design of information collection procedure

6. Collection of information

7. Analysis of information

8. Generalization or predictions


4.2.1 Problem and Observation:

Observation is the first stage, in which one senses that certain changes are

occurring or that some new behaviors, attitudes and feelings are surfacing in one’s

environment (i.e., the work place).How does one observe phenomena and changes in

the environment?

4.2.2 Identify of Information:

It involves the seeking of information in depth, of what is observed.

This could be done by talking informally to several people in the work setting or to

clients or to other relevant sources, thereby gathering information on what is

happening and why. (Unstructured interviews)

Then it is followed by structured interviews.

Additionally by doing library research or obtaining information through other sources,

the investigator would identify how such issues have been tackled in other situations.

4.2.3 Development of Collecting Data Instrument:

Develop a questionnaire and seminars to collect a feasible data for good results and

make good questionnaire according to topic. In this study, primary and secondary

research will be both incorporated. The reason for this is to be able to provide

adequate discussion for the readers that will help them understand more about the

issue and the different variables that involve with it. A structured questionnaire will

be designed for this study. The study will survey 25 commercial banks about their

TQM processes

4.2.4. Population and Sample:

The target population of this study was managers and few employees from the banks.

TQM in their operations. Therefore, the selected sample is considered to be a valid

representation of the population because is a well-established and renowned

representative of the manufacturing and service industries for over 38 years. In this

study, the banking organizations were purposively targeted.


The unit of analysis for this study was the managers who possessed adequate

knowledge of their organizational practices pertaining to quality management while

had great understanding about the level of CS in their organizations. In fact, a number

of researchers also had selected this sample group (i.e. managers) as their target

population in relation to the empirical study of TQM postulated that a commitment to

quality management was primarily initiated by the top management, and departmental

managers were usually more familiar with the basic principles and terminology of

quality management as compared to other levels of employees (i.e. low-level

management). Thus, this group of population was chosen as the target for this study.

The empirical data were collected using a questionnaire survey. A random sample of

30 managers was selected from the banks. Only one site per organization was

included in the sample. Of the 40 questionnaires originally distributed, 30 were

returned with answers. This constituted an overall response rate of 75 percent.

Nevertheless, ten of the returned questionnaires were not usable. .

4.2.5 Design of Data Collection :

It is the next logical step after theory formulation.

From the theorized network of associations among the variables, certain testable

hypotheses or educated conjectures can be generated. Hypothesis testing is called

deductive research. Sometimes, hypotheses that were not originally formulated do get

generated through the process of induction. Questionare is designed as structerd

questions.major and more questions are close ended.

4.2.6 Collection of Information

4.2.6.1 Primary Sources

The primary data for the study will be represented by the survey results that

will be acquired from the respondents. A structured questionnaire will be designed for

this study. The study will survey 25 commercial banks about their TQM processes.

4.2.6.2 Secondary Sources :


The literature reviews to be presented in the second chapter of the study will

represent the secondary data of the study. The secondary sources of data will come

from published articles from books, journals and theses and related studies.

4.2.6.3 Data Collection Method:

Survey

Books

Discussion

Internet

Research papers journels,articles

. 4.2.7 Analysis of Information:

Analysis of whole collected data to b done next and apply tests to calculate

good results. It is the important step which shows all differentiation and values.

4.2.7 Generalization:

Generalization is the process of arriving at conclusions by interpreting the

meaning of results of the data analysis.

4.3 Problem of the Study:

The key problem that will be explored in this study is the implement ability of TQM and the effectiveness of such in the banking industry in Pakistan. The following research questions will be given answer to:

1) How TQM is applied in commercial banks in Pakistan?

2) How TQM improve the quality of commercial banks in Pakistan?

3) How can the quality of services of commercial banks be improved through TQM?

4.4 Research Design:


The research strategy that the study will utilize is the descriptive method. A

descriptive research intends to present facts concerning the nature and status of a

situation, as it exists at the time of the study (Creswell, 1994). It is also concerned

with relationships and practices that exist, beliefs and processes that are ongoing,

effects that are being felt, or trends that are developing (Best, 1970). In addition, such

approach tries to describe present conditions, events or systems based on the

impressions or reactions of the respondents of the research (Creswell, 1994). This

research is also cross-sectional because of limited time. This research is a study of a

particular phenomenon (or phenomena) at a particular time. (Saunders et al, 2003)

Accordingly, cross-sectional studies often employ the survey strategy, and they may

be seeking to describe the incidence of a phenomenon or to compare factors in

different organizations.

In this study, primary and secondary research will be both incorporated. The

reason for this is to be able to provide adequate discussion for the readers that will

help them understand more about the issue and the different variables that involve

with it. The primary data for the study will be represented by the survey results that

will be acquired from the respondents. A structured questionnaire will be designed for

this study. The study will survey 25 commercial banks about their TQM processes.

On the other hand, the literature reviews to be presented in the second chapter of the

study will represent the secondary data of the study. The secondary sources of data

will come from published articles from books, journals and theses and related studies.

In this section, we discuss sample and data collection procedures and operational

measures of variables used in the study as well as the statistical tests used to evaluate

the multidimensionality of TQM practices and its relationship with CS.

4.6 Aims of Research:The main aim of the study is to explore the implementability and the effectiveness of

TQM implementation in Pakistani commercial banks. In lieu with this, the following

research objectives will be addressed.

Study the implementation levels of TQM among Pakistani commercial banks

Determine how such implementation improved the quality of products and

services offered by Pakistani commercial banks


4.7 Summary of Research Framework:

Dependent Variable:

Customer Satisfaction

Independent Variable:

Leadership

Strategic planning

Customer focus

Process management

Information and analysis

Human recourse management

Continuous improvement

In relation to the above, the variables are identified on a general basis. There are

several other variables that affect the Customer Satisfaction level, but only a few are

considered for this in order to avoid complexity

Relationship among Variables

Result Dependent Independent

Performance Customers’ Satisfaction

Leadership

Process Management

Human Resource

Management

Customers’ Focus

Information Analysis


Strategic Management


Employee Management

Communication

4.7.1 Variable Measurements:

4.7.1.1 Independent Variables: TQM Practices:

This measure is based on the seven dimensions of TQM . The seven dimensions

namely LD, CF, SP, IA, PM, HR and CI. Each of these TQM categories consists of

three statements or items. Thus, a total of 21 statements were developed. Sample

items include “Top management strongly encourages employee involvement in

quality management and improvement activities” (LD), “Our organization has a

written statement of strategy covering all business operations which is clearly

articulated and agreed by our senior manager” (SP), “Our organization collects

extensive complaint information from customers” (CF), “Employees are encouraged

to develop new and innovative ways for better performance” (PM), and “Availability

of key performance figures for analysis and decision making” (information sharing).

4.7.1.2 Dependent Variable:

Similar to TQM, the measures of CS were derived and adapted from numerous

existing studies. Five statements were developed under this construct. Respondents

(i.e. managers) were asked to indicate their opinions about the CS level in their

organizations based on five-point scale (1, strongly agree; 2, agree; 3, neutral; 4,

disagree; 5, strongly disagree). Some of the examples of the statements that measured

CS are as follows: “Customer satisfaction is an everyday priority in my organization,”

“Customers are satisfied with my organization's products/services,” and “My

organization's customers feel that we strive to satisfy.”


4.8 Usefulnees/Implication of study:

4.8.1 Research Implications:

In this study, a contemporary research in the domain of TQM has implications in both

theoretical and managerial perspectives. These implications will be discussed as

follows.

4.8.2 Theoretical Implications:

From the theoretical perspectives, this study highlights the importance of TQM in

contributing to CS within the banking service context. The exploration of the

association between TQM practices and CS in the banking industry fills the current

disparity and consequent gap in knowledge. The proposed theoretical model in this

study emphasizes those TQM elements that are particularly important in determining

a high level of CS towards the service providers or the service firms. In addition, there

are very limited empirical studies that investigate the multidimensionality of TQM

components which facilitate the level of CS within a service setting. Thus, this

empirical study may obtain the attention from other researchers with its relatively new

concept as it identifies the circumstances that are most conducive to the establishment

of CS, particularly in the domain of TQM.

4.8.3 Managerial Implications:

This study provides some insight into the true worth of TQM implementation in

which it reinforces the widely held be that LD, CF, IA,CI and HR are positively

associated with CS. In addition, this research study provides constructive information

that helps the practitioners to precisely identify areas of concerns and take corrective

measures. A clear vision and mission statements that asserts the future direction of

the organization should be established the bank. Apart from SP, management may

need to determine whether effective PM exists in their BANKS. If not, management

should perhaps re-engineer or revitalize its processes in order to improve its overall

business performance while enhance the CS simultaneous.


5. Graphs of Data Analysis

(1) Gender Respondents:

Frequency Table

Gender of Respondents

Frequency Percent Valid Percent Cumulative Percent

Valid Male 10 66.7 66.7 66.7

Fem 5 33.3 33.3 100.0

Total 15 100.0 100.0

Conclusion:


After data operate and bring together I have found that 67% males respond me and

33% females respond me.

(2) Know about CRM:

Frequency Table

Know about CRM


Valid Strongly Agree 6 40.0 40.0 40.0

Agree 8 53.3 53.3 93.3

Strongly Disagree 1 6.7 6.7 100.0

Total 15 100.0 100.0


Conclusion:

After data operate and bring together I have found 53.3% peoples are agree 40%

strongly agree and 6.7% strongly disagree.

(3) CRM Positive Tool:

Frequency Table

CRM a positive tool for attracting customers



Agree 9 60.0 60.0 93.3


Total 15 100.0 100.0


Conclusion:

After data operate and bring together I have found 60% peoples are agree 33.3%


(4) Customer Satisfaction:

Frequency Table


Satisfies customers contribute more revenue to firm



Agree 8 53.3 53.3 93.3


Total 15 100.0 100.0

Conclusion:



(5) Equality Basis:

Frequency Table


Need to recognize all the customers on equality basis



Agree 7 46.7 46.7 80.0

Disagree 1 6.7 6.7 86.7


Total 15 100.0 100.0

Conclusion:

After data operate and bring together I have found 46.7% peoples are agree 33.3%

strongly agree 6.7% are disagree and 13.3% are strongly disagree.

(6) Equality Basis:


Frequency Table

Proper functioning of system improve quality



Agree 7 46.7 46.7 86.7

Disagree 1 6.7 6.7 93.3


Total 15 100.0 100.0

Conclusion:


strongly agree 6.7% are disagree and 6.7% are strongly disagree.

(7) Employees Commitment:


Frequency Table

Employees commitment play a role in improving quality



Agree 7 46.7 46.7 93.3

Disagree 1 6.7 6.7 100.0

Total 15 100.0 100.0

Conclusion:


strongly agree 6.7% are disagree.


(8) Customer Expectation:

Frequency Table

Offer of products in accordance to customers' expectations


Valid Agree 4 26.7 26.7 26.7

Disagree 6 40.0 40.0 66.7


Total 15 100.0 100.0

Conclusion:



strongly agree 33.3% are disagree.

(9) Technology:

Frequency Table

Technology adoption influence the price of product



Agree 10 66.7 66.7 93.3

Disagree 1 6.7 6.7 100.0

Total 15 100.0 100.0


Conclusion:After data operate and bring together I have found 66.7% peoples are

agree 26.7% strongly agree 6.7% are disagree.

(10) Large Scale Business Reduce Price:

Frequency Table

Conducting business on large scale reduce prices


Valid Agree 1 6.7 6.7 6.7

Disagree 10 66.7 66.7 73.3


Total 15 100.0 100.0


Conclusion:


strongly disagree and 66.7% are disagree

(11) Quality and Price:

Frequency Table


Quality and price correlated



Agree 9 60.0 60.0 93.3


Total 15 100.0 100.0

Conclusion:

After data operate and bring together I have found 60% peoples are agree 33.3%

strongly agree 6.7% are strongly disagree.

(12) Price of Product After CRM:

Frequency Table


price of products affect CRM


Valid Disagree 10 66.7 66.7 66.7


Total 15 100.0 100.0

Conclusion:

After data operate and bring together I have found 66.7% peoples are disagree and

33.3% are strongly disagree.

(13) Customer Loyalty:

Frequency Table


Loyal customers are more profitable




Total 15 100.0 100.0

Conclusion:

After data operate and bring together I have found 60% peoples are disagree and 40%

are strongly disagree.

(14)Complaints Affect Customer Satisfaction:


Frequency Table

Complaints affect customers satisfaction




Total 15 100.0 100.0

Conclusion:




(15) Customer Satisfaction Affect CRM:

Frequency Table

Customers' satisfaction affects CRM




Total 15 100.0 100.0

Conclusion:




(16)Existing Customers are More Beneficial:

Frequency Table

Existing customers are more beneficial than new ones



Agree 2 13.3 13.3 20.0

Disagree 9 60.0 60.0 80.0


Total 15 100.0 100.0

Conclusion:



strongly agree 60% are disagree and 20% are strongly disagree.

Interpretation and Analysis

(1) Designation:

Frequency Table

Designation of the RespondentsFrequency Percent Valid Percent Cumulative Percent

Valid Manager 25 100.0 100.0 100.0


Conclusion:

After data operate and bring together I have found 100% peoples are managers.

(2) Motivation Structure:

Frequency Table


Introduction of motivation structure by management


Valid Agree 11 44.0 44.0 44.0

Strongly Agree 6 24.0 24.0 68.0

Neutral 5 20.0 20.0 88.0

Disagree 3 12.0 12.0 100.0

Total 25 100.0 100.0

Conclusion:

After data operate and bring together I have found 44% peoples are agree 24%

strongly agree 12% are disagree and 20% are neutral.

(3) Management Response to Complaints:

Frequency Table


Management's response to complaints


Valid Agree 13 52.0 52.0 52.0

Strongly Agree 12 48.0 48.0 100.0

Total 25 100.0 100.0

Conclusion:


strongly agree.

(4) Training Programes:


Frequency Table

Training program aims for minimizing mistakes


Valid Agree 13 52.0 52.0 52.0


Neutral 1 4.0 4.0 100.0

Total 25 100.0 100.0

Conclusion:


strongly agree and 4% are neutral

(5) Technology:


Frequency Table

Training program concentrate on financial services


Valid Agree 15 60.0 60.0 60.0


Neutral 5 20.0 20.0 100.0

Total 25 100.0 100.0

Conclusion:




(6) Technology:Frequency Table

Corrective actions


Valid Agree 10 40.0 40.0 40.0


Neutral 4 16.0 16.0 100.0

Total 25 100.0 100.0

Conclusion:




(7) Competitors:Frequency Table

Competitors


Valid Agree 9 36.0 36.0 36.0


Neutral 5 20.0 20.0 92.0

Disagree 2 8.0 8.0 100.0

Total 25 100.0 100.0

Conclusion:




(8) Communication:

Frequency Table Changes


Valid Agree 12 48.0 48.0 48.0


Neutral 7 28.0 28.0 88.0

Disagree 3 12.0 12.0 100.0

Total 25 100.0 100.0

Conclusion:




(9) Long Term Plan:Frequency Table

Long term plan


Valid Agree 15 60.0 60.0 60.0


Neutral 6 24.0 24.0 96.0

Disagree 1 4.0 4.0 100.0

Total 25 100.0 100.0

Conclusion:




(10) Continuous Improvement:

Frequency Table



Valid Agree 17 68.0 68.0 68.0


Neutral 2 8.0 8.0 96.0

Disagree 1 4.0 4.0 100.0

Total 25 100.0 100.0


Conclusion:



(11) Technology:Frequency Table

Demands of the job


Valid Agree 12 48.0 50.0 50.0


Neutral 9 36.0 37.5 95.8

Disagree 1 4.0 4.2 100.0

Total 24 96.0 100.0

Missing System 1 4.0

Total 25 100.0


Conclusion:

After data operate and bring together I have found 48% peoples are agree 8% strongly

agree 4% are disagree and 36% are neutral.

7. Limitations

7 .1 Research Limitations and Future Research:

Several limitations of this study should be noted in order to determine possible future

research opportunities. First, the time sequence of the relationships between the

variables could not be determined since cross-sectional data were used.

Second, this study was confined only to banking industry. It is suggested that future

research should cover not only whole service but manufacturing industries as well.

Third, a limited number of settings and managerial level were examined. Since TQM

is an organization-wide process and it involves the total participation of all levels of

employees, future research might study more employees at different hierarchical

levels that consist of top executives, middle and lower management employees.

Questionnaire survey alone may suffer response bias and lack of respondent

awareness. Therefore, this analysis needs to be supported by field observations and

interviews of managers from the sample.


7. Findings

TQM leads to improve quality in every organization.

It results efficiency & high productivity.

It gifts us customer satisfaction.

By adopting it an organization become best in class organization.

It leads to employ satisfaction also.

It fruits fairness of work n the employ devotes more emotions to its work.

It reduces the cost of the processes.

It gives the organization huge profits.

Shareholders wealth, trust and investment maxims many times by adopting it.

It results in loyal and ultimately loyal customer.

It gives employs empowerment.

It increases the market share of the organization.


Recommendation

Top management should create a culture that happily absorbs the changes and

innovation.

There should be such types of norms and values that can well come and

appreciate the technology and innovation.

There should be seminars,workshops,training programs about the benefits of

the TQM.

Employees should be involved in making policies of TQM.

The ultimate theme of all the policies should be customer focus.

TQM should be used for the process management ie improvement in process.

HRM department should be highly effective and resourcefull.

All the managers should have the quality of effective leadership.

Top management should support the climate of TQM.

There should be effective planning for the implementation of TQM.

TQM should be a part of organisation to sustain the growth and ompetitive

edge of the organisation.

Old staff that can,t change itself according to innovation should be fired out

and young blood should be iin policy formation.


Conclusion

In conclusion, the main purpose of this research study was to investigate the

relationships between TQM practices and CS as perceived by managers from the

TQM certified banks in Rahim Yar Khan. The findings provided empirical evidence

that TQM have significant and positive association with CS. Finally, the findings

revealed that the dimensions of LD, CF, IA,CI as well as HR were positively

associated with CS. Predominantly, it was found that HR as well as IA were perceived

as the dominant TQM practices as they have strong association with CS. And as we

that the customer are the real asset of the organization, so the firm that adopts TQM

enjoy huge profits, owner wealth maximization, employees satisfaction. customer

retention.loe cost of resources, fairness in work and improvement in the process.


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Appendix

Questionnaire

TQM and customer satisfaction aspects on Banks

NAME ______________________________

DESIGNATION _________________________

Questionnaire

1) The bank employees believe in the relationship between the application of the TQM concept and the success of the bank

Agree Strongly agree

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http://www.informaworld.com/smpp/title~content=t713737146~db=all

http://www.informaworld.com/smpp/title~content=t713737146~db=all


Neutral Disagree

2) The management has a completely and written plan to introduce the TQM concept to their employees

Agree Strongly agree Neutral Disagree

3) The management improved and developed the motivation structure to introduce the TQM Concept


4) The bank management listening to the customer complaints and provide an immediate solutions.


5) The bank management making surveys to know the customer needs and wants


6) The training programs aimed to minimize the mistakes and achieving high level of Quality



7) The training programs concentrate on the financial service quality importance.


8) The bank management encourages and adapts the new ideas related to quality management


9) The bank management forms teams work to improve the bank quality involving employees in all levels.



10) The bank management grants awards to their employees about their excellent Performance regarding quality .

Agree Strongly agree Neutral Disagree 11) The bank management and its employees are making

preventive and immediate corrective actions for the mistakes.


12) There is an active communication method between customers and employees.


13) The bank management has general strategic goals for the quality dependent on the wants and needs of depositor, loan, and beneficiary.



14) The bank management studies the situation of the other competitors to improve the Service


15) The bank management has methods to follow up changes in customer wants and Needs


16) The senior management has a long term plans for the service quality


17) The bank has a continuous improvement in its financial services quality.


18) The bank has high-qualified employees to work in quality isuues.

Agree Strongly agree Neutral


Disagree

19) The bank management considers the suggestions and comments of the customer on their financial services quality


20) Do you find that the skill demands of the job are more than that you have?


tqm and online banking

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