An investigation of the factors influencing total quality -management practices in the banking industry in Kenya (case of banks within Nairobi County)
Rugendo, Henry Mwenda
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The banking sector in Kenya is among the fastest growing industries serving a huge base of clients. It is also the backbone of the economy serving a critical role of channeling funds from where there is a surplus to where there is a deficit. Given the intensive competition among the forty two banks in Kenya (see appendix), it is imperative that they embrace management practices that ensure efficient operations, high quality services that are differentiated from competitors and reduce operational costs incurred due to flawed systems. This is where Total Quality Management (TQM) comes in. From the literature of TQM it has been argued that organizations can benefit a lot from employing quality practices. In areas such as Asia particularly Japan and Malaysia it has been identified that TQM practices have a positive impact on the operations of the service sectors particularly in healthcare, aviation and education. However, due to some contradictory findings in some areas such as Philippines and Russia it was imperative to find out how situation was like in Kenyan Banks. Moreover there was no study on TQM done in Kenyan Banks beforehand which necessitated this research. The study aimed to find out the current level of TQM adoption in Kenyan Banks and the general factors that have influenced the practice. The research was broken down into four main objectives which were how management commitment, customer focus, continuous improvement and employee empowerment influenced the TQM practice among the Banks. The methodology employed involved distributing questionnaires to 42 heads of departments from seven banks using the drop and pick method. The heads of departments were chosen as they are primarily responsible for quality management within the banks. Of the 42 questionnaires distributed 36 were filled giving forth to 86 percent response rate. The research data was analyzed using SPSS. The study found that 36 percent of banks had some form of quality adherence having possession of ISO 9000 series certification. The level of TQM awareness was found to be very high among the respondents with 80 percent indicating they knew of TQM concepts. However the study found that only 19 percent of banks practiced TQM in their operations. To answer the research questions, the study found that management commitment affected TQM the most having a Pearson's correlation of (.826) and 65 percent of respondents affirming this. The study also found that employee empowerment and continuous improvement moderately affected the TQM practice having a Pearson's correlation of (.547) and (.529) respectively and a support of 80 percent from the respondents. Customer focus was found to have the lowest influence on TQM practice. Although the aspect of benchmarking was popular with 81 percent of banks supporting it, other customer care aspects were dismally practiced. This gave rise to a Pearson's correlation of (.418) which indicates a low positive influence on the TQM practice. With this regard the study concluded that management commitment, employee empowerment, continuous improvement and customer focus influenced TQM practice in that order. The study therefore recommends that management commitment be adopted strongly in banks as it is the single most factor that affects TQM practice the most. The study also recommends that employee empowerment, continuous improvement and customer focus be revamped in banks as they have positive influence on TQM. The research found that there was a significance difference between TQM perception on banks and practice. It is therefore likely for the study findings to change in the near-term hence a longitudinal study is highly encouraged. As well it would be prudent for future researchers to study how TQM practices affect performance of banks as a guideline to which TQM efforts the banks should employ in order to maximize their return on investments.