Non-financial balanced scorecard perspectives and service quality in commercial banks in Thika town, Kenya
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Date
2018
Authors
Muthoni, Purity
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Quality in servicing customers is an important marketing construct for banks. In today's
turbulent economic environment service quality is an invaluable asset that banks should
manage in order to survive and gain a competitive advantage. Despite the realization of
the importance of service quality in the banking sector, there is still evidence of
challenges on quality of the service which leads to customer satisfaction. Implementation
of balanced score card perspectives can help bank in achieving better service quality. The
purpose of this study was to determine the effect of implementation of non-financial
balanced scorecard perspectives on service quality in commercial banks in Thika town,
Kenya. It specifically focused on establishing the effects of customer perspective, internal
business process perspective and learning and growth perspective. The study was
anchored on the SERVQUAL Model, resource based view of the firm and organizational
learning theory. This study used a descriptive survey research design. The study targeted
branch managers, operations managers, credit managers and customer service managers
working in the commercial banks within Thika Town. The researcher applied the census
approach to include the 48 respondents. The study used a self-administered
questionnaires as the main instrument of data collection. Descriptive methods such as
frequency distribution, percentages mean, and standard deviation were used to analyze
data. Regression analysis was employed to find out the relationship between variables.
Presentation of the findings was done through tables and graphs. Descriptive analysis
showed that the three perspectives were adopted by participating banks to a large extent.
Regression analysis showed that learning and growth perspective (F=13.750, P=0.001) as
well as business process perspective (F=36.552, P=0.000) were significant. The beta
coefficients showed that internal business process perspective (β=0.739) had the highest
effect of the three perspective followed by learning and growth (β=0.314) and customer
perspective (β=0.107) in that order. There was a strong positive correlation (R=0.844)
between non-financial balanced scorecard perspectives and service quality in commercial
banks. The findings further indicate that 71.2% of service quality in commercial banks
can be attributed to non-financial balanced scorecard perspectives. The findings show
that the F value is significant (F(3,28) = 23.088, P=0.00) indicating that implementation
of non-financial balanced scorecard perspectives was significant. The study concluded
that implementation of non-financial balanced scorecard perspectives has a strong
positive effect on service quality in commercial banks in Thika town. The study
recommended that banks provide more incentives to their customers to chance customer
retention and therefore customer satisfaction.
Description
A research project submitted to the school of business in partial fulfillment of the requirements for the award of degree in master of business administration (strategic management option) of Kenyatta university July, 2018