QUALITY MANAGEMENT INITIATIVES AND PERFORMANCE OF COMMERCIAL BANKS IN MAKUENI COUNTY, KENYA
Zipporah Kirigo Njuguna - Masters of Business Administration (Strategic Management), Kenyatta University, Kenya
Shadrack Bett - Department of Business Administration, Kenyatta University, Kenya
ABSTRACT
The banking sector has consistently been characterized by persistent operational inefficiency and poor customer services and in order to address the problems of inefficiency in performance these organizations are fast adopting TQM in order to enable them effectively and efficiently meet the growing and complex demands of customers. Despite the fact that quality management has been addressed within a firm, total quality management and its underlying assumptions could also be applicable to strategy management. However the application of TQM in a financial sector set up has not been inherent. Banking institutions in Kenya have been characterized by poor performance. This has been linked to poor profitability as a result of internal factors. Poor performance has been a source of concern due to the important roles played by commercial banks in an economy. The current study sought to examine the effect of total quality management practices and performance of Commercial banks in Makueni County, Kenya. The specific objectives of the study were to assess the effect of employee involvement, management commitment, continuous improvement and customer focus on performance of commercial banks in Makueni County, Kenya. The study utilized Crosby’s Approach to Total Quality Management, Deming’s theory of Total quality management and systems theory. The study used descriptive research design and a population of 104 respondents drawn from top and middle level management was considered. A sample of 40% was taken generating 42 respondents. Closed ended questionnaire was utilized in the study. Reliability and validity of research instruments was ascertained by the analysis of data. The analysis of the study was based on descriptive and multiple regression analysis. The study established that employee involvement (β=0.587, p=0.000<0.05) had a positive and significant effect on performance of commercial banks. Top management commitment (β=0.111, p=0.000<0.05) had a positive and significant effect on performance of commercial banks. Continuous improvement (β=0.371, p=0.000<0.05) had a positive and significant effect on performance of commercial banks. Customer focus (β=0.097, p=0.002<0.05) had a positive and significant influence on performance of commercial banks. The study concludes that employee involvement had a positive and significant effect on performance of commercial banks. Top management commitment had a positive and significant effect on performance of commercial banks. Continuous improvement had a positive and significant effect on performance of commercial banks. Customer focus had a positive and significant influence on performance of commercial banks. The study recommends that all branch managers of commercial banks operating in Makueni County should improve on their employee empowerment practices so as to significantly influence performance of their organizations. The senior managers in head offices of all commercial banks in Makueni should increase their commitment towards quality of management initiatives so as to positively influence performance of their organizations. The senior management team of all commercial banks with branches in Makueni County should improve on continuous improvement initiatives to positively influence performance of their institutions. The operations managers of all commercial banks operating in Makueni County should come up with sound strategies of improving on customer focus in order to positively influence performance of their organizations.
