Total quality management implementation and how well commercial banks do as an organisation

<p>TQM has become a competitive strategy for organizations and has been widely</p><p>implemented throughout the world. Over the previous three decades there has been a</p><p>dramatic growth globally in the implementation of total quality management (TQM) in</p><p>many organizations with the aim of improving the quality of their products and services</p><p>and meeting customers' needs. Although the literature in the field relates the success of</p><p>many organizations in the implementation of TQM it also refers to the fact that there</p><p>have been some failures or shortcomings and barriers to the implementation of TQM.</p><p>These failures or barriers to adoption and implementation are due to lack of top</p><p>management commitment or weak understanding of total quality management and</p><p>encompass organizational cultural factors. A firm's performance is a function of how</p><p>well managers use quality management practices to improve the quality of products and</p><p>services. In today's global environment organizations are constantly looking for ways to</p><p>expand and improve their businesses in terms of quality to enhance performance. Quality</p><p>management practices have been used by banking firms in Ethiopia to improve on</p><p>performance. However customers are still complaining that the quality of service</p><p>products has been compromised. The purpose of this study was to establish the effect of</p><p>total quality management practices on organizational performance of commercial banks</p><p>in Ethiopia. The specific objectives of the study were: to identify the extent that the</p><p>commercial banks in Ethiopia have adopted TQM principles; to explore the TQM</p><p>elements that are significantly associated with the Organizational Performance (OP) in</p><p>the Ethiopian Commercial Banks; and to investigate the effect of each TQM elements on</p><p>the organizational performance of the commercial banks. The study used both descriptive</p><p>and explanatory research design. The target population comprised all 17 commercial</p><p>banks and a sample size of 330 branch manager respondents from Addis Ababa Adama</p><p>and Hawassa cities. The study adopted simple random proportional sampling technique.</p><p>The study used primary data which was collected using self-administered questionnaires.</p><p>Validity of the instruments was ensured through face and content validity and reliability</p><p>was tested using Cronbach's Alpha with a coefficient of 0.7 which was considered</p><p>acceptable. Data was analyzed using descriptive and inferential statistics. Descriptive</p><p>statistics was used to summarize data while inferential statistics specifically Multiple</p><p>Linear Regression was used to test the hypotheses. The analysis used SPSS version 22 to</p><p>aid in data analysis. The results were presented using tables and figures. Out of variety of</p><p>TQM factors affecting OP five were identified and selected through pilot results for</p><p>TQM implementation in the Ethiopian banks. These factors were ranked as: top</p><p>management commitment education and training customer focus employees'</p><p>involvement and people management according to their level of significance of effect</p><p>over the organizational performance on the basis of the analysis made. The study</p><p>recommended that the management should be committed to quality by providing strategic</p><p>direction with respect to quality management practices which should be aligned to the</p><p>firms' objectives. Policy makers should create a quality framework that is geared towards</p><p>improving performance and ensure it is adhered to by all stakeholders in the commercial</p><p>firms in Ethiopia. Finally the study recommends that similar research be done in other</p><p>sectors like manufacturing industries.</p>