Effect of TQM in Banking Industry

Introduction

Banks play significant role in the economic system because they are financial intermediaries which involve the transfers of funds in and outside the country. The services offered by the banks include the quality, speed, efficiency, and innovation which make the delivery of services and products unique from other bank competitors. In considering the quality of the services in the banks, the strategic management and total quality management are considered that distinguishes the ideal quality of the banks.

Background and Problem Statement

In the action of the banks in paying attention to their quality services, there is a significant effect of the total quality management or TQM in terms of the competition. But there is no doubt that the foreign banks can be ahead of the competition because of various factors. From the technological aspects of the foreign banks, there can be certain advantages that can be gained. However, through the use of the TQM, it is identified that there will be systematic methods, like in data collecting and credit risk management, that will implement a more quality-centered services in terms of banking operation (Naeem, Saif, & Qasim, 2008). Since the banking sector is getting competitive every time, the TQM is proposed to increase the successful rate of the business by taking the integral part of the strategic management. However, what would be the effects of the TQM in the banking businesses?

Research Aim and Objectives

The aim of the study is to investigate the effectiveness of TQM in the banking industry, particularly in Tanzania. In order to achieve this aim, there are four objectives that should be considered. First is to recognize the existing strategic management being employed in banks. Second is to identify the strengths and weaknesses of the strategy that banks employ in their system. Third is to study the TQM implementation on different commercial banks in Tanzania. And fourth is to develop and propose a quality model of TQM for the banking services.

Literature Review

In the competitive environment of banking industry, the quality implementation of a strategy is indeed necessary. Of all the types of banks in Tanzania, the commercial banks are identified to be the most type of institution that is engaged with the complexities. The operation of such banks may indicate the introduction of TQM as one of the highlights in banking operations (Naeem, Saif, & Qasim, 2008). TQM, as a total organizational approach is made to meet the customer needs and expectations. This kind of approach includes both manager and employees to continuous improve the organization’s processes, products and services. With the help of TQM, the organization is associated with the creation of such system between the people and products and/or services. Therefore, in order to improve the organizational competitiveness and effectiveness, it is proposed that TQM is a great foundation on an organization’s system. In addition, the TQM invites and targets the management and techniques together with the organizational concepts and principles. If the kind of strategy is implemented in the banking organization, the services can be fashioned and are expects to lecture more advantages in the competition. The quality improvement is not the specialization of TQM but it can deliberately make an impact towards the work and responsibilities of the employees and managers to create the improvement needed in their industry. To improve the financial sector and the entire economy, the banks and their methods should also the address the problems in the society, in which the TQM can be applicable (Psychogios & Priporas, 2007).

Methodology

The suggested method in the study is the use of the secondary information and interview, which is more appropriate if the study, is conducted in different commercial banks of Tanzania. In order to achieve the study level of TQM, it is better if the researcher/s is oriented regarding the implementation of TQM in a certain bank. Then, the researcher will develop an interview guide and conduct a scheduled interview among the five members of the bank. The participants can be the executives, bank manager or supervisors, senior managers, and employees. It is advised that the said participants are included in the interview. The data collected will be presented in an organized manner, such as the use of tables, which indicates the bank name and the level of TQM implementation. The researcher/s can thereby analyze all the collected information and determine its effectiveness in the banking businesses. At the end, the study can generate a comprehensive model for the quality implementation of TQM.

References:

Naeem, H., Saif, M.I., & Qasim, S., (2008) Total Quality Management – A Recommended Strategy for The Pakistani Banking Sector, International Business & Economics Research Journal, 7(11) [Online] Available at: http://cluteinstitute-onlinejournals.com/PDFs/912.pdf [Accessed 09 Aug 2010].

Psychogios, A.G., & Priporas, C-V., (2007) Understanding Total Quality Management in Context: Qualitative Research on Managers’ Awareness of TQM Aspects in the Greek Service Industry, The Qualitative Report, 12(1) [Online] Available at: http://www.nova.edu/ssss/QR/QR12-1/psychogios.pdf [Accessed 09 Aug 2010].

Reasons of Employee Turnover in Banking Sector in Pakistan

Introduction

Employees are considered as the people who have the functions to control the outcome of one certain task. In a service industry, employees are expected to provide performance according to their roles. It is because; people or customers are the essential elements of the organization that has the ability to dictate the flow of their sales. However in banking sector, the scenario is different from the other industry because of the recognized continuous increase in employee turnover.

Background and Problem Statement

Many studies had been carried that composed of investigative property in terms of determining the factors that might affect the performance of the employees. It is important for the organization in global environment to have a competitive performance. Often, the performances are based on the abilities of the people to deliver the knowledge and skills. This same idea is true in banking sector, wherein the performances are the after sought contribution of the employees for the organization. The effectiveness of an employee is manifested in the performance of the organization. Due to this fact, the increase number of opportunities available makes an impact in employee turnover (Akhtar, 2006). The focus of the paper is to provide the reasons behind the employee turnover, especially among the banking sector in Pakistan.

Research Aim and Objectives

The main aim of the study is to identify the factors that contribute in the employee turnover in Pakistan, particularly in the banking sector. In order to answer the aim of the study, three objectives are needed to satisfy. First is to recognize the growing trend of employee turnover. Second is to investigate the environment of Pakistan’s banking sector. And third is to describe the perceptions of the employees as well as the bank managers regarding the turnover.

Literature Review

Various researches already crafted regarding to the job design, motivation and the associated factors, strategies to increasing the job performances, job satisfaction, employee involvement, and the effectiveness of training and development. All the studies are fashioned with the aim to either understand the employee’s nature of work or to create contribute towards the employees’ performance and competitiveness. There are several factors that play an important role to maintain the impact of globalization within the organization. The increase in employee turnover can be drawn from many disciplines. Banking sectors in Pakistan demonstrated that job design can have an effect on employee motivation that can increase the employee’s performance in their respective workplace. The job design and models are presented according to the banks’ goal in enhancing the efficiency and effectiveness to deliver the services. It is identified that job design creates an influence towards the performance of an employee because it can guide the behavior of an individual, and it can provide appropriate competitive actions towards the global competition (University of Central Punjab, 2009). On the other hand, it is believed that the employee participations can affect the job satisfaction. As inspired by the domino effect, if an employee achieved the satisfaction towards the work, they can gain the productivity and commitment to give the necessary performance – all for the advantage of the organization (Bhatti & Qureshi, 2007). For over the years, international organizations are attempting to decode the elements behind the job satisfaction and commitment which definitely adds value to people’s productivity. A wide array of industries, including the banking sectors, believed that the there is a positive relationship be between employee participation and the Job satisfaction and job satisfaction with employee productivity, commitment and turnover. Naturally, there is a long-term participation of employee to attend the demands of organizations and the organization, on the other hand, can be successful in the market. This also establishes the concept of organizational culture because of the influence of competitiveness because of the effects of the employees’ performances (Bukhari, 2008).

Methodology

The suggested method in the study is through the survey and interview. Because the study needs to understand the reason behind the employee turnover, the survey can be an effective tool to demonstrate the perceptions of the employee. There are 50 participants are bank’s employees who will represent the population of the employees. The questionnaires are according to the Likert Scale to gain the understanding the impact of the theories and practices applied in employees are effective to increase the level of participation and turnover. And on the second part, the interview is focused on the 5 management (including the managers, HR managers, supervisors) employees to give details regarding the applied strategies to increase the turnover of the employees.

References:

Akhtar, S., (2006) Shamshad Akhtar: Pakistan’s Capital Markets – Mobilizing for Growth [Online] Available at: http://www.bis.org/review/r070117g.pdf [Accessed 12 July 2010]

Bhatti, K.K., & Qureshi, T.M., (2007) Impact of Employee Participation on Job Satisfaction, Employee Commitment and Employee Productivity, International Review of Business Research Papers, 3(2) [Online] Available at: http://www.bizresearchpapers.com/Bhatti.pdf [Accessed 12 July 2010].

Bukhari, Z., (2008) Key Antecedents of Organizational Citizenship Behavior (OCB) in the Banking Sector of Pakistan, International Journal of Business and Management, 3(12) [Online] Available at: http://ccsenet.org/journal/index.php/ijbm/article/viewFile/712/684 [Accessed 12 July 2010]

University of Central Punjab (2009) Job Design with Respect to Employee Motivation & Job Performance (Pakistan’s Banking Industry) [Online] Available at: http://www.scribd.com/doc/18064754/Job-Design-wrt-Employee-Motivation-and-Job-Performance [Accessed 12 July 2010].

Strategic Management Practices for a Bank in Botswana and its Impact on the Bank's Progress

Introduction

The level of operation and managerial approach of the banks are identified to affect the impact of the banks as a major financial institution. This is also a practice in which the banks can establish competitiveness among its wide arrays of competition. It is believed that with the continuous banking processes and management practices, there is a significant result such as the progress in the banking, financial sector, and the entire economy.

Background and Problem Statement

Prior to the impact of globalization and the experience of the financial crises in the latter year of 2008, banks became more aggressive. The usual key drivers of the banks are identified that can facilitate the growth and improvement of the banks. First are the customers who are also considered as the most important element because they can help the banks to achieve their goals. Second are the colleagues who can be the partners of the banks in strengthening the workforce. Third is the community which serves as the external partner towards the development of people. Fourth are the companies and their power of investment. And lastly is the control in which the banking practice is magnified through the application of the strategic management. Because of the key driers of the banks, the country such as Botswana can achieve its own economic growth. This is through developing the people and providing the necessary investment for the Botswana businesses. However, what are the effective strategic management practices of the banks in Botswana and in what ways it can contribute towards the bank’s progress.

Research Aim and Objectives

The main aim of the study is to determine the strategic management practices applicable for the Botswana and their banking institution. In order to relay the ideas associated with the main topic, there are three objectives that needed to be satisfied. First is to identify the current practices in banking sector of Botswana, particularly in its management. Second is to recognize the challenges and the opportunities that are involved in the country’s banking environment. Third is to draw the link of the practices towards the overall goal of the banks in the coming years. In this way, the study can identify the steered strategic management practices and its impact in the bank’s progress.

Literature Review

The banks’ operation in Botswana can be identified along with the improvement in the organization and technologies. From the administration down to the supervision, the banking system is strictly implemented. Banks in Botswana contributes by gaining financial strengths from the recovery and continuous developments. The use of appropriate management and information are effective forms of strategy towards the improvements of the banks. Enhancing the managerial approach can effectively increase the competitiveness of the banks. Because of the recognized robust strategies in banking processes, it is highly suggested that the management approach should also possess the ability to monitor the improvements such as better services for the customers, regardless of where the customers are located. The management and control abilities of the banks must priorities the overall control environment by means of improving the ability of doing business in an efficient and effective way. In addition, by minimizing the errors and providing the necessary responsibilities for the people, who will provide the services, are the viewed results of strategic management. The strategic management is analyzed as the most critical external relations because it includes the research and formulation of strategies that can be disclosed among the leaders to ensure that the Bank’s features and functions are recognized and appropriately implemented. In this way, it clearly shows that there is an improvement in terms of operational platforms and capability to answer the challenges. The strategy of banks in Botswana is more than the aim of establishing strong communication but also the involvement of the African character, to have a successful reforms and future strategic orientations.

Methodology

The applied method in the study is the use of secondary information which can be obtained from Botswana’s banking report in the past years. The data can be captured particularly in the participating banks of Botswana and reviewing the management practices as time evolves. Through comparing the managerial approaches, the assessment can be conducted which can help the study to identify the best asserted strategy in management. In addition, by integrating the banks’ environmental factors and their goals, the study can measure the impact of the strategic management and its practices to satisfy both the competition and progress.

References:

African Development Bank Group (2002) Strategic Plan [Online] Available at: http://www.afdb.org/fileadmin/uploads/afdb/Documents/Policy-Documents/ADB_STRATEGIC_PLAN2003-2007E.PDF [Accessed 12 July 2010].

Al-Hawari, M., Hartley, N., & Ward, T., (2005) Measuring Banks’ Automated Service Quality: A Confirmatory Factor Analysis Approach, Marketing Bulletin, Vol. 16, Art. 1. [Online] Available at: http://marketing-bulletin.massey.ac.nz/V16/MB_V16_A1_AlHawari.pdf [Accessed 12 July 2010].

Barclays Bank of Botswana Limited (2008) Annual Report [Online] Available at: http://www.barclays.com/africa/botswana/doc/barclays-ar08-final.pdf [Accessed 12 July 2010].

Credit Risk and Bank Performance in Nigeria

Introduction

Banks and other financial institutions are expected to remain fruitful even in the midst of economic uncertainties and financial crunches. In most of the third world countries, the banking institutions are delivering the financial for the poor. This kind of activity is another type of financial cycle and profit gaining. Parties enjoyed the benefits – for the livelihood, there is a chance to increase their living through setting a small business and for the banks there is an awaiting interest that can increase their earnings.

Background and Problem Statement

The financial sectors across the globe experience the changes due to the impact left by the global recession and economic trends. Reforms are the most basic answer in which every country attempts to perfect. In Nigeria, it is appreciated that the banking sector produced the well performance through the reforms. It is acknowledge that the sound and efficient financial sector is the key in the mobilization the saving, fosters the productive investments, and improving the risk management. As compared to it neighboring countries, Nigeria’s financial sector emerges through the performance. The successful commercial bank consolidation which started in 2005 resulted in both regional and international expansion of well-capitalized banks (USAID, 2008). However, how effective is the credit risk management being implemented in Nigerian banks, especially in reducing the poor performance and increasing the profitability of the Nigerian banks.

Research Aim and Objectives

The main aim of the study is to figure the intensity of credit risk as part of the bank’s approach towards the profitability. In order to achieve this aim, the study should address the following objectives. First is to look at pre-consolidation era in 2005-2007, and post consolidation (reform period) 2008-2010. Second is to describe the ability of credit risk and its management that will set an argument contributing to the issues of banks’ poor performances. And lastly, is to measures the approaches of the banks towards profitability.

Literature Review

The Nigerian banks almost lost their key in playing strategically and it is in the pre-consolidation era. Most of the bank needs the strategic repositioning and restructuring to accelerate the growth of their revenues and profitability during the post-consolidation era. In this event, there is a great competition and struggle towards the banking supremacy. To surpass all the adversity in financial/banking sector, there should be an inclusion of the sharp deviation to robust the operation.

In the analysis of the behavior of the banks, Nigeria’s financial sector already employed varieties of the methods in which the banks will achieve their performances. In the post-consolidation, it appeared that most of the banks employed the Discounted Cash Flow Model in the measuring the nature of the dividend policy in the banking industry. The changes in the industry because of the consolidation reached in discussing the valuation metrics which include the Economic Profit Model, PBV Model, PE Model, and PGE Model (Meristem, 2008).

The poor performance traced in the operations of the Nigerian Banks probably came from the structure of the markets and the assets. The values of the assets suddenly changes and the rates of prices, as well as the interests, are affected. Uncertainties ruled the climate in the financial sector that tends to lose the banking sectors’ capability in operations and profitability. However, through delivering the sound and appropriate management of the banks, the chances to get their potentials are extremely high. The measurements in profitability are settled through the introduction of the guideline that will be useful in assessing the methods and procedures for monitoring the risks that might involve. Paying special attention on the credit risks and its policy is the expected to be associated with the controlling market risks, and the exchange and interest rates risks. In the identification of the risks, the banks new products and activities should be ensured that they were all into an adequate controls. And this can be done through the aid of the accounting and information system that can expose the related risks (CenBank, 2000).

Methodology

The suggested method in the study is the utilization of the secondary information. Through the sorted data in Nigerian financial sector, the essential information can be gathered. In addition, there is an opportunity to compare the report of the banks placed in different regions of Nigeria and assess them to give the details in credit risk and their approach to its management. The participating banks will be three of the following Nigerian banks: Afribank, Tier Banks, Diamond Bank, FCMB, and Skye Bank. The examination of the performance is possible through reviewing the investment rationale and risk/loan analysis of the respective banks.

References:

CenBank, (2000) Central Bank of Nigeria Banking Supervision Annual Report [Online] Available at: http://www.cenbank.org/out/Publications/reports/BSD/2001/bsdar00.pdf [Accessed 02 July 2010].

Meristem, (2008) Nigeria Equity Research [Online] Available at: http://www.websoft.com.ng/meristem/app/mail/MEIRSTEM%20RESEARCH_%20NIGERIA%20EQUITY%20REPORT-%20MIDDLE%20TIER%20BANKS.pdf [Accessed 02 July 2010].

USAID, (2008) Nigeria Economic Performance Assessment [Online] Available at: http://pdf.usaid.gov/pdf_docs/PNADL990.pdf [Accessed 02 July 2010].