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IMPACT OF TOTAL QUALITY MANAGEMENT ON THE PERFORMANCES OF AN ORGANIZATION

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

Management activities in the business world are directed towards achieving an ample share of the industry and ultimately control of, if possible, the direction towards which the industry moves. Towards achieving this, various managerial techniques have to be put in place. The business world is highly competitive. Thus all businesses must strive towards putting in place, policies that would greatly increase sales volume while maintaining quality and the quality of service delivery. This trend has been in existence for generations and would continue to be.

It has been largely responsible for the various challenges facing captains of industry world-wide; the scramble to ensure that the various goods and services offered by them achieve the highest standard of quality and cost effectiveness. This becomes more critical in light of technological advances that have put before the customer, an array of goods of very high quality. Every investor expects dividend from their investor, just as customers expect value for their money.

Due to ever increasing alternatives, it is pertinent for producers to ensure that qualitative and cost effective goods are produced in order to increase patronage and generate more income. These may however not be possible without a qualitative management technique; hence the adoption of Total Quality Management (TQM) becomes pertinent. TQM became a source of unification of visions and ideas across the organization to ensure the successful execution of the mission, even though TQM at that time was a novel idea to the organization.TQM as adopted by FIRST BANK Plc can be described as the navigational aid for the successful berthing of FIRST BANK Plc at the pinnacle of New Generation Banks in Nigeria.

1.2 STATEMENT OF THE PROBLEM

For a long time now, business institutions in Nigeria have been faced with various problems, top of which are mismanagement and lack of top quality goods. These problems resulted in for instance, the failure of many banks from the late 1980s into the early 1990s. Customers lost deposits many had worked all their lives for. Other sectors, like the manufacturing sectors have also been affected by the scourge of mismanagement and disregard for quality. Many of these organizations especially those in the banking industry reorganized themselves after the problems they faced during this period. But they also had to put structures in place to ensure that what caused their initial demise did not reoccur. One of the strategies adopted was Total Quality Management (TQM). The focus was now on the customer and what to do to satisfy them, rather than the ‘bottom line’. The adoption of TQM has gone a long way towards improving management processes and service delivery and has helped restore the confidence of the populace in the banking industry.

1.3 OBJECTIVE OF THE STUDY

The objectives of the study are;

1.   To ascertain the merits of implementation of TQM and to assist management by offering advice on the desirability of the implementation of and ways of achieving the objectives of TQM

2.   To determine the contribution of employees towards the implementation of TQM and determine whether the merits justify the implementation of TQM.

3.   To ascertain the impact of TQM in the Banking industry

4.   To ascertain how TQM help managements of service organizations to focus on the nature and scale of quality service delivery.

5.   To ascertain the level the level of awareness of TQM among staff of first bank, Plc

1.4 RESEARCH HYPOTHESES

For the successful completion of the study, the following research hypotheses were formulated by the researcher; 

H0:   TQM has no significant impact on the growth on Nigerian banking sector

H1: TQM has a significant impact on the growth on Nigerian banking sector

H02: the merits of TQM implementation does not assist management in decision making and attainment of TQM objective

H2: the merits of TQM implementation does assist management in decision making and attainment of TQM objective.

1.5 SIGNIFICANCE OF THE STUDY

The primary objective of any business is to create and keep a customer. To this end, TQM can be defined as, “the processes, methods and systems that organizations use to delight customers and at the same time, help reduce costs, increase revenue and empower employees. These methods are not fixed in stone. They grow and develop with time” (MacDonald, J. 1993). TQM is a relatively new management technique that has revolutionized business management and a return to some of the most fundamental ideas of management effectiveness. It is a tool that should serve to enhance the profitability of an organization, with emphasis on total quality from the bottom to the top of management. The significance of the adoption of TQM as observed by the researcher indicates improved performance by identifying Service Quality Indicators (SQIs) i.e. those things that ‘irritates’ customers and streamlining their operation in order to eliminate those ‘irritants’. It is the intention of the researcher to highlight problems of service delivery in the banking industry and proffer solutions to these problems through the application of TQM. The researcher intends to create awareness about TQM, how it is being applied in the chosen organization, and its effects on customers and employees alike. The effect on staff welfare, motivation, promotion etc will also be highlighted. The researcher expects that the research work will aid in finding headway out of the scourge of mismanagement. The researcher hopes the study shall serve as a useful tool for any organization that seeks to implement TQM.

1.6 SCOPE AND LIMITIATION OF THE STUDY

Though relatively new, TQM as subject matter is very wide. For the purpose of this research, the study is restricted to FIRST BANK PLC. The researcher encounters some constrain which limited the scope of the study;

a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study   

b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities 

1.7 DEFINITION OF TERMS

TOTAL QUALITY MANAGEMENT: Total quality management consists of organization-wide efforts to install and make permanent a climate in which an organization continuously improves its ability to deliver high-quality products and services to customers.

CONTROL CHART: A graph of the process character that is used to determine how much process variability is due to random variation and how much is due to unique events.

CUSTOMER: Whoever acquires inputs to be able to complete a job to an agreed minimum level or standard. The employee is the internal customer of the bank while those they serve are the external customers.

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