Internal Service Quality Management and Operations Performance Among Commercial Banks in Kenya

Abstract

Across all service industries, service quality remains a critical issue in maintaining and propagating business in the competitive market place. To survive in a highly competitive service environment, it is apparent that service industries need to provide customers with high quality services. The importance of services and managing them should therefore not be underestimated. Companies are forced to be part of the service competition and therefore need a completely new perspective to view business. Too often, they focus on their external customers from where the direct profit comes from. This perspective needs to be deflected also to include the internal customers since all customers are valuable. The objectives of this study were to determine the factors affecting internal service quality and establish the relationship between internal service quality and operations performance among commercial banks in Kenya. The research was conducted through a descriptive survey design and a total of 66 respondents randomly selected from 3 large commercial banks, 7 medium commercial banks and 12 small commercial banks. Questionnaires were used to collect primary data. The collected data was analyzed by use of the Statistical Package for Social Sciences (SPSS). The data analysis techniques included descriptive statistics like the mean, percentages and standard deviation. Inferential statistics like regression analysis were also used to establish relationships between the dependent and independent variables. The findings were presented in tables, pie charts and bar graphs. Major research findings indicated that the commercial banks carried out internal service quality management through a dedicated service quality management department and that the commercial banks used five main measures of service quality namely reliability, assurance, tangibles, empathy and responsiveness. The main conclusion was that different measures of service quality had different contributions to operational performance of commercial banks with the highest contributor being measures of reliability followed by measures of tangibles, measures of responsiveness, measures of assurance and measures of empathy respectively. The main recommendation was that policy makers should create policies and procedures that promote the inclusion of all measures of service quality in the pursuit of desired levels of operational performance among commercial banks. The researcher suggests that further research be carried out with an aim of creating a model to provide clear guidelines on the appropriate mix of internal measures of service quality that should be adopted by organizations in their quest to attain appropriate levels of operational performance.