Total quality management practices and operational performance of commercial banks in Kenya

Abstract

The purpose of this project was to examine the total quality management practices and operational performance of commercial banks in Kenya. The banking service sector in the entire world is getting competitive every day due to the changes in technology and quality issues. In order to be successful total quality management (TQM) practices ought to be the integral part of any commercial banking organization’s strategic management. The Kenyan government liberalized the financial sector through reforms that bestowed banking laws that encourage the entry of private banks into the financial system in order to stimulate competition with the public banks which significantly promoted the development of the banking sector. A census of all the 43 commercial banks was done for this study. The study relied on data collected through a structured questionnaire to meet the objectives of the study using five point Likert scale. The questionnaire questions focused on the total quality management practices implementation and operational performance of the Kenya commercial banks. The questions were both open ended and closed ended. The process of data analysis involved data clean up and explanation and responses in the questionnaires were tabulated coded and analyzed using Statistical Package for Social Science (SPSS) version 20.0. The results were represented in form of tables, pie charts and bar graphs. The study was significant as it will provide the management of sampled commercial banks and the rest of the banking sector, information that they can leverage on to improve on their implementation of total quality management. It will also add to the knowledge required to assist policy makers and regulatory bodies such as Central Bank of Kenya to make decisions that will change the way commercial banks’ operations are carried out in Kenya in terms of quality service delivery. Total Quality Management is expected to reduce total cost and improve service delivery to the end customers at the same time. The reasoning in existing literature is however seldom underpinned by more rigorous empirical material and becomes therefore conceptual and superficial. In this project the perspective of all responding commercial banks was taken into consideration to concretize the implementation of Total Quality Management in service delivery. Lack of empirical data on TQM implementation in commercial banking sector gives a good ground for more research in this area. The researcher strived to find out implementations of Total Quality Management (TQM) practices and operational performance among commercial banks in Kenya. The study was guided by the following general objective: To determine the total quality management practices implementation and operational performance in commercial banking sector in Kenya.