Total Quality Management and Sustainable Performance Improvement by Microfinance Institutions in Nairobi County

Abstract

The rapid change in the environment has resulted to organizations reviewing their strategies from time to time to stay in operation and survive. This has resulted to management implementing different approaches and the most significant one has been the implementation of Total Quality Management. TQM can simply be defined as a management approach that is centered on quality, based on the participation of all the organization members and aiming at a long term success through customer satisfaction and benefits to the members of the organization and to the society. This study aims to display a clear relationship between Total Quality Management and its effect on sustainable performance improvement of Microfinance Institutions in Nairobi County. The study reviewed the TQM principles that include management commitment and Leadership, strategic planning and cultural change, customer focus, continuous improvement, training and employee relations, factual based decision making, process approach to management and quality supplier relationship. The empirical data was collected using a self-administered questionnaire that was distributed to the 12 licensed microfinance institutions by the Central Bank of Kenya in Nairobi County. Of the 36 questionnaires distributed, 27 of them were returned yielding a response rate of 75 per cent. The collected data was coded, quantified and analyzed quantitatively and qualitatively. Quantitative data was analyzed with the use of statistical package for social sciences (SPSS). The findings of the study confirmed the benefits that arise from implementation of TQM and that it has a positive effect on sustainable performance improvement including customer satisfaction and operational effectiveness.