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The topic of this project is “Total Quality Management in the Banking Industry.
(A case study of Zenith Bank of Nigeria Plc) The major objective of the study is to
ascertain the level of awareness and adoption of TQM practices among staff of
Zenith Bank in Enugu metropolis and also determine the major limitations of the
TQM practice in the bank. Instrument for data collections are questionnaires and
research questions, which formed the course of primary data, while materials
from various published articles, textbooks, journals and newspapers formed the
secondary data. The method of analysis is the use of tables, percentages and chi
square. The major finding of the research is that all staff of Zenith Bank are aware
of the TQM elements and are fully involved in the practice of TQM in their day to
day business. The study recommends that since the practice of TQM improves
customer service and care, there is need for constant training of all staff on TQM
practices on a continuous basis. Employees and subordinates should be given
opportunity to participate in decision making using the element of TQM practice
and culture.
Title Page – – – – – i
Certification – – – – – ii
Dedication – – – – – iii
Acknowledgement – – – – – iv
Abstract – – – – – v
Table of Contents – – – – – vi
1.1 Background of the Study – – – – 1
1.2 Statement of the Problem – – – – 5
1.3 Objectives of the Study – – – – 6
1.4 Research Questions – – – – 7
1.5 Research Hypotheses – – – – 7
1.6 Scope and Limitations of the Study – – 8
1.7 Significance of the Study – – – – 9
1.8 Definition of Terms – – – – 9
Reference – – – – 11
2.1 Introduction – – – – 13
2.2 Origins of TQM – – – – 13
2.3 Overview – – – – 16
2.4 Total Quality Management- – – – 22
2.5 Elements of TQM – – – 26
2.6 TQM Enablers – – – 28
2.7 Relevance of TQM – – – 29
2.8 Role of Management in – – – 30
2.9 Barriers to TQM – – – 30
2.1 Brief Historical Background of Zenith Bank Plc – 31
Reference – – – 44
3.1 Research Design – – – 46
3.2 Location of the Study – – – 46
3.3 Sources of Data – – – 47
3.4 Population – – – 47
3.5 Sample Size Determination – – – 47
3.6 Data Collection Instrument – – – 48
3.7 Techniques for Processing and Analyzing Data 50
4.1 Presentation and Analysis of Data – – 53
4.2 Test of Hypothesis – – – 62
5.1 Summary of Findings – – – 68
5.2 Conclusion – – – 69
5.3 Recommendation – – – 69
Bibliography – – – 71
Appendix – – – 73
Questionnaire – – – 74
1.1 Background of the Study:
Today every organization has to study what customer demand is. Who is
our customer? How do we delight our customers? What do customers
wish to experience when dealing with us? What do customers frame in
their mind about us? All these questions should be taken into
consideration hence it is the customer who defines quality (Arora 2006:1).
Quality is fast becoming an essential aspect of banking, and in the coming
years it would form a basic requirement for the survival of the industry. It
is indeed worthy of note that quality needs to be natural through positive
attitude and quality culture in an organisation.
At a time when the deregulation of financial services and consequent ready
access to funds produced a new competitive environment, both the
commercial and merchant banks in the country then were competing with
finance and mortgage houses, insurance companies and stock brokers. The
new competition brought about successes for some and spectacular failure
for others. In the new millennium, banking has gone even beyond
expectation, and for the surviving banks, competition has just began. The
financial service sector has not been immune from or ignored the era of
quality revolution. New products sought initial competitive advantage,
new attractive interest rate, turnaround time, all in the bid to attract more
customers. Macdonald (1998:13).
In the service sector, we have non-invertible products. Demand for service
is variable. Service sectors are hospitals, banks, transportation and public
utility e.t.c.
In the early 1990s, there was a sea of change in the banking industry that
sent many Chief Executives of the industry back to the drawing board to
find new ways to compete. At this time, the top management of the
industry learned the fundamental lessons that customers were willing to
pay a price premium for products and services that consistently meet high
standard of quality. Customers now perceive that they have the right to
demand for good services, since they pay for it. As the service industries
are setting promises, all that the customer wants is for the promises to be
According to Arora (2006:50), Reputation is either built or lost through
satisfying or dissatisfying customers. What does it take to satisfy a
customer today? The customer will have a need which we are trying to
fulfill. This may be weakly articulated or very vague. Either way, it is our
responsibility to identify the need as precisely as possible and meet it. If
we do this, then the customer is satisfied.
The loss of a customer can be devastating, although we may be blissfully
unaware of it, each customer who walks away, takes away future years of
repeat revenue.
We do not sell to customers today, they buy. That is, they call the tune,
they have the choice of banking with any bank of their choice (with the
advent of a stable capital base for the existing banks). They will only bank
with a particular bank if that bank makes it easy or special. Excellence in
services can be achieved through ISO 9000, ISO 14000, 18000, TQM, team
work, Quality Assurance. Arora (2006:3).
Customer satisfaction can only be achieved when the bank defines
customer needs from the customer point of view and not from its own
point of view. For this, the customer must be the centre of all the activities
carried out in the organization.
According to Arora 2006.9, quality of a product throughout its lifespan is
total Quality. All personnel of the organization are committed to quality by
doing the right thing the first time and every time by employing the
organization‟s recourses to provide value added quality to the customers.
Total quality accomplishes the business goals by designing and supplying
products and services to achieve customer satisfaction at an economic
The term TQC (total quality control) was conceived by A. V. Freignbaum
1983, Japan, TQC later became TQM. It is a corporate business
management philosophy which recognizes that customer needs and
business goals are inseparable. Arora (2008:11).
Management must be able to recognize that TQM will not happen by
accident. TQM is a managed process which involves people, system and
supporting tools and techniques. Quality should begin to permeate
financial institutions as a way of life and it should begin with employee
TQM, though a recent phenomenon is important in the banking sector. It
has evolved as a management concept out of the need by organizations for
continuous quality improvement and critical importance of increased
profitability and survival in the face of competitive challenges in the
banking industry.
This starts with the customers by learning to identify and meeting their
basic requirements and then empowering staff by giving them the tools
they need to perform excellently.
It is in this regard that this research work is aimed at assessing the practice
of Total quality management by Zenith Bank Plc.
1.2 Statement of the Problem:
Banks being financial intermediaries are the backbone of any economic
system involved in channeling funds from those having surplus to those
having its shortage,(Luckett,1994:36). The objective of this fund channeling
is to earn profit. In order to reach maximum number of customers, banks
develop a network of branches. Branches are the points where banks offer
their products. Banking products are almost the same in any country but
what matters is the way the product is offered and the quality aspects
associated with those products. Total Quality Management (TQM), a
buzzword phrase of the modern age is based on the assumption that
quality can be managed in every aspect of a company‟s business. Total
Quality Management is viewed as virtually a new organizational culture
and a way of thinking. So the approach has an intense focus on customer
satisfaction, accurate measurement of every critical variable in business
operations, continuous improvement of products, services and processes
and on work relationships based on mutual trust and teamwork, (Pearce &
Robinson 2005:24).
Total Quality Management is a structured system for satisfying internal
and external customers and suppliers by integrating in the business
environment, continuous improvement, and breakthroughs with
development, improvement, and maintenance cycles while changing the
whole organizational culture,(Cole & Mogab1 999:35). This is the
comprehensive approach towards quality management covering all areas
of business.
Like other industries, quality improvement is taking place at a
revolutionary pace in the banking sector, (Rana,2005:15). Keeping in view
the competitive environment in the banking sector where bank officers are
trying their best to offer high quality services to their customers, there is
great need to develop a TQM model for commercial banking branch
operations, highlighting the different departments in the branch and the
application of TQM principles to such departments with proper
assessment of the extent of practice of TQM principles in our chosen bank
of research, which in this case is Zenith bank plc. There is no such
comprehensive model available in the body of knowledge covering all
departments of commercial banking branch.
The objectives of the study are;
1 To ascertain the level the level of awareness of TQM among staff of
zenith bank, Plc
2 To assess the level of adoption of TQM practice by staff of zenith
bank plc
3 To determine the extent to which members of staff are involved in
the practice of TQM in Zenith Bank, Plc
4 To identify the major limitations of TQM practice in Zenith Bank,
The following research questions will be addressed in this Study;
1 what is the level of awareness of TQM among staff of zenith Bank
2 what is the level of adoption of TQM practice by staff of Zenith bank
3 To what extent are members of staff of zenith Bank plc involved in
the practice of TQM?
4 To what extent does the practice of TQM affect customers service
and care in Zenith Bank Plc?
5 What are the major limitations of TQM practice in Zenith Bank plc?
The following hypotheses are formulated for this study;
1 H0; the level of awareness of TQM among Zenith Bank‟s staff is not
H1; the level of awareness of TQM among zenith Bank‟s staff is high.
2 H0; the level of adoption of TQM practice by staff of zenith Bank is
not high
H1; the level of adoption of TQM practice by staff of zenith Bank is
3 H0; members of staff of zenith bank are not involved in TQM
practice to a large extent
H1; members of staff of Zenith Banks are involved in TQM practice
to a large extent
4 H0; the practice TQM does not significantly affect customer service
and care in zenith Bank, Plc.
H1; the practice of TQM significantly affect customer service and

1.6 Scope and Limitations of the Study:
The study will assess the practice of TQM in Zenith Bank Plc , a service
organization. It therefore stands to reason that the principles and practices
this study espouses will be applicable to the service sector only.
Due to economic and time constraints in terms of huge amounts of money
involved in carrying out the study extensively to cover all branches of
Zenith Bank Plc, plus the urgency needed in the early submission of the
research result, the study has been limited to cover only the Zenith Bank
Presidential Road Branch.
The project was also limited by the constraint of securing primary data
from the bank coupled with the lukewarm response from respondents who
had to be persuaded to complete and return questionnaires on time.
1.7 Significance of the Study
The research study is useful to Zenith Bank Plc as a means of identifying
and criticizing effectively the knowledge and experiences gained in the
implementation and application of TQM as a newly developed
management technique aimed at achieving higher productivity.
This research will help top management determine the areas in the
organization that needs to be improved upon and adequate measures to be
taken as a means of achieving higher productivity through Total Quality
1.8 Definition of Terms:
TQM – Total Quality Management
The following are some definitions of TQM:
(i) TQM is a way of managing to improve the effectiveness, flexibility
and competitiveness of a business.
(ii) TQM is an integrated organizational approach in delighting both
external customers by meeting their expectations on a continuous
basis through every one involved with the organizational working
on continuous improvement in all products, services and
procedures along with proper problem solving methodology.
(iii) TQM is an approach for effective management of an enterprise
through forms on its people and processes by organization with
customer driven leadership.
(iv) TQM is a fundamental shift, the systematic analysis and blue
printing of operation, process of habitual improvement where
control is embedded within and is driven by culture of the
organization. Managing quality is the job of each and every member
of an organization.
(v) TQM is a cost effective system for integrating continuous quality
improvement efforts of people at all levels in an organization, to
deliver products and services which ensure customer satisfaction.
(vi) TLC another name for TQM.
T – Total customer focus and satisfaction
L – Leadership, setting values, vision, mission, goals, objective
C – Continuous improvement of key processes.
ISO standards: ISO is the international organization for standardization. It
is made up of national standard institutes from countries large and small,
industrialized and developing, in all regions of the world. ISO develops
voluntary technical standards which add value to all types of business
operations. They contribute to making the development, manufacturing
and supply of products and services, more efficient, safer and cleaner.
ISO standards serve to safe guard consumers and users in general, of
products and services.
ISO 9000: ISO 9000 and 14000 are known as generic management system
standards. Generic means that the same standards can be applied to any
organization, large or small, what ever its products – independent or
whether it is a product or a service – in any sector of activity.
ISO 9000 is primarily concerned with quality management. The definition
of quality is ISO 9000 refers to all those features of a product or service
which are required by the customer. ISO 9000 is a basic building block of
TQM setting the frame work for a culture that nourishes TQM. It is a
method of maintenance of standards facilitating TQM.
Quality Assurance
Assurance means insurance. Quality assurance means quality insurance.
The main purpose of quality assurance is to assure that the product is fit
for use. In the quality assurance concept, qualified independent auditors
examine the quality of the product and issue a certificate that the product
is fit for use.
Quality is conformance to requirements or specifications or standards. It
can also be defined as fitness for the purpose of use.
Arora K. C. (2009) Total Quality Management 3rd ed, (Delhi: S.K. Katara & Sons).
Cole, W. E., & Moyab. J. W. (1999). TQM in action New Delhi: Beacon Books.
Luckett, d.G. (1994) Money and Banking New York: McGraw Hill Inc.
Macdonald, John (1998): Quality and the Financial Service Sector: The Journal of
Total Quality: Vol 1, No 2 Pg. 13.
Pearce, J.A. & Robinsons, R.B. (2005). Strategic Management, New York: Mc Graw
Rana, I.A. (2005). TQM Paradigm in banking. Retreived April 4, 2010 from


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