TOTAL QUALITY MANAGEMENT PRACTICE AND ORGANIZATIONAL PERFORMANCE IN FINANCIAL INSTITUTIONS

Abstract

The TQM practice in business firms has led to several calls for research on TQM practice and their relationships on quality management result .In this study, these calls are being examined by establishing the relationships of TQM practice with service quality and service quality with customer satisfaction. Data were collected from 17 commercial banks. This study has used both secondary and primary source of information. DEA was used to measure relative efficiency of CBs by using secondary data. The CBs were found to be less volatile in terms of relative efficiency via operation approach comparing to intermediation approach. The findings of this analysis strongly suggest there are important implications for bank managers and bank regulatory to take an action for operating the banks in efficient frontier in the competitive environment. For primary data attitude and perceptions of both employees and customers were measured in 5-point Liket scale. Exploratory factor analysis was used for ensuring the construct validity and cronbach alpha was used for reliability. Multiple regression modeling was used to establish the relationship between extracted TQM practices and service quality and to establish the relationship between service qulaity and customer satisfaction as well. Model adequcy tests were performed for both modeling. The fitted models proved to be the best predictive functions. The pocess management was found to be the most influencing variable on service quality.Similaly responsivness was found to be the most influencing variable on customer satisfcation. The models developed in this study will serve as a threshold to carry on future research to investigate the impact of TQM practices in financial institutions. Future research should explore the impact of TQM on organizational performance taking into various other influencing factors like time, culture, and work design. Moreover, the developed TQM model will help bank mangers and practitioners in their daily operation as the model clearly specified the impact of TQM practice on service quality and impact of service quality on customer satisfaction.