Total Quality Management Practices and Organisational Performance: a Case Study of Co-operative Bank of Kenya Limited.

Abstract

The banking sector in Kenya play an important role in the economy. Given the rise in competition and need for survival, it is critical that banks adopt management practices that ensure efficiency and high quality services while reducing operational costs incurred that are different from competitors. This study sought to establish how Total Quality Management (TQM) practices affect organisational performance in banks and how these practices influence the organisational performance of Cooperative Bank (Co-op Bank) of Kenya Limited. The objectives of the study were to determine TQM practices implemented by Co-op Bank, and the influence of TQM practices on organisational performance of Co-op Bank. The study was carried out through purposeful sampling technique whereby 118 staff members form the eight departments of the bank who are directly involved in the organization decision making were used. The questionnaire based on structured questions was used to collect data to meet the objectives of the study using the Likert scale. Data obtained was analyzed through descriptive analysis and linear regression analysis in-order to illustrate the relationship between TQM practices and organisational performance. The conclusion of the study was that the model on employee participation had highest explanatory power (95.6 percent) and model on supplier partnership had lowest explanatory power (27.5 percent). Furthermore, the largest change (1.109 units) on organisational performance was there is improvement in customer satisfaction due to training programmes, whereas supplier partnership has reduced overall lead time for products and services in bank had the largest decrease change (-0.487 units) on organizational performance. This study recommends that similar study should be carried out on TQM and organization performance in other banks like private banks and to investigate other factors that affect the customer satisfaction for Co-op Bank.