ABSTRACT

The broad objective of this research work is to take a critical look
at the principle of total quality management so as to find out how its
implementation will affect an organisation‟s productivity and
profitability. For the purpose of this study, the researcher limited its
data to those of the Skye Bank Plc and her customers. The researcher
used survey method to investigate the effects of Total Quality
Management on productivity using the probit model: a case study of Skye
Bank Plc Edo State.

CHAPTER ONE
INTRODUCTION

1.1 HISTORICAL BACKGROUND AND THE ORIGIN OF SKYE BANK PLC
Banking in Nigeria took a new dimension after the pronouncement of the
former governor of the Central Bank of Nigeria professor Charles Soludo
for the need to improve the banking industry in Nigeria thereby
competing with other foreign banks, hence capital base to 25 billion
naira.
According to the governor of central bank professor Charles Soludo, the
whole idea of the increment is to give room for other small financial
institutions to strive, thereby reducing the rate of competition amongst
banks in Nigeria.
For the purpose of this study, Skye Bank PLC came together as an entity
after due diligence was carried out amongst their five banks.
• Prudent Bank
• EIB Eko International Bank
• Reliance Bank
• Bond Bank
• Cooperative Bank Ltd
Currently, the bank has a significant network spread across the nation
over 200 branches and also planning to spread across West African
countries, turn up before the end of 2007, it major of business is
centered round services, hence service delivery is term of Skye Bank or
the hallmark as it term.
As a new generation bank, Skye Bank Plc is online real that is to say
every customer can access his/her account from any of location whether
it is savings or current account. It is worthy to know that the bank is
highly aggressive in expanding its numerous clientele world, that is to
say that the satisfaction derived by the customers is a key.
As a strategy to preposition the industry in order to offer high quality
products, CBN embarked upon a process of scrutinizing products offered
by banks.
Quality management of products in a post consolidation era been brought
to front banner. In order to contribute to this debate, TQM (total
quality management) as a policy for assessing and
regulating service delivery process became a very important instrument in this regard.
At the heart of the survival of any bank the satisfaction of the clients
is most important, the clients/customers are only satisfied when their
demands are being met at the right cost and to the right quality.
Ironically, it only when the customers are satisfied that the bank in
question can be seen as performing it as a new generation bank.
One particular approach to improve organizational performance and
effectiveness is the concept of the Japanese-inspired Total Quality
Management. This is a set of management practices throughout the
organization, geared to ensure the organization consistently meets or
exceeds customer requirements. TQM places strong focus on process
measurement.
The successful organization should as a matter of policy be constantly
seeking opportunities to improve the quality of its products or services
and processes; the bank must also couple quality with a required level
of productivity. TQM represents a total system and as such increasingly
enhances quality circles as a broader means of addressing the demand for
quality.
Total Quality Management is a method by which management and employees
can become involved in the continuous improvements of their products and
services. It is a combination of quality and management tools aimed at
increasing profit and reducing losses due to wasteful practice.
This research work stems from the need to evaluate the cost of quality
vis-à-vis its benefits in terms of increased productivity of any
organization, a lot of banks pay lip service to quality simply because
they do not realize the benefit such investment of time, effort and
money will bring to their banking system other are skeptical on whether
or not there is any real benefit at all.
It was the need to clear all these and show through a detail and
systematic study of how a popular quality philosophy such as TQM will
affect the performance of Skye Bank PLC that forms that background for
the study.
1.2 STATEMENT OF THE PROBLEM
The central focus of gravity organization is customer satisfaction and
improved performance. Quality focus seeks to institutionalize planned
and continuous improvement so as to ensure that quality is the outcome
of all activities that takes place within an organization; that all
functions and all employees have to participate in the improvement
process; that organization need both quality culture and management
effectiveness of this approach in making small but steady improvements.
But users and critics of Total Quality Management universally agree that
that approach takes too long to do, many abandon the approach with
frustration because it takes too long.
If we were to break a Total Quality Management efforts into its
components, it takes more time, very little go into problem solving.
Perhaps, we should spend more time on identifying the right problem.
After all, solving the wrong problem is a complete waste of time, in
this section we shall strictly discuss the basic problems encountered in
TQM implementation which was addressed by this research work.
One nagging and ever present problem with Total Quality Management is
meetings and more meetings; lots of time goes into meetings. Thus
anything that will make meetings effective will reduce the amount of
time spent on the Total Quality Management and then makes it worth the
while.
Another problem with Total Quality Management implementation is the fact that a great deal of time is spent on charting
a process. Steam members debate how the current process works. In
essence, by describing the process, teams set the stage for how the
process could be changed. Description of the process creates the mind
set and frame within which solutions would be sought.
Discovering ways to radically reduce the time it takes to do a process
charts will go a long way in helping to solve the problem.
Still another problem is that and effort is spent in data collection,
once an improvement is made we need to collect data to verify that
indeed real improvement have been made. This phase takes considerable
amount of time, as designed surveys distributed, retrieved and analyzed,
several months to a few years may be spent on data collection. Again
effort need to be put on strategies to reduce the amount of time and
effort spent on this area.
1.3 OBJECTIVES OF THE STUDY
The broad objectives of this research work are to take a critical look
at the principle of Total Quality Management so as to find out how its
implementation will affect an organization performance. The specific is
to investigate the following:
• The relationship between Total Quality Management variables and the bank productivity.
• The relationship between Total Quality Management variables and the bank profitability.
1.4 RESEARCH QUESTIONS
The questions related to this work are:
• Does the implementation of Total Quality Management (TQM) have any effect on the performance of the bank?
• What kind of effect does Total Quality Management (TQM) has on the performance of the bank and
• To what extent does Total Quality Management (TQM) implementation affect performance?
1.5 HYPOTHESES OF THE STUDY
To identify the achievements of the desired objectives, the following hypotheses are formulated:
H0: Represents Null Hypotheses
H1: Represents Alternate Hypotheses
HYPOTHESES I
H0: Total quality management variables will have negative influence on banks productivity.
H1: Total quality management variables will have great influence on banks productivity.
HYPOTHESES II
H0: Total quality management variables will have negative influence on banks profitability.
H1: Total quality management variables will have a great influence on banks profitability.
1.6 SIGNIFICANCE OF THE STUDY
Looking at the volume of investment required to execute a formidable
quality instrument such as TQM in bank, one would agree that it is
important to be able to convince ourselves that such investment would
yield some gains for the bank before embarking on such a project.
Thus to say that this study is justified is merely repeating the obvious
as without a study like this it might be difficult to get the
support of quality advocators and sympathy of other members of the organization.
Apart from this management, we will also not be able to measure the
benefit derivable from their huge investment in implementing quality
programmes such as TQM. A study like TQM will therefore provide a guide
towards evaluating the gains of implementing a quality program both for
organisations who has done that and those that are still in the process.
In summary, the following listed points could be considered as justification for a study just as this:
• It provides an opportunity to critically evaluate every quality program in line of what benefit it will yield.
• It provides a good basis for the justification of proposed quality program for the advocators of such program.
• It shows vividly what organization stand to gain or lose it implementing quality programs such as TQM.
• Finally it exposes organization and other readers to the rudiments of Total Quality Management philosophy.
1.7 THE SCOPE OF THE STUDY
This research work covers the performance of Skye Bank Plc. in the years
before and after the implementation of Total Quality Management in the
organization.
It is a study designed to compare the implementation of the Total
Quality Management principles in Skye Bank Plc. with the performance of
the banks using turn over and profitability as a measurement yard-stick
for the banks performance.
1.8 LIMITATION OF THE STUDY
• Network interconnectivity to enhance elaborate research
• High level of illiteracy
• Organization operational huddles
• Time and cost constraints due to cause of scarcity in gasoline to go about the research.

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