The relationship between quality management systems and organisational performance: a case of the Malawian banking services industry.

Abstract

This Thesis investigated the relationship between Quality Management Practices (QMPs) and organisational performance, focusing on Malawi banking sector. The problem which the study addressed was operational and strategic emanating from the poor performance of the banking system as manifested by inefficiencies in terms of unstable networks, increased autoteller machine downtime, long queues in the banking halls, unpatriotic staff members, and very alarming interest rates as compared to other countries within the region. Over recent years, the banking sector has witnessed retrenchment of large numbers of staff due to the closure of banks across the country. The study hypothesises that the appropriate implementation of QMPs would help solve these problems. This would entail identifying: 1) QMPs variables that result in the highest performance; 2) investigating the complementarity of these variables in enhancing performance, and 3) suggesting a model of QMPs befitting the banking sector in Malawi. The investigation and verification of these hypotheses were based on the responses of the interviewed bankers in 86 branches from representative banks across the country. The investigation relied on primary data gathered using structured survey instruments with ratings of Likert scale through the positivist paradigm approach. Also, secondary data was sourced from the Reserve Bank of Malawi (RBM). SPSS software was applied for quantitative data examination, and the outcomes were compared and affirmed with empirical evidence from the literature. Descriptive, bivariate, and multivariate statistical tests were applied to arrive at the conclusions. Cronbach’s Alpha was applied to achieve reliability and internal consistency of results. In respect of addressing the first objective, the study established and adopted a set of five key QMPs, which comprised 1) commitment from senior management, 2) people management, 3) organisation culture, 4) customer focus, and 5) quality performance management. These constructs were empirically and statistically authenticated to be more appropriate and directly influencing bank performance. In addressing the second objective, the study established that the variables identified above, associate and complement each other towards organisational performance. In respect of addressing the third objective, the study developed a model suitable for the service industry. In conclusion, the findings confirmed that the implementation of QMS has a significant bearing in addressing the study problem and offers solutions to the strategic challenges being faced in the banking sector or related industries in Malawi.