TQM in the Banking Industry

This research explores the issue of total quality management (TQM) in banking. The issue is addressed in three contexts, as follows: (1) defining quality management within the context of the banking industry; (2) application in the banking industry of the TQM mandate to involve all members of an organization in the quality program; and (3) relating the key principles of TQM to the operations of the banking industry.

Defining Quality Management Within the

Context of the Banking Industry

The service sector of the economy, of which banking is a part, is highly dependent upon the interactions of employees with customers (Port, Carey, Kelly, and Forest, 1992, pp. 6674). A high proportion of a service product is created by employees in their interactions with customers. Thus, the effectiveness of the interrelationship between the TQM concept and human resource management is critical to the application of the TQM concept by banking organizations.

Product quality came to the forefront in the American economy in the late1980s, as the top managements in American companies learned that American product quality was generally perceivedby Americans and foreign consumers aliketo be inferior to products from other countriesparticularly Germany and Japan (Port, Carey, Kelly, and Forest, 1992, pp. 6674). Initial emphasis in the American quality reawakening was on manufactured goods. In the service sectors, includ

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ls of employee job satisfaction, and greater discretionary authority for employees interacting with customers (Wemple, 1992, pp. 5761). High quality in banking means, among other things, that the employee interacting with a customer must solve the customer's problem then and there because the customer may not come back later. The effective application of TQM in banking, thus, requires that great care be exercised in employee selection (Smith, Boroski, and Davis, 1993, pp. 8193). Such application also requires that superior training be provided to the bank's employees, that effective jobrelated support services be provided for the bank's employees, and that banks retain their employees (Hart and Schlesinger, 1991, pp. 433454). The banking organizations that have sought real quality improvement have traveled an unconventional route (Holland, 1993, p. 146). Their investment decisions have been based on keeping old customers and winning new customers, as opposed to cost cutting benefits; on expected improvements in delivery time, and corporate image, as opposed to shortterm return on investment; and on improvements in product quality, flexibility, and time from research to market, quicker order processing, and higher custome
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Some common words found in the essay are:
Teixeira Ziskin, Spagnola Spagnola, Larson LaFasto, Kelly Forest, TQM Decision, TQM Effective, Hart Schlesinger, Deming's Obviously, York City, TQM Deming's, 1993 pp, qualityoriented banking, banking organizations, banking organization, 1989 pp, decisionmaking process, quality control, banking industry, product quality, spagnola spagnola 1993, 1992 pp, spagnola 1993 pp, 1993 pp 617, nutt 1989 pp, ziskin 1993 pp,
Approximate Word count = 5631
Approximate Pages = 23 (250 words per page)

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