Title of the Report

A report submitted to the Department of Management Studies in partial fulfillment of the

requirement for the award of the Degree of Bachelor of Business Administration in
Jahangirnagar University, Savar, Dhaka.

Submitted to
Nafiza Islam
Course Instructor

Submitted by
Group: Firebirds, Batch 4th

Name of Members ID No.

1. Jahanara Sophi 1717
2. Ayesha Siddika 1720
3. Sumaiya Fatema Binte Shahid 2209
4. Tahira Tasnia 1727
5. Noushin Islam 1733

Department of Management Studies

Faculty of Business Studies
Jahangirnagar University
Savar, Dhaka.

Date of Submission: July 24, 2017

i
 Letter of Transmittal

July 24, 2017

Nafiza Islam
Assistant Professor
Department of Management Studies
Faculty of Business Studies
Jahangirnagar University

Subject: Letter of transmittal for report.

Dear Madam,

With due honor, we are submitting the attached report entitled “Total Quality Management (TQM)
Practice in Commercial Banks of Bangladesh” under the course of Total Quality Management
(TQM). To prepare the paper, we collected and studied materials in due time and analyzed these
and eventually finalize the report.

This report examines the implementation of TQM in Banks of Bangladesh. Actually we have
enjoyed more in preparing this report and studying this topic. Our 5 members have worked hard
to prepare this report. So we would highly oblige if the content of the report have been acceptable
to you.

Though we have put our best efforts yet it is very likely that the report may have some mistakes
and omissions that are unintentional. So, we hope that the report will worthy of your consideration.

Sincerely yours,
………………………
Jahanara Sophi
ID: 1717

On behalf of the group members

ii
 Abstract
TQM has become a competitive strategy for organisations and has been widely
implemented throughout the world. Over the previous three decades, there has been a
dramatic growth globally in the implementation of total quality management (TQM) in
many organisations with the aim of improving the quality of their products and services,
and meeting customer’s needs. Although the literature in the field relates the success of
many organisations in the implementation of TQM, it also refers to the fact that there
have been some failures or shortcomings and barriers to the implementation of TQM.
These failures or barriers to adoption and implementation are due not only to a lack of
top management commitment or weak understanding of total quality management, but
also encompass organisational cultural factors.

The purpose of this research is to assess the level of TQM implementation, and to
explore the influence of organisational culture on TQM implementation in Bangladeshi
Banks. In addition, this research identifies the main obstacles that affect the
implementation of TQM in Bangladeshi banks.

This study uses both quantitative and qualitative methods to achieve the objectives of
the research. A questionnaire was designed to determining the level of TQM
implementation in Libyan banks, and to identify the causal relationships between
factors, in order to explore the influence of organisational culture on TQM
implementation. Complimentary semi-structured interviews were conducted with
manager to gain a greater understanding of some additional issues with regard to TQM
practice and organisational culture.

The results of data analysis show that the level of TQM implementation in Eastern bank
limited was low. The findings showed that group culture and developmental culture
had a positive influence on all TQM implementation factors. In addition, hierarchical
culture and rational culture did not have any influence on TQM implementation factors
in this context.

Moreover, the study revealed that some of the obstacles that affected the achievement
of a high level of TQM implementation in Eastern Bank Limited were: a lack of top
management commitment; a lack of training programmes relating to quality
management; and a weak focus on customer expectations and satisfaction.

iii
The findings of this study make an original contribution to the academic and practical
knowledge of TQM. It is the first exploratory study to have assessed TQM
implementation, and to have investigated the influence of organisational culture types
on TQM implementation in Eastern Bank Limited. Besides presenting some
recommendations for Eastern bank limited, the research offers suggestions for further
research in this area.

iv
 Acknowledgement

I would like to express my deepest appreciation to all those who provided us the possibility
to complete this report.

A special gratitude we give to our honorable teacher Mr. Zahidul Karim, Assistant
Professor, in the Department of Management Studies, Jahangirnagar University, whose
contribution in manage the respondent helped us to complete our survey and collect
genuine information.

Furthermore, I would also like to acknowledge with much appreciation the crucial role of
the staff of Eastern Bank Limited, who gave the permission to use all required equipment
and the necessary materials to complete the task “Mr. Jahangir Alam” and his information
about TQM and cordial support.

A special thanks goes to our all team members who help to assemble the parts and gave
suggestion about the report.

Last but not least, many thanks go to the head of the project, Mrs. Nafiza Islam, Assistant
Professor, Department of Management Studies, JU, who have invested her full effort in
guiding the team in achieving the goal.

We have to appreciate the guidance given by other supervisor as well as the panels
especially in our project presentation that has improved our presentation skills thanks to
their comment and advices.

We also place on record, our sense of gratitude to one and all, who directly or indirectly,
have let their hand in this venture. We have taken efforts in this project.

However, it would not have been possible without the kind support and help of many
individuals and organizations. I would like to extend my sincere thanks to all of them.

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 Table of Contents

Chapter 1: Introduction .................................................................................................................. xi

1.1 Introduction .......................................................................................................................... xi
1.2 Background of the Study ..................................................................................................... xi
1.3 Research objectives ............................................................................................................xiii
1.4 Research Hypotheses ......................................................................................................... xiv
1.5 Scope and Limitations of the Study ................................................................................... xiv
1.6 Significance of the Study ................................................................................................... xiv
1.7 The structure of the study ................................................................................................... xv
Chapter 2: The Fundamentals of Total Quality Management ...................................................... xvi
2.1 Introduction ........................................................................................................................ xvi
2.2 Total Quality Management ................................................................................................ xvi
2.3 Origins of TQM ................................................................................................................. xvi
2.4 Overview:.........................................................................................................................xviii
2.5 Total Quality Management Model Bank: ......................................................................... xxii
2.6 Department-wise Application of the TQM Model to Commercial Branch Banking
Operations ..............................................................................................................................xxiii
2.6.1 The Leadership in Commercial Branch Banking ...............................................xxiii
2.6.2 Account Opening Department ...........................................................................xxiii
2.6.3 Accounts Department.........................................................................................xxiii
2.6.4 Remittances (Inwards and Outward), Clearing and Collections (Inward and
Outward). ........................................................................................................................... xxiv
2.6.5 Cash Department ................................................................................................ xxiv
2.6.6 Term Deposits – Issuance and Encashment ....................................................... xxiv
2.6.7 International Trade and Credit Operations.......................................................... xxv
2.6.8 Diagnostic Nature of the Proposed Model .......................................................... xxv
2.7 Elements of TQM: ............................................................................................................ xxv
2.8 TQM Enablers:................................................................................................................. xxvi
2.9 Role of Management in TQM: ......................................................................................... xxvi
2.11 Barriers to TQM............................................................................................................ xxvii
2.12 Chapter summary .......................................................................................................... xxvii
Chapter 3: Overview of Eastern Bank Limited .......................................................................... xxix
3.1 Name of the Company ..................................................................................................... xxix
3.2 Legal Form ....................................................................................................................... xxix
3.3 Composition of the Group EBL ........................................................................................ xxx
Vision ..................................................................................................................................... xxxi
Mission................................................................................................................................... xxxi
Values .................................................................................................................................... xxxi
3.4 CORPORATE DIRECTORY ......................................................................................... xxxii

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 Committees of the Board of Directors ................................................................................. xxxiv
Chapter 4: Research Methodology................................................................................................ xli
4.1 Introduction ......................................................................................................................... xli
4.2 Research Philosophy ........................................................................................................... xli
4.3 Research Design.................................................................................................................. xli
4.4 Location of the study ....................................................................................................... xliii
4.5 Data Collection Methods ................................................................................................. xliii
4.6 Questionnaires................................................................................................................... xliv
4.7 Fieldwork Process ............................................................................................................. xliv
4.7 Research Hypotheses ......................................................................................................... xlv
4.8 Chapter Summary ............................................................................................................xlvii
Chapter 5: Findings of the Observation ................................................................................... xlviii
5.1 Introduction .................................................................................................................... xlviii
5.2 Top Management Commitment ..................................................................................... xlviii
5.3 Customer Focus and Satisfaction ................................................................................... xlviii
5.4 Quality Policy ................................................................................................................... xlix
5.5 Employee Training............................................................................................................ xlix
5.6 Employee Involvement .......................................................................................................... l
5.7 Reward and Recognition ........................................................................................................ l
5.8 Benchmarking ....................................................................................................................... li
5.9 Continuous Improvement...................................................................................................... li
5.10 Chapter summary ...............................................................................................................lii
Chapter 6: Barriers to Total Quality Management Implementation ............................................ liii
Chapter 7: Recommendations for Better Implementation and Practice of TQM in Banking Sector
...................................................................................................................................................... liv
7.1 Introduction ......................................................................................................................... liv
Training...................................................................................................................................... lv
Sufficient Branches .................................................................................................................... lv
Sufficient ATM Booths.............................................................................................................. lv
Online Banking Service ............................................................................................................ lvi
Benchmarking ........................................................................................................................... lvi
Employee Involvement ............................................................................................................. lvi
Role of the Government ............................................................................................................ lvi
7.2 Conclusions ........................................................................................................................lvii
Reference ................................................................................................................................... lviii
Appendix....................................................................................................................................... 60

vii
 List of Abbreviations

Abbreviations Definition
B Benchmarking
BCD Bank of Commerce and Development
CFS Customer Focus and Satisfaction
CI Continuous Improvement
CIS Communication and Information Systems
CSFs Critical Success Factors
CVF The Computing Values Framework
DC Developmental Culture
EE Employee Empowerment
EFQM European Foundation for Quality Management
EI Employee Involvement
EQA The European Quality Award
ET Employee Training
FA Factor analysis
GC Group Culture
HC Hierarchical Culture
IDI Individualism
ISO International Standards Organisation
JUSE The Japanese Union of Science and Engineering
LTO Long term orientation
MAS Masculinity
MBNQA The Malcolm Baldrige National Quality Award
NIST National Institute of Standards and Technology
PD Power distance
PDCA Plan, Do, Check, Act
QA Quality Assurance
QC Quality Control
QMS Quality Management Systems
QPP Quality Policy and Planning
RC Rational Culture
RR Recognition and Reward
SPC Statistical Process Control
SPSS The Statistical Package for the Social Sciences
TMC Top Management Commitment
TQC Total Quality Control
TQM Total Quality Management
WB World Bank

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 Figures Pages no

Figure 1.1: The structure of the thesis 9

Figure 3.1: The Deming Cycle – PDCA 35

Figure 3.2: Baldrige criteria for performance excellence framework

(2009–10) 44

Figure 3.3: The structure and criteria of the EFQM excellence model
(EFQM, 46
2010)
Figure 4.1: The Competing Values Framework of Organisational Culture 99

Figure 5.1 Research methods design 122

Figure 5.2 Hypothesis model 147

Figure 6.1 The effect of organisational culture types on TQM

implementation 173

Figure 7.1: The Proposed Model for successful TQM implementation 218

ix
x
 Chapter 1: Introduction

1.1 Introduction

The objective of this preliminary chapter is to provide an overview of the research

presented in this study. It commences with a brief discussion of the background to the
study, followed by an exploration of the research objectives, research questions, and
description of the significance and structure of the study.

1.2 Background of the Study

The globalisation of the marketplace, international trade, and rapid technological

innovation are among several factors that have increased competition, affecting businesses
worldwide. To survive and compete in an environment characterised by rapid change, a
number of organisations across the globe have begun to implement new ways of thinking
and strategies to improve their organisational performance in order to become more
efficient and flexible, and to achieve the benefits attainable with quality management; in
particular, Total Quality Management (TQM) (Al-Khalifa and Aspinwall, 2000). TQM is
a management philosophy designed to increase competitiveness, reduce costs, and secure
continuous process improvement. Consequently, there has been a change in organisational
thinking, from approaches based on production-oriented operations to a more
competitively oriented method that places the achievement of customer satisfaction at the
centre of business operations (Baidoun, 2004).

Many organisations have realised that improving the quality of their products and services
is vital for their businesses to survive and to compete in a fast-moving environment. Over
the last few decades, the development and implementation of effective TQM have made
it possible for organisations to occupy advantageous positions, and to be more competitive
in the world-market.

Therefore, TQM has frequently been implemented as a means of achieving better product
quality, improving the quality of services, and satisfying the needs and the expectations of
customers. Many countries have started to create their own national quality awards in order
to promote the employment of TQM at a national level; especially following the success
of the Malcolm Baldrige Award (MBNQA) in the USA, and the European Quality Award
(EQA) in Europe.

xi
However, in practice, it is not a simple task to achieve the benefits of TQM. Despite its
success across several organisations, there is evidence to suggest that attempts to
implement TQM are often unsuccessful (Garvin, 1986; Tata and Prasad, 1998; Rad, 2005;
Venkatraman, 2007; Salaheldin, 2009). Moreover, many studies have indicated that
several organisations failed to achieve the expected benefits of TQM due to their ignorance
of cultural factors (Kekäle and Kekäle, 1995; Tata and Prasad, 1998; Al-Khalifa and
Aspinwall 2000; Prajogo and McDermott, 2005; Yong and Pheng 2008; Zu et al., 2010).
According to Deal and Kennedy (1999), successful implementation of TQM requires a
measure of change in the values, attitudes, and culture of an organisation. Therefore, many
organisations endeavour to shape their cultures as a means of improvement, aligning that
culture with new trends in the application of new philosophies. In addition, Tata and
Prasad (1998) have stated that the lack of significant success in implementation is often
not viewed as a failure of the TQM philosophy, but more as a result of not paying sufficient
attention to the cultural variables that affect it. It is clear, then, that culture is an important
influence on organisational performance and TQM implementation. It is consequently
important to understand and define organisational culture type in order to study an
organisation's readiness for the adoption and implementation of TQM.

Owing to globalisation the international economic environment has experienced major

changes in recent years. The financial sector has also witnessed fundamental changes,
including the consolidation of organisations and an increase in competitiveness. It is,
therefore, logical to assume that this globalisation will affect banking efficiency. These
situations have encouraged many countries (particularly Arab nations) to liberalise their
financial sectors through deregulation, in order to upgrade efficiency levels and to enhance
the health of their banking systems. The ultimate objective would be to promote
effectiveness and improve performance.

There is no doubt that, in both developing and developed countries, the banking sector
plays a vital role in economic and financial activities. It completes the functions of
allocating financial resources and providing the public with a means to save for the future
and to borrow to meet current financial needs. In developing countries, banks dominate
the financial sector; and are generally the main source of finance in such economies.

Many emerging nations have undertaken a range of measures to reform their financial
systems when facing increased competition from financial institutions based in more

xii
developed countries. These reforms aim to end government intervention, expand the role
of the private sector through deregulation, open up economies to greater foreign
participation in the banking sector and financial markets, and adopt transparent
commercial procedures to achieve higher economic growth.

However, while it can be argued that the banking system plays an important role in the
financial structure of a country, it is the state that bears the ultimate responsibility for
maintaining the confidence of the public in the integrity and security of the banks. Such
sincerity and trust are maintained at an international level by the World Bank (WB), the
International Monetary Fund (IMF), and the Basel Committee, ensuring a sound and
capable banking sector through continual reform. Furthermore, the main objective of these
reforms is to enhance the efficiency of banking operations by improving the quality of
services, along with profitability and competitiveness; thus, maintaining competitive
prices and offering greater safety and reliability.

The term TQC (total quality control) was conceived by A. V. Feigenbaum 1983, Japan,
TQC later became TQM. It is a corporate business management philosophy which
recognises that customer needs and business goals are inseparable. Arora (2008:11).
Management must be able to This that TQM will not happen by accident. TQM is a
managed process which involves people, system and supporting tools and techniques.
Quality should begin to permeate financial institutions as a way of life and it should begin
with employee satisfaction. TQM, though a recent phenomenon is important in the
banking sector. It has evolved as a management concept out of the need by organisations
for continuous quality improvement and critical importance of increased profitability and
survival in the face of competitive challenges in the banking industry. This starts with the
customers by learning to identify and meeting their basic requirements and then
empowering staff by giving them the tools they need to perform excellently.

It is in this regard that this research work is aimed at assessing the practice of total quality
management by Eastern Bank Ltd.

1.3 Research objectives

The principle aim of this study is to assess the level of TQM implementation and explore
the influence of organisational culture on TQM implementation in three Libyan banks.
each objective achieve this, the following three objectives the conclusions:

xiii
 1. To ascertain the level the level of awareness of TQM among staff of Eastern Bank
Ltd

2. To assess the level of adoption of TQM practice by staff of Eastern Bank Ltd

3. To determine the extent to which members of staff are involved in the practice of
TQM in Eastern Bank Ltd

4. To identify the major limitations of TQM practice in Eastern Bank Ltd.

1.4 Research Hypotheses

The following hypotheses are formulated for this study;

1. H0; the level of awareness of TQM among Eastern Bank Limited’s staff is not high
H1; the level of awareness of TQM among Eastern Bank Limited’s staff is high.
2. H0; the level of adoption of TQM practice by staff of Eastern Bank Limited is not
high
H1; the level of adoption of TQM practice by staff of Eastern Bank Limited is high
3. H0; members of staff of Eastern Bank Limited are not involved in TQM practice
to a large extent

1.5 Scope and Limitations of the Study

The study will assess the practice of TQM in Eastern Bank Ltd, a service organisation. It,
therefore, stands to reason that the principles and practices this study espouses will be
applicable to the service sector only.
The project was also limited by the constraint of securing primary data from the bank
coupled with the lukewarm response from respondents who had to be persuaded to
complete and return questionnaires on time.

1.6 Significance of the Study

The research study is useful to Eastern Bank Ltd as a means of identifying and criticising
effectively the knowledge and experiences gained in the implementation and application
of TQM as a newly developed management technique aimed at achieving higher
productivity.

xiv
This research will help top management determine the areas in the organisation that needs
to be improved upon and adequate measures to be taken as a means of achieving higher
productivity through Total Quality Management.

1.7 The structure of the study

This thesis is divided into ten chapters, as shown. Chapter One provides an introduction
to the study, including the background and need for it, and presents the research objectives
and questions. This is followed by the significance and the structure of the study. The
second chapter discusses in detail the concept of TQM, the evolution of Total Quality
Management, and the emergence of quality gurus and their contribution. Chapter Three
gives an overview of Eastern Bank Limited. The research methodology adopted is covered
in Chapter Four. Data analysis and findings, including the discussion, can be found in
more detail in Chapters Five and Six respectively. Chapter Seven is dedicated
organisational the conclusions for each objective of this research, and the contribution of
the study.

xv
 Chapter 2: The Fundamentals of Total Quality Management

2.1 Introduction

Thus chapter provides an overview of the literature pertaining to TQM. It presents an

overview of the fundamentals of TQM in terms of its concept and history, the influence of
quality gurus‘ and their contributions, models of implementation and a brief introduction
to TQM awards, the movement of TQM implementation in developed and developing
countries. This is done in order to provide an understanding TQM theory, which underpins
the foundations of its implementation by organisations.

2.2 Total Quality Management

Total Quality Management (TQM) refers to management methods used to enhance quality
and productivity in organisations, particularly businesses. TQM is a comprehensive
system approach that works horizontally across an organisation, involving all departments
and employees and extending backwards and forward to include both suppliers and
clients/customers.

TQM is only one of many acronyms used to label management systems that focus on
quality. Other acronyms that have been used to describe similar quality management
philosophies and programs include CQI (Continuous Quality Improvement), SQC
(Statistical Quality Control), QFD (Quality Function Deployment), QIDW (Quality in
Daily Work), TQC (Total Quality Control), etc. Like many of these other systems, TQM
provides a framework for implementing effective quality and productivity initiatives that
can increase the profitability and competitiveness of organisations.

2.3 Origins of TQM

Although TQM techniques were adopted prior to World War II by a number of

organisations, the creation of the Total Quality Management philosophy is generally
attributed to Dr W. Edwards Deming. In the late 1920s, while working as a summer
employee at Western Electric Company in Chicago, he found worker motivation systems
to be degrading and economically unproductive; incentives were tied directly to the
quantity of output, and inefficient post-production inspection systems were used to find
flawed goods.

xvi
Deming teamed up in the 1930s with Walter A. Shewhart, a Bell Telephone Company
statistician whose work convinced Deming that statistical control techniques could be used
to supplant traditional management methods. Using Shewhart's theories, Deming devised
a statistically controlled management process that provided managers with a means of
determining when to intervene in an industrial process and when to leave it alone. Deming
got a chance to put Shewhart's statistical-quality-control techniques, as well as his own
management philosophies, to the test during World War II. Government managers found
that his techniques could be easily taught to engineers and workers, and then quickly
implemented in over-burdened war production plants.

One of Deming's clients, the U.S. State Department, sent him to Japan in 1947 as part of
a national effort to revitalise the war-devastated Japanese economy. It was in Japan that
Deming found an enthusiastic reception for his management ideas. Deming introduced his
statistical process control, or statistical quality control, programs into Japan's ailing
manufacturing sector. Those techniques are credited with instilling a dedication to quality
and productivity in the Japanese industrial and service sectors that allowed the country to
become a dominant force in the global economy by the 1980s.

While Japan's industrial sector embarked on a quality initiative during the middle 1900s,
most American companies continued to produce mass quantities of goods using traditional
management techniques. America prospered as war-ravaged European countries looked to
the United States for manufactured goods. In addition, a domestic population boom
resulted in surging U.S. markets. But by the 1970s some American industries had come to
be regarded as inferior to their Asian and European competitors. As a result of increasing
economic globalisation during the 1980s, made possible in part by advanced information
technologies, the US manufacturing sector fell prey to more competitive producers,
particularly in Japan.

In response to massive market share gains achieved by Japanese companies during the late
1970s and 1980s, U.S. producers scrambled to adopt quality and productivity techniques
that might restore their competitiveness. Indeed, Deming's philosophies and systems were
finally recognised in the United States, and Deming himself became a highly-sought-after
lecturer and author. The "Deming Management Method" became the model for many
American corporations eager to improve. And Total Quality Management, the phrase
applied to quality initiatives proffered by Deming and other management gurus, became a

xvii
staple of American enterprise by the late 1980s. By the early 1990s, the U.S.
manufacturing sector had achieved marked gains in quality and productivity.

Table 1.1 : Quality Gurus and their Contributions

Quality guru Main contribution

Edward Deming Stressed management‘s responsibility for quality.

Developed fourteen points‘ to guide companies in

quality improvement.

Joseph Juran Defined quality as ―fitness for use‖.

Developed the concept of cost of quality.

Philip Crosby Coined phrase ―quality is free‖.

Introduced concept of zero defects.

Armand Introduced concept of total quality control.

Feigenbaum

Kaoru Ishikawa Developed cause-and-effect diagrams.

Identified concept of the internal customer‘.

The quality guru’s contributions have significantly underwritten to the development of

quality concepts.

2.4 Overview:

Newman & Cowling (2005:43) conducted an empirical study as major quality

improvement initiatives undertaken by two British banks. Tool for data collection was
developed on the basis of SERVQUAL model. The model measured 10 aspects of service

xviii
quality: reliability, responsiveness, competence, access, courtesy, communication,
credibility, security, understanding or knowing the customer and tangibles. It measured
the gap between customer expectations and experience. The study indicated a considerable
improvement in service quality and that was evidence in support of the SERVQUAL
model.

A TQM study by Burton & Philip (2005:15) discovered if the organisation had a track
record of effective responsiveness to the environment, and if it had been able to
successfully change the way it operated, the TQM will be easier to implement.
Implementing TQM essentially involved organisational transformation: beginning to
operate in new ways, developing a new culture. The study also concluded that
implementation of TQM would inevitably face resistance, to be addressed directly by
change agents coming up according to the expectations of external customers. The study
concluded that leadership styles and organisational culture must be congruent with TQM.
TQM is a powerful technique for unleashing employee creativity and potential, reducing
bureaucracy and costs, and improving service to clients and the community.

Saffran & Vogt (2006:45) studied the implementation of the quality management system
based on ISO 9000 at Deutsche Bank AG. To establish the quality system, a structural
plan was divided into four steps: Determination of tasks and responsibilities; studies;
implementation and certification. A major component of the second step was the quality
manual, the creation of which followed three guidelines: simple language, understandable
illustrations, and focusing on the essentials. Guidelines for this documentation included:
outcome-based planning, uniform methods of describing procedures, readability and
employee focus. Documentation was the basis for evaluation during the registration audit,
which found no nonconformities. Therefore, Deutsche Bank earned a three-year
registration without limitation. Implementation of the quality management system cost
Deutsche Bank about 3,975,000 DM, not including registration costs. Benefits of
implementation included improved clarity and motivation for employees, increased
customer satisfaction, and higher productivity. The success of the Deutsche Bank quality
system initiative was based on factors such as employee involvement, open
communication, customer orientation, and flexibility in adapting the system to new
requirements. Edwards & Smith (2001:12), conducted a research on TQM in Banking
focusing on the quality performance standard setting, measuring and monitoring. The
study concluded that customer care programs, action teams and improved communications

xix
were the first steps; the next step in maintaining the competitive edge was the
establishment of quality performance standards and devising systems for measuring and
monitoring their effectiveness. The best way to institute quality into an organisation,
particularly a bank, was to train employees to do their job better through a top down
training structure.

Brah et al. (2000:23), conducted a research on TQM and business performance in the
service sector in Singapore. Clear evidence was found that TQM implementation
improved business performance in the service sector of Singapore. The study found that
while accrued benefits could be attributed to some of the tools of TQM, such as customer
focus and quality improvement rewards, the key to the success of TQM lied in its
intangible and behavioural features such as top management support, employee
empowerment and employee involvement.

A TQM study by Tsang & Antony (2001:13) analysed TQM practices in the UK. The
results focused on 11 critical factors of quality management. Continuous improvement,
teamwork and involvement, customer focus, top management commitment and
recognition, training and development, quality systems and policies, supervisory
leadership, communication within the company, supplier partnership or supplier
management, measurement and feedback and cultural change. It was found that customer
focus is the most successful driven factor for TQM programs in UK service organisations.

Joseph (2001:36) examined the implications of Total Quality Management approaches for
various manufacturers in the State of Maine, USA. Information was gathered through a
written questionnaire. The research utilised various quality tools such as measurement of
external customer satisfaction, employee involvement and team building. The data
strongly indicated that the larger firms were more likely to have a quality initiative in
place. The study suggested further areas of inquiry, indicating a need for additional
information and including training for small firms regarding the application of a quality
program.

Zia ul Haq (2005:23) conducted a study on TQM Implications in Financial Sector,

focusing on change management issues that addressed quality management practices in
the service sector, difficulty in taking a holistic approach to Total Quality Management
(TQM) implementation in the service environment, and the challenges of delivering
organizational reform through TQM. The study employed a quasi-qualitative case study

xx
methodology. Twenty service companies from health care, insurance, consulting, banking
and financial services were studied over a period of two years to assess their change
management practices for implementing TQM. The study found that unrealistic
expectations of employee commitment, the absence of process focus, lack of information
flow, holes in education and training and failure to create a continuous improvement
culture contributed significantly towards failure. The study concluded that when real and
actual approaches to change management follow academic models and techniques of
change management, the ability to develop and implement organization-wide change
progresses more smoothly.

Gupta (2005:45) conducted a study on Quality Management in service firms: sustaining

structures of total quality service. The research proposed a conceptual model may be
developed that may be used in understanding the relationships between sustaining
structures that support the total quality service (QTS) philosophy and customer
satisfaction. Integrating the SERVQUAL instrument and other work in the service quality
literature, especially the Deming management model, the investigation developed a model
for understanding the interactions between customer satisfactions and sustaining
structures. This model developed three constructs: leadership, organisational culture and
employee commitment, which is very important in achieving total quality service
objectives. The proposed model linked these three constructs with business processes and
total quality service. This study provided an important conceptual framework for
evaluating the relationships between customer satisfactions and sustaining structures.
Samat & Saad (2006:12) conducted a study on TQM practices, service quality, and market
orientation. The main purpose of this study was to explore the relationship between Total
Quality Management (TQM) practices and service quality as well as the relationship
between TQM practices and market orientation. Structured questionnaires were
distributed to managers of 175 service organisations in the northern region of Malaysia.
The results showed that employee empowerment, information and communication,
customer focus, and continuous improvement had a significant effect on service quality
whereas only employee empowerment and customer focus had a significant effect on
market orientation.

The review helped the researcher in developing the understanding that

xxi
 • After the successful implementation of TQM in manufacturing, it is now the turn
of the service industry.

• TQM implementation is a cultural change aiming at employee creativity, reducing

costs and improving services to clients and the community.

• The success of TQM program in the financial sector is associated with strong
leadership emphasising strategic and tactical planning.

• The top-down training programs need to be started in order to attain desired quality
level in the banking industry.

• Service quality standards in banking sector need to be set logically first then their
measurement and controlling requires attention.

• TQM implementation with the commitment of top management and employee

empowerment improved customer services successfully.
• TQM application is possible in larger firms as they have established processes and
procedures, further the academic TQM models along with the techniques of change
management facilitate organisation wide change progress. In this scenario, the
customer becomes the focus and the most successful driven factor for TQM
program in the banking sector. There is a need to develop a TQM conceptual
framework for application to real life banking business. What could be a TQM
Model equally applicable to all commercial banks for their branch banking
operations?

2.5 Total Quality Management Model Bank:

Literature review indicates that whatever model is available in order to measure quality
implementation is either about management and employees or quality issues related to
customer services. And they are general in nature. The proposed model combined
simultaneously:

a. TQM principles Nagware et al (2006:42).

b. Branch banking departments: Account Opening, Funds Transfer, Cash, Lockers,

Foreign Trade, Advances, Accounts and Admin, and Customer Services.

xxii
Attributes of service quality presented by Zeithaml & Bitner (1996:18).

2.6 Department-wise Application of the TQM Model to Commercial

Branch Banking Operations

2.6.1 The Leadership in Commercial Branch Banking

Branch Manager is the leader, responsible for the smooth running of day to operations and
also for the business growth at the branch level. He should present himself as a dedicated
and committed role model to be followed by other staff members. He should be able to

• motivate staff for quality services;

• encourage innovation

• promote group decision making and

• supervise the satisfaction level of both internal and external customers.

2.6.2 Account Opening Department

The Officer In charge of Account Opening Department is responsible for opening new
accounts and activating the dormant ones. He should be able to

• serve the customers promptly;

• make the account opening process the pleasant experience

• exercise relationship marketing

• leave no stone unturned to satisfy customers

• Efficient record keeping and

Error free processing.

2.6.3 Accounts Department

The Officer In charge of Accounts Department is responsible for book keeping (profit/loss
accounts, accruals, depreciations etc.) of the branch transactions and also for budgetary
aspects. He should be able to

• base his work on facts which means having the more realistic approach towards
branch activity and business growth;

xxiii
 • develop procedures resulting full monitoring and control over branch activity; and

• manage records efficiently

2.6.4 Remittances (Inwards and Outward), Clearing and Collections (Inward

and Outward).

The Officer In charge of Remittances Department is responsible for processing customer’s

requests for funds transfer. He should be able to

• maintain efficient documentation

• Speedy and error free processing

• serve customers with a smile

• Reply promptly to corresponding branches and Head Office and

• adhere to laid down procedures of Central Bank

2.6.5 Cash Department

The Officer In charge of Cash Department is responsible for cash receipts and payments.
He should be able to

• serve customers with smiling face and due courtesy

• process cash receipts and withdrawals accurately and efficiently

• make additional arrangements on cash tills in the case of long queue and

• Dispose of excess cash on hand as per the laid down policy of the bank converting
the non-performing asset into a profit generating one.

2.6.6 Term Deposits – Issuance and Encashment

The Officer In charge of Term Deposits is responsible for the issuance and encashment of
Term Deposits. He should be able to

• process the applications timely

• Exercise due vigilance while disbursing profit on deposits

• Work on the processes and procedures to lessen the time required for the issuance
and encashment of term certificates and

xxiv
 • zero defect production.

2.6.7 International Trade and Credit Operations

The Officer In charge is responsible for Import, Export and Credit Operations. He
should be able to

• follow the relevant industrial bench marking;

• Work with required professional autonomy and spontaneity;

• improve continuously procedures for quick and accurate processing of

transactions;
• Timely deliver debit – credit advice to customers; and

• update the departmental processes and record keeping according to latest

international industrial practices.

2.6.8 Diagnostic Nature of the Proposed Model

The proposed model is diagnostic in nature and has the capacity to diagnose
problems in the following areas:

While taking the model as operationalization of TQM in banking, the level of

implementation may be checked with an appropriate scale.

The model may be taken as an independent variable. Strict adherence to TQM

principles may lead towards higher customer satisfaction (dependent variable) and
financial performance (dependent variable).

2.7 Elements of TQM:

Following are the elements of TQM

I. Top management has to demonstrate its commitment to TQM and provide strategic
direction to the movement – strategic outlook.
II. Customer involvement/satisfaction, customer driver‟s quality
III. Shares vision (suppliers/Vendors, Employees, Employer) partnership.
IV. Teamwork consensus.
V. Process orientation – Process ownership.
VI. Continuous quality improvement attitude
VII. Products and services to be delivered at lowest social cost.

xxv
VIII. Cultural change at all levels
IX. Value based decision making
X. System thinking has to be developed.
XI. Innovation is must for survival
XII. Employees Empowerment.

2.8 TQM Enablers:

TQM enablers are:

I. Turn employees from skill holders to disseminators

II. Emphasis process
III. Get people to perform machine centred activities with full quality focus.
IV. Measure key parameters of all activities.
V. Use technology efficiently
VI. Build in continuous learning and improvement process.
VII. Get the workforce to manage himself.
VIII. Use cross-functional people and cross-functional teams.
IX. Use customers and competitors to drive all decisions.
X. Use sincerity and trust as a basis for all dealings. Saying = doing.
XI. Deploy the whole workforce
XII. Use scientific methods
XIII. Benchmarking data
XIV. Use facilitation mediate structure
XV. Compensate for weakness inherent in culture
XVI. Maintain at all times, focus on objective to satisfy the customers better than
competitors do.

2.9 Role of Management in TQM:

First of all, management should be educated, trained in TQM. If management agrees to

implement TQM then it is possible to implement TQM.

Requirement Criterion of TQM is concerned with increasing management‟s physical and

financial control over procedures, documentation, systems of people.

xxvi
Management continues to adopt inconsistent approaches such as attempting to control
costs and employees while espousing the importance of the customers and the need for a
trust based culture.

2.11 Barriers to TQM

Following are barriers to TQM:

a. Failure to appreciate TQM as a cultural revolution.

b. Failure of top management to have a long term vision. Excessive emphasis

on the short run.

c. Lack of exemplified top management commitment.

d. Fear of senior Management losing control.

e. Lack of Z theory application. In Z theory, there is an in depth trust and

understanding among the employees of an organisation. They have a
common heritage and cultural background. Everyone in the organisation
trusts every other person. Trust has in depth understanding of their fellow
employees (subtlety), has a common heritage and cultural background
(intimacy). The use of ideal goals, the focus in people, work directly on
manufacturing the product and the need for continuous improvement is
needed.
f. Lack of employee’s commitment.

g. Attempting to produce at capacity

h. Outdated accounting system.

2.12 Chapter summary

This chapter has provided an overview of the literature on the fundamentals of TQM, in
order to understand the theory informing the concept. It reviewed the various definitions
and history of TQM, the influence of quality gurus and the knowledge and ideas that
contributed significantly to the philosophy and principles of TQM. This chapter also
reviewed three models of quality awards for business excellence: the Deming Prize, the
European Quality Award (EQA), and the Malcolm Baldrige National Quality Award
(MBNQA). This was followed by a discussion of the ISO 9000, which aims to integrate

xxvii
and harmonise similar quality management standards into a single body of international
quality principles that can be applied to world trade and commerce. In the next chapter,
the selected bank for the study will be described in details.

xxviii
 Chapter 3: Overview of Eastern Bank Limited

3.1 Name of the Company

Eastern Bank Limited

Registered & Head Office

Jiban Bima Bhaban,

10, Dilkusha Commercial Area,

Dhaka-1000, Bangladesh. Telephone: 880-2-9556360,

Fax: 880-2-9562364, 9554610

Swift: EBLDBDDH, Cable: EASTBANK

e-mail: info@ebl-bd.com

Web: www.ebl.com.bd

3.2 Legal Form

A public limited company incorporated in Bangladesh on August 08, 1992 to carry out all
kinds of banking businesses in and outside Bangladesh. Having taken over the businesses,
assets, liabilities and losses of erstwhile Bank of Credit & Commerce International
(Overseas) Limited as per BCCI Reconstruction Scheme 1992 of Bangladesh Bank, the
bank commenced its operations on August 16, 1992.

xxix
3.3 Composition of the Group EBL

Eastern Bank Limited (Group)

Bank Subsidiaries (fully owned)

Eastern Bank Limited EBL Securities Limited

(Stock Dealing & Brokerage)

Off-Shore Banking Unit EBL Investments Limited

(OBU), Bangladesh (Merchant Banking Operations)

Yangon Representative EBL Asset Management Limited

Office, Myanmar

(Asset Management i.e. managing

mutual funds)

EBL Finance (HK) Limited

(First foreign subsidiary doing

trade finance and off-shore

the banking business in Hong Kong)

xxx
Vision

To become the most valuable brand in the financial services in Bangladesh creating long-
lasting value for our stakeholders and above all, for the community, we operate in by
transforming the way we do business and by delivering sustainable growth.

Mission

We will deliver service excellence to all our customers, both internal and external.

We will ensure to maximise shareholders' value.

We will constantly challenge our systems, procedures and training to maintain a

cohesive and professional team in order to achieve service excellence.

We will create an enabling environment and embrace a team based culture where
people will excel.

Values

Service excellence

We passionately drive customer delight.

We use customer satisfaction to accelerate growth.
We believe in change to bring in timely solution.
Openness

We share the business plan.

We encourage two-way communications.
We recognise achievements, celebrate results.
Trust

We care for each other.

We share learning/ knowledge.
We empower our people.
Commitment

We know our roadmap.

We believe in 'continuous improvement'.
We do not wait to be told.

xxxi
Integrity

We say what we believe in.

We respect every relationship.
We do not abuse information power.
Responsible corporate citizen

We are tax-abiding citizen.

We promote the protection of the environment for our children.
We conform to all laws, rules, norms, sentiments and values of the land.

3.4 CORPORATE DIRECTORY

Core Business

Corporate Banking

A wide array of products and customised solutions is offered to corporate clients through
9 relationship units: 6 in Dhaka and 3 in Chittagong. Our offerings include but not limited
to term lending, project financing, working capital financing, trade financing, supply
chain, cash management solutions, payroll banking, syndication, advisory services etc.

SME Banking

SME Banking primarily targets SME clients to meet up their financial needs offering
tailor-made banking solutions through 57 SME Centres located across the country. It also
facilitates farmers and women entrepreneurs directly through women cell and agri unit.

Consumer Banking

Consumer Banking offers a wide range of depository, loan and card products to cater the
demands of individual customers. It simplifies daily banking needs and satisfies lifestyle
aspirations of consumers by extending suitable loan products. We serve our customers
through a network of 82 branches, 13 priority centres, 4 student centres, 202 ATMs and
58 CDMs.

xxxii
Treasury

This business segment predominantly deals with managing cash flow and liquidity of the
bank. It also deals with fixed income securities, foreign exchange, currency trade, asset-
liability management, fund transfer pricing etc., a complete package of treasury solutions
to both internal and external customers.

Centralised Operations & Risk Management

EBL follows the centralised model of operations in processing voluminous customer

information, monitoring and assessing credit risk, trade finance operations, cards
operations to ensure better control and compliance, service excellence and good
governance. Branch managers having no authority to take credit decision are expected to
focus on sales and service.

xxxiii
Committees of the Board of Directors

Board of Directors

Chairman
M. Ghaziul Haque
Directors (Other than chairman)

xxxiv
Sl. Name Position

Mir Nasir Hossain

1. Director
(Representing Mir Holdings Ltd.)

2. A. M. Shaukat Ali Director

Md. Showkat Ali Chowdhury

3. Director
(Representing Namreen Enterprise Ltd.)

Salina Ali
4. Director
(Representing Borak Real Estate (Pvt.) Ltd.)

Anis Ahmed

5. (Representing Aquamarine Director

Distributions Ltd.)

Independent
6. Meah Mohammed Abdur Rahim
Director

Mufakkharul Islam Khasru

7. Director
(Representing Namreen Enterprise Ltd.)

Independent
8. Ormaan Rafay Nizam
Director

Gazi Md. Shakhawat Hossain

9. Director
(Representing Purnima Construction (Pvt.) Ltd.)

xxxv
 Managing
10. Ali Reza Iftekhar
Director &
CEO

Company Secretary

Safiar Rahman, FCS

Executive Committee

Status
Status with the
Sl. Name with the
Bank
Committee
1. Mir Nasir Hossain Director Chairman
Md. Showkat Ali
2. Director Member
Chowdhury
3. Salina Ali Director Member
Managing Director
4. Ali Reza Iftekhar Member
& CEO
Secretary: Safiar Rahman, FCS

Audit Committee

Status with the Status with the

Sl. Name
Bank Committee

Meah Mohammed Independent

1. Chairman
Abdur Rahim Director

2. A.M. Shaukat Ali Director Member

xxxvi
 Mufakkharul Islam
3. Director Member
Khasru

Ormaan Rafay Independent

4. Member
Nizam Director

Gazi Md. Shakhawat

5. Director Member
Hossain

Secretary: Safiar Rahman, FCS

Risk Management Committee

Status with the Status with the

Sl. Name
Bank Committee

1. Mir Nasir Hossain Director Chairman

Meah Mohammed Independent

2. Abdur Rahim Director Member

3. Gazi Md. Shakhawat Director Member

Secretary: Safiar Rahman, FCS

Credit Rating

Rating by Moody’s

For the first time in private sector banks in Bangladesh, EBL has been awarded Ba3 rating
by world renowned rating agency Moody's with a stable outlook. This rating is equivalent
to that of our sovereign rating (Ba3), also assigned by Moody's.

Rating by CRISL

xxxvii
The Bank has completed its credit rating by Credit Rating Information and Services
Limited (CRISL) based on the Financial Statements 2015 and was awarded ‘AA’ in the
Long Term and ‘ST-2’ in the Short Term.

Rating Long term Short term

Surveillance Rating

AA ST-2

2015

Surveillance Rating

AA ST-2

2014

Outlook Stable

Ownership Composition

As on December 31, 2016, shareholding position of EBL by the Directors, General Public
& Financial Institutions is presented below:

Status

Number of % of total

Composition

Shares shares

Directors 221,820,064 31.56%

General Public 407,869,621 58.03%

Financial Institutions 73,167,067 10.41%

Total 702,856,752 100.00%

xxxviii
Stock Exchange Listing

The ordinary share of the Bank is listed with both Dhaka Stock Exchange Limited and
Chittagong Stock Exchange Limited. Shares of EBL are categorised as ‘A' in both the
Stock Exchanges.

Capital (December 31, 2016)

BDT 12,000,000,000 (Face value per

Authorized Capital

share BDT 10)

BDT 7,028,567,520 (Face value per

Paid-up Capital

share BDT 10)

Accounting Year-end

December 31

Auditors

Rahman Rahman Huq

Chartered Accountants

Tax Consultant

ACNABIN

Chartered Accountants

Legal Advisors

xxxix
Sadat, Sarwat & Associates and

Sadia Rowshan Jahan

xl
 Chapter 4: Research Methodology

4.1 Introduction

The chapter provides an overview of the research philosophy, approaches, and methods of
data collection and data analysis. This chapter deals with the data collection methods that
will be used in this study to evaluate the implementation of TQM in Eastern Bank Limited
and to explore the influence of TQM implementation. organisational

The aim of this chapter is to explain the research philosophy and design that has been
employed by this study. More specifically, this chapter is structured as follows: it starts
with a brief discussion of the research philosophies and the selected methodology. This is
followed by an explanation of the research design. This is followed by a description of the
data collection methods, questionnaire construction and pilot study, and content of the
final draft of the questionnaire. Finally, the chapter ends with a discussion of the statistical
methods used in this research.

4.2 Research Philosophy

Saunders et al. (2007, p.112) asserted that ―a research philosophy or paradigm is a way
of examining social phenomena from which particular understandings of these phenomena
can be gained and explanations attempted.‖ They highlighted that this term is frequently
used in the social sciences, but that it can lead to confusion because it tends to have
multiple meanings. In addition, Saunders et al. (2007) pointed out that the term research
philosophy ‘relates to the development of knowledge and the nature of that knowledge. In
addition, they added that the research philosophy contains important assumptions about
the way in which the researcher views the world. These assumptions will underpin the
research strategy and the methods which are selected as part of that strategy. Easter by-
Smith et al. (2002) observed that the relationship between data and theory has been
vigorously debated by philosophers for many centuries. These writers advanced the
concept a step further when they considered how the failure to think through philosophical
issues can seriously affect the quality of research.

4.3 Research Design

The research design is very important to both the collection of data and its analysis. Indeed,
it could be described as the plan through which the aims and objectives of the investigation

xli
are realised. Saunders et al. (2007) referred to this stage as the general planning stage
determining how a researcher will attempt to achieve their research aims. According to
Creswell (2012, p.20), ―research design is the specific procedures involved in the
research process: data collection, data analysis, and report writing. He added that mixed
method designs are procedures for collecting, analysing, and mixing both quantitative and
qualitative data in a single study or a multi-phase series of studies. The research design
involves the planning of the actual study, dealing with such aspects as research paradigms,
strategies, approaches, data collection methods, and data analysis techniques, which all
impact on the extent to which the research aim and objectives are achieved.

(Collis and Hussey, 2003). Therefore, the choice of research design depends on the
research objectives and questions. The design will be constructed, step by step, to link the
whole of the research together. The figure gives an overview of the research design in this
study.

Gant Chart
Serial Starting Ending Duratio
No Task Description Date Date n

Preparati 1 Planning and Discussion 25-May-17 5-Jun-17 10 days

on 2 Interview 14-Jun-17 14-Jun-17 1 day

3 Data Analysis 15-Jun-17 17-Jun-17 3 days

4 Introduction of report 19-Jun-17 21-Jun-17 3 days

5 Methodology 22-Jun-17 24-Jun-17 3 days

Presentation and Analysis of
Execution 6 Data 2-Jul-17 8-Jul-17 7 days
Preparing Summary of
7 Findings 10-Jul-17 12-Jul-17 3 days
Conclusions and
8 Recommendation 13-Jul-17 14-Jul-17 2 days
Figure 4.1: Gant Chart

xlii
4.4 Location of the study

This study was conducted in Eastern Bank Limited, Head Office, Dhaka, Bangladesh.

4.5 Data Collection Methods

The appropriate selection of data collection methods depends mainly on enhancing the
value of the research. In particular, the selected methods should enable the researcher to
achieve the objectives of the study. Data can be collected in a variety of ways, in different
settings and from different sources (Sekaran, 2003). The researcher seeks to identify the
level of implementation of TQM in Libyan banks and to explore the influence of
organisational culture on TQM implementation. Therefore, the researcher must obtain
enough information from the research to make this possible. When deciding to conduct
research, regardless of the type of research, it is important for a researcher to choose the
best data-collection method.

Saunders et al. (2007) stated that most research projects require some combination of
primary and secondary data to answer research questions and meet objectives. These two
methods of data collection can be used by any business research. According to Saunders
et al. (2007), secondary data includes all the sources that are available to a researcher in
order to obtain the necessary information to identify a research problem. Secondary data
can be categorised as a documentary form of data collection rather than one involving a
survey. Documentary data includes written (e.g. books. journals, reports) and non-written
(e.g. television programmes and CD-ROMs) information. For this research, secondary
data will be used to establish the history of the quality movement, TQM gurus, quality
awards and the status of TQM in developed and developing countries, and to determine
the critical success factors of TQM, as well as organisational culture dimensions and types.
The secondary data used in this research will be obtained from many sources, which can
be classified as paper-based sources (books journals, periodicals, abstracts, research
reports, conference papers, market reports and annual reports.

On the other hand, primary data collection includes two main methods: questionnaires and
interviews. A number of other methods can also be employed, either singly or in
combination. A combination of methods is used in order to improve both the reliability
and validity of the data gathered. The choice of data collection methods, including mail

xliii
questionnaires, telephone interviews and face-to-face interviews, is significant because it
affects the cost of the data collected.

According to Teddlie and Tashakkori (2009), probably the most common methods
occurring mixed-methods are questionnaires and interviews. This combination allows for
the strengths of each strategy to beneficially combine with those of the other.
Questionnaires can be used to inexpensively generate a large number of responses that
produce information across a broad range of survey topics. Data gathered using interviews,
on the other hand, is based on a relatively small number of respondents, who generate
more in-depth information in response to queries from the interviewer.

4.6 Questionnaires
The questionnaire strategy is usually associated with the deductive approach. It is a
common strategy in business and management research, and is most frequently used to
answer who‘, what‘, where‘, how much‘ and how many‘ questions (Saunders et al., 2007).
It is also used in the vast majority of TQM, and organisational culture literature. The use
of this technique has also been supported by Saraph et al. (1989), Denison and Spreitzer
(1991), Flynn et al. (1994), Ahire et al. (1996), Chang and Wiebe (1996), Dellana and
Hauser (1999), Al-Khalifa and Aspinwall (2000), Al-Zmany (2002), Chapman and Al-
Khawaldeh (2002), Baidoun (2004), Prajogo and McDermott (2005), Cameron and Quinn
(2006), Stock et al. (2007), Al-Marri et al. (2007), Jung et al. (2008), Salaheldin (2009),
Zu et al. (2010) and Vecchi and Brennan (2011). Bell (1999, p.245) defined a
questionnaire as:

―… a widely used and useful instrument for collecting survey information providing
structured, often numerical data, being able to be administered without the presence of
the researcher, and often being comparatively straight forward to analyse.‖

This study used questionnaires as the main quantitative tool. This method was used
because it was the most appropriate tool to suit the Bangladesh environmental conditions.
In addition, the researcher used a questionnaire delivered by hand to each respondent and
then collected again from their banks.

4.7 Fieldwork Process

The fieldwork for this study was conducted in Eastern Bank Limited in the mid of June.
For the purposes of this research, the field work phase consisted of two stages: the pilot

xliv
study stage, as discussed in Section 5.8.1.2 above, and the actual fieldwork stage. The
researcher visited the bank targeted in this study and obtained permission from the relevant
departments to conduct interviews quality manager, urging him to help the researcher to
collect the data and information required. In addition, the researcher delivered the
questionnaire, together with a cover letter from the Department of Management Studies at
Jahangirnagar University (see Appendix B); this was intended to encourage the participant
to cooperate with the researcher, as an undergraduate student studying university, in the
fieldwork data collection phase. The letter stated that this data was an essential part of this
research requirements.

4.7 Research Hypotheses

The following hypotheses are formulated for this study;

1. H0; the level of awareness of TQM among Eastern Bank Limited’s staff is not
high.
H1; the level of awareness of TQM among Eastern Bank Limited’s staff is
high.
The following two hypotheses were derived from the general hypothesis, to
explore the influence of factors of awareness on the implementation of TQM
the following are found to have impacts:
H1a: The training and educational programs conducted by the top management
of Eastern bank provides the employees with all the knowledge achieves to
practice TQM in in the organisation.
H1b: The general meeting conducted before implementing any quality policy
in the Eastern bank makes the employees of all level aware of the needs of the
following quality policy implementation. Moreover, every minute details
needed for the implementation and practice of the upcoming quality policy are
also made clear to the employees from middle management level to the front
line supervisors.

2. H0; the level of adoption of TQM practice by staff of Eastern Bank Limited is
not high

H1; the level of adoption of TQM practice by staff of Eastern Bank Limited is

xlv
 High.
The following hypotheses has the following factors affecting the
implementation and practice of TQM in Eastern bank limited:

H1a: The level of adoption of TQM practice is high in Eastern bank limited,
this is because the top management commitment towards the implementation
of TQM is found impressively high in EBL.

H1b: The general meeting of all levels of employees before the adoption and
implementation of any quality policy in EBL has a great positive impact on the
mindsets of the employees that they are taken into consideration before
adopting any major decisions. Behavioural is one of the major factors
influencing the high-level adoption of TQM practice by the employees of EBL.

H1c: The training and education policy of EBL is another factor that provides
the positive impact on the high level of practice of TQM in EBL. The training
and education program of EBL facilitates the employees to learn all the skills
that will be needed by the employees while practising or adopting the
upcoming quality policy of the organisation. Since employees are all equipped
in an enriched way to work on the newly implemented quality policy so they
show little resistance towards the adoption of any new policy.

3. H0; the organisation culture of Eastern bank limited has the negative impact
on the implementation and practice of TQM in the bank.

H1; the organization culture of Eastern bank limited has positive impact on the
implementation and practice of TQM in the bank.

H1a: Developmental Culture of Eastern Bank limited has a positive influence

on TQM factors (top management commitment, customer focus and
satisfaction, quality policy, employee training, employee involvement,
employee empowerment, reward and recognition, communication and
information system, benchmarking, and continuous improvement).

xlvi
 H1b: Hierarchical culture has a positive influence on TQM factors (top
management commitment, customer focus and satisfaction, quality policy,
employee training, employee involvement, employee empowerment, reward
and recognition, communication and information system, benchmarking, and
continuous improvement).

H1c: Group culture has a positive influence on TQM factors (top management
commitment, customer focus and satisfaction, quality policy, employee
training, employee involvement, employee empowerment, reward and
recognition, communication and information system, benchmarking, and
continuous improvement).

H1d: Rational culture has a positive influence on TQM factors (top

management commitment, customer focus and satisfaction, quality policy,
employee training, employee involvement, employee empowerment, reward
and recognition, communication and information system, benchmarking, and
continuous improvement).

4.8 Chapter Summary

Chapter five discussed the key aspects of the methodology used in this study in terms of
the research design, philosophy, approach and methods. Data analysis was mentioned with
reference to the statistical methods used in this research. A questionnaire was used as the
main method of data collection; this choice was explained and justified in this chapter.
Semi-structured interviews were conducted with the general manager, in order to gain a
greater understanding of some of the issues in the research. Data analysis and the research
findings will be discussed in the next chapter.

xlvii
 Chapter 5: Findings of the Observation

5.1 Introduction

This chapter discusses the results that emerged in chapter five, and also presents the
findings obtained from the questionnaire and the interviews, to help explain and expand
upon the findings obtained from the quantitative research tools. This section provides a
comprehensive discussion of the research findings, both quantitative and qualitative, and
links them to the relevant literature in order to realise the research objectives.

5.2 Top Management Commitment

From our findings of the top management commitment regarding the implementation of
TQM in EBL is that they give utmost importance to the top management commitment.
And EBL has one of the highest top management commitment practice in Bangladesh.
According to the Human Resource Manager: "We practice the highest possible TQM as is
possible in the banking sector of Bangladesh." Further when our group wanted to know
about some details of TQM implementation and practice in EBL. The TQM in charge
provided us with every practising detail of their institution.

5.3 Customer Focus and Satisfaction

Since banks are not manufacturing organisations so they need to be intensely focused on
customers demand and the means to satisfy the customers. According to the Human
Resource manager:

―We know that the customer is the Performance in indicator and customer
satisfaction is the heart of our business operations that assist in developing our
processes and services. We have established have department concerned with the
issues of customers, to identify their needs and suggestions, and measuring their
satisfaction, but this department has little interaction with external customers and
they are slow in moving to improve the situation. “Since we do not have any
tangible product which the customer can analyse of, so it is our service that can
satisfy the banking customers most. Keeping this in our mind we try our best to
serve the customers wholeheartedly.”
The questionnaire results also show that EBL gives the highest importance to the
customers' needs and satisfaction both in theory and practice.

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5.4 Quality Policy

In EBL the quality policy is not centralised as a whole. Rather they practice a quality
policy that is segregated department wise and is not just another line. They practice quality
only where it is needed. EBL forms quality strategy instead of quality policy, form quality
policy according to the necessity of the departments and practice in that particular area of
need.
One of the best things that we found in our observation in the details of EBL is that before
implementing any new quality policy, a company-wide conference or meeting is held
where all the employees are made aware of the upcoming quality policies to be
implemented, the reasons for those to be adopted, what changes are going to come and
most importantly why the change is important along with the impacts of those changes in
the overall performance of the bank. This is one of the best practices we found in EBL
because when top management makes the employees clear of these facts and cooperation
of employees are wanted, employees get a feeling of oneness and contribute their best to
the changes.

5.5 Employee Training

Employee training in EBL is considered as one of the most important factors that help
satisfy the customers. They give utmost importance to employee training and hence made
it separate for particular departments. According to the Human Resource manager:
Most of the banks are reluctant to train their employees simply because when employees
become qualified they leave to work for other banks, which might offer them a higher
salary and other opportunities that the prevailing banks cannot offer. So the banks feel
sometimes that they do not want to spend more money for the benefit of others. But we
here in EBL do not support this concept and practice training for the employees.
“We provide training separately to the employees of the different department, later on,
they all are brought together as a whole to perform a demo training session. Sometimes,
top management officers also join these type of combined training programs to encourage
the employees."
“It becomes more like a family meeting than a training session, which helps employees
perform better in real life situations giving them the confidence and courage to face any
customer promptly.”

xlix
At EBL Employees of all level starting from the top management to the front line
supervisors are educated in the concurrent and any new concept of TQM that gets
recognition in the banking sector as well as has the possibility to be implemented in the
near future in the organisation. Top management executives are facilitated to participate
in TQM seminars and are always kept up to date by providing materials containing the
recent progress in TQM globally.

5.6 Employee Involvement

In EBL employee involvement is less in areas of providing decisions. This is because the
decisions are made by top management and employee participation is not allowed in the
decision making level. Involvement of employees is practised at the implementation level
of the decisions provided by the top management. Banking sector sometimes needs to
make decision maintaining the rule and regulations of the guidelines provided by the
central bank. For this reason, EBL has kept the decision making within the boundaries of
top management, as explained by the Human Resource manager. HR manager added:
There are not great opportunities for employees to provide their contributions and
suggestions, as well as the use of means of communications are very few in the bank, such
as regular meetings, videos, and open days for communication purposes, where all our
employees would be able to meet and talk with top management and explain the
difficulties in the bank, and the current work environment‖.

5.7 Reward and Recognition

EBL has an annual rewarding policy practice. In the words of the HR manager: There is
the system for recognitions and rewards in this bank, and our bank strictly maintains
regulations regarding rewarding and recognising on the basis of favouritism, personal
relationships and friendship, in other words, there is no unfair apportionment of rewards
among employees in EBL. “We keep track of the performance of every employee
department-wise, and at the end of the year we reward those employees who performed
their best in their field (of course at the top management, middle management and front
line supervisor level). This reward is sometimes monetary and sometimes non-monetary.”

On the other hand, one of the flaws have been found during the survey is that in the reward
and recognition system of EBL is that, recognition is not actually being practised. For if

l
the rewarded employee is not known to others personally then other employees will simply
know that Mr. x from department Y has got Z reward. This should not be the recognising
formula. Recognition demands some kinds of social familiarisation, which is hardly found
in the reward and recognition system of EBL.

5.8 Benchmarking
The HR manager of EBL accepted the fact that they do not practice any kind of
benchmarking policy in their organisation. Sometimes in some of the departments, the
target is provided to be fulfilled by comparing the performance of their competitors. But
a particular benchmark is never set in their organisation. HR manager explained: "We
have not established organisation benchmarking to measure our progress in continuous
quality improvement. We do not use tools to assess our progress by comparing our
performance with other banks and look in banking sector every bank has their own targets
and aims to be fulfilled by the end of the year. So, it is not actually necessary to have
another bank to the benchmark of your own performance. That's why we do not practice
benchmarking for evaluating our performance rather we go for targets to be fulfilled by
each department, and finally contribute to the to summarising of the bank as a whole."

Sometimes, we use the benchmarking for comparing financial performance between our
branches in order to determine the levels of the strengths and weaknesses in the financial
performance of each branch. But We do not often use benchmarking to accurately measure
the bank‘s situation compared with other banks

5.9 Continuous Improvement

EBL practices continuous improvement in two levels viz employee level and department
level. In both the levels, they provide training which include training sessions to be
conducted at a different branch than that of the working branch of the employee.
Continuous improvement is also measured annually both of the employees and of the
departments. Employees, as well as departments that achieve improvement beyond the
expected limit, is rewarded with accolades like foreign trips of the whole department along
with the family members, on payment vacation etc. The HR manager says: “We know that
continuous improvement is the most important factor in the implementation of quality
management, so we are very interested in operations improvement within the bank in order
to improve the level of customer service and improve the efficiency and performance of

li
the bank; so we strive to introduce the latest technologies to help our employees with
improved processes and upgrading services level.

5.10 Chapter summary

This chapter has presented a discussion of the findings that have emerged from analysing
the questionnaire data in chapter five, and the semi-structured interviews, which link the
findings to the literature of TQM, and organisational culture. The findings defined by the
first objective indicated a low level of TQM implementation in Eastern Bank Limited.
This low level of implementation was mainly due to low top management commitment
and limited focus on customers and their satisfaction; lack of quality policy; poor
employee training; low levels of employee involvement; insufficient or ineffective reward
and recognition; a lack of benchmarking; and a failure to commit to continuous
improvement.

Furthermore, based on these findings, a model is proposed for the success of TQM
implementation in the Eastern Bank. The model provides a comprehensive foundation for
successful TQM implementation in the bank. Research conclusions, contribution,
recommendations, limitations and future research avenues will be discussed in detail in
the next chapter.

lii
 Chapter 6: Barriers to Total Quality Management
Implementation
After discussing the issue of TQM implementation and practice in EBL with the HR
manager we found some factors that act as the barriers in the way of implementing as well
as practising TQM in the banking sector of Bangladesh. Some of the barrier creating
factors are:

1. Lack of top management commitment and support;

2. Culture (employees and customers);
3. The speed of implementation of TQM, without sufficient planning and
preparation.
4. Inability to change organizational culture.
5. Lack of accuracy in quality planning.
6. Incompatible organizational structure and isolated individuals/departments.
7. Outdated Accounting System.
8. Lack of cooperation among the departments.

According to the HR manager: Although we apply a TQM philosophy, our employees still
have negative perceptions about the need for TQM in the bank. Also, we suffer from the
difficulty of dealing with some clients and customers, who have the culture of the tribe
and family, and who seek to use these relationships when undertaking any procedures or
operations with the bank‖. We started the programme, but most employees did not have
enough knowledge to follow it through, and after the implementation, they discovered that
there had not been sufficient planning and preparation for TQM implementation, so we
faced many problems during the implementation stages. Therefore, we should take a long
time to study the plans and consider completely, those aspects which are likely to have a
positive and negative influence on TQM before implementation. He further added:
Creating a quality culture was the main difficulty during the stages of the implementation.

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 Chapter 7: Recommendations for Better Implementation and
Practice of TQM in Banking Sector

7.1 Introduction

The aim of this concluding chapter is to set out the main findings of the study, which have
emerged in the preceding chapters. This chapter also makes recommendations to improve
the implementation of TQM in the Eastern Bank Limited, and also offers some
recommendations for further research, as well as establishing the study‘s contribution to
knowledge in this area.

Customers are more sensitive in case of service than in the case of tangible goods, a survey
found that customers are 73% more impulsive while purchasing a service than in the case
of purchasing manufactured goods. This is because while buying a tangible good, the
customer gets to touch the product, look at the label of the product and a sense of assurance
works; while in the case of services no tangibility is found by the customer and the sense
of assurance is fully absent. This is the reason for customers to become impulsive. An
Ishiwaka Model is recommending for the bank:

Figure 8.1: Ishiwaka Model for TQM implementation

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The banking sector is a service sector i.e. intangible with the very limited part to be
tangible. Services provided by the banks are in many cases same or similar, Moreover
today's customers come to take the service of a bank after knowing about the bank e.g.
when a person comes to a specialized bank for taking its service, he/she comes from
knowing about the bank and mainly because of his/her need of such bank. So, the changing
factors in banking service are the customer service factor that will help the banks gain
customer satisfaction and fulfil TQM objectives. Some of the factors that can help improve
the customer service of banks of Bangladesh we found are recommended below:

Training

Training the front desk employees on organisational behaviour in order to deal with
the customers with utmost care and importance. In this case, the proverb "first
impression is the last impression" will work as wonder. If the customer gets dissatisfied
at the first visit to the bank then the customer along with some more potential
customers related to him/her will be lost by the bank. EBL already has some training
programs for their employees at different levels of their organization, but they should
particularly focus on implementing training programs for the front desk employees
(who deal with the customers directly and of course both at the primary and secondary
phases of providing service) to ensure the practice of TQ approach in their
organization.

Sufficient Branches

For providing quality banking service every bank should have a sufficient number of
branches all over the country. If a customer willing to take the service of a bank cannot
find the outlet of that particular bank near his locality, it is pretty normal that he will
lose interest since no one wants to go beyond his convenience. Thus, one of the ways
to provide customers with supreme banking service is to increase the number of EBL
branches in suburban areas of Bangladesh.

Sufficient ATM Booths

Another factor is the presence of the ATM booth of the particular bank. Nowadays
ATM booths of many banks are found even in the outskirts of large cities. In this
condition, if a customer does not find the ATM booth of a particular bank, he will
probably lose his interest once again in taking the service of that bank by the same

lv
 excuse of inconvenience. Hence, EBL should improve the quality of their banking
service by making more ATM booths of their bank in maximum possible localities
around Bangladesh.

Online Banking Service

Online banking services have become the need for banking service seekers. So, along
with the traditional form of banking a bank has to ensure the availability of online
services like online money transfer, recharging mobile balance using the bank account,
paying the utility bills using the online banking services etc. So, EBL should enhance
the quality of their service by becoming the pioneer in facilitating a maximum number
of online banking services.

Benchmarking
Eastern bank limited do not use benchmarking in improving their service. But they
should develop methods of benchmarking, which are an important tool for the
continuous improvement of quality, and increase training in the field of benchmarking
to achieve business excellence.

Employee Involvement
Employee involvement is an important factor in the implementation of TQM. EBL
should pay more attention to promoting employee involvement in the decision-making
process, and delegation of authority and responsibilities. This will make all employees
feel they have the responsibility and authority to participate in decision making and
problem-solving at the appropriate operating levels.

Role of the Government

The government can play an important role in building a quality environment by

emphasising the importance of quality for the whole country, and by establishing an
annual award for TQM. This will serve many purposes, such as encouraging
continuous improvement, raising awareness of quality and eliminating the fear of
change.

lvi
 7.2 Conclusions

Many organisations have realised that TQM is the way of improving the quality of
goods and services, along with improving productivity and lowering costs. This
requires a long-term commitment by top management that involves working with
customers and suppliers to improve performance; education and training; developing
the right organisational culture and climate; developing accurate and responsive
management systems; and establishing targets for quality improvement.

lvii
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 Appendix

The Study Questionnaire

60