The Impact of Tqm on the Performance of Banks

Advances In Management THE IMPACT OF TOTAL QUALITY MANAGEMENT ON BANKS PERFORMANCE IN NIGERIA By: ADEOTI JOHNSON OLABODE Business Administration Department, University of Ilorin. ABSTRACT Banking authorities in every country of the world are paying great attention to the state of the three ‘S’ (3S) - safety, soundness and stability in their different banking systems. The competitive nature of the banking system in Nigeria has increased the number of district banks from eight in 1992 to forty two (42) in 1994 and by the end of 1995 the figure has risen to fifty-one (51). Facts emerging from already distressed banks revealed that bad management is indisputably a major factor for distress. The concomitant effect of the distress situation is the general erosion of banks confidence. This article looks at the application of Total Quality Management as a panacea to many unethical practices that spell the doom of the distressed banks. The objective of the study is to examine the gains of application of total quality management in the service industry’ with particular reference to the commercial banks in Nigeria and also to see how the application of TQM can prevent future threats of distress in commercial banks. The entire commercial banking sub-system was partitioned into three categories, first, second and third generation. The first generation banks are defined as those having a track record of more than 50 years, second generation banks as those that emerged after the indigenisation act of 1976 and the third generation banks are defined as post - distress banks or New generation banks. Three banks were selected randomly one to represent each of the three generation banks. The selection of the three banks was based on their proximity to the author. The data analysis employed is ANOVA. The major results of the article shows that the quality and quantity of employees employed determine to a very large extent the survival of any bank, also that the application of TQM is

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