SERVICE QUALITY AND CUSTOMER SATISFACTION (THE CASE OF COOPERATIVE BANK OF OROMIA)

Abstract

It is obvious that customers are important stakeholders in organizations and their satisfaction is a priority to management. Customer satisfaction has been a subject of great interest to organizations and researchers alike. In recent years, organizations are obliged to render more services in addition to their offers. The quality of service has become an aspect of customer satisfaction. It has been proven by some researchers that service quality is related to customer satisfaction. Others used service quality dimensions to evaluate service quality. Considering this, the study was intended to assess the level of service quality and customer satisfaction of CBO. For this purpose, the study was used descriptive approach focusing on both primary and secondary data. Besides, Questionnaires were distributed to 97customers and 33 employees of the bank in order to collect primary data. The respondents were selected by using simple random sampling technique. The SERVQUAL instrument developed by Parasuraman (1985) has been applied in designing the questionnaire by using five dimensions of service quality: tangibility, reliability, responsiveness, assurance, and empathy. The questionnaire aimed to determine the level of customers’ expectation and perception towards the service quality of the bank. Correlation analysis is carried out to examine the impact of the five service quality dimensions over customer satisfaction. The results revealed that the reliability and empathy dimensions raised the highest level of expectation, whereas the reliability, empathy, and responsiveness dimensions gained the highest level of perception. The findings showed that the dimensions of service quality such as tangible, reliability, responsiveness, assurance, and empathy are positively correlated to customer satisfaction.