EFFECT OF TOTAL QUALITY MANAGEMENT ON ORGANIZATIONAL EFFECTIVENESS: THE CASE OF COMMERCIAL BANK OF ETHIOPIA

Abstract

The purpose of this research is to explore the influence of TQM practices on organizational effectiveness at commercial bank of Ethiopia (CBE) Addis Ababa branch offices. This study uses quantitative approach to achieve the objectives of the research. A questionnaire was used to collect the relevant data for this study. The study was conducted on 384 employees including top level managers selected from 12 randomly selected sample branches of CBE found in Addis Ababa. The data collected was analyzed by descriptive and inferential statistical analysis techniques. The results of data analysis show that the level of TQM practices at CBE was moderate. The multiple regressions analysis was used to explain the influence of TQM practices on organizational effectiveness at CBE. The findings showed that seven TQM practices including employee empowerment, employee involvement, customer focus, quality focus, employee training, reward and recognition and top management commitment had a positive influence on organizational effectiveness at CBE. In addition, continuous improvement did not have any influence on organizational effectiveness at CBE. Moreover, the study revealed that some of the obstacles that affected the achievement of a high level of TQM implementation at CBE were: a lack of training programs relating to the quality management system, a lack of motivation and reward system, and poor organizational communication. Finally, on the basis of the research findings, this study recommends the company to improve its training programs relating to the quality management system, motivation and reward system, and organizational communication.