Investigating the Effect of Total Quality Management Practices on Organizational Performance in the Jordanian Banking Sector

Rawan Al-Ettayyem,Zu’bi M. F. Al-Zu’bi

doi:10.5539/ibr.v8n3p79

Abstract

The aim of this study is to examine the effect of Total Quality Management (TQM) practices (customer satisfaction, education and training, continuous improvement, teamwork, and top management commitment) on organizational performance (financial and non-financial) in the Jordanian banking sector. Research papers which are related to services are limited in Jordan. Since Jordanian economy is heavily dependent on the services sector, such research may enhance the quality of this sector. The methodology is based on a questionnaire distributed to 11 commercial banks, and the statistical package for social sciences (SPSS) was used to analyse and examine the hypotheses. This research has indicated that TQM practices have a positive effect on organizational performance both financially and non-financially.

Highlights

In recent years, measuring organizational performance has become essential for companies to survive, whether they are in the manufacturing or service sector
The purpose of this paper was to study the relationship between Total Quality Management (TQM) practices and organizational performance in the Jordanian banking sector
The results show that there is a positive relationship between TQM practices and organizational performance in the Jordanian banking sector, this result is supported by (Hoang et al, 2010; Fotopoulos & Psomas‟s, 2010; Goetsch & Davis, 2013; Sweis et al, 2013)

Summary

Introduction

In recent years, measuring organizational performance has become essential for companies to survive, whether they are in the manufacturing or service sector. Globalization has brought unexpected changes to the economy, and because of this, all organizations are looking for strategies to increase performance and mechanisms to withstand any crisis, in the banking sector. The banking sector is facing unstable financial times, related to liquidity, inflation, exchange rate, credit, loans, cash flow and interest rate, so banks need to establish procedures and tools in order to confront these challenges enhance their performance and survive through economic hardships. TQM has become the new method to reinforce competitive advantages and organizational performance; it is the core of a company‟s success (Ooi et al, 2011). The main idea of this research is: Can the Jordanian banking sector utilizing of TQM practices to improve their performance?

Objectives

Methods

Results

Conclusion