Influence of quality management practices on organizational performance The Case of Banking Sector in Tanzania

This study aimed to assess the influence of Quality Management (QM) practices on Organisational Performance (OP) with a view to propose strategies to be adopted by Banking Sector (BS) to improve performance. Until recently not much attention has been paid to quality improvement in financial services organisations especially in the developing countries and the relationship between the QM practices and OP, in Tanzania BS, has not been established. After various QM practices and OP measures had been evaluated, it was decided that five QM practices and five OP constructs would be adopted in this study. The questionnaire requested the participants to indicate on a 5-point Likert scale the extent to which each QM practice was practiced. Statistical analyses were conducted using SPSS to perform reliability analysis, correlation analysis and multiple regression analysis (t- statistics, standardised beta values and significant levels). Overall, the study findings indicate that certain specific QM practices had a significant relationship to financial performance measures such as net income before taxes, and operating leverage, but did not seem to have the same level of relationship with sales revenue, or the non financial performance measures. The study also concluded that there are other unique organisational factors such as Key Management Committees that can moderate the relationship between QM practices and performance improvements. Therefore this study recommends that, depending on the performance measure requiring improvement, there is need for a different emphasis to be placed on different elements of QM and a consideration of other organisational factors.