a holistic model for total quality service

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A holistic model for total quality service

G.S. Sureshchandar, Chandrasekharan Rajendran, R.N. Anantharaman

The Authors G.S. Sureshchandar, Indian Institute of Technology Madras, Chennai, India

Chandrasekharan Rajendran, Indian Institute of Technology Madras, Chennai, India

R.N. Anantharaman, Indian Institute of Technology Madras, Chennai, India

Abstract Total quality service (TQS) is a socio-technical approach for revolutionary and effective management.

However, the contemporary quality management literature is overridingly manufacturing oriented andthere seems to be a dearth of comprehensive studies (from the management's perspective) addressingthe critical dimensions of TQS that will depict a holistic TQM philosophy in service organizations. Thepresent study is an earnest endeavour to fil l this void. Based on a thorough review of the prescriptive,

practitioner, conceptual and empirical literature, the study has identified 12 dimensions as crucial for theinculcation of a TQM ambience in a service set-up. The criticality of each of these dimensions from a

service perspective is corroborated in detail. An instrument for measuring TQS with specific reference tothe banking sector has been developed. Data have been collected from executives from banks in a

developing economy. The instrument has been empirically tested for unidimensionality, reliability andconstruct validity using a confirmatory factor analysis approach. A model for TQS has also been

proposed, illustrating the relationships between the various dimensions. The present research work offersa systematic framework for the conceptual and empirical understanding of TQS and its critical factors.

Article type: Theoretical with worked example.

Keywords: Service, TQM, Factor analysis, Modelling.

Content Indicators: Research Implications*** Practice Implications*** Originality*** Readability**

International Journal of Service Industry ManagementVolume 12 Number 4 2001 pp. 378-412

Copyright © MCB University Press ISSN 0956-4233

Introduction

In this era of intense competition, quality has become the key slogan in organizations as they strive for acompetitive advantage in an atmosphere characterized by liberalization, globalization and knowledgeablecustomers. Starting from the birth of the quality revolution triggered by the precepts, concepts anddoctrines of the gurus of quality, such as Deming, Juran, Crosby, Ishikawa, Taguchi and others, there



have been copious contributions by people in all spheres ranging from academicians and researchers topractitioners. The nature, extent, and kind of research work done in both manufacturing and servicesectors would emanate from any scrupulous scrutiny of the existing literature.

The manufacturing total quality management (TQM) literature abounds with empirical studies on thecritical dimensions of TQM. Several researchers have come out with different dimensions such as top

management commitment and leadership, quality policy, training, product/service design, supplier qualitymanagement, process management, quality data and reporting, employee relations, workforcemanagement, customer focus, customer involvement, benchmarking, statistical process control usage,employee empowerment, employee involvement, corporate quality culture, strategic quality management,and so on, as critical for TQM in the manufacturing organizations (Adam, 1994; Ahire et al ., 1996; Blackand Porter, 1996; Flynn et al ., 1994, 1995; Forker et al ., 1996; Madhu et al ., 1996; Powell, 1995; Saraphet al ., 1989). These dimensions and other approaches are basically tools of the intellect that were forgedin administrative theory, tempered in manufacturing quality management and are naturally expected to behoned to cutting sharpness in service quality management. On the contrary, though most of thesedimensions and other techniques and strategies proposed by various theorists and practitioners seem toprovide a near universal remedy to the problems of the manufacturing business, keeping them as acomplete yardstick for service quality improvement lacks sound logic. The point to be underscored here isalthough from a conceptual viewpoint most of the dimensions of manufacturing quality managementshould naturally apply to service organizations, the complex implementation issues surrounding totalquality service (TQS) (i.e. TQM in service organizations) call for some serious soul-searching as servicesdiffer from manufacturing goods on a number of continua: service intangibility, simultaneity of production,delivery and consumption, perishability, variability of expectations of the customers and the participatoryrole of the customers in the service delivery. However, the service quality literature seems to be devoid ofcomprehensive research that addresses the critical aspects of TQM from a service perspective, andoffers a holistic model that will help researchers and practitioners to better understand the intricacies ofTQM in the service ambience.

Against this backdrop, the present study makes a spirited bid to develop a conceptual framework basedon a robust research methodology that will effectively confront the challenges envisaged.

The overarching objectives of this paper are therefore fivefold:

(1) to furnish a brief critique of the extant literature on TQM and TQS;(2) hence, to identify and corroborate the criticality of those dimensions that could be deemedcritical for the establishment of a TQS environment;(3) to develop an instrument to measure TQS (from the management's perspective) based on theidentified dimensions with a specific focus on the banking sector;(4) to empirically test the developed instrument for unidimensionality, reliability and constructvalidity using a confirmatory factor analysis (CFA) approach; and(5) to propose a holistic model for TQS by illustrating the relationships between the variousdimensions.

Only through subtle management of these factors can an organization aspire for its zenith in terms ofquality, which eventually will lead to enhanced business performance.

Review of the literature

The contemporary manufacturing quality management literature is quite encyclopaedic, encompassing anoverabundance of research works on:

the critical dimensions of TQM (Saraph et al ., 1989; Flynn et al ., 1994; Ahire et al ., 1996; Blackand Porter, 1996; Silvestro, 1998; Joseph et al ., 1999a);



the relationships between quality management practices and organizational/businessperformance (Adam, 1994; Flynn et al ., 1995; Forker et al ., 1996; Madhu et al ., 1996; Samsonand Terziovski, 1999; Terziovski and Samson, 1999; Agus et al ., 2000);

the soft issues (i.e. people oriented issues) of TQM (Powell, 1995);

the influence of contextual factors on TQM (Benson et al ., 1991; Joseph et al ., 1999b);

the relationships between product quality and customers' perceptions of product quality (Waller

and Ahire, 1996); the concept of control in the context of TQM (Godfrey et al ., 1997); and

the effect of TQM age on quality (Ahire, 1996).

A review of the literature on services reveals that many researchers do articulate different theories andversions on:

customer perceptions of service quality (Grönroos, 1978, 1982, 1983, 1984, 1990, 1993;Parasuraman et al ., 1985, 1988, 1991, 1994a, b; Zeithaml et al ., 1985, 1990; Cronin and Taylor,1992, 1994; Teas, 1993a, b, 1994);

the concept of service culture (Schneider and Bowen, 1995);

the critical role of the personnel and human resource management function (Schneider andBowen, 1992; Berry, 1999);

the operational, organizational and human resources factors for improving service (Berry, 1995;Waldman and Gopalakrishnan, 1996);

the effect of the built-in environment (Bitner, 1992);

service switching, service encounters, critical incidents, and recovery (Bitner et al ., 1990;Keaveney, 1995; Chandon et al ., 1997); and

financial outcomes of service quality initiatives (Rust and Zahorik, 1993; Rust et al ., 1994, 1995,1999).

Therefore, it is indeed true that over the past two decades, service quality has emerged as an importantfield of study in the marketing and the organizational behaviour texts. But although the criticality of theabove mentioned features of TQS have been emphasized independently, it appears that no researchwork, as yet, has collectively taken all these features into consideration, or has provided an all-encompassing holistic model of TQS (from the perspective of the management), addressing all the facetsof TQM in service organizations (such as human and non-human aspects of service production anddelivery, service design and operations, aesthetics of the physical environment, information technology,industrial relations, corporate citizenship behaviour, etc.). Probably, this omission is due to the fact thatthe exponents of quality management felt that the tools, techniques, strategies and critical factors of TQMin manufacturing could very well be replicated in the management of services as well. As TQMprogrammes become universally implemented and sophisticated, it is indeed true that some aspects ofthe TQM philosophy can also be applied to services. But, the results and findings of the studies done inmanufacturing cannot be applied directly to the service sector due to certain well-known inherentdiscrepancies and contradictions between manufacturing and service organizations.

This point was also underscored by Bowen and Schneider (1988) as the authors explained that if theprototypical service differs from the prototypical good, then the systems by which these goods andservices are produced and marketed will also vary. To put everything in a nutshell, the critical factors of

manufacturing TQM vary in their dimensions and dynamics when applied to services, as the differentcharacteristics of services call for some judicious organizing principles, which means that servicesmanagement warrants a different system by which services can be produced and marketed as opposedto the production and marketing of manufacturing goods.

Therefore, there is an obvious need for the researchers to first identify and validate the critical dimensionsof TQM in service organizations, and to develop a framework for TQS implementation in the same. Thisneed has provided the stimulus for the present study, which is an ardent, and perhaps the first, venture tofill this void.



Critical dimensions of TQS

A review of literature on quality management implied that the critical dimensions of TQS could be broadlycategorized under three groups as follows:

(1) Those dimensions of manufacturing quality management that can be effectively used in

service organizations - of course with due modifications (these include dimensions such as topmanagement commitment and visionary leadership, human resource management, design andmanagement of processes, information and analysis, benchmarking, continuous improvement,employee satisfaction, and customer focus).(2) Those dimensions that are seldom addressed in the literature, but are nevertheless keyelements of TQM in both manufacturing and service organizations (e.g. union intervention andsocial responsibility).(3) Those factors that are highly unique to service organizations (namely, servicescapes - theman-made physical environment - and service culture).

The present work, based on a thorough review of the prescriptive, conceptual, practitioner, and empiricalliterature on quality management, identifies 12 dimensions of QM as critical for the institution of a TQMenvironment in service organizations. The dimensions that have been identified are as follows:

(1) top management commitment and visionary leadership (TMCL);(2) human resource management (HRM);(3) technical system (TS);(4) information and analysis system (I & A);(5) benchmarking (BM);(6) continuous improvement (CI);(7) customer focus (CF);(8) employee satisfaction (ES);(9) union intervention (UI);(10) social responsibility (SR);(11) servicescapes (SP); and(12) service culture (SC)

The criticality of each of these dimensions is discussed and corroborated from a service perspective inthe following sections.

Top management commitment and visionary leadership

Top management commitment is prerequisite for effective and successful TQM implementation. Visionaryleadership pertains to the formulation of a long-range vision for the development of the organization,propagating the vision throughout the organization, devising and developing a plan of action and finallystimulating the entire organization towards the accomplishment of the vision.

With more and more service industries attempting to develop an edge over their rivals, leadership efforts

consume a greater share of top management's time and effort, perhaps as much as one-quarter in thepreliminary start-up phases. Awareness, knowledge, and understanding of basic TQS principles andconcepts are prerequisites for the top executives as the ultimate pay-offs from commitment to servicequality improvement can be substantial (Milakovich, 1995). True and efficient service leadership is criticalfor building a climate for excellence that surpasses operational complexities, external market pressures,or any other potential impedance to quality service that might exist (Zeithaml et al ., 1990). Managingservice quality effectively calls for a clear understanding of the concepts of satisfaction, quality and values(Rust and Oliver, 1994). Service leadership is the art of leading and espousing a mental, strategic andspiritual change in the organization and simultaneously initiating and accomplishing practical changesand ensuring that there are systems and measures (Edvardsson et al ., 1994).



Human resource management

Many organizations tend to become more eager and enthusiastic for economic development to the extentthat they are inclined to place greater emphasis on technology, completely overlooking the fact that it isthe human resource that makes the capital, technology and other resources productive. But, if thetechnological advances lure the organization to consider technology as a substitute for human beings,

instead of using it as a tool, it may prove disastrous for them. This is especially true in serviceorganizations since the interaction between the service provider and the customer is so great that iteventually determines the quality perceptions and satisfaction of the consumer. In such a scenario,service firms need to deal with a number of organizational behaviour issues ranging from selection andrecruitment, training and education, employee empowerment to employee involvement, in their qualitymanagement efforts. The logic here is that only if the employees are treated as valuable resources bytheir employers will they, in turn, treat their customers as valuable (Schneider and Bowen, 1992).Therefore, it is indispensable for service organizations to look upon HRM as a source of competitiveadvantage.

Recruitment and selection . Careful recruitment and selection of employees is a precursor to effectiveworkforce management as it helps to evolve a committed workforce who are always prepared to give theirbest towards accomplishing the goals of the organization. In service organizations, disparate facets of

service can be differentially conformant for customers, and, consequently service facilities must besystematized so that they lay stress on the relevant service facets. This can only be achieved byrecruiting and selecting appropriate people (i.e. befitting for a given market and market segment), trainingthem to discharge with respect to the market segment, and rewarding them in ways that arecommensurate with the demands placed on them (Schneider and Bowen, 1993). Schneider et al . (1994)pronounced that the type of employees recruited and selected, and the kinds of orientation theyexperience are clear indicators of the priorities of the organization as they send a strong signal in thisregard. They suggested that human resources personnel should conduct job and organizational analysesto unearth those characteristics deemed crucial for success. Only such people who are likely to havethose personal attributes should be recruited and hired, as success demands competency and energiesdirected at multiple simultaneous organizational priorities. In order that a service organization creates aclimate for service, the people recruited, attracted, and selected must embody service attributes thatpromote such a climate (Schneider and Bowen, 1992).

Training and education . Education and training is one of the keys of any meaningful quality improvement.Employees will understand the theory of quality only when they are properly trained in the qualityconcepts and tools. As services call for strong interpersonal relationships between the service providerand the customer, service firms need to invest more in improving the interpersonal skills, especially of thecustomer contact personnel (Bowen and Schneider, 1988). Apart from this, other ingredients of traininginclude technical job skills and cultural values and norms. Employees at all layers and levels should alsobe trained to have a service focus (Schneider and Bowen, 1992). Training also helps organizations tosend powerful messages about an organization's priorities. Most employees possess inclinations towardmaking larger contributions to the organizational goals and objectives. Training provides them the skillsthat allow these predispositions to become active, thereby transforming motivation into a competency(Schneider et al ., 1994).

Employee empowerment . To be pragmatic, "empowerment" must characterize a real shift in the focus ofpower. Empowerment also leads to increased employee participating in the quality improvement efforts,due to the heightened awareness of responsibility and equity among people at various levels. Servicesare produced and consumed simultaneously which means that empowerment in service organizationsrequire employees to cast a courteous, flexible and spontaneous problem solving face to customers(Schneider and Bowen, 1992). Numerous service organizations have started adopting variousempowerment techniques by pushing the level of autonomy and responsibility to increasingly lowerlevels. Empowerment actually consists of systematically re-distributing four key aspects throughout theorganization from top to bottom: power, information, rewards and knowledge (Schneider and Bowen,1995). Zemke and Schaaf (1989) stated that several service companies have greatly succeeded in their



quality management programmes by adopting empowerment approaches in their organizations (e.g.American Airlines, SAS, Marriott, Federal Express, etc.). Milakovich (1995) argued that for TQS to beeffective, empowerment should portray a state of mind or attitude shared by all members of theorganization instead of a set of rigid rules, policies, procedures or practices.

Employee involvement . Employee empowerment alone will by no means ensure full participation of

employees in quality improvement efforts. No management discipline or improvement technique, still lessmodern technology, can supplant the ingenuity of the person doing the work as only people make quality;the leader just enables them to do it. Several techniques such as "quality circles", "problem hit squads","quality improvement teams", "suggestion teams" can be used to encourage employee participation(Smith, 1995).

In contrast to manufacturing, employees in service organizations not only help produce the output, but arealso involved in selling as well. Employees in service encounters run the service operation, market theservice, and are equated by customers with the service. Employees who interact with customers must besimultaneously able to control the quality of the service delivered, as they deliver the service, whichmeans that employees who render the service are service marketers too, and not just service deliverers(Schneider and Bowen, 1995). To sum up, employees play a very crucial role in the production andmarketing of services due to the simultaneity of production and delivery of service. Therefore, employee

involvement in quality improvement efforts is vital for TQS implementation, as their latent talent willliberate boundless improvement energy.

Technical system

The technical system includes design quality management and process management.

Design quality management . Design of services is an important dimension of quality management. Soundand reliable service design is vital as it meets or exceeds the needs, expectations and desires ofcustomers, ultimately leading to enhanced business performance. The ability to design servicessystematically is as important as designing products. Gummesson (1987) proposed two quality strategiesthat must be adopted right from the design stage:

(1) prevention, i.e. ensuring that the design of the service avoids quality problems arising when itis produced; and(2) zero fault strategy which means that if the design is right, then the quality service depends onemployees doing things right, thereby resulting in zero faults.

Zeithaml et al . (1990) presented a bird's eye view of designing services. They asserted that servicedesign is a form of architecture that involves processes rather than bricks and mortar. Designing qualityinto service insists on combining the precision of the engineer, the integral attitude of the architect, andthe customer-orientation of the marketer. They concluded that in order to effectively design quality into aservice, one not only needs to comprehend the wants and passions of the customer, but also needs tounderstand the intricacies of the service. Hauser and Claussing (1988) discussed the use of an approachcalled "house of quality" to abet inter-disciplinary management groups and teams to identify, understandand translate the product/service characteristics (perceived as important by customers) into design

preferences and production yardsticks. Good service design results in excellent quality of core servicewith features that positively influence customer perceptions of service quality (Schneider and Bowen,1995). Many services involve complex designs, as one has to take care of both the core service and theservice delivery processes (Edvardsson et al ., 1994).

Process management . Subtle management of key business processes is vital for effective qualityimprovement. The big winnings in a quality revolution can only come from restructured andmetamorphosed business processes. Service process management essentially refers to the procedures,systems and technology that are required to streamline the service delivery i.e. it delineates the non-



human element of service delivery, as opposed to human element which is captured under the topicservice culture. Service delivery processes should be perfectly streamlined, standardized and simplifiedso that customers can receive the service without any hassles. Milakovich (1995) observed that the key toTQS relies on using the process as a means to transfer knowledge, thereby responding to customersfaster than the competitors. Zemke and Schaaf (1990) quoted that a study of 1,500 consumers byCambridge Reports, a Massachusetts-based research firm, found that 44 per cent of the respondentsindicated that "ease of doing business with" was the fundamental reason for choosing a financial firm.Enhancement of technological capability (e.g. computerization, networking of operations, etc.) plays acrucial role in streamlining the service delivery.

Information and analysis system

An organization's QM movement will be rendered futile if there is inadequate/ineffective dissemination ofgeneral information. In order that QM be effective, conventional information systems focusing on cost andfinancial accounting activities, sales, marketing, purchasing and scheduling will not be adequate.

Most services have rush or peak periods, and unless the organizations keep themselves prepared forsuch eventualities, they may not be able to provide quality service to customers (as services, unlikegoods, cannot be inventoried and used in times of emergency or demand). This can only be achieved by

equipping the employees with information regarding the process and the customers (Berkley and Gupta,1995). In service organizations, customers' perceptions of quality and customer satisfaction data are notuseful in and of themselves. They are fruitful only when they are used as an incipient point forimprovement (Schneider and Bowen, 1995).

Organizations instituting TQM require enhanced communications to espouse the improvement process.In a TQM ambience people need to communicate across organizational levels, functions, product lines,and locations to work out current problems, eschew new ones and implement change (Pfau, 1989).

Benchmarking

The purpose and guidelines for effective benchmarking have been extensively discussed in the QMliterature. Benchmarking is a discipline which is probably more talked about and better said than done.

Ahire et al . (1996) argued that proficient manoeuvring of quality of products or services and internalprocesses without losing grip on the external factors such as competition, requires prudent use ofbenchmarking. The organization, in total, can be transformed to world class status when benchmarking isdirected at the key or critical business processes.

While in manufacturing standards such as product characteristics, process, cost, strategy, etc., are usedas benchmarks, it is all the more difficult to benchmark services. Because of the very puzzling nature ofservices and the consequent organizational contingencies that it warrants for its design, production,delivery and consumption, there is a need for organizations to focus on benchmarking not only hard data,but also certain behavioural features such as customer satisfaction and employee satisfaction, apart fromcomparing the services and processes through which they are delivered.

Continuous improvement

The Japanese were the forerunners of the concept of "kaizen " or "continuous improvement" (CI).Continuous improvement is increasingly becoming the life-blood of any TQM organization. Deming (1986)emphasized the importance of continuous improvement in his philosophy wherein he states: "Improveconstantly and forever the system of production and service, to improve quality and productivity; and thusconstantly decrease costs".

The quest for workable systems to improve service quality has been described more realistically as apilgrimage rather than a panacea (Milakovich, 1995). Schneider et al . (1996) laid emphasis on eliminating



the concept of an acceptable quality level, and stressed espousing the concept of continuousimprovement with the goal of zero defects. The quest for quality improvement is not a definable task witha traditional beginning, middle and end; but a continuous journey that throws up more and moreopportunities for improvement. It has no definable objective other than the desire to strive for continuousimprovement, and to look for breakthroughs with revolutionary order of magnitude changes that, onceagain, we would have dismissed as unrealizable only a few years ago (Jeanes, 1990).

Customer focus

Customer focus and satisfaction is such an important component of the TQM movement becauseorganizations can outscore their competitors by effectively addressing customers' needs and demands,and anticipate and respond to their evolving interests and wants. In the manufacturing sector this can beachieved by the use of technology which will produce products that consist of such attributes of quality asconformance to requirements, conformance to specifications, reliability, durability, absence of variation,fitness for use, etc.

In service organizations, as customer expectations are highly dynamic and complex in nature, serviceproviders need to think differently about their businesses in contrast to their manufacturing counterpartswho produce tangible goods. Though the complexity and multi-dimensional nature of quality have been

thoroughly grasped by many successful service firms, yet they strive to focus their energies and effortsmainly on customer-defined areas (specific customer needs) so as to satisfy them. Customer satisfactionshould be made the goal and the ultimate measure of service quality (Milakovich, 1995). In today's worldof intense competition, satisfying customers may not be enough. The real gains of a quality revolutioncome only from customer delight.

Schneider and Bowen (1995) gave a gist of the essentiality of customer involvement in serviceorganizations. Shrewd practitioners and researchers are uncovering and recommending innovative waysto build on their naturally existing closeness between service organizations and customers by treatingcustomers as productive "human resources", "substitutes for leadership" and as "organizationalconsultants". Organizations that consider and treat their customers as only end-user consumers of theirservices will certainly lose the service game to organizations that involve their customers in a miscellanyof other roles that intensify the customer-service provider relationships. As services are visualized as a

"game" between persons the significance of customer involvement in any quality improvement effortsbecomes all the more critical as illustrated by Stebbing (1993) that services actually are typified by actsand interactions which are basically social events. Organizations should not guess or go with theirpremonitions about the customer wants and expectations, but should try to harmonize customerexpectations and the management perceptions of it by asking customers directly (about their qualityperceptions, satisfaction, values etc.) through surveys, focus groups and so on, and effectively use suchquality data to improve service quality and customer service. Schneider and Bowen (1995) analyzed themeans of satisfying customers from a psychological point of view. They argued that customers should betreated as people first and as consumers second. People are driven to gratify their needs at a morerudimentary level than that at which they are driven to satisfy their expectations. If an organizationdissatisfies the customers by not meeting their expectations, it can still recover; but if the organizationdissatisfies customers by violating their basic needs, it will lose them. Customer satisfaction is a short-term concept, which may or may not lead to commitment. The management's responsibility is to ensurethat satisfaction manifests itself as commitment in the long run.

Employee satisfaction

Employee satisfaction is basically the degree to which employees of an organization believe that theirneeds are continuously satisfied by the organization. Schneider and Bowen (1995) advocated theimportance of fulfilling the psychological contracts with employees by an organization as they reasonedthat just as customers come to the service business with psychological contracts, employees join theservice business with psychological contracts; and therefore only when the employees are satisfied withthe business, are they likely to fulfil the psychological contracts with their customers. Humans guide their



skills, energies and competencies only toward the rewards they value as precious. Hence, managementmust ensure that rewards reinforce those behaviours (like customer oriented, innovation oriented andcitizenship behaviours) that maximize the concurrent accomplishment of multiple organizationalpreferences. Valued rewards should include recognition and perquisites (cars, offices, and so on) and not

just pay and promotion (Schneider et al ., 1994).

Folger and Greenberg (1985) stressed the concepts of distributive and procedural justice for employees.They stressed that employee perceptions of fair treatment include not only pay and other financialrewards (i.e. the distribution they receive), but also procedural justice in the form of performanceappraisal systems, career and promotion opportunities, superior-subordinate relations, job assignments,etc. In service organizations, these procedural issues call for a greater degree of organizationaleffectiveness than in the manufacturing sector, particularly when the organization effectiveness ismeasured in terms of customer satisfaction. Therefore, due to service intangibil ity, the procedural facetsof organizational reward systems obligate greater sensitivity on the part of the management while dealingwith these issues (Schneider and Bowen, 1992). In essence, an organization must not only have a focuson service quality/customers but also concentrate on employee satisfaction, as research has shownnumerous examples of strong relationships between employee perceptions of employee well-being andcustomer perceptions of service quality and satisfaction.

Union intervention As TQM is an organization-wide approach, its success is greatly influenced by its employee union.Employee relations issues affect the organizational system, and consequently determine the nature andextent of TQM implementation. But, strangely enough, the role of unions has been seldom discussed inthe quality management literature. Godfrey et al . (1997) argued that this omission could have been madepremeditatedly as industrial relations issues were outside the sphere of the expertise of TQM gurus. Theauthors concluded that such an uni-dimensional approach would sabotage any effort towards TQMimplementation as the sum and substance of TQM is its multi-disciplinarity. Wilkinson et al . (1992) alsoadhered to this view as they state that the exclusion of trade unions echoes a unitarist standpoint, withTQM - essentially a management philosophy - presumed to be on the extra-murals of the union domain ofinfluence. Nonetheless, as TQM underscores the need for revamping the organizational functioning andworking practices, which are basically the conventional areas of union concern, industrial relation

problems become increasingly serious and meaningful at lower levels in the hierarchy of an organization(Wilkinson, 1994). Geary (1993) observed that as the union members strongly believe that the TQMinitiatives would pose a potential threat to the very functioning and influence of workplace unions, suchquality improvement (QI) efforts are opposed vehemently. It was further asserted that certain rudimentaryfeatures of TQM, such as team working and group problem solving, might challenge the legitimacy oftrade unions' role in the organization, and consequently could lead to fears of seclusion of unions.

It is however possible for the union and the management to work in unison in order to developrelationships that go in tune with the TQM goals. In such an understanding, unions can take responsibilityfor quality and can help to create an environment conducive for employee participation. With a majorchunk of the workforce in both developed and developing nations working in service organizations,industrial relations issues are as crucial as they are in manufacturing industries (if not more). And, withthe technological growth (in terms of computerization, networking etc.) gripping the service sector, andthe known aversions and apprehensions of the unions towards such advancements, it could beconcluded that any QI effort dawns and dusks with the employee unions.

Social responsibility

Yet another dimension worth considering in its own right is the social responsibility. This critical factorseems to have been overlooked in the TQM literature, though it has found due recognition andrepresentation in the Malcolm Baldrige Model (Malcolm Baldrige National Quality Award Guidelines ,1997, 1998, 1999, 2000). Man is a social animal. He is a part and parcel of the society, and he is boundby the norms, values, beliefs, and the culture prevailing in society. He cannot do every thing on his own



and for his wellbeing alone. If this be the case for an individual person, no wonder, we can say that anorganization has got an even greater responsibility to the society in which it operates.

No doubt, a business or industrial enterprise exists to make profits. This can be achieved by fulfilling itsmission. At the same time, an organization must also grow and have a good image, i.e. it should meet itssocial and community obligations. In other words, the concept of corporate citizenship should come to the

fore if an organization is to be successful and progress towards achieving business excellence. At theend of the day, it is not only the profit or revenue that counts for an organization, but an indomitable beliefin the corporate responsibility to its society becomes indispensable. With the entire world undergoing anupheaval - a quality revolution - it is this attitude that will certainly give an organization a competitive edgein the long run over many others who vie for greater honours in terms of profits, ROI, market share etc.,completely ignoring the fact that they are accountable to the society in which they thrive.

In a study conducted in the USA on customers of non-banking financials, it was found that one of thepredominant consumer concerns on service quality was the emphasis on equal treatment tempered bypragmatism, stemming from the belief that everyone, big or small, should be treated the same. Customerswere also concerned about getting good service at a reasonable price, but not at the expense of quality(Zemke and Schaaf, 1990). Although this feature sounds highly abstract and imperceptible, it doesinfluence the formation of quality perceptions by customers. This subtle, but nonetheless powerful,

dimension sends strong signals towards improving the organization's image and goodwill, andconsequently affecting the customers' overall satisfaction with the services and their loyalty to theorganization.

Servicescapes

Although all service transactions have been portrayed as human interactions between the customer andthe service provider, many other implicit factors do influence the service cognition of consumers. Thephysical environment does influence behaviours and create an image about the organization and itsemployees, particularly in service businesses such as hotels, restaurants, professional offices, banks,retail stores, and hospitals.

The sum total of all the possible moments of truth experienced by the customers - both human and non-

human - provides the rationale behind the customers' perception of the service business and thesatisfaction they derive from it. The tangible facets of the service facility (such as equipment, machinery,signage and employee dress - the "servicescape") strongly influence customer perceptions of quality,particularly as the core service becomes more intangible (Schneider and Bowen, 1995). Services arehighly intangible which means that customers evaluate service quality through summary impressions ofevidence found in the service organization's physical environment. In an empirical research work, Bitner(1992) spelled out how the built-in environment (i.e. the man-made physical surroundings, namely, theservicescapes) affected both customers and employees. It was also concluded that in addition toattracting or deterring entry, the servicescape could, in fact, influence the degree of success that theconsumers experience in accomplishing their plans once they are inside the organization.

As the service is generally produced and consumed at the same time and at the same place, theconsumer experiences the total service within the firm's physical facility. Therefore, the production site (or

the place where the service is produced) cannot be concealed and may, in fact, have a strong impact onconsumers' perceptions of the service experience; i.e. even before the service transaction is made,consumers look for cues about the firm's abilities to deliver quality service (Berry and Clark, 1986). Thephysical setting is rich in such cues, and may be very influential in communicating the firm's icon andpurpose to the customers. Another noteworthy observation was that in service organizations, the samephysical setting that communicates with and affects customers' perception of service might also affectemployees of the firm (Baker et al ., 1988).

Service culture



As tangibles such as size, number of employees, return on expenditures (ROE), return on investments(ROI), stock price, and so on, are important characteristics of an organization's business performance,what is equally (or even more) paramount is to think about organizations more in terms of the intangiblessuch as the organizational culture. This culture enables people to espouse a common vision of theorganization and its goals, and fasten the various functions of organizations towards a common goal,thereby ensuring the seamlessness of processes that contribute to service pre-eminence (Schneider andBowen, 1995). Customers in service organizations are separated by only a very frail and permeable layerfrom the employees, which means the physical and psychological closeness between them is so greatthat only an organizational culture that stresses service quality throughout the organization couldestablish the seamlessness in the service delivery.

An organization characterized by a good service culture is more likely to offer a reliable, responsive,empathetic service to customers and provide them with the assurance in conveying trust and confidence.These attributes of service quality, i.e. reliability, responsiveness, empathy and assurance, have beenfound to be four of the five factors upon which customers' perceptions of service quality is based (seeParasuraman et al ., 1988). A moment of truth happens any time the customer comes face to face with anorganization and uses that occasion to judge the quality of service provided by it (Zemke and Schaaf,1990). When such an encounter is negative, a "critical incident" is said to transpire. In such aneventuality, it is highly imperative for the service organization to involve itself in "recovery," i.e. to respondimmediately to the customers' complaints and bring things back to normality. At that moment, theemployees are very much on their own. What happens can no longer be directly influenced by theorganization. The outcome of such a transaction is only influenced by an organization's culture. A stronginternal service culture is likely to lead to better employee-customer interactions that will result inimproved quality in service delivery, which, in turn, will lead to higher perceived service quality from thecustomer's point of view. A service organization needs to effect and sustain an organizational change inorder that TQS becomes effective. The culture that is prevailing in an organization ultimately determineswhether such a change is accomplished.

Empirical validation of TQS constructs

Methodology

The availability of hard evidence based on a rigorous research methodology is mandatory for thedevelopment of reliable, valid and pragmatic diagnostic instruments by researchers, in order to enhancethe process of theory building. Also, such instruments and their findings can be effectively used bypractitioners for the evolution and betterment of their TQM programmes. This can only be achieved bymeasuring the perceptions and experiences of a range of TQM practitioners from industries, especiallywhen secondary data are not available. Questionnaire survey has been widely acknowledged as anefficient tool for assessing the perceptions of individuals/organizations on a particular subject.

In order to empirically validate the 12 TQS constructs, a survey instrument consisting of 126 items hasbeen developed. This instrument has been developed on the basis of an exhaustive review of theliterature (prescriptive, conceptual, empirical and practitioner) and also based on a pilot survey amongpractitioners (executives of banks) in a developing economy - India. Feedback has also been obtainedfrom experts (i.e. academicians and researchers) in the field. The instrument has been refined several

times based on the pilot study findings and on the comments and suggestions of the experts. Theinstrument has been so developed in order to maximally capture all the aspects of quality management,with respect to the various dimensions of TQS. Though the instrument could be made generic to theservice sector as a whole, it has been so designed as to specifically address the issues of the bankingindustry. But the dimensions and the items (vis-à-vis the parlance) are highly flexible, in the sense thatthe items (phraseology) can be modified to suit any category in the service industry. One particular sectorout of the entire range of organizations in the service industry is chosen in order to have a high level ofinternal validity. The banking sector has been chosen because perceived service quality tends to play asignificant role in high-involvement (high interaction between the customers and the service providers)industries like banks (see Angur et al ., 1999). Also, banks traditionally have long-term business



relationships with customers. Moreover, the banking sector is large enough to capture and represent allthe critical dimensions of TQS (though the intensity of these dimensions may vary from one serviceorganization to another) that the management may have to encounter in order to effectively manage aservice organization. Therefore, by targeting the banking sector and making use of this study as areference, the results and findings will also have a much wider appeal, i.e. extendible to other serviceorganizations. The complete instrument consisting of all the 126 items spread over the 12 dimensions ispresented in the Appendix.

The items with respect to the various dimensions have been jumbled and arranged in a random order.Data have been collected from middle and top level executives belonging to different banks (publicsector, private sector and foreign) in India. The respondents have been asked to indicate their perceptionof the level of TQS practices in their banks with respect to each item on a seven-point Likert scale (from 1indicating very low to 7 indicating very high). A total of 422 executives from 51 different banks have beenapproached from whom 248 correctly completed questionnaires (belonging to 43 banks) have beenreceived, yielding a response rate of around 60 per cent. Table I shows the number of banks and thecorresponding number of respondents who have participated in the study. The high response rate is dueto the personal-contact approach used followed by periodic follow-ups over telephone and personal visits.

Scale refinement and validation

A crucial aspect in the evolution of a fundamental body of knowledge in any management theory is thedevelopment of genuine measures to obtain valid and reliable estimates of the organization-levelconstructs and their relationships to another. Research should initially identify the intrinsic dimensions ofquality management, check that they are measured reliably and validly, and subsequently ascertain theirinfluence on organizational performance (Flynn et al ., 1994). Unless reliability and validity areestablished, it is hard to standardize the measurement scales, without which it is difficult to know whetherthe scales actually measure what they are suppose to measure. Therefore, the first step in scaledevelopment and refinement is to expound the theory and concepts that underlie a particularmanagement concept. This can be achieved through an extensive review of the literature and thesubsequent identification of the critical dimensions of the construct (in the present study, it is TQS) that itis intended to measure. The next step is the design of a survey instrument by careful selection of therepresentative items to measure each factor. Step 3 involves pre-testing of the instrument either

objectively or subjectively by experts in the field (content validity checking). The next step is themodification, refinement and finalization of the measurement instrument. Data are usually collectedthrough field survey and then the collected data are factor analysed (usually exploratory) in order tounearth the latent factors based on item factor loadings. Then the instrument is subjected to tests ofreliability and validity, thereby operationalization and standardization are ensured. All the abovementioned steps have been carried out in the present study with only one exception. The technique usedhere for factor analysis is Confirmatory Factor Analysis (CFA) approach, as opposed to the conventionalExploratory Factor Analysis (EFA) approach.

Traditionally, the EFA approach has been used in organizational behaviour and marketing research.Basically, EFA is designed for the situation where the relationships between the observed and latent(factors) variables are unascertained or uncertain and the approach proceeds in an exploratory mode todiscover the underlying factors, thereby illustrating the relationships between the factors and theobserved variables. However this approach has certain l imitations. The foremost limitation of thisapproach lies in the fact that in EFA, items are assigned to those factors on which they load mostsubstantially. Therefore, it is possible for an item to load to a significant extent on more than one factorand hence the distinctiveness/identity of the factors is af fected. Furthermore, in pure EFA items areloaded on to a factor only statistically and not on any theoretical basis, thereby affecting the valid identityof the factors. And, finally the concept of unidimensionality (i.e. extent to which items on a factorconstitute or govern one single construct) has not been taken care of in EFA approach (Ahire et al .,1996). In essence, EFA is particularly useful only in the absence of a sufficiently detailed theory about therelationships of the observed variables to the latent constructs.

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In contrast, the CFA approach overcomes the above mentioned limitations and addresses the situationwherein the researcher specifies a model a priori, and tests the hypothesis that a relationship betweenthe observed and the latent variables does in fact exist. In other words, the hypotheses that form theconstraints are an integral part of the CFA technique. This is because the researcher is aware of thenumber of factors that are required to explain the inter-correlations among the measured variables.Furthermore, he/she knows which observed variables are presumably reliable indicators of each of thefactors, and which variables are not related to a factor. The postulated model draws its logic fromresearch outputs and other theoretical perspectives, and if the researcher has a reasonably good ideaabout the likely number of factors to be found, and the variables that are expected to be highly influencedby a particular factor, it is more appropriate to use CFA rather than EFA (Bentler, 1995). As TQS is at anadvanced stage of research and in view of the increasing acceptance of the CFA approach in bothmarketing and organizational behaviour literatures, the present work chose to adopt the factor analysis ina confirmatory fashion.

Once a scale has been developed, its construct validity must be ensured so that one can have confidencethat explanations based on the proposed model reflect reality. Construct validity is broadly defined as theextent to which an operationalization measures the concept it is presumed to measure. In order to checkfor the goodness of the overall model fit, the following hypothesis has been formulated.

H1. TQS is a 12-dimension structure consisting of the above identified 12 dimensions.

A basic prerequisite for construct validity checking is the unidimensionality of the measure.Unidimensionality refers to the existence of a single construct/trait underlying a set of measures. Themost important and fundamental assumption in measurement theory is that a set of items forming aninstrument measures just one thing in common. Unidimensionality alone, though a necessary condition, isnot sufficient by itself to establish the usefulness of a scale. Once unidimensionality of a scale issubstantiated, its statistical reliability should be assessed before it is subjected to any further validationanalysis. Reliability of a measure determines its ability to yield consistent results (Nunnally, 1988). Even asupremely unidimensional (and otherwise construct valid) scale would be rendered futile if the resultantaggregate score is ascertained basically by measurement error, with the values of the scores broadlyfluctuating over repeated measures (Gerbing and Anderson, 1988). Hence, for each of the scales,unidimensionality and reliability analysis have also been performed in addition to ensuring construct

validity.

Unidimensionality analysis

Items within a measure are useful only to the extent they share a common nucleus - the characteristics tobe measured (Nunnally, 1988). It is highly difficult to represent the value of a scale by a solitary numberwithout the concept of unidimensionality (Venkatraman, 1989). For unidimensionality checking, ameasurement model is specified for each construct and CFA is run for all the constructs. Individual itemsin the model are investigated to see how closely they represent the same construct (Ahire et al ., 1996). Acomparative fit index (CFI) of 0.90 or above for the model implies that there is no proof of lack ofunidimensionality (Byrne, 1994). The CFI indices for all the 12 constructs present in the developedinstrument are shown in Table II. All the CFI indices are above 0.90, denoting strong unidimensionality forthe scales.

Reliability analysis

Several measures of reliability can be evaluated in order to establish the reliability of a measuringinstrument. These include test-retest method, equivalent forms, split-halves method and internalconsistency method. These methods are based on theories such as true and error scores, parallel formsand domain sampling. Of all the above methods, the internal consistency method requires only oneadministration and consequently is supposed to be the most general and effective, especially in fieldstudies. In this method reliability is operationalized as internal consistency, which is the degree of inter-







correlations among the items that constitute a scale (Nunnally, 1988). Internal consistency is estimatedusing a reliability coefficient called Cronbach's alpha (Cronbach, 1951). An alpha value of 0.70 or aboveis considered to be the criterion for demonstrating internal consistency of established scales (Nunnally,1988). The Cronbach's alpha values for all the 12 scales are shown in Table II. All the values well exceedthe obligatory requirements, thereby testifying that all the 12 scales are internally consistent and haveacceptable reliability values in their original form.

Validity analysis

Consensus seems to be lacking in the methodological literature with respect to the extensive variety oflabels/tags and the way they are organized to describe the validity of scales and measures. Differentvalidity terms are used to reflect means to illustrate numerous aspects of construct validity. Acomprehensive list of validity types that are typically mentioned in texts and research works include face,content, convergent, discriminant and criterion related validity.

Face validity . Face validity is the mere appearance that a measure is valid. Often a measure isconsidered to have face validity if the items are reasonably related to the perceived purpose of themeasure (Kaplan and Sacuzzo, 1993). Though it can be argued that this is probably the weakest way ofdemonstrating the construct validity, it does not in any way mean it is wrong, as the researcher on most

occasions has to rely on subjective judgement throughout the research process. As the TQS constructswere identified from the literature, their selection is justified, thereby ensuring the face validity of theinstrument. The face validity was also established through a thorough review by experts (both academicsand practitioners) in the field.

Content validity . Content validity of an instrument refers to the degree to which it provides an adequatedepiction of the conceptual domain that it is designed to cover. Apart from face validity, content validity isthe only type of validity for which the evidence is subjective and logical rather than statistical. If the itemsrepresenting the various constructs of an instrument are substantiated by a comprehensive review of therelevant literature, content validity can be ensured (Bohrnstedt, 1983). As explained in the precedingsections, the present instrument has been developed based on a detailed analysis of the prescriptive,conceptual, practitioner and empirical literature. Moreover, the content validity of the instrument was alsoensured through a thorough review by experts (both academics and practitioners) in the field.

Convergent validity . Convergent validity is the degree to which the various approaches to constructmeasurement are similar to (converge on) other approaches that they theoretically should be similar to.When a measure correlates well with other measures that are believed to measure the same construct,evidence for convergent validity is obtained (Kaplan and Sacuzzo, 1993). It can also be such that eachitem in a scale is treated as a different approach to measure the construct (Ahire et al ., 1996). By thismethod the convergent validity can be checked using a coefficient called Bentler-Bonett coefficient(&utrif;). A scale with &utrif; values of 0.90 or above is an indication of strong convergent validity (Bentlerand Bonett, 1980). The values of &utrif; for all the scales are summarized in Table II. It can be seen fromthe table that all the scales have a &utrif; value of more than 0.90, thereby demonstrating strongconvergent validity.

Discriminant validity . Discriminant validity of a measure is the degree to which the measure is not similar

to (diverges from) other measures that it theoretically should not be similar to. Discriminant validity isensured by demonstrating that a measure does not correlate very highly with other measures from whichit is supposed to differ. A scale possesses discriminant validity if its component items estimate only oneconstruct (Bagozzi et al ., 1991), i.e. discriminant validity is an illustration of the uniqueness of the scale.Scales are tested for discriminant validity using a chi-square difference test. CFA is run for the selectedpairs of scales, keeping the correlation between the two factors as free parameters. Let the chi-squarevalue of this model be chi 1. In the next step CFA is re-run for the same scales by fixing the correlationbetween the two as 1. Let the chi-square value of the second model be chi 2. The chi-square differencetest checks for the statistical significance of the statistic (chi 1 - chi 2) at a significant level of 0.01. Thetwo constructs of interest are distinct and hence unique if (chi 1 - chi 2) is statistically significant. The



above procedure should be repeated for all the possible pairs of scales in the instrument (Ahire et al .,1996). In the present study as there are 12 TQS factors a total of 66 discriminant validity checks (i.e.

12C2)

have been carried out. All the 66 tests were statistically significant at a level of 0.01, thus indicating thatall the 12 factors are distinct constructs - a strong demonstration of discriminant validity. As all the testshave been found to be statistically signif icant, the values of the 66 chi square differences are notfurnished here.

Criterion-related validity . The basic idea of criterion-related validity is to check the performance of themeasure against some criterion. Traditionally, criterion-related validity is evaluated by examining thecorrelations of the different constructs with one or more measures of business (or quality) performance(Saraph et al ., 1989). In the present context criterion-related validity is established by correlating thescales scores with two constructs, considered to be the two outcome constructs of the TQS programme,i.e. ES and CF. The correlations are shown in Table III. It should be noted that all the scales havesignificant positive correlations with ES and CF. Thus criterion-related validity is established for all thescales.

Inferences from the research work

To sum up, all the 12 dimensions have exhibited strong unidimensionality, reliability, convergent,

discriminant and criterion-related validities. Moreover, the CFI and the Bentler-Bonett coefficient (&utrif;)for the overall model have also been found to exceed the minimum requirements. Therefore, hypothesisH1 is accepted implying that TQS can be conceptualized as a 12-dimension structure composed of theabove identified 12 dimensions.

The instrument thus standardized can be used to measure the levels of TQS practice in serviceorganizations. A total quality service index (TQSI) with respect to each dimension can be computed foreach organization.

The TQSI for a particular organization with respect to a particular dimension, is the average value (meanof the executives' scores) of that dimension score per item. The TQSI will give an indication of theperformance of an organization with respect to a particular dimension. These indices can be kept bydecision makers as reference points, upon which improvement efforts can be targeted. These indices

would also help researchers to better comprehend the different facets of TQS especially in a developingeconomy. Researchers can use this work as a basis for subsequent studies in other service organizations(apart from banking) and in other economies. Such studies are vital to enrich the subject of TQS, as itwould enable researchers and practitioners to thoroughly comprehend the significance of the differentfacets of TQS across multiple service settings and different cultures.

Relationships among the constructs

As we all know, the very concept of TQS is built on the premise that it is an integrated approach wherethere is a lot of interdependence among its dimensions. This notion has been proposed by many TQSgurus and practitioners time and again. Moreover several researchers have re-emphasized this viewthrough their research findings. This emphasizes the belief that TQS is a holistic philosophy and set of

practices that has to be executed as a whole rather than piece by piece. In view of the above it has beendecided not to portray and test any causal relationships among the TQS dimensions. But in order toobtain a glimpse of the relationships among the various dimensions of TQS a bi-variate correlationanalysis has been performed. The bi-variate correlations among the constructs are summarized in TableIII. All the correlations have been found to be statistically significant at a level of 0.01. It is to be noted thatall the correlations are positive.

There is a very high degree of interdependence/co-ordination among the constructs as can be seen fromthe high correlations among all the factors. The only exception is Union Intervention, which has a lowcorrelation with the other factors. This can be attributed to the fact that TQM, inherently being a







management concept, is expected to be seen with scepticism by the union members unless they areconvinced about the real benefits of such QI efforts. As TQM is an organization-wide, multi-disciplinaryapproach that warrants increased participation of employees at all levels and functions, in the form ofteamwork and shared vision and objectives, it is destined to fail if it is imposed on the workforce withoutthe full fledged support of the union.

There is a very high correlation between top management commitment and leadership (TMCL) and theother TQS constructs. The highest among them are CF (0.93), ES (0.91), HRM (0.90), SC (0.90), SR(0.88) and CI (0.87). It underscores the fact that the impetus for any quality management effort shouldcome from the top. It also emphasizes the fact the top management commitment is highly mandatory forthe management of soft issues (tacit, behavioural oriented issues) of TQS. It can also be observed thatthe correlations among HRM, TS, I&A, SC, SP and SR are high, thereby indicating that these six factorsform part of the organizational system of a TQS environment. Benchmarking is reasonably correlated withthe other TQS constructs accentuating the significance of a standard of comparison in any TQS effort. Allthe factors are highly correlated with ES and CFS, which are fundamentally the goals or the outcomefactors of the TQS approach. It is also to be observed that all the factors are highly correlated withcontinuous improvement. This observation re-emphasizes the crucial role of the concept of continuousimprovement which is actually the super-ordinate factor that binds all other factors in an environment thatthrows up more and more challenges and opportunities for improvement.

An integrative framework for TQS

Based on the above findings, a descriptive model (see Figure 1) for TQS is proposed illustrating therelationships between them. It is evident from the model that TMCL provides the impetus for the TQSmovement. Top management's interest in quality should not be a mere intellectual exercise. Rather, itshould be characterized by a very intense personal commitment evinced through strategies and visionaryleadership. This commitment and leadership drives the organizational system consisting of such sub-systems as the HRM, SC, TS, I&A, SP and SR. The industrial relations issues are captured by UI, andBM is used as the standard of comparison. Every organization has a purpose, a mission or a goal. It maybe to serve the customers with a product or a service. The organization can serve the customers onlythrough its employees. Therefore, customer focus and employee satisfaction should obviously be the twogoals of any management approach including TQM. This is especially true in service organizations

because of the habitually occurring physical and psychological closeness between the employees and thecustomers.

The dimensions that have been discussed earlier are all vital components for quality improvement. But,TQM can only be effective if these dimensions operate in an environment that embraces continuousimprovement as a philosophy of quality management; i.e. the success of any TQS movement wouldlargely depend on how synergically the various dimensions are espoused in an ambience of continuousimprovement. The odyssey towards TQM is a long, steady, sustained and demanding one. The key isstrong management commitment that will create an entire change of the organizational culture and way ofoperating, so as to make all members of the organization strive all the time for customer focus and anever ending improvement. The arrows in the model are all double headed to drive home the point thatTQS is an integrated approach where there is a lot of synergy among the various factors. Furthermore, inservice organizations (unlike in manufacturing where the emphasis is on superiority in product, process,

technology etc.), the focus is more on the subtle, implicit and behavioural aspects such as service culture,HRM, and other soft issues. To put everything in a nutshell, TQS is not a progeny of one or twomanagement strategies, but rather a mélange of carefully fabricated approaches contributed from severaldisciplines (e.g. P/HRM, organizational behaviour, psychology, operations management, marketing,economics, systems thinking, etc.). In this vein, the focus on multiple theoretical approaches also helpssuccessful quality-driven organizations to retain their uniqueness, thereby sustaining the competitiveadvantage.

Implications of the research for management theory and practice







The implications for management theory and practice include the following:

The study has identified a comprehensive list of TQS dimensions (from the perspective of themanagement), addressing all the facets of TQM in service organizations (such as human andnon-human aspects of service production and delivery, service design and operations, aestheticsof the physical environment, information technology, industrial relations and corporate citizenship

behaviour). The empirical validation of the measurement instrument for TQS strives to enrich thesubject of theory building (especially in the light of scarcity of empirical research works in TQSliterature) by advocating a multi-disciplinary approach to TQS. A holistic model for TQS portrayingthe relationships among its dimensions has also been proposed. This effort provides a systematicframework for a conceptual and empirical discernment of TQS and its critical dimensions.

The TQS instrument can be effectively used by decision makers to measure the level of TQSimplementation in the various service organizations. The TQS Index values so computed for thedifferent dimensions would offer key information on the different quality management practicesthat have to be ameliorated in order to enhance the business performance with respect to quality.

The research work attempts to add to the "not so rich" literature (when compared to literatureavailable on developed economies) available on quality management with respect to developingeconomies. Such studies in different economies help researchers and practitioners to betterunderstand the intricacies and relevance of the various aspects of TQS across different cultures.

Limitations of the present research work and scope for future work

The limitations of the present study and scope for future work include the following:

CFA has indicated that TQS can be formulated as a 12-dimension structure composed of theabove identified 12 dimensions. Tests of unidimensionality, convergent and discriminant validitieshave shown that all the 12 dimensions are indeed independent. At the same time, the results ofbi-variate correlations indicated that all the correlations are high positive and are statisticallysignificant at the 0.01 level. Consequently, from the CFA and correlation analysis, it can beinferred that although the 12 dimensions of TQS are independent enough to be significant theyare highly correlated as well. Therefore, one has to be very careful in investigating the influenceof the TQS dimensions on say business performance. The high correlations among the TQS

dimensions would result in the problem of multi-collinearity when these dimensions are treated asindependent variables and some aspects of business performance are treated as dependentvariables in techniques such as multiple regression. Special care should be taken to eliminate theeffects of multi-collinearity before any further investigations are carried out. Once this is done theinvestigation of the influence of the different dimensions of TQS on business performance wouldhelp decision makers to plan their TQS programmes more appropriately and harness theirresources accordingly, thereby resulting in a competitive advantage.

Though the underlying theme of the TQS instrument addresses the quality issues of the serviceindustry as a whole, the study has been confined to the banking sector. Further researchinvestigating the criticality of the TQS dimensions in other service sectors is required in order toeffectively generalize the findings across the entire service industry.

The instrument has been validated by collecting data from executives of banks in a developingeconomy, i.e. India. Due to this there is a possibility of a cultural bias playing a role in the

outcome of the study, as the expectations of people in a developing economy may be differentfrom those of a developed economy. Therefore the study can also be duplicated in othereconomies (particularly in developed ones) so as to have a comprehensive depiction of theimportance of the various aspects of TQS across different cultures.

The TQSI values would throw light on the performance of the organizations with respect to eachdimension. At the same time as already mentioned the intensity of the different dimensions mightvary from one service sector to another. Therefore it would be more prudent to attach weights tothe various dimensions (depending on the type of service sector e.g. non-banking financialinstitutions, insurance, construction, travel, health care, education, hotels etc.) so that a clearer



picture on the actual level of TQS practice in the organizations would emerge. Expert judgementcould be called for in assigning the weights to the various dimensions of TQS.

Summary

With the entire world undergoing a quality revolution, TQS remains a potential area of research. Though

many savvy practitioners are instrumental in developing the technical tools of quality management, itstheory and practice lag behind. And even more confounding is the fact that there is a big gap between itstheory and practice as the practitioners are far ahead of the theoreticians. While quality raises its head inthe twilight of the business horizon, a daunting challenge sneers at the practitioners and looms large infront of the researchers. The present study strives to offer a comprehensive and yet simple methodologyfor scientifically examining how the plethora of philosophies, precepts, concepts and practices involved inQM can be structured into a systematic framework for the development of an empirical understanding ofTQS and its components. A comprehensive instrument framework with a specific focus on the bankingsector has also been developed and validated based on data collected from executives of banks in adeveloping economy. The instrument (with due modifications) can be effectively used by researchers andpractitioners to measure the level of TQM implementation in various other service organizations as well(e.g. non-banking financial institutions, insurance, construction, travel, health care, education, hotels, andlocal government). A model for TQS has also been proposed portraying the relationships between the

various dimensions. The present work endeavours to add value to the literature by contributing to theestablishment of a paradigm for TQM in the service ambience.

Table I. Distribution of respondents (executives of banks) among the three groups of banks

Table II. Unidimensionality, reliability and convergent validity indices for the 12 TQS



Table III. Bi-variate correlations among the TQS constructs

Figure 1. A holistic model for TQS

Appendix. Instrument for measuring TSQ (from theperspective of the management) with specificreference to the banking sector

The instrument to measure TQS has solicited the respondents' perception of the actual level of practice ofTQS with respect to the 126 items on a seven-point Likert scale (1 = very low, 2 = low, 3 = slightly low, 4= medium/moderate, 5 = slightly high, 6 = high, and 7 = very high.)

The items have been jumbled and arranged in a random order in the original instrument. The itemscorresponding to the 12 dimensions of TQS are given below:

(1) Top management commitment and visionary leadership (TMCL):



Commitment of the top management to the philosophy of TQM.

Inclination of the top management to allocate adequate resources and time for qualityimprovement efforts.

Tendency of the top management to view employees as valuable and long-term resources.

Degree to which the senior executives are dynamic.

Degree to which the senior executives act as friends, philosophers, and guides to their

subordinates. Extent to which the top management evaluates the effectiveness of their personal leadership and

commitment to TQM.

A clear quality vision (based on customer focus) and the extent to which the vision forms thebasis for strategic planning and decision-making.

A clear quality vision (based on employee focus) and the extent to which the vision forms thebasis for strategic planning and decision-making.

Extent to which the management takes into account the competitive environment and the elementof risk in its strategic planning and decision making.

Preparedness of the management to remove the root causes of problems and not just "fire-fight"the symptoms.

Emphasis of the senior management on quality rather than cost.

(2) Human resource management (HRM):

Recruitment and selection - Effectiveness of the selection and recruitment process (in terms ofobjectivity and "Right man for the Right job"). - Emphasis on the quality awareness right from therecruitment stage. - Degree to which promotion and career development programmes emphasizequality management in the organization. - Use of work values and ethics as criteria for employeeselection. - Extent to which the organization takes steps to deepen the applicant pool to enhanceemployee quality.

Training and education - Effectiveness of the organization to link education and training ofemployees to its long-term plans and strategies. - Evaluation and improvement of the training andeducation programmes to employees. - Frequency of TQM training programmes conducted foremployees working in all functional areas. - Training of employees in diagnostic and basicproblem solving skills such as cause and effect analysis, pareto analysis, brainstorming, quality

control circles and quality management systems such as ISO 9000. - Training of employees inteam building and group dynamics. - Degree to which the employees are trained to be consciousof human relations. - Training of employees to develop communication abilities.

Employee empowerment - Extent to which the employees are given commensurate authority andoperational independence to achieve results. - Extent to which the employees are protected andadvised properly in the event of their inadvertent and unforeseen failures in the course ofpursuing TQM. - Extent to which the employees are encouraged to voice their opinions, criticismsand feedback on organizational functioning and performance. - Providing employees enoughsupport and encouragement to solve problems. - Extent of accountability of employees forcustomer service.

Employee involvement - Encouragement of employee suggestions and innovation. - Evaluation ofthe effectiveness, extent and type of involvement of employees in TQM programmes. -Effectiveness of quality control circles (QC), cross functional and quality improvement teams

(QIT) for problem solving. - Proper co-ordination of all the activities of the task groups (e.g. qualityimprovement teams (QITs), quality control circles (QCs) and other cross functional teams) toensure that there is knowledge and understanding of the different projects that have beenundertaken to avoid overlap, repetition and possible conflict.

(3) Technical system (TS):

Design quality management - Integration of customer feedback in the design of operationalprocedures and processes. - Thorough evaluation of the new service design in terms of



implementation and operational aspects before the service is produced and marketed. - Extent towhich the organization co-ordinates activities among different departments/branches during theservice development processes. - Quality-costing exercise to analyze quality related costs,including costs due to failure of systems and services. - Extent to which the organizationevaluates and improves designs and design processes for improvement in service quality.

Process management - Degree to which the processes and procedures are foolproof. - Extent to

which the service delivery processes are standardized, simplified and documented so thatservices are delivered without any hassles (seamlessness of service) - Enhancement oftechnological capability (e.g. computerization, networking of operations, etc.) to serve customersmore effectively. - Regular tracking and maintenance of the key processes that are critical to thebusiness. - Systematic documentation of procedures for investigation of causes of errors andsubsequent corrective actions. - Emphasis on developing procedures for reducing the overallservice delivery times.

(4) Information and analysis system (I&A):

Extent to which the organization actively gathers, integrates, and communicates information thatis critical to the implementation and practice of TQM.

Extent to which the customer-contact personnel frequently communicate with the management on

matters relating to customer service. Extent of the periodic communication of the effectiveness of TQM processes to employees at all

levels.

Effectiveness of the overall communication process in the organization (in terms of quickness andcompleteness).

Degree to which departmental meetings are conducted at regular intervals to plan, implement andmonitor the effectiveness of Quality Improvement programmes.

Effective use of the data related to customer service for improving the quality level in theorganization.

Use of measures for proactive prevention rather than reactive correction.

Use of charts, graphs and other statistical tools and techniques to monitor quality.

Effective correlation of the customer-service levels with financial performance.

(5) Service culture (SC):

Extent to which the employees at all levels realize that the real purpose of their existence is"service to customers".

Degree to which the employees believe that TQM plays a vital role in strengthening theorganization's ability to compete in a highly competitive market place.

Resistance of the employees to change.

Trust, openness and good relationships among the employees.

Level of prevalence among employees, feelings such as "My Bank" and " We work towards thebank's excellent performance, image and customer service".

Extent to which "team spirit" dominates individualistic preferences and projections.

A strong belief in the philosophy of "Right first time" and "Right every time" among employees.

Extent to which the organizational structure facilitates fast decision-making and enables quickresponse to customers' requirements.

Extent to which the bank is typified by a flat organization with minimum hierarchy andbureaucracy.

(6) Servicescapes (SP):

Extent to which the bank ensures that there is a positive impact of the prevailing physicalenvironment on customers.



Extent to which the ambient conditions such as temperature, ventilation, noise, odour, etc.,prevailing in the organizational premises are comfortable to customers.

Degree to which signs, symbols, advertisement boards, pamphlets and other artifacts in theorganization are appealing to the customers.

Extent to which the equipment, physical facilities and the materials associated with service havean appeal to the customers.

Degree to which the physical layout of premises, facilities, and other furnishings are comfortablefor the employees to work.

Extent to which the physical layout of equipment and other furnishings are comfortable for thecustomers to interact with the employees.

Extent to which house keeping is kept as a priority and of the highest order in the organization.

Degree to which the way employees are dressed have a pleasing and neat appearance.

(7) Social responsibility (SR):

Extent to which the bank leads as a corporate citizen, and the level to which it promotes ethicalconduct in everything it does.

"Service Transcendence" - Making customers realize their unexpressed needs by giving morethan what they expect.

Giving equal treatment to all the customers, stemming from the belief, that every one, big orsmall, should be treated alike.

Providing good service at a reasonable price, but not at the expense of quality, to people from allwalks of life.

Having branch locations in most places convenient to all sections of the society (e.g. remotevillages, slum areas etc.).

Having a sense of public responsibility among employees (in terms of being punctual, regular,sincere and without going on strike).

Having a sense of social responsibility characterized by giving loans to economically and sociallydowntrodden people, needy ones, entrepreneurs, etc., with less rigid loan conditions.

(8) Union intervention (UI):

Role played by the employees union in establishing the policies and strategies of theorganization.

Employees union's co-operation and support to the drive for improved customer focus andservice quality in the organization.

Extent to which recruitment, selection, and the career development policies and programmes areinfluenced by the employees union.

Congruence between management, union and employees with the belief that their functions arecomplementary and not contradictory, towards improving organizational performance.

Role played by the employees union in deciding on the extent of computerization in theorganization.

Extent to which the organization regularly apprises the employees union about the TQM effortsand their outcomes.

(9) Benchmarking (BM):

Emphasis on benchmarking the services and processes with respect to those of other banks.

Emphasis on benchmarking the training programmes with those of other banks.

Emphasis on benchmarking the level of customer focus with those of other banks.

Emphasis on benchmarking the effectiveness of Human Resource Management (HRM) withthose of other banks.



Emphasis on benchmarking the level of servicescapes (i.e. the aesthetics, appeal, comforts andthe facilities) with those of other banks.

Emphasis on benchmarking the level of commitment of the bank for the society as a whole, withthose of other banks.

(10) Customer focus (CF):

Extent to which customer focus and quality are driving forces behind day-to-day operations.

Pleasing and courteous behaviour of the employees towards the customers.

Intensity and depth of service (Having more number of options in every service/transaction, e.g.,various fixed deposit or recurring deposit schemes with different interest rates, quick chequeclearing facility with a higher service charge, etc.).

Service innovation (providing information/details on a regular basis, through post, telephonicbanking; ATM; room service facility, credit cards to Defence personnel etc.).

Providing services to the customers as promised.

Providing services to the customers as per the promised schedule.

Providing prompt service to customers.

Willingness to help customers and the readiness to respond to customers' requests.

Extent to which the organization strives to develop the necessary capabilities in terms of

manpower and facilities to meet the needs and expectations of customers. Effective evaluation of the bank's performance with respect to customer satisfaction and service

by means of a definite mechanism.

Effective use of customer feedback to improve the service standards.

Extent to which the employees have the necessary skills and ability for actions whenever a criticalincident takes place (i.e. when a problem arises).

Effectiveness of customer-grievance redressal procedures and processes.

Providing services right the first time.

Apprising the customers of the nature and schedule of services available in the bank.

Instilling confidence in the customers regarding the organization's services and capabilities byproper employee behaviour.

Giving individual and caring attention as much as possible to the customers by having thecustomers' best interests at heart.

Making customers feel safe and secure in their transactions with the bank.

Convenient (to customers) operating hours and days (e.g. working on Saturdays and Sundays,extended service hours during evenings, weekdays, etc.).

Diversity and range of services (having a wider range of financial services from the bank, e.g.deposits, retirement accounts, loans for purchases of cars, houses etc., foreign exchange,traveller's cheques, safe deposit lockers, etc.).

Extent to which the customers are apprised of information on the bank's TQM efforts.

Extent to which customer participation (involvement and feedback) is sought in matters pertainingto operations and strategies of the bank.

Extent to which employee behaviours are guided by customers' feedback.

Extent to which the management regularly apprises customers about the importance of their co-operation and advisory role.

(11) Employee satisfaction (ES):

Extent to which the management provides ample recognition and encouragement forachievements in quality.

Focusing on job enrichment rather than on job enlargement and rotation.

Degree to which the management actively devises strategies to improve employee satisfaction.

Effectiveness of grievance redressal of employees.

Providing performance-oriented group incentives.



Extent to which the performance evaluation systems take inputs from a combination ofsupervisory, peer, subordinate and customer sources.

Extent to which non-financial reward systems (e.g. selection for training programmes, preferencefor choice of posting, etc.) recognize quality contributions and achievements.

Effectiveness of the appraisal system in giving each appraisee an idea of what is expected ofhim/her in the future.

Design of career paths for employees, with opportunities and limitations clearly specified.

(12) Continuous improvement (CI):

Extent to which the organization believes that "continuous improvement" results in a competitiveadvantage.

Emphasis of continuous improvement in all operations and at all levels.

Extent to which the need for obtaining immediate results override (or dominate) the drive forquality processes and improvement.

Degree to which the organization is characterized by a divine discontent which drives/motivates itto seek continuous improvement in every aspect of everything it does.

Quantification of continuous improvement strategies on the basis of factors such as cost, timeand performance.

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