Continuous improvement strategy in Bank central Asia

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Table of Contents

Introduction
Quality imperatives
Strategic importance of quality
Quality philosophies
Quality tools
Management of Quality
Quality problems in the work place
Conclusion
Reference List

Introduction

To illustrate the ides of continuous improvement strategy the organization to be used as the case study is Bank central Asia. This is a financial institution that specializes in providing financial services to the public.

It mainly deals with all types of accounts, loan provision as well as foreign exchange services. Continuous improvement strategy has been applied in this organization for the purpose of ensuring that all the activities are being carried out in accordance to the changing trends.

The electronic world is evolving at a very high rate and the most effective organizations are the ones which update their systems frequently to counter these changes. Bank central Asia is one of the leading banks in the region and most of the monetary activities are conducted from there.

Most commercial banks, apart from those owned by foreigners, for example, obtain their credit from this bank, and it determines the rate of interest that they should use when disbursing loans to the public.

This organization is owned by the government, and just like all the other central banks, it performs tasks such as minting and distributing currency, banker to the other commercial banks, banker to the government and also as the foundation for the establishment and maintenance of the country’s monetary policies.

Bank Central Asia has been in existence since the days of informal money. This was in the form of a regulatory body that would attach value to the products being evaluated. It has grown over time, and with the changing trends in the money market.

With the introduction of currency, the organization evolved in its function, and became a storage and exchange point for traders. That is why it has remained the central monetary unit in the region, implying that it authorizes the operations of all other financial institutions.

Quality imperatives

This refers to the most important factors that affect the quality of services and the general performance in the organization. They are classified into three broad categories namely the economic imperatives, social imperatives and the environmental imperatives.

The economic imperatives in this case involve the factors affecting the performance of the economy such as the rate of inflation, unemployment rate, production levels and the foreign exchange value. These are detrimental factors to this banking institution as it is expected to ensure that these are kept in check.

Raising levels of inflation is an indication that the Bank Central Asia has failed in its role as the regulator of the amount of currency in circulation. The result of this is an increase the general prices of commodities as well as an increase in the rate of unemployment.

The other quality category of quality imperatives is the social imperative which deals with the determination of people’s living standards. Bank Central Asia is faced with the task of ensuring that the basic commodities are affordable to the majority of the population by controlling inflation.

This way, most people will be able to live above the poverty levels, hence increasing their productivity. The third quality imperative is the environmental imperative, which deals with the provision of services that can bring about an improvement in the condition of the environment.

An example of this is the offering investors affordable loan, especially the ones inclined to real estate development. These factors are considered to be important in the quality determination of the operations in Bank Central Asia since in the long run, they determine the satisfaction accrued by the clients from the company’s operations.

In relation to continuous improvement strategy, the quality imperatives determine the direction and position of the organization in relation to the other like organizations. In order to improve the performance of the organization, the management should first concentrate on improving on these quality imperatives.

This means that the bank should concentrate more on preventing inflation by regulating the amount of money in circulation, reducing the cost of living for the people and shifting most of their focus to financing the investment projects in the country.

This ensures that there is a sustainable rate of growth and development, while at the same time preventing the country from incurring external debts for development purposes.

With time, these needs might change and the institution should therefore be on the lookout to ensure that they are not left behind. This is the whole idea behind continuous improvement strategy.

Strategic importance of quality

Quality in simple terms refers to the excellence in performance. In a banking institution like in our case, it may include aspects such as customer satisfaction, profitability and sustainability of the organization. Services of good quality must not be necessarily expensive.

The organization can develop a plan that ensures they offer affordable services that are of good quality. In most cases banks undertake the strategy of offering loans to the public and then they attach a high rate of interest to the loans.

This may attract a number of people in the high social ladder category, while this does not guarantee the bank an increase in the profitability level.

The quality of the services might be of high caliber but only attainable to the lucky few. Other banks and financial institutions prefer developing strategies that are friendly to the majority middle class, and this does not imply that the quality of their services is low.

Quality is an important strategic aspect in this organization, and others like it as it determines the level of operations measured by the number of customers and the profitability. Quality administration is in fact a separate department in the organization faced with the task of performing the total quality management or the TQM.

Proper management of quality ensures that the organization is able to achieve its long term goals without having worry about losing their share of the market. Most of such organizations face stiff competition from their counterparts, and the quality of services they offer is what determines the size of their market share portion.

When making normative decisions affecting the organization from inside, the management should therefore concentrate on improving quality as this will put most of the external forces affecting the organization into place.

Quality philosophies

Quality has been an important aspect in many countries attracting the attention of philosophers such as Deming, Crosby and other philosophical gurus. These philosophies, according to Beckford (2010), “form a basis for the modern quality discipline, used in most of the organizations” (53).

The high competition that is still rising over the years requires that good quality products and services be offered by the respective organizations if they are to survive in the market. Deming, one of the philosophers, developed the idea of using statistics in the manufacturing process.

His approach to quality management was a revolutionary one rather than evolutionary, as he believed that the best way to counter competition through quality management is to do away with the old system completely and introduce a new one. He also put across fourteen points to be considered by managers wishing to improve the quality in their organizations.

The first one of these points is “to be constant in the improvement of the services, second is adopting new philosophies, third terminating the dependence of public inspection”. The fourth point is stopping the habit of awarding business on price tag alone and fifth improving the system infinitely.

The next point is leadership institution followed by institute training. Eight, is driving out fear and the ninth one is breaking down barriers between staff members. The tenth point is about eliminating slogans, exhortations and targets for the workforce.

Next, is to eliminate the numerical quotas, then removing the barriers to pride of workmanship. This is followed by “instituting a vigorous program of education, and retraining, and finally taking action to accomplish the transformation” (Williams 1994, p. 23).

Deming indicated further that the success of the quality management would be guaranteed if the organization adhered to all these points and not just a few of them.

Crosby is the other quality philosopher who insisted in “doing things the right way at first to avoid the menace of trying to fix them later on” (Silverman & Propst 1999. p. 86). The cost of compromising quality is higher than most people ever imagine.

He therefore asserts that the management should spend most of their time improving on the quality as this will save them a lot of costs in future. Other gurus in quality philosophy include Armand Feigenbaum who “developed the concept of total quality control, customer defined quality and cost of nonconformance” (George & Weimerskirch 1994, p. 78).

The other philosopher is Kaoru Ishikawa, and he is remembered for the development of “the cause and effect diagram. He is the person behind the use of quality circles and the idea of internal customers” (Williams 1994, 30).

Genichi Taguchi is the other quality guru who developed “the loss function and an adaptation of orthogonal arrays to designed experiments.

He also championed the concept of robustness”(Beckford 2010, p. 55). The communication of these philosophies in the organization should be carried out during training to ensure that new employees are aware of what is expected of them in relation to quality management.

Quality tools

These are the tools used to assess the quality of production in an organization. In the banking industry, it involves assessing the customer turnover, time taken to serve and the profitability resulting from these operations. It involves a lot of statistical processes of drawing and interpreting performance graphs and charts.

The first tool used in quality management is benchmarking. This is whereby a standard is set over which future performance is compared against. This standard is determined based on past experiences and the capacity of the organization as well as the general performance of the entire industry.

The other quality management tool is the house of quality which is an illustration of the relationship between the desires of the customer and the production capacity of the organization.

“It resembles a house with the correlation matrix as the roof top, the wants of the customer in relation to the features of the product as the main part of the house and competitor evaluation as the porch among the others” (Silverman & Propst 1999, 40).

Pareto charts are the other set of quality management tools whose purpose is to prioritize the issues affecting the organization in terms of what should be dealt with first. “It describes the frequency distribution of any given characteristic of data.

It is also referred to as the 20-80 rule owing to the fact that it explains how the small percentage of an element can contribute a higher percentage to the success of an organization” (George & Weimerskirch 1994, p. 80). This explains how quality in an organization can be determined by a few numbers of factors being taken into consideration keenly.

It is not about a large amount of input but proper utilization of the little input that is available. Prioritization is the most important aspect in this case, and it ensures that the most important elements in quality assurance are taken into consideration first. The other tool for measuring the quality in an organization is the Baldrige awards.

These awards are given to organizations that perform best in the economy, and this performance is what defines the quality of the services provided therein. Next is the six sigma. This is “a business management strategy used to improve the quality of process outputs by identifying and removing the causes of defects and minimizing variability in the business processes” (Beckford 2010, 58).

In this, the organization is expected to produce goods that are almost 100% free of defects if a high level of quality is to be attained.

The human resource management has direct /indirect influence on the quality produced owing to the fact that they determine the quality of labor brought into the organization. This is in fact the most important department when analyzing quality management issues.

Management of Quality

Management of quality is one of the most important elements in an organization since it directly determines the performance of the organization. Strategic alliances improve on the performance of the organization, since it allows the exchange of ideas hence an improvement in the quality of the services being offered.

One of the ways of managing quality is through supplier development. Here, the management establishes strong links with the suppliers, and this results in constant supply. They are therefore able to meet the demands of their customers effectively and on time.

The other way of managing quality is using the total quality management strategy or TQM as well as adhering to ISO9000, a quality standard determined by the International Standards Organization.

Quality assurance is also used when managing quality and this involves the management taking the initiative to ensure good quality services are being provided to their customers.

Finally, is the skill based quality management and this is whereby duties in the organization are allocated according to the skills of the individuals and the employees are encouraged to specialize in one area of operation. This ensures that they are able to deliver the services to the best of their ability.

Quality problems in the work place

Quality problems in an organization are mostly brought about by lack of motivation from the employees. The source of this is the management since they determine the working conditions in the organization. As a result of there being a compromise in the quality of services, the credibility of the organization tends to decrease with time.

This brings about loss of profits owing to disappearance of the customers. In such organizations, there is a constant friction between the management and the employees. This is brought about by unmet deadlines and poor performance in terms of customer relations.

These organizations also have a problem in maintaining their employees since people do not like being associated with organizations that are not performing well.

Conclusion

From the discussion above, it is clear that quality is the overall factor in determining the success of an organization. Besides ensuring customer satisfaction, it also ensures employee satisfaction hence ensures that the organization can maintain its employees for long periods of time.

This means that the level of expertise in the employees continues to develop over time and they provide even better services.

Quality management is the responsibility of the management who in some cases hire external quality assessors, who can determine the quality of the organization without any bias. This allows the manager to take note of the areas that compromise quality and so make any necessary changes in this regard.

Reference List

Beckford (2010), Quality: A critical Introduction 3rd Ed, London, Routledge.

George, S, & Weimerskirch A (1994), Total quality management: strategies and techniques proven at today’s most successful companies. New York, Wiley.

Silverman, l, & Propst, L (1999), Critical SHIFT: the emerging future of quality in organizations. Milwaukee, Wis, ASQ Quality.

Williams, R (1994) Essentials of total quality management. New York, Amacom.

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