DEPARTMENT OF BUSINESS MANAGEMENT
NMMU
ASSIGNMENT INFORMATION
2006
Library Short Loan File
Documents
1 Assignment lecture (separate power point presentation)
2 Report writing information
3 Examples of previous assignments
Gray, B.A.
Louw, M.J.
Rootman, C.
Van Eeden, S.M.
200134598
200345879
202086751
200206979
Note: Title page
Group names in alphabetical order
Name of lecturer/lecturers
AIDS AND THE SMALL BUSINESS
THE PERSPECTIVE OF PRO-DIVE
DATE: 9 April 2004
LECTURER: Ms J Krüger
TABLE OF CONTENTS
Page
1
INTRODUCTION
1
2
2.1
2.2
2.3
LITERATURE OVERVIEW
Aids in South Africa
Impact of Aids on business
Steps and measures being undertaken by
business to combat Aids
2
3
3.1
3.2
EMPIRICAL RESEARCH
Background of small business interviewed
Report on findings
4
4
CONCLUSIONS AND RECOMMENDATIONS
6
3
5
LIST OF SOURCES
ANNEXURE A: COMPLETED QUESTIONNAIRE
Note: Contents page (centred heading)
Treat headings in contents page the same as in text e.g. bold / not bold
No full stops after numbering
No heading numbers for List of sources / Annexures
(No page number)
1
INTRODUCTION
Problem statement “It is estimated that one in eight persons
in South Africa has Aids…
Reason for the research….. It is unknown what the
perception of the small business is towards Aids and what is
currently being done to manage and combat this disease.
The Objective is to investigate the following among small
businesses, namely their attitude towards Aids, the impact of
Aids on their business and the what steps (if any) are being
undertaken to manage and combat Aids
Method of research A theoretical investigation into Aids was
undertaken and existing secondary sources (journals, internet
and books) were consulted. An empirical research was
conducted by means of an interview and a structured
questionnaire.
Difficulties encountered – Working in the group, lack of
sources, existing sources were old etc
Contents to follow – What follows is firstly an overview of
Aids in South Africa, its impact on business and an overview
of steps and measures being undertaken by business to combat
Aids. This is followed by the results of the interview
conducted.
Note: No page number shown on the first page of report
No full stops after numbering of headings
Headings are not shown in introduction – merely a guide
ASSIGNMENT
Note: Important information to note
No headings shown in introduction
Title page
 According to instructions (NO FRILLS)
 Names: Surnames first in alphabetical order
 Double title page: for receipt purposes
Table of contents





Numbering
No full stop after the numbers
List of sources (at the end) – no number
Page numbers must be indicated, Page heading
Layout of table of contents must be the same as in the
body of the report i.e. if a heading is in capitals and
underlined in the body it should appear the same in the
table of contents
Body/text of the assignment




Never not refer to “I” or “we”
Headings must be numbered
Page numbers are shown (except first page)
When taking information from a book, no matter how
short the extract, reference or source MUST be
acknowledged and indicated (otherwise plagiarism)
 If use of reference in the body it must appear in the list of
sources
Referencing
 The first time a source is used (three or more authors) it
must be in full, thereafter make use of et al.
List of sources
 In alphabetical order and listed
 According to “How to complete a scientific assignment”
 No numbers / bullets
NB NB NB….
Consult: “How to complete a scientific assignment”
Note: Documents may not resemble and copy exactly from the original work
Biggs, M.A.
204024412
Meiring, A.H.
204001706
Roux, G.J.
204006090
Sparius, O.
204003202
THE USE OF “E-COMMERCE”:
A SMALL BUSINESS PERSPECTIVE
Module:
EB101
Lecturer:
Ms B Gray
Date:
2 April 2004
TABLE OF CONTENTS
Page
1
INTRODUCTION
2
LITERATURE OVERVIEW
1
2.1 THE NATURE AND IMPORTANCE OF E -COMMERCE
1
2.2 THE USES OF E-COMMERCE BY A SMALL BUSINESS
2
2.3 THE FACTORS INFLUENCING THE USE OF E-COMMERCE
3
2.4 THE CURRENT AND FUTURE TRENDS IN E-COMMERCE
3
3
EMPIRICAL RESEARCH
3.1 GENERAL INFORMATION
4
3.2 THE USE OF E-COMMERCE
5
3.3 FACTORS INFLUENCING THE USE OF E-COMMERCE
5
4
CONCLUSION AND RECOMMENDATIONS
7
LIST OF SOURCES
8
ANNEXURE A: COMPLETED QUESTIONNAIRE
No sub-headings!
1
INTRODUCTION
Problem statement “E-commerce is changing the way we communicate shop, invest,
learn and stay informed about the world around us.”
Reason for research In today’s information driven society the use of e-commerce is
becoming increasingly more important. This report is focused on determining the role ecommerce plays in the small business enterprise.
Objective The aim of this report is to investigate and focus on the nature and importance
of e-commerce, its uses in the small business environment and the factors influencing this
usage.
Method of research A theoretical research on e-commerce was undertaken and existing
secondary sources were consulted. An empirical research was conducted by means of an
interview with a small business owner and structured questionnaire.
Difficulties with research A vast amount of information is available, causing difficulties
to find only that relevant to the report. Some information was outdated and could not be
used.
Contents to follow Firstly a literature overview is given about what e-commerce is, its
uses in small businesses and future trends in e-commerce. To follow is the report back on
the findings of the questionnaire used to interview a small business owner to determine
the role of e-commerce in the particular small business.
2
LITERATURE OVERVIEW
2.1 THE NATURE AND IMPORTANCE OF E-COMMERCE
According to www.gcal.ac.uk e-commerce is a business approach in which some or all
of the sales and customer support processes are managed electronically, usually via the
Internet. According to the website www.intechnology.co.uk an e-business combines the
resources of traditional information systems with the vast reach of an electronic medium
such as the Internet (including the World Wide Web, intranets, and extranets). Ecommerce plays an important part in today’s information driven society. It enables
enterprises simplifies many day-to-day tasks. An example is that business transactions
can be done from anywhere around the world independent of office hours. The most
important part e-commerce plays in the small business environment is that it creates the
opportunity for small enterprises to compete with larger ones for customers.
(www.iib.qld.gov.au) According to Davis & Benamati (2003:7) “the real potential of ecommerce is improved efficiency, not revenue generation.”
2.2 THE USES OF E-COMMERCE BY A SMALL BUSINESS
According to the web site www.sccd.sk.ca a business can utilize e-commerce in many
ways to work faster, more efficiently, or to facilitate relationships with customers,
suppliers or partners.
On the Internet a business can create a website that provides information for existing and
potential stakeholders (such as customers, investors, shareholders, etc.) about products,
services or developments. A business can be accessible through their website. In this way
a business improves its customer service by having a faster response time for ordering and
after –purchase service. (www.sccd.sk.ca)
Newsgroups, chat rooms, web-based newsletters and banner ads can all be used to
promote a business beyond its current client base. A business can also use its web site to
solicit market research from clients or guests to their sites about what products or services
they want and need, and what they think of current products or services offered. The
electronic sharing of information also reduces the need for meetings which are time
consuming and involve large amounts of paper. (www.sccd.sk.ca)
Customers can shop or do other transactions 24 hours a day, all year round. This
facilitates international trade, especially from countries in different time zones.
(Tassabehji 2003:12-13)
2.3 THE FACTORS INFLUENCING THE USE OF E-COMMERCE
According to Williams (1999) in a study done by Goeler (1998) the factors identified to
implementing e-commerce includes the following:
The costs involved. The main concerns are the lack of funds for implementation costs, the
lack of monthly cash to maintain sites and the probability that their will be no real return
on their investment. The security concerns are customer fraud and the potential for
hackers to gain access to vulnerable information.
The businesses in the study by Goeler (1998) had the necessary technical skills, but they
were impeded by the difficulties of implementing and integrating commerce sites. The
majority of the Businesses in the study by Goeler (1998) were worried “that the loss of
customer contact would decrease the quality of service.”
Visa (1998) is of the meaning that gender and age have an influence on how small
businesses utilise technology.
2.4 THE CURRENT AND FUTURE TRENDS IN E-COMMERCE
E–commerce has grown in the United States from zero in 1995 to a $95 billion retail
business and reached a $1.2 trillion turn over rate in 2003. In the next five years electronic
business is expected to grow at double digit rates, making it the fastest growing commerce
in the world. (Davis et al. 2003:i-iv)
According to Tassabehji (2003:299-301) e–commerce trends can be divided into 5 phases:
Phase 1 (1995+) The very earliest stages of internet advertising, businesses and
organisations were using the internet to establish a presence in the cyber world
Phase 2 (1998+) Faculties for basic electronic transactions developed. Very few user
interaction and transactions were done mainly off line. Companies use internet as an
alternative channel to increase revenue and sales. At this time a lack of internet users and
sufficient skill and technology resulted in a slow moving process.
Phase 3 (2000+) This stage has already begun or is at the begin stages for many
companies and for those at the peak of e –commerce technology it is still developing.
Companies are now concentrating on achieving system compatibility to support business
changes and they are moving closer and closer to customers, suppliers and manufacturers.
Information, products and services are becoming more personalised and customised to
individual consumers. The goal now is profit – commercial benefits and survival.
Phase 4 (2003+) Involves re-engineering of sites to promote e-commerce. Organisation
and transactions time delay decrease to reach an aim claimed by Bill Gates (business at
the speed of thought). Goal – Continued growth and development.
Phase 5 (2006) Here the business model would have developed to a whole new dynamic
and increasingly comfortable system and no longer be seen as new. E-commerce becomes
an everyday activity, where after we can expect a new wave of business activities.
3
EMPIRICAL RESEARCH
3.1 GENERAL INFORMATION
A small business enterprise in Uitenhage, called Do IT Computers was interviewed. The
form of the enterprise is a partnership and the owners are Mr. G.J. Roux and Mr. J. van
Niekerk. The owners do not have management qualifications, because they are both still
in school. Do IT Computers has been in existence for 2 years and has employed only the
two owners for the entire period. Taking into consideration that the business is run parttime the annual turnover of R500 000 or less is quite impressive. The business has
experienced strong growth over the past two years and with the addition of Mr. Roux a
few months after the start of the business, their business has also experienced growth in
employees. Both of the owners regard the business profitable and agree that the business
is very successful.
3.2 THE USE OF E-COMMERCE
E-commerce tools get used quite extensively in Do IT Computers. The internet is the main
form of communication for Do IT. They use it to communicate with their customers and
with all of their suppliers. Financial and management accounting and the set-up and
upkeep of a database are solely done on computer and are the responsibility of Mr. Roux.
Mr. Van Niekerk is responsible for managing the payroll and benefits as well as the efilling and the banking. All of the banking activities get done via the internet. The internet
and e-mail correspondence are used regularly to search for, locate and correspond with
new suppliers.
Orders from the suppliers and payment of these orders are done via the internet, but
unfortunately no order can be made electronically. The business relies heavy on the
electronic payment of accounts by customers, as the only other way to pay is with
physical cash. Customers can enquire about their order via e-mail, but tracking facilities
are not available. Products get promoted the old fashion way, but the business also makes
use of more modern means of advertising, like sms and e-mail. This is largely restricted
by the financial implications. The internet is used to gather information regarding the
product that the business is selling as well as any thing else that is of interest to the
business.
3.3 FACTORS INFLUENCING THE USE OF E-COMMERCE
Infrastructure The business has a modern and extensive infrastructure. Computer
technologies are at the fore front of technology and access to the internet provides no
problem. The business also has access to a reliable, uninterruptible ISDN internet
connection which provides sound internet security, and computer software like Microsoft
Windows XP and Office System 2003 gets used for all the management activities. The
only thing that the business lacks is its own web-site, but this is largely because of the
financial pressure it will put on the enterprise.
Skills/Training Both of the owners of the enterprise are extremely competent when it
comes to computers. They both know how to use the internet, all of the software that they
use and, although they don’t have a web-site, they know how to create and maintain a
web-site. Most of the knowledge is self taught and when uncertainty arises they consult
books and the internet. Both of the owners have attended workshops, but not on a regular
basis.
Knowledge of benefits The owners strongly agree that an enterprise cannot operate
efficiently if it doesn’t make use of E-commerce tools and that these tools will reduce the
overall cost to the business. They agreed further more that sales volume would increase
with the use of these tools and that new costumers can be reached more easily when using
E-commerce tools. Mr. Van Niekerk added that E-commerce tools improve customer
satisfaction and that it also helps businesses to deliver better customer services.
Cost of E-commerce Although Do IT Computers is a registered business and has access
to the internet and modern technologies; it still finds the cost of E-commerce very
expensive. The business is managed from home, which means that the enterprise uses the
private recourses of the owners. If the enterprise had its own premises it would not have
access to the large amount of E-commerce tool it has access to at this moment, largely due
to the costs.
E-commerce support As stated previously, the owners are competent when it comes to
computers and seeing as most of the business gets done on the computer they are able to
solve most of the problems them self. When a problem requires specialized attention they
don’t find it difficult to find this specialized help, although it rarely comes from family or
friends. The HELP function on the computer and the internet are not used extensively
when assistance is required.
Benefits of E-commerce The owners agree that their enterprise is much more efficient
because of the use of E-commerce. They testify that it has increased sales volume,
customer numbers and, most importantly, customer satisfaction. Because they have
always used e-commerce they are neutral about the fact the e-commerce reduces cost.
4 CONCLUSION AND RECOMMENDATIONS
We have come to the conclusion that E-commerce tremendously benefits all enterprises of
all sizes. It not only provides an improvement in the efficiency of the business, but also
improves the relationship the enterprise has with it clients. The relatively high cost of ecommerce for a small enterprise is the only factor keeping it from becoming one of the
most important tools in the business industry today. If an enterprise is in the financial
position to make use of e-commerce we would full heartedly recommend it because of all
the benefits it holds for the enterprise.
LIST OF SOURCES
Davis & Benamati. 2003. E-commerce basics. Boston: Addison Wesley.
Tassabehji, R. 2003. Applying e-commerce in business. London: SAGE.
Van Niekerk, J. 2004. Interview: Do IT Computers. 26 March
Visa. 1998, in Williams V. 1999. E-commerce: small businesses venture
online. http://www.sbaonline.sba.gov/advo/stats/e_comm.pdf (29 Mar. 2004).
Von Goeler, K. 1998, in Williams V. 1999. E-commerce: small businesses venture
online. http://www.sbaonline.sba.gov/advo/stats/e_comm.pdf (29 Mar. 2004).
www.gcal.ac.uk/cit/helpdesk/useful_definitions.htm (27 Mar. 2004).
www.iib.qld.gov.au/itcareers/talk.asp(27 Mar. 2004).
www.intechnology.co.uk/html/reseller/techserv_R/res_glossary.asp (28 Mar.
2004).
www.sccd.sk.ca/aims/html/Programs/ecom/source/Module1/uses.html
(28 Mar. 2004).
Kemp, S.
203007166
Mentz, M.
203008960
Rossouw, J.H.
203010817
Snyders, A.J.M.
201305135
MEASURING SERVICE QUALITY OF BANKING
INSTITUTIONS
A SMALL BUSINESS PERSPECTIVE
DATE: 23 SEPTEMBER 2004
LECTURER: Ms B. Gray
TABLE OF CONTENTS
Page
1.
INTRODUCTION
1
2.
LITERATURE OVERVIEW
2
2.1
THE NATURE OF SERVICES
2
2.2
THE CHARACTERISTICS OF SERVICES
2
2.2.1 Intangibility
2
2.2.2 Inseparability
2
2.2.3 Heterogeneity
3
2.2.4 Perishability
3
2.3
THE NATURE OF SERVICE QUALITY
3
2.4
THE IMPORTANCE OF SERVICE QUALITY
4
2.5
THE TEN DIMENSIONS OF SERVICE QUALITY
5
3.
EMPIRICAL RESEARCH
7
3.1
BACKGROUNDS OF THE SMALL BUSINESSES INTERVIEWED
7
3.2
REPORT ON FINDINGS
8
3.2.1 General findings
8
3.2.2 Findings with respect to the ten dimensions of service quality
9
4.
CONCLUSIONS AND RECOMMMENDATIONS
11
LIST OF SOURCES
13
ANNEXURES A-C: COMPLETED QUESTIONNAIRES
14
ANNEXURE D: LETTERHEADS
26
ANNEXURES E & F: COPIES OF REPORTS
27
1.
INTRODUCTION
When considering service quality, the tendency is to look at chain stores and major
national service providers. It is often over-looked that inherent in every encounter with a
banking institution, whether in person or indirectly, is the provision of a service, the
quality of which can be measured according to the same criteria applicable to other
service providers.
Since banks are such an indispensable part of everyday life, unacceptable levels of service
quality are often ignored. From a different perspective though, another aspect that is often
neglected is the major contribution of small businesses as clients of the banking sector.
Therefore it is important to establish exactly what the needs of a small business owner are
with respect to banking and to establish whether banks successfully satisfy these needs.
The objective of the research was to gain an insight into the perception and overall
satisfaction of small businesses with respect to the level of service quality provided by the
banking sector, as well as to conduct a study of the assessment criteria applied by small
businesses in this regard.
A two-fold research method was implemented to reach the objective. A study of available
literature sources pertaining to services and service quality, both in general and
specifically related to banking institutions, was undertaken. The second part was an
empirical study conducted by means of interviews and topic-related questionnaires, in
which three small businesses, each banking at a different institution, were approached to
provide information.
This research project presented no difficulties whatsoever. Sufficient secondary literature
sources were available, and the owners interviewed gave wonderful co-operation.
Following this will be a theoretical overview of the nature and importance of services and
service quality, as well as a summary of the ten dimensions of service quality. The
subsequent section deals with the background of the businesses interviewed and provides
a report on the findings. This is followed by a summary and recommendations.
2.
LITERATURE OVERVIEW
A study of available literature sources was undertaken to determine the nature and
characteristics of services, as well as the nature and importance of service quality and
the ten dimensions applicable to service quality, with specific reference being made to
banking institutions. This section provides a report of these findings.
2.1
THE NATURE OF SERVICES
Many different definitions and perceptions may be associated to services. Pollard and
Liebeck (1994:732) define a service as a helpful or beneficial act. This is however a
very general definition revealing little about the nature of services. In order to more
accurately describe the nature of services, it is necessary to take note of the fact that
services usually consist of tangible and intangible components (Baron & Harris
1995:159), that it cannot be physically possessed and that it results from human and/or
mechanical effort focused on people or objects (Lamb, Hair, McDaniel, Boshoff &
Terblanche 2004:438).
2.2
THE CHARACTERISTICS OF SERVICES
Services are uniquely identified by four main characteristics. They are:
2.2.1 Intangibility
This characteristic relates to the impossibility of observing a service by means of the
five human senses. The service cannot be inspected before purchase and it is inevitable
that the selling activity will precede production. (Lambin 2000:300.)
In order to
counter this lack of physical evidence of the service offered, banking institutions resort
to cards, cheques and other instruments.
2.2.2 Inseparability
Various interpretations of this characteristic are available. It is impossible to produce
and consume a service in separate locations, since they are sold, produced and
consumed at the same time (Lamb et al. 2004:440). It also relates to the impossibility
of separating the service from its provider (Lamb et al. 2004:206). This has two
implications: the client participates in production and the service provider has direct
contact with the client (Lambin 2000:301). With respect to banking institutions, this
characteristic is evident from the consideration of the necessity of visiting the bank in
order to utilise certain services.
2.2.3 Heterogeneity
Heterogeneity is especially applicable to services with a high labour content (Zeithaml,
Parasuraman & Berry 1990:15) and it means that services tend to be less standardized
and uniform than physical goods (Lamb et al. 2004:440). This pertains to banking
institutions when related to the different standards of services delivered by different
employees, for example the varying quality of interactions with different cashiers.
2.2.4 Perishability
Unlike physical products, a service is incapable of being stored or inventoried, and as a
result of this it is impossible to regain service production capacity that has been lost
(Lambin 2000:301).
2.3
THE NATURE OF SERVICE QUALITY
In the service industry, service quality is a very important aspect since it measures how
well the service level delivered matches customer expectations (Baron & Harris
1995:160). According to this the customer will determine his/her satisfaction with the
service delivered. The client will be satisfied if expectations are met, will deem the
service quality as being exceptional if expectations are exceeded, but will regard it as
unacceptable if expectations are not met (Fitzsimmons & Fitzsimmons 1994:189).
Customers assess service quality according to the service delivery process, peripherals
associated to the service as well as the service outcome (Parasuraman & Zeithaml
2002:340).
To illustrate this, consider a client who approaches his/her banker. The client will not
only measure service quality according to the outcome, but will also consider the
responsiveness and friendliness of the banker, and even the level of technology used by
the bank.
2.4
THE IMPORTANCE OF SERVICE QUALITY
Every service provider will agree to the statement that service quality is fundamental to
the success and survival of a service institution. There are two main reasons for this.
● The South African economy has evolved into a service economy in which
institutions compete on the basis of services delivered (Zeithaml et al. 1990:1).
This also holds true for banking institutions. This evolution of the economy is
illustrated by means of a table indicating the increase in services as a percentage
of Gross Domestic Product (GDP) in South Africa.
Figure 1: Services as percentage of the South African GDP
Year
1981
1991
2000
2001
%
47.9
57.1
65.2
65.3
Source: World Bank (2003)
● Superior quality serves as an excellent competitive strategy (Zeithaml et al.
1990:2) giving institutions the competitive advantage needed to survive in a
highly competitive market. Due to the number of banking institutions available,
clients are able to simply change to another institution should they experience
unacceptable problems at their current banking institution. This will result in
the institution losing a portion of its market share, therefore banking institutions
simply cannot afford to provide average services.
2.5
THE TEN DIMENSIONS OF SERVICE QUALITY
Service quality is evaluated according to criteria established by customers (Zeithaml et
al. 1990:16), thus it is important to identify the criteria in order to facilitate
improvement. There are ten dimensions generally recognized as evaluative criteria
used by customers to assess service quality, irrespective of the type of service
concerned (Parasuraman & Zeithaml 2002:340). Zeithaml et al. (1990:20) stress the
importance of realizing that these ten dimensions are not necessarily independent of one
another, while Lambin (2000:505) suggests that in some instances they are somewhat
redundant.
Below follows a summary of these ten dimensions. A short explanation of each
dimension, followed by an example relating to banking institutions, will be provided.
● Tangibles
This refers to various aspects, such as the appearance of the premises, equipment,
communication materials (see Annexure D – Letterheads) and personnel (Zeithaml et
al. 1990:21), as well as the physical evidence relating to the service provided
(Lambin 2000:505), for example the various types of bank cards.
● Reliability
Reliability indicates the ability of a business to perform a promised service
dependably and accurately (Zeithaml et al. 1990:21), and it relates to the consistency
of performance (Lambin 2000:504).
An example is the degree to which bank
statements are free of errors.
● Security
The main components of security are physical, financial and moral safety (Lambin
2000:505), in other words a risk- and danger-free environment (Parasuraman &
Zeithaml 2002:340). The main concerns of banking institutions in this respect are
the safety of using ATMs (First National Bank 2004 - see Annexure E) and the risks
involved in Internet banking, as shown in a fairly recent media report by Altenroxel
and Thiel (2003) (see Annexure F – copy of report).
● Courtesy
Clients always observe the politeness, respect, consideration and friendliness of
contact personnel (Zeithaml et al. 1990:21), for example the bank’s switchboard
operator or the employee responsible at the information desk.
● Responsiveness
Zeithaml et al. (1990:21) define responsiveness as the willingness of a service
provider to provide assistance and punctual service. For a small business, the timely
arrival of a new cheque book will be very important, since many businesses use
cheques to pay expenses.
● Competence
A service provider will be regarded as competent if the necessary skills and
knowledge are displayed. The ease of processing a transaction serves as an example
in this regard. (Zeithaml et al. 1990:21.)
● Credibility
Credibility involves the trustworthiness, believability and honesty of the service
provider (Parasuraman & Zeithaml 2002:340). An employee of a banking institution
who discloses the financial information of a client to others will seriously jeopardise
the reputation and credibility of the bank.
● Communication
According to Parasuraman and Zeithaml (2002:340) clients must be kept informed,
while the service provider must be capable of listening to the client and
communicating in a language he/she understands. Interest rates fluctuate, which
necessitates regular updates to clients, especially mortagees and investors.
● Access
Parasuraman and Zeithaml (2002:340) submit that a client will consider the
approachability of a service provider and ease of contact as evaluative criteria. The
availability of branches is relevant in this respect, such as the fact that prior to the
incorporation of BOE into Nedbank, the latter did not have a branch in Jeffreys Bay,
which is one of the most popular holiday destinations in South Africa during
summer.
● Understanding the customer
As far as any service provider is concerned, the effort made to know clients and their
needs is invaluable (Parasuraman & Zeithaml 2002:341). Knowledge of a client’s
personal situation and financial capabilities will be an important factor in assessing
credit-worthiness when considering mortgage applications.
3.
EMPIRICAL RESEARCH
An empirical study was undertaken in order to obtain an insight into a small business’
perception of the service quality of the banking institution of which it is a client.
Included in the study was a comparison of the level of service quality at three of South
Africa’s largest banking institutions, as perceived by clients of the respective
institutions. Below follows the background of each business interviewed as well as a
report on the findings.
3.1
BACKGROUNDS OF THE SMALL BUSINESSES INTERVIEWED
Three small businesses, including a hairdresser, a laundry and a mini market, were
interviewed to facilitate this study. A brief background of each business is provided in
this section.
Cape View Mini Market, a retailer in Kabega Park, Port Elizabeth, has been owned and
managed by an Asian male for the past fifteen years. The owner has no formal
management qualification, yet this close corporation had a turnover between R500 000
and R999 999 in the last financial year. As far as the growth and success of the
business is concerned, the owner reports no significant changes during the last two
years. The Newton Park branch (Branch code: 5103) of First National Bank provides
this retailer with banking services.
Mrs. E. Haasbroek, a hairdresser from Uitenhage, has twenty years experience as owner
and manager of Salon Erika, a sole proprietorship with a reported turnover of less than
R500 000 for the last financial year. She has a qualification in Beautyculture and
Hairdressing. During the last two years the owner has experienced growth in terms of
turnover, and this contributes to her view of her business as being successful and
profitable. Mrs. Haasbroek does her banking at Nedbank, Uitenhage (Branch code:
126-317).
Wash `n Spin Laundry, situated in Cape Road, Port Elizabeth, has been active in the
service industry for the past eight years. This close corporation is owned and managed
by a white male, Mr. Harris, who employs two full-time workers. Although his annual
turnover last year was less than R500 000, he feels that he is experiencing sufficient
growth, considering the type of business concerned. Mr. Harris does his banking at the
North End branch (Branch code: 632005) of ABSA Bank.
3.2
REPORT ON FINDINGS
3.2.1 General findings
On a general basis, consideration of the information provided led to the following
conclusions:
● Despite dissatisfaction in a few areas, small businesses tend not to change to other
banks.
● Small businesses consider themselves to be loyal clients of their banks.
This
reinforces the
importance of the contribution of small businesses when viewed from the banking
sector.
● It was also derived that the satisfaction of the business as a client seemed to increase
with
an increase in the number of years the business banked at a specific institution.
● Only one business experiences dissatisfaction to some extent.
The other two
businesses
are generally satisfied with the level of service quality provided by their respective
banks.
● The only business indicating reluctance to recommend its bank to others was the
business
that experienced some dissatisfaction relating to the quality of services provided.
Figure 2 provides a graphical presentation of the three small businesses’ general
perception of the level of service quality provided by their respective banking
institutions.
Figure 2: General Perceptions
Vertical Axis:
(1) - Disagree strongly
(2) - Disagree
(3) - Neutral
(4) - Agree
(5) - Strongly agree
5
4
3
2
1
0
ABSA
FNB
Nedbank
A
B
C
D
E
F
Categories as listed below
Categories:
A) - I have no plans to switch to another bank in the future
B) - I regard myself as a "loyal" client of this bank
C) - I would recommend my bank to others
D) - I prefer this bank to any of the other banking institutions
E) - I am satisfied with the service rendered to me by my bank
F) - My bank treats me as a valued client
3.2.2 Findings with respect to the ten dimensions of service quality
This section will provide feedback on the ten dimensions of service quality as perceived
by the three small businesses interviewed.
● Tangibles
All three businesses agreed that their bank has attractive premises and that staff is neatly
dressed. As for communication material, only one owner indicated a minor degree of
dissatisfaction with respect to bank statements. It is evident that all three relevant banks
optimally utilise the latest technology available.
● Reliability
Two owners agreed that they can depend on their bank and that the accuracy of services
provided by their bank is of a high standard. The third owner disagreed with statements
relating to accuracy and showed great dissatisfaction as far as the dependability of his
bank is concerned.
● Security
The overall security perceived by two owners was of a high standard. The third owner
agreed that there is sufficient security available for clients at the premises, though he has
some reservations regarding the safety of Internet banking and his financial transactions.
● Courtesy
Courtesy at all three branches is deemed to be excellent. One owner was undecided with
respect to the level of courtesy provided in situations of impersonal contact, such as the
banking institution’s website.
● Responsiveness
All three businesses generally agreed that the bank is willing to provide assistance
timeously.
The availability of senior managers caused some dissatisfaction in one
owner’s banking experiences.
● Competence
Of the three small businesses interviewed, one strongly agreed and one merely agreed that
their bank displays sufficient levels of competence, while the third business remained
undecided in this regard. This owner did however agree that staff displayed sound
knowledge of bank related matters.
● Credibility
The credibility of the respective banks varied from a completely neutral perception in one
case to a situation of absolute satisfaction in another.
● Communication
Communication at all three relevant banks is regarded as adequate, except for one owner
who feels that information and options are not always explained properly.
● Access
It was found that the owners’ overall experiences with respect to access to the bank,
whether in person, by telephone or Internet, have been positive. Two small businesses did
however show some indecision as to whether they always agree or disagree with the
necessity of placing a client on hold.
● Understanding
This section of the interview revealed divergent experiences. Even though two
owners agreed that their bank delivers services specific to their individual needs, one
owner feels that his bank does not recognize him as a regular client and staff does not
understand his specific needs. This owner showed no positive responses to any
questions pertaining to the relevant bank’s understanding of his business as a client
of the institution.
This report supports the inference that two businesses are in general satisfied with the
services provided by their bank, whereas the remaining business experiences varying
degrees of satisfaction, with undecided perceptions in respect of many fields.
4.
CONCLUSIONS AND RECOMMENDATIONS
The literature study emphasized the distinction between physical products and services,
and provided a well-structured foundation for extended research in the field of service
quality.
This foundation was provided by means of overviews pertaining to the
importance of and the ten dimensions of service quality, with specific reference to
banking institutions. The empirical study confirmed the importance of service quality
as perceived by clients and showed the accuracy of the ten dimensions of service
quality as evaluative criteria used by clients to assess service quality.
Two aspects observed during research serve as central focus points in the study of
service quality provided by banking institutions. Firstly, the level of service quality
provided by a bank has the potential of having an indirect influence on the success of
the bank. Satisfied clients displayed willingness to recommend their bank to others
while dissatisfied clients did not. Secondly, the level of satisfaction enjoyed by clients
reflected a tendency to increase as the client’s relationship with the bank matured over a
period of years.
It is also submitted that there exists a link between these two aspects that, if utilised, has
the potential to increase the bank’s market share and efficiency. The bank should aim
at providing satisfactory levels of service quality to small businesses during the early
years of their association with the particular bank, and at maintaining this level
throughout the association. Not only will this ensure the retention of clients, but it will
also lead to an expansion of the bank’s client base over the years. This will serve as a
major contribution to the success and survival of a banking institution.
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