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Corporate Governance and Total Quality Management Implementation in The Telecom Sector, Ghana
Michael Owusu-Kyei1,2*, Yusheng Kong1, Michael Owusu Akomeah2 and Stephen Owusu Afriyie2 1Jiangsu University, School of Finance and Economics, 301 Xuefu Road, Zhenjiang, China. 2Ghana Communication Technology University, I.T. Business, PMB 100, Accra-North, Ghana. *Corresponding Author
The Emerging markets (EMs) and Frontier markets (FMs) within today’s global business economy function as the central engines of growth. Populations which previously had limited or no access to modern technological advances now enjoy product and service novelty, especially within the telecommunication sector. The leapfrogged generations of technology made them seize the opportunity for improved living conditions through mobile telephony. This paper seeks to analyze the performance of telcos in an emerging market, using some selected telecommunication companies in Ghana as a case study. The objective of this study is to investigate the effects of corporate governance on the implementation of total quality management (TQM) policies in the telecom companies. This investigation provides a basis by which telecommunication companies can configure, generate and develop consistent, flexible and adoptive corporate governance features and total quality management (TQM).
A self-completion questionnaire was administered to customers and employees of MTN Ghana and Vodafone Ghana. Both companies operate with the same procedures and equipment, hence the need to use the same apparatus for all contacted customers and employees. There were 800 respondents from both companies’ employees and customers, although 850 questionnaires were administered. The investigators also did run preliminary tests such as reliability, validity, and multicollinearity tests to ascertain if the received data were reasonable enough for the research, and would fit the expected model. The data collected were analyzed and inference drawn in the study.
The study purposively used 800 respondents drawn from the customers and employees of Mobile Telephone Networks (MTN) Ghana and Vodafone Ghana Limited. The researchers employed Factor Analysis for the investigation to assess the proclivity of governance mechanisms on TQM. This technique helped the investigators to describe and explain the effects of corporate governance on the implementation total quality management (TQM) policies. The key finding of the research revealed that effective board control applied to TQM policies has a significant influence on the performance of telecommunication companies. The study recommended that there must be training of telecommunication personnel especially low and middle level management to appreciate the importance of total quality management as a cost reduction strategy for telecom companies.
Keywords: Corporate Governance, Total Quality Management, Employee Commitment, Customer Requirement, Effective Control.
Corporate governance and total quality management are of most importance to every organization which telecom sector is not exceptional. Good implementation of total quality management policies are strongly dependent on the effective controls deployed by the corporate governance of that organization.
Most organization’s failure is based on ineffective corporate governance system since the policy makers and implementers are based on the governance system of that organization. Therefore, this study looks for the disparity between them in the telecom sector in Ghana.
The concept of corporate governance and total quality management (TQM) is a vast subject that enjoys a long and rich history. It is an area of study that incorporates managerial accountability, board structure and shareholder rights. Corporate governance system has a direct proportional effect on total quality management (TQM). The aspect of good corporate governance will determine the kind of quality service offered to clients. The issue of governance began with the beginning of corporations, dating back to the East India Company, the Hudson’s Bay Company, the Levant Company and other major chartered companies during the 16th and 17th centuries(Baysinger & Butler, 2019).While the concept of corporate governance has existed for centuries, the name did not come into vogue until the 1970s(Turnbull, 2019).
The balance of power and decision-making between board of directors, executives, and shareholders have been emerging for centuries. The issue of corporate governance has been a hot theme among academic experts, regulators, executives and investors. Corporate governance provides strategic direction for board of directors and mangers of all businesses, whether publicly-traded or closely engaged. Even though, telecommunication companies are regulated by the government and state agencies, the strategic board – management relationships exist for organizational performance.(Abubakar, Elrehail, Alatailat, & Elçi, 2019)advocates that the importance of the board of directors is the ability and readiness to influence corporate performance through active participation and supervision. Board practices that seek to influence corporate performance consist of financial transparency, board size, strategic changes, fairness, accountability, as well as director independence. Board leadership (especially the CEO) is the driving force for board effectiveness and inspires business performance. Ideally, sound corporate governance is anticipated to increase organizational performance. The key objective of the application of good corporate governance is to enhance value for company shareholders and stakeholders in the long run. There is an influence of total quality management in the implementation of sound corporate governance.
(Fatima, Malik, & Shabbir, 2018), suggested that total quality management services rendered should to be internally efficient and externally effective. The system is people-driven and results are plain in terms of better teamwork, company moral and organizational climate, resulting in improved productivity and profitability. It is a continual process of detecting, minimizing or eliminating errors in supply chain management, whilst enhancing the customer focus, and ensuring that employees work effectively(Adam, Wessel, & Benlian, 2021). TQM helps to bring the entire firm together with unified goals; constantly improving processes, products and services to ensure customer satisfaction. This management strategy that emphasizes a continuous, organization-wide effort to maintain quality customer service and satisfaction could be achieved when good corporate governance structures exist in the organization. This research tries to prove that corporate governance when performed well can improve total quality management (TQM) in telecommunication companies.
The literature related to the effects of corporate governance on the implementation of total quality management (TQM) policies by telecommunication companies in Ghana has not seen much works in the area. It is against this background that this research is conducted and be added to the available literature. However, various theories have been promulgated to support the implementation of corporate governance systems to achieve organizational performance. Different scholars have propounded a number of theories, and each of the theories has an argument on definition and practice of corporate governance. This study was however guided by five theories which best suit the Ghanaian telecom sector, thereby given empirical evidence on current issues facing the Ghanaian telecom sector.
CORPORATE GOVERNANCE THEORIES
Resource Dependency Theory
(Zona, Gomez-Mejia, & Withers, 2018), stated that resource dependency theory concentrates on the role of board directors in providing access to resources needed by the firm. Furthermore, they contend that resource dependency theory focuses on the role that directors play in providing or securing essential resources to an organization through their linkages to the external environment. , (Liu, 2020),actually concur that resource dependency theorists provide focus on the appointment of representatives of independent organizations as a means for gaining access in resources critical to firm success. From the exploration of(C. Wang, Xu, & Li, 2018),directors bring resources to the firm, such as information, lawfulness, skills, access to key constituents such as suppliers, buyers, public policy makers, as well as social groups. Directors can be classified into four categories: insiders, business experts, support specialists and community influential. Firstly, the insiders are current and former executives of the firm and they provide know-how in specific areas such as finance and law on the firm itself, as well as general strategy and direction. Secondly, the business experts are current, former senior executives and directors of other large for-profit firms and they provide expertise on business strategy, decision making and problem solving ideas. Thirdly, the support specialists are the lawyers, bankers, insurance company representatives and public relations experts and these professionals provide support in their individual specialized field(Smith, 2020). Finally, the community influential factors are the political leaders, university faculty, clergy members, leaders of social or community organizations.
Stakeholder Theory
From the scholastic work of(Lee & Yue, 2020), stakeholder theory was embedded in the management discipline in 1970 and gradually devolved to incorporate accountability to a broad range of stakeholders. Stakeholder theory was derived from a combination of the sociological and organizational disciplines. Stakeholder theory is less of a formal unified theory and more of a broad research tradition, incorporating philosophy, ethics, political theory, economics, law and organizational science. A stakeholder is defined as “any group or individual who can affect or is affected by the achievement of the organization’s objectives”. The stakeholder’s theorists suggest that managers in organizations have a network of relationships to serve – this includes the suppliers, employees and business partners. It is argued that this group of network is important other than owner-manager-employee relationship (Njiru & Nyamute, 2018). On the other end, (Freudenreich, Lüdeke-Freund, & Schaltegger, 2020)contends that stakeholder theory attempts to address the group of stakeholders deserving and requiring management’s attention. Though, (Moshood, Nawanir, Sorooshian, Mahmud, & Adeleke, 2020)claimed that all groups participate in a business to obtain optimum benefits. However,(Awan, Sroufe, & Shahbaz, 2021)suggested that the firm is a system where there are stakeholders, and the purpose of the organization is to create wealth for its stakeholders. The network of relationships with many groups can affect decision-making processes, as stakeholder theory is concerned with the nature of these relationships in terms of both processes and outcomes for the firm and its stakeholders.(Barney & Harrison, 2020), argued that, this theory focuses on managerial decision-making and interests of all stakeholders who have intrinsic value, and no sets of interests is assumed to dominate the others.
The stewardship theory
The stewardship theory starts from the premise that organizations serve a broader social purpose than just maximizing the wealth of shareholders. It holds that corporations are social entities that affect the welfare of many stakeholders. These stakeholders are groups or individuals that interact with a firm, and they affect or are affected by the achievement of the firm’s objectives(Freudenreich et al., 2020). Successful organizations are judged by their ability to add value to all their stakeholders’ worth. Some scholars consider the natural environment to be a key stakeholder(de Freitas Netto, Sobral, Ribeiro, & Soares, 2020). Stakeholders can be instrumental to corporate success, and have moral and legal rights(Rusconi, 2019). The stewardship theory suggests that a firm’s board of directors and its Chief Executive Officer (CEO), acting as stewards should be motivated to act in the best interests of the firm rather than for their own selfish interests. This is because, over time, senior executives tend to view the firm as an extension of themselves (Ocasio, Laamanen, & Vaara, 2018). Therefore, the stewardship theory argues that, a firm’s top management cares more about the firm’s long-term success. According to(Juntunen, Halme, Korsunova, & Rajala, 2019), when stakeholders get what they want from an organization, they return to the firm for more. Consequently, corporate leaders have to consider the claims of stakeholders when making decisions and conduct business responsibly towards the stakeholders. The participation of stakeholders in corporate decision-making can enhance efficiency and reduce conflicts(Law et al., 2018). According to(Baah, Opoku-Agyeman, Acquah, Issau, & Abdoulaye, 2020), corporations adopt reactive or proactive approaches when integrating stakeholders’ concerns in decision making. A corporation embraces a reactive approach when it does not integrate stakeholders into its corporate decision-making processes. This results into a misalignment of organizational goals and stakeholder demands. Stewardship is about choosing to provide service over self-interest. It begins with a willingness to be deeply accountable for a body larger than oneself for a team, an organization, or a community(Hu, Yan, Casey, & Wu, 2021). On the same emphasis of selflessness,(Schillemans & Bjurstrøm, 2020)state that stewardship requires employees and management of any institution to be deeply accountable for the outcomes within the organizations without trying to control others or trying to take care of them. It involves a redistribution of power and privilege, moving choice and resources closer to the edges of the organization. Some of the kinds of things leaders can do to become stewards include: giving choices to people at the edge as much as possible, conducting performance appraisals where bosses evaluate their subordinates, peers talking about how they are doing work together, meeting in a circle not auditoriums. Circles allow people to see and talk with each other. Auditoriums are for people to be talked to. In addition, one should let off the idea that everything needs consistency. There are just a few areas that need it, like how staff report business finances. Eliminating the privilege system should also be a priority bigger, and nicer offices should not be given to only top-level officers. A top manager that has a special parking spot should give it up for others to use. A team leader willing to adopt stewardship theory should be enthusiastic to say that though he or she may not know what is best for every employee, he or she could ask them of their views and listen to what they have to say.
Agency Theory
(Huu Nguyen, Thuy Doan, & Ha Nguyen, 2020)defined Agency Theory as the relationship between the principals (such as shareholders of a company) and agents (such as directors of a company). According to this theory, the principals of the company hire the agents to perform specific work. The principals delegate the work of running the business to the directors or managers, who are agents of the shareholders (business owners). The shareholders expect the agents to act and make decisions in the best interest of the principal(Voorn, Van Genugten, & Van Thiel, 2019).On the contrary, it is sometimes not seen that agent make decisions in the best interests of the principals. The agent may be succumbed to self-interest, opportunistic behavior and fall short of expectations of the principal. The theory prescribes that individuals or employees are held accountable in their executed tasks and responsibilities. The key features of agency theory are separation of ownership and control. Rewards and Punishments can be used to correct the priorities of agents.
Transaction Cost Theory
Transaction cost theory states that a company has number of contracts within the company itself or with market through which it creates value for the company(Akbar & Tracogna, 2018). There is cost associated with each contract with external party; such cost is called transaction cost.
If transaction cost of using the market is higher, the company would undertake that transaction itself. Transaction cost theory is part of corporate governance stipulating that cost will arise when someone else is contacted to get something done on behalf of the establishment (Bebchuk & Hirst, 2019). It is based on the principle that one will certainly incur cost whenever one gets someone else to do something for him or her. For instance, directors are being urged to run the business one owns. Transaction cost theory is an alternative variant of the agency understanding of governance assumptions. It describes governance frameworks as being based on the net effects of internal and external transactions, rather than as contractual relationships outside the firm (i.e. with shareholders).
TOTAL QUALITY MANAGEMENT (TQM) POLICIES
Quality Service Delivery
Quality service delivery signifies how well services meet the needs of the consumer based on their expectation on service quality. Customers frequently gauge quality based on how well they are treated, how much it costs, and how satisfied they are in general. The majority of business executives understand how important providing high-quality services is to the success of their company. Following best practices, such as respecting customers’ time, being friendly, and offering informed and helpful information, are aspects of providing great customer service. The provision of prompt, high-quality support to customers by a firm and its staff is considered to as good customer service(Shokouhyar, Shokoohyar, & Safari, 2020). Customer service can involve anything from assisting clients with purchasing to resolving issues. By meeting client needs, agents of customer service are accountable for making sure that consumers have a positive experience. Customers may be dealt with in-person, on the phone, or online via email or chat services. From the point of view of (Moldoveanu & Narayandas, 2019), developing customer service skills can help organizations advance in business, because it is a level of expertise that a company tends to value. Ways of delivering quality customer include: being approachable, responding quickly, understanding product or service, paying attention to clients, expressing gratitude, gaining knowledge about the customers, request for feedback and then put it to good use.
Effective Board Control
A competent Board of Directors serves as the ultimate internal monitor, and is the foundation of a well-functioning and well-governed company’s governance system. An effective board of directors is one that has a diverse membership and gives managerial guidance(Baysinger & Butler, 2019). An operative board reviews the performance of the board as a whole as well as the performance of each individual member and collectively on a regular basis. The board makes intelligent decisions that are of a high standard and fosters a performance culture that drives value development.
Notwithstanding, (Samimi, 2020) posit that monitoring and controlling any risks or conflicts of interest involving management, directors, and shareholders is a crucial part of the board’s supervisory role. It is easy to forget how many times in a year an employee does not conform to a controlled procedure or how many times a piece of equipment was down due to unplanned maintenance. If strict documentation is maintained, the firm will be able to objectively quantify areas for improvement and management could focus their efforts where they will provide the greatest return of both time and financial resources.
Effective boards typically exercise shareholder accountability and take on relevant stakeholder engagement(Pucheta‐Martínez & Gallego‐Álvarez, 2019). At least one meeting should be held each year for the board to discuss strategic planning in line with the organization’s objective. Planning an annual board retreat with the purpose of assessing the previous year and making plans for the current year and future years is an excellent approach for accomplishments. Boards of directors have the task to yearly evaluate the CEO’s performance. It is essential to monitor and measure the performance of the business.
Employee Commitment
It is key to ensure that all employees within the organization know about the Total Quality Management (TQM) policies and make them a fundamental part of their work. Employees should know corporate goals and recognize the importance of these goals to the overall success of organization(Islami, Mulolli, & Mustafa, 2018). Employees need to know what is expected from them and why. It may sound like a no-brainer but too often; management does not drive this home. When employees understand and share the same vision as management a world of potential is unleashed. If they are in the dark, commitment is lacking and policies will not be successfully deployed. Internal cooperation focuses on selective human resource dimensions of the organization. Internal cooperation manifest itself into teamwork, unity of purpose, mutual trust and respect for all, participation at all levels and shared approach throughout the organization (Rezaei, Ferraris, Busso, & Rizzato, 2022).
This cooperation creates synergy and facilitates superior individual and team performance that affects the success of quality initiatives in the organizations. This approach is exemplified through leading or participating in projects, working on cross-functional teams, and accepting assignments that provide valuable on-the-job learning (Grass, Backmann, & Hoegl, 2020). These initiatives provide opportunity to develop individual and team members for collaborative roles in competitive environment. (Wiener, Gattringer, & Strehl, 2018), focused on team work and collaboration and argued against competitive behaviour when he said “harm comes from internal competition and conflict, and the fear that is thereby generated.” (Zhao, Liu, Wang, & Ge, 2019)stated three forms of social interaction namely; cooperation, competition and interdependence. They suggested that cooperative behaviour results in superior achievements under most circumstances, including different tasks and contexts. (Rezvani, Khosravi, & Ashkanasy, 2018), argued that teamwork “builds up trust, improves communications and develops interdependence.” Teamwork has been exalted as the key to successful TQM institutions. According to (Ahmed, 2019)the only efficient way to tackle process improvement or complex problems is through teamwork. (Godfrey, 2018)identified teamwork as one of the core activities in award winning companies.
(Antunes, Mucharreira, Texeira Fernandes Justino, & Teixera-Quirós, 2020)found that continuous improvement in service rendering results, financial results, customer results, marketing results, operational results, community results and employee results is ensured by using teams such as problem-solving teams, quality control teams, cross-functional teams, quality circles and small group activities. Research indicates that people are at their best as part of the team. Through integrated efforts and problem solving, teams can achieve higher results (Huang, Kuo, & Chen, 2020).
The essential factor for the success of quality management is team based work environment. Researchers also found that interdisciplinary team approach provides a faster response to customer needs and superior product and service quality.(Pauley et al., 2022)proposed development programs for managers which include team-oriented engagements, creating cooperative culture to achieve strategic goals. The research work of (Gutierrez-Gutierrez, Barrales-Molina, & Kaynak, 2018)values teamwork that forms an integral part of its strategy enabling a focused and integrated solution for its customers.
Quality Improvement Culture
The organizational culture needs to be modernized on a continuous basis to encourage employee feedback. Employees are full of valuable knowledge; hence business owners should listen to those executing the processes that keep the business moving daily (Mikołajczyk, 2022). If employees have an idea on how to improve operations, they need to know management respects their ideas or they will not share. Quality improvement culture is a group of activities pertaining to managing a process. It entails use of information, competencies, means, procedures and systems to define, visualize, measure, control, report and improve the processes. The ultimate goal is to meet customer requirements and improve customer satisfaction (Gajewska, Zimon, Kaczor, & Madzík, 2020).
Management of process includes planning, coordinating and monitoring technical and human aspects of the processes. The quality awards, ISO 9000:2000 and other TQM related programs emphasize quality improvement culture that yields improved performance(Lasrado & Nyadzayo, 2019). In TQM context, quality improvement culture is achieved through use of statistical techniques, change of process and eliminating those steps that do not add value to internal or external customers. Quality improvement owners are key to effective process management. They have responsibilities for and authority over process design, operation and measurement of performance. Quality function deployment expounded by (Prentice, Dominique Lopes, & Wang, 2020)suggested that assessment of service quality depends on service process and the interaction between service provider and customer. (Mukhopadhyay, 2020) found that quality improvement culture facilitates evaluating continuous quality improvement programs ,established positive relationship of quality improvement culture and customer and employee satisfaction related programs. (Meister & Willyerd, 2021) asserted that the Company has always believed in the importance of innovation to maintain development. Through quality improvement culture, the company has enhanced its capability to plan and implement management innovation and technical innovation. China Mobile has maintained and realized continuous innovation in business and services, and has attracted more customers with its superior quality (Feng & Liao, 2020).
The company three-pronged strategy of management innovation, market oriented technical innovation and service, and business innovation has yielded positive results. (Shafiq, Lasrado, & Hafeez, 2019)found that research and development activities in quality improvement culture initiatives, affected organizational performance. According to (Kimura, Thangavelu, Narjoko, & Findlay, 2020), one of Australia’s three largest telecommunications and internet carrier companies experienced increased productivity, improved the speed of time-to-market, and cost saving through efficient and effective quality improvement culture. (Tien, Jose, Ullah, & Sadiq, 2021)faced a major problem of how to manage, sort, approve and process employees’ ideas so that these could be evaluated and implemented efficiently. The management of process yielded cost reduction, customers’ satisfaction and rapid response. The researchers explored service provision process of a large telecommunication company. The evidence found that the effectiveness of process improved employees’ response capabilities (Awan, Arnold, & Gölgeci, 2021).
Continuous Improvement in Process
Total Quality Management (TQM) is a continuous process and not a program. This requires constant improvement in all the related policies, procedures and controls established by management (Vinodh, Antony, Agrawal, & Douglas, 2021). Do research, keep ear to the market and make an effort to routinely revise all aspects of operation. There should be a constant effort to improve proficiency – which will result in constant scopes for improvement (even if some improvements are small).The concept of continuous improvement implies constant improvement in the processes, products and services. (Organization, 2020) urged organizations to continuously improve the products and services. (Kerzner, 2019), identified that continuous improvement is based on process management practices that yield incremental improvement and innovations in products, services and processes.
Organizations need perpetual reevaluation of existing products, services and processes and setting up of new objectives for their betterment. This is an organization wide approach in which every member is responsible for an ongoing improvement in performance (Armstrong, 2021). Salient aspects of the philosophy of continuous improvement include the following: Customer focus; Prevention of defects; Management by facts; Respect for employees; Market driven ongoing commitment; integrated response to problems solving; Motivation of the workforce; Senior management commitment to philosophy of continuous improvement. (Graban, 2018)viewed continuous improvement as an initiative that enhances success and decreases failures. (Ringberg, Reihlen, & Rydén, 2019)found it as a process of continuous incremental innovation. (Saffar & Obeidat, 2020)concluded that this approach leads to creativity and competitive excellence. Based on extensive literature review, (Loyarte-López, Barral, & Morla, 2020)noted that continuous improvement creates a body of knowledge diffused within the organization, embodied in its people, equipment, materials and work methods. This knowledge is difficult for competitors to duplicate because it is often very widely diffused, consisting of a great many custom tailored and tightly linked elements; thus, it creates a sustainable advantage for the firm. (Pakurár, Haddad, Nagy, Popp, & Oláh, 2019) found that continuous improvement is critical for service quality. It was highlighted by (A. Sharma, Adhikary, & Borah, 2020)that this process is important for firm’s ability to provide high quality services.
(Azalanzazllay, Lim, Abidin, & Anass, 2022)concluded that top leadership, strategic focus in planning, firm’s culture, employees’ mindset and learning are essential for successful implementation of continuous improvement. (Fischer, Imgrund, Janiesch, & Winkelmann, 2020) encourage employees to challenge the existing procedures to improve business processes through monitoring and reviewing the performance indicators, making action plans and involving all employees in process management. (Armstrong, 2021) continue to challenge itself to improve internal standards, the way it works with partners, and to manage the impact of its services and operations. The investigation of (Abbas, 2020)strives to improve customer services and enhance organizational ability to meet customer needs and improve customer privacy policies and procedures. The investigation establishes a direct link between continuous improvement and customer satisfaction. However, the desired results can only be achieved with the help of an integrated response through commitment of top management, favourable employees’ attitude, supporting organizational culture, effective planning and execution (Olafsen, Nilsen, Smedsrud, & Kamaric, 2021).
Customer Requirement
In today’s market, customers requires and expect perfect goods and services with zero defects (Ali et al., 2021). Focusing on customer requirements is significant to long term survival and essential in order to build relationships with customers as people do business based on emotion. Competitors will always be a risk. Keep customers close and happy. Make sure precise requirements of all customers are documented and understood by everyone that touches the account. Customer requirement or satisfaction is at the heart of TQM philosophy. This calls for meeting and exceeding customers’ expectations. A proactive approach to responding to changing customer’ needs are vital to attract and retain customers. By close interaction with customers, organizations can determine customers’ changing requirements, trends and use them as yardstick with their competitors (Ebert & Tavernier, 2021).
They stated that “in TQM environment, the job is not done until the customer is satisfied.” Customer satisfaction is based on the company’s ability to fulfill the business, emotional, and psychological needs of its customers. Customer satisfaction levels are directly related to financial results. (Lysenko-Ryba & Zimon, 2021)noted that customer satisfaction may depend not only upon the product itself, but also upon the experience surrounding acquisition of the product. Customer satisfaction, then, may be more a global concept than simply product evaluation. Satisfaction may involve evaluation of an entire product bundle or offering. (D. Sharma, Taggar, Bindra, & Dhir, 2020)noted that customer satisfaction is exemplified by customer-driven focus. Moreover, (Tenza, Attafuah, Abor, Nketiah-Amponsah, & Abuosi, 2022) identified 10 domains of customer satisfaction that include quality, value, timeliness, efficiency, ease of access, environment, inter-departmental teamwork, front line service behaviour, commitment to the customer and innovation. (Al Halbusi, Jimenez Estevez, Eleen, Ramayah, & Hossain Uzir, 2020) explicates that internal quality practices of organizations affect customer satisfaction that workers’ awareness and mindset positively related to customer satisfaction. In service firms, customer satisfaction influence’s a firm’s profitability. Improved customer satisfaction in services leads to higher customer retention(Simanjuntak, Putri, Yuliati, & Sabri, 2020). (East, Singh, Wright, & Vanhuele, 2021)using critical incident technique, identified more than 800 critical behaviour of service firms that caused customers to switch services. The behaviour was categorized into price, inconvenience, core service failure, service encounter, response to failure, competition, and ethical problems. An organization wide approach is needed to affect customer satisfaction. Everyone in the organization needs to identify the customers, their needs, expectations, and the means to satisfy them. A swift and responsive approach by all will make the organization competitive. Customer satisfaction is an ongoing process that needs to be institutionalized to get the strategic benefits.
(Santa‐Maria, Vermeulen, & Baumgartner, 2022)asserted that customers are the foundation for sustained development of the company. ‘Satisfaction 100 Campaign’ enhanced customers’ rights and showed positive results.(Kim & Kim, 2020), in a case study of Chine Mobile, found “perceived expectations, perceived quality, perceived value, perceived usefulness, and perceived ease of use were critical factors for customer satisfaction with mobile services”.(Ferrell, Hartline, & Hochstein, 2021)acknowledged that customer promise charter is the cornerstone of its strategy and challenge employees to provide the best services to the customers to make them happier and loyal.(Ali et al., 2021)views customer satisfaction as the foundation of its growth and places customer satisfaction on top priority through setting high standards of services and maintaining the trust in the brand. (X. Wang, Tajvidi, Lin, & Hajli, 2020) noted that it “value its long term commitment with customers and believes that it should always act to earn their trust and loyalties, our communication with our customers are always to be clear, transparent and fair”.(Baran & Woznyj, 2020)noted that “ongoing effort to strengthen customer focuses in every part of the business”. (Welbeck, Owusu, Simpson, & Bekoe, 2020), in a case study of comparison of stakeholders’ involvement in three firms in the Swiss telecommunications industry, noted that good stakeholders relations affect business performance and create a win-win situation.(Farmania, Elsyah, & Tuori, 2021)emphasized that it creates value for each customer through customization and transforming customer related information into actions. In a case study of mobile phone users in(Raza, Umer, Qureshi, & Dahri, 2020), found that better network, superior customer care and high quality are vital for users’ satisfaction. (Büyüközkan, Havle, & Feyzioğlu, 2020)concluded that, “trust, reliability and simplicity are the key words in our customer relations policy, which puts quality of service at the heart of our integrated operator strategy”.(Tien, Diem, et al., 2021)asserted their commitment to the customers by continuously offering more and better services and the best market experience. Japan’s, leading mobile phone Company, highlighted that meeting needs of customers is company’s top priority. The Company’s ‘customer-first’ philosophy is the main pillar of its strategic focus that yields positive results for retaining current customers and attracting new users (Lin, Ma, & Ying, 2021).
RESEARCH METHODOLOGY
A self-completion questionnaire was administered to customers and employees of MTN Ghana and Vodafone Ghana. Both companies operate with the same procedures and equipment, hence the need to use the same apparatus for all contacted customers and employees. There were 800 respondents from both companies’ employees and customers, although 850 questionnaires were administered. The investigators also did run preliminary tests such as reliability, validity, and multicollinearity tests to ascertain if the received data were reasonable enough for the research, and would fit the expected model. The data collected were analyzed and inference drawn in the study. Simple random sampling technique was employed to gather the data. The primary data were compiled through questionnaires measured using Likert scale rating of 1-5, where: 1, 2, 3, 4 and 5 represent strongly disagree, disagree, neither agree nor disagree, agree and strongly agree respectively. Both structured and unstructured questionnaires were used to collect data from the heads of department and customers of Mobile Telephone Networks (MTN) Ghana and Vodafone Ghana Limited. This design was used to estimate the effects of corporate governance on the implementation of total quality management (TQM) of telecommunication companies. To ascertain the impact of corporate governance on the overall quality management services provided by MTN and Vodafone Ghana, the data were statistically analyzed using Factor Analysis. The factor loadings and communalities of the variables were then confirmed using a Principal Component Factor Analysis with an Equamax rotation.
Table 1: Descriptive Statistics
Student Motivation Factors | N | Mean | Std. Deviation |
QuaServ : Quality Service Delivery | 800 | 3.957 | .308 |
EffCon : Effective Board Control | 800 | 4.505 | .433 |
EmpCom : Employee Commitment | 800 | 4.328 | .691 |
QuaCul : Quality Improvement Culture | 800 | 3.783 | .451 |
ContImp : Continuous Improvement in Process | 800 | 4.121 | .291 |
CusReq : Customer Requirement | 800 | 4.168 | .574 |
Valid N (listwise) | 800 |
From the results in Table 1, it is evident that out of the six constructs surveyed in relation to of total quality management, Effective Board Control had the highest mean (M=4.505)as ranked by the respondents. This was followed by Employee Commitment (M=4.328), Customer Requirement (M=4.168), Continuous Improvement in Process (M=4.121), Quality Service Delivery (M=3.957) and Quality Improvement Culture (M=3.783) in that order. The scores on each of these constructs were all above 3.5 suggesting that most respondents were in agreement that the implementation of TQM policies significantly influence the performance of Telecom companies. (Sunarsi, 2020) support the results by showing that Effective Board Control has a great influence on the performance of organizations. With adherence to controls, it is the responsibility of boards to put together strategies that will propel the organization to success. Board of directors normally pays much attention to what happens in the institution, integrating good internal controls for performance measures guided by plans, strategies and TQM policies. The empirical evidence provided in this study agreed with the observations made by Gupta et al. (2021) who reported that boards set up to look spearhead matters of strategic importance and TQM policy issues.
Table 2: Reliability, KMO and Bartlett’s Tests
Test | Statistic | df | Sig. |
Cronbach’s Alpha | .897 | ||
Kaiser-Meyer-Olkin Measure of Sampling Adequacy | .710 | ||
Bartlett’s Test of Sphericity | 25.292 | 15 | .000 |
Cronbach’s alpha measures reliability or internal consistency of the variables of interest. It is a way of measuring the strength of that consistency. Cronbach (1951).(Yanmış, Bahçecioğlu Turan, & Özer, 2022)asserts the test rule used to determine whether the chosen variables are internally consistent and reliable should be greater than 0.70. From Table 2, the alpha coefficient is 0.897, exceeding the pragmatic threshold of 0.70. This indicates that the variables have a higher level of internal consistency for the investigation. The Kaiser-Meyer-Olkin (KMO) index evaluates the sampling accuracy, which establishes whether or not the responses provided with the sample are sufficient. Kaiser (1974) advocates KMO value of 0.50 as the lowest (satisfactory) threshold to progress with an acceptable factor analysis. The KMO measure, which can be seen in the table above, is 0.710, which is suitable for the research. Bartlett’s test is another technique for examining how strongly variables are related. The Bartlett’s test of Sphericity is used to test the hypothesis that the correlation matrix is an identity matrix. The significance value of Bartlett’s Test of Sphericity must be less than 0.05 for the factor analysis to be acceptable. The table above also reveals that the result of the Bartlett’s Test of Sphericity is 0.000. (highly significant p-value). This demonstrates that the data gathered for the model were high and statistically significant.
Table 3: Principal Component Factor Analysis and Communalities
Variable | Component Matrix | Communality | |||
Factor 1 | Factor 2 | Factor 3 | |||
QuaServ | .818 | .673 | .702 | .786 | |
EffBod | .735 | .597 | .686 | .693 | |
EmpCom | .705 | .581 | .464 | .772 | |
QuaCul | .380 | -.166 | .535 | .506 | |
ContImp | .681 | .628 | .455 | .729 | |
CusReq | .595 | .459 | .531 | .688 |
The loadings of the six variables on the three extracted factors are shown in the component matrix with communalities in the table above. The factor analysis technique chooses variables that should be congregated together on a factor. The factors cannot be simply named or easily described, since the outcomes could possibly be related with one another. The model of 6 variables were separated into 3 items based on the most important items, and had identical answers in factor 1 and concurrently in factor 2 and factor 3. The greater the absolute value of the loading, the more the factor contributes to the study variable. With identical responses detected in component 1, component 2, and component 3 at the same time, the model identified Quality Service Delivery (QuaServ) as the most important item from the information presented Factor 1, but the model regarded Quality Improvement Culture (QuaCul) as a less relevant item.
Table 4: Total Variance Explained
Variable | Initial Eigenvalues | Extraction Sums of Squared Loadings | ||||
Total | % of Variance | Cumulative % | Total | % of Variance | Cumulative % | |
QuaServ | 1.173 | 29.554 | 29.554 | 1.173 | 29.554 | 29.554 |
EffBod | 1.072 | 24.857 | 54.411 | 1.072 | 24.857 | 54.411 |
EmpCom | 1.020 | 17.822 | 72.233 | 1.020 | 17.822 | 72.233 |
QuaCul | .961 | 13.020 | 85.253 | |||
ContImp | .914 | 9.237 | 94.490 | |||
CusReq | .859 | 5.510 | 100.000 | |||
Extraction Method: Principal Component Analysis |
This means that customer requirement needs to be strengthened as well as quality culture improvement needs to be strengthened for firm performance. Communalities define the common variance the factors share with the study variables. A higher communality indicates that the factor solution has extracted more variance from the variable.
Communalities must be 0.4 or above to provide an appreciable measurement of factor analysis(Garson, 2022). All communalities with the exclusion of QuaCul had substantial values (greater than 0.6). This shows that the variables influencing the prediction of the study’s outcome make the model fit. Greater communalities are always preferable.
Table 4 displays total variance explained by the variables. Quality Service Delivery (QuaServ) could explain variance from the initial Eigen values up to 29.554%. However, all the variables; Quality Service Delivery (QuaServ), Effective Board Control (EffBod), Employee Commitment (EmpCom), Quality Improvement Culture (QuaCul), Continuous Improvement in Process (ContImp) and Customer Requirement (CusReq) combined as predictors accounted for up to 100% of the variance. This elucidates that in order explore the effects of corporate governance on the implementation of total quality management (TQM) policies in the telecom companies, all the predicting variables must be brought together to have a perfect fit. Eigenvalues for the first three variables were more than 1.0 (1.020), and they explained 72.233% of the overall variance. As a result, the model extracted the first three factors to explain the experiment, accounting for 72.233% of the total variance, and the outcomes would not be influenced. With regards to Extracted Sums of Squared Loadings, it is observed that the first variable explains 29.554% of the variance, whereas the second and third variables were 24.857% and 17.822% respectively.
Based on our research findings on TQM policies being implemented in the Ghanaian telecom sector, shows that the reason for customers’ complaints is due to lack of adequate meeting the needs of customer requirement. Customers are the priority of any giant company, because survival of every company is dependent on the customers. (Cornforth, 2020) believe the appointment of boards gives them the opportunity to develop strategic policies that seek to tackle the needs of the organization and its stakeholders. The composition and role of board members are also becoming more challenging and crucial, because they are most likely to enhance institutional survival. An efficient board of directors is centered on governance structure that aims to build productive internal control mechanisms, which will lead to effective meeting of customer requirement. From the study findings, effective board control was appropriate in the telecom companies in Ghana. The greatest threat to the growth of telecommunications sector is effective control, because if all policies are controlled effectively, being employee commitment, quality culture improvement continuous improvement, and customer requirement, there would not be any failure in any of the policies.
However, guidelines should be instituted such that directors, employees and customers will adhere to them.(Iyer, 2018)opined that fines or penalties alone will not solve the problems with service of telecommunication companies, and that the fundamental problems are issues of proper systems to check the activities of TQM policies. Employee Commitment is an important factor in bringing together skills, dynamism, drive, innovation and resources, leading to enhanced results in a business organization. (Collins, 2021) expounds that senior management commitment plays a critical role to provide leadership direction, allocate and deploy resources that can improve an organization’s performance.
Consequently, this study wishes to make the following recommendations well intentioned to improve the system. Training of telecommunication personnel especially low and middle level management to appreciate the importance of total quality management as a cost reduction strategy is strongly suggested. There is need for telecommunication companies in addressing their effective control problem to adopt new way(s) of checking the entire TQM policies to make sure all the policies are working appropriately. Proper systems to check the efficiency of policies must be adopted by strengthening the effective control system to propel firm performance.
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