DEPARTMENT OF BUSINESS MANAGEMENTNMMU

ASSIGNMENT INFORMATION2006

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1 Assignment lecture (separate power point presentation)2 Report writing information3 Examples of previous assignments

Gray, B.A. 200134598Louw, M.J. 200345879Rootman, C. 202086751Van Eeden, S.M. 200206979

Note:Title pageGroup names in alphabetical orderName of lecturer/lecturers

AIDS AND THE SMALL BUSINESSTHE PERSPECTIVE OF PRO-DIVE

DATE:9 April 2004LECTURER: Ms J Krüger

TABLE OF CONTENTS

Page1 INTRODUCTION 1

2 LITERATURE OVERVIEW 22.1 Aids in South Africa2.2 Impact of Aids on business2.3 Steps and measures being undertaken by

business to combat Aids 3

3 EMPIRICAL RESEARCH 43.1 Background of small business interviewed3.2 Report on findings 5

4 CONCLUSIONS AND RECOMMENDATIONS 6

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 boldNo full stops after numberingNo 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 reportNo full stops after numbering of headingsHeadings are not shown in introduction – merely a guide

ASSIGNMENT

Note:Important information to noteNo 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 1

2 LITERATURE OVERVIEW

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

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 e-

commerce 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). E-

commerce 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

No sub-headings!

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 e-

commerce 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 part-time

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 e-

filling 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 e-

commerce 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.

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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