A great number of factors affecting the excellence of service quality in the three of CSOs were identified, and hence, they are presented in Table 5.5 raised at the three managerial levels.
For simplicity, the factors are classified as External and Internal, the latter being further sub- divided into three main groups, related to the bank, human resources management, and service characteristics respectively. The external factors are considered as government regulations, competition, guardian authorities (intervention), religion and culture, banking culture, and customer relationship management.
Government regulations and competition were confirmed by the interviewees of all three CSOs as critical factors affecting service quality. Market competition is a serious issue for all banks operating in the Syrian market because the newly-introduced regulations within the Private Banking Act No.28 of 2001 and the Islamic Banking Decree No. 35 (2005) opened up the Syrian market to foreign banks.
Regarding the banking government regulations, there was a clear contradiction of views between the participants from the three CSOs. Some interviewees were appreciative of the Syrian Islamic governing regulations, describing them as excellent and comprehensive. According to their views, the legalised Islamic banking regulations in Syria summarise the cumulative experiences of various global and local legislation worldwide. However, other participants criticised the regulations on the grounds of lack of clarity and accuracy which
172
cause some confusion in banking work. Additionally, they blame the restricted procedures of the Central Bank of Syria (CBS) which prevent the operating banks from performing many services related to foreign exchange, etc. Furthermore, they complained about the high taxation rate imposed by the Ministry of Finance on the operating banks, which forces them to raise their interest rates. And, they do not approve of certain regulations that hinder the bank‘s profitability in some cases. For instance, it is forbidden for state-owned banks to reinvest properties which are obtained through non-performing loans. Instead, the government requires these properties to be sold at auction whereas the private banks can reinvest these assets to gain profits.
As a state-owned bank, CSOA has some unique factors affecting service quality, represented by the intervention of guardian authorities (the Central Bank of Syria, Ministry of Finance, and the Council of Monetary and Credit) which impedes decision-making and affects work flexibility. Practically, the leaders of state-owned banks have limited authority to adjust their products according to their customers‘ wishes because of the guardian authorities‘ interference. Conversely, the private banks have full authority to produce new services according to consumer demand and at the required speed.
Additionally, the association between governmental organisations causes delays in service delivery, negatively affecting customer satisfaction. For example, issuing some official documents like the Housing Register from other state-owned organisations takes a few weeks in some cases, or transferring money from the General Organisation for Housing to the REB requires several days which causes longer delays in granting loans.
And another unique factor revealed in CSOA was the religion and culture, since many interviewees indicated dissatisfaction with their jobs because of their Islamic values and principles. In addition, some SFEs in CSOA referred to society‘s conservative approach to banking in general, and indicated that they had been criticised for working in banking and that such denigration negatively affected their emotions, and accordingly their work productivity and motivation.
CSOB and CSOC, as private banks, present two other unique factors represented by the lack of banking culture, and customer relationship management.
Lack of banking culture is a serious issue affecting banking sector performance as well as the monetary and economic cycle in society. Practically, customers in Syria can be grouped into two main categories, those who prefer to save their money in a cupboard, and those who
173
prefer to remove their capital from the Syrian banking sector. According to the view of the participants, both kinds of customer should be more knowledgeable about the ways banks in Syria work, so that their trust may be increased, and custom gained. Additionally, Islamic banks face genuine scepticism about their ability to provide banking services compatible with Islamic law (Sharia). These doubts relate to the novelty of the Islamic banks in the Syrian market and the lack of knowledge about Islamic banking values.
Not surprisingly, customer relationship management features as the other unique factor emerging in both CSOB and CSOC, since private organisations generally work hard to develop strong and positive relationships with their customers. The interviewees stress the significance of building a clear strategy in dealing with customers and developing all the required communication skills among staff so that they recognise all the customers‘ needs. ‗Know your customer‘ was one of the highlighted values by the majority of the participants.
Regarding the internal factors, the first group bank-related factors, which include the IT system, infrastructure, work pressure, routine and bureaucracy, marketing and market research, job description, control and accountancy, and sufficient top and middle management skills.
The interviewees recognise the role of their IT systems in improving service quality and in generally providing fast and reliable service related to computers, counters, cameras, detectors, and queue systems. However, they do stress the need to update their IT capability to provide more secure and reliable service for customers (mainly in respect of electronic banking), and to overcome the daily technical problems affecting work such as faults in the queue systems, and deadlock in the network connections.
The other mentioned factor by the three CSOs is the lack of infrastructure and mainly the technical infrastructure in Syria, such as computers, ATMs, electrical circuits (digital) in rural areas to connect the ATM, and the limited number of branches. For instance, in CSOA the Audit Directorate has not yet been activated officially because of space restrictions.
Moreover, the number of branches remains limited in some governorates (e.g. there are two branches of CSOA in Aleppo, the second largest city in Syria, while other state-owned banks like the Commercial bank of Syria has nine branches in this city). Clearly, as a state-owned entity, CSOA should have the capability to achieve a much better geographical spread. In fact, the CSOA has extended from 15 branches in 2003 to 26 branches in 2010, but this growth does not compare with that of the private banks in the sector, and it is believed that the public sector bureaucracy impedes expansion by presenting many obstacles to the
174
opening of new branches like opening new credits and budgets, the slow process of materials purchase, etc.
―REB has extended from 15 branches in 2003 to 26 branches in 2010. However, this growth is still not enough compared to private banks. The routine and bureaucracy in the public sector impede the expansion process and launching new branches through many obstacles like opening new credits and budgets, the mechanism of materials purchase, etc. In addition, the huge number of customers who deal with public banks requires launching more branches with high capabilities. The new strategy for REB suggests launching offices instead of branches to save some expenses related to the geographical space and human resources.‖[CSOA TM4]
Other bank factors included work pressure that was cited in both CSOA and CSOC, where interviews cited a causal relationship between the work pressure and the limited number of branches.Participants confirmed that work pressure negatively influences customer perception of service quality since long queues exist in some branches at certain times of the day (10-12 am).
―We have long queues of customers, which we cannot avoid at particular times of the day (10-12 am). No doubt work pressure negatively affects the service quality. In my opinion the limited number of branches is the main reason for work pressure‖. [CSOA SFE7]
Some other common factors highlighted by one or two of the CSOs included the routine and bureaucracy. Interviewees from the state-owned bank complained about the complexity of decision-making regarding the granting of loans, and other bureaucratic procedures which consume both customer and employee time.
―The application forms for opening accounts should be filled by hand and then using the computer, which consumes much effort and time. Opening an account at REB requires a waiting time of about 45 minutes by the customer. Such complex procedures and unnecessary documents is a cause of aversion and dissatisfaction to the customers‖. [CSOA SFE7]
Many other examples have been referred by the interviewees regarding the routine and bureaucracy in dealing with other public organisations and affect the service delivery. For instance, it takes three to four months to obtain permission to install an electricity metre for an ATM chamber or to change the place of the metre.
175
Likewise, the interviewees in CSOC mentioned the need to curtail the degree of bureaucracy by reducing the number of papers and documents required for each process, and especially for routine processes. They justified their comments by reference to the work cycle in Islamic banks that is longer than traditional banks in order to ensure compliance with the Islamic law.
Marketing and market research represented the other unique factor, although the precise issues were different in CSOA and CSOC. The absence of a marketing approach in the state- owned banks is a general problem, but in the case of CSOA, it was apparent that having been in existence for more than four decades, the bank is devoid of any marketing approach, having no concept or techniques associated with marketing their financial services. And whilst in 2008, a Marketing Directorate was created, this is a dependent of the IT Directorate, and has so far failed to design any marketing plan for the bank.
―There is a big gap between the practical performance of our bank and the bank‘s image in the customers‘ mind. The main reason is the lack of marketing or banking marketing at REB. Actually we have a lot of available services which need to be introduced clearly to the customers‖. [CSOA TM2]
In contrast, CSOC has a very active Marketing and Market Research Directorate, which has performed much research, assisted by other external marketing companies. Indeed the Marketing Directorate has a vital role in promoting all the bank‘s services and products as well as in accessing the customers‘ perceptions about the bank.
Other factors were exposed by CSOA and CSOB, like the absence of job descriptions which means that the occupier of any position does not recognise his task and responsibility appropriately. One TM clarified:
―The absence of a job description for each position is a real problem. It is very difficult for every employee to understand his tasks and responsibilities without a precise job description. The diversity of tasks for each director makes the issue of accounting difficult and complicated.‖ [CSOA TM6]
In fact, the researcher also recognised that some vital positions were occupied by the same person, as for axample in CSOA, the Treasury Director also heads the Foreign Relations Exchange Directorate, and the Marketing Director is as the Assistant IT Director.Such lack of specialisation and overload affects service quality since it is difficult for those managers to allocate sufficient time and skill to these different responsibilities. In complete contrast,
176
CSOC interviewees indicated there were having clear policies and procedures in spite of their bank‘s recent launching.
Control and accountancy is another factor mentioned by some TMs and MMs in CSOA and CSOB. They consider control to be significant in the success of any quality initiative, and hence in achieving the best service quality for customers. One TM in the CSOA underlined control and accountancy as a main tool to motivate employees and improve their performance.
The skills possessed by TMs and MMs were also noted by interviewees in CSOA and CSOB as sufficient in as much as they were good at communicating with their staff and creating a friendly relationship with employees and customers.
Some unique factors emerged for each case study. Regarding CSOA, one such factor was seen in the preference of different categories of customer to bank with a state-owned enterprise rather than a private one because of the perception that such banks were more secure.
For CSOB, one unique factor is represented by the smooth work flow according to the interviewees, a product of the small size of the bank and the consequent limited number of directorates and branches, which makes communication easy and effective between units.
For CSOC, however, four unique factors emerged in this case but not in the other two cases, these being a clear strategy for the bank, clear vision and mission, clear quality perspectives, and commitment to Islamic values. As confirmed by the respondents of CSOC that there is a clear identification for bank‘s strategy (in particular quality strategy), Bank‘s vision and mission, and quality perceptions.
In fact, the researcher recognises a clear understanding of the quality concept by all the bank‘s departments and employees where they did not restrict the quality liability on the quality directorate. (As opposed to the public sector where there was blurring and lack of clarity in the quality perspective for the majority of the interviewed employees). Additionally, Islamic values commitment was mentioned by some SFEs who consider the degree of bank commitment and compliance with Islamic values and principles is a very significant factor in achieving the best service quality within Islamic banks.
177
Concerning the human resource management factors, the three CSOs share many perceptions of such factors as training, qualifications, experience, recruitment, and employee satisfaction. Particularly, participants elucidate the significance of continuous training for employees especially to demonstrate the legitimacy of those performing certain tasks. Unfortunately, much negative feeling was expressed in connection with training, especially in CSOA, and this whole issue is discussed in detail in section 5.4.3.1. In respect of legitimacy, the lack of banking qualifications among staff is a critical factor that was highlighted by interviewees in all CSOs. Generally speaking, the Syrian banking sector does not have well qualified staff, but a difference is noticeable between the state-owned and private banks as a review of the qualifications of employees in CSOA reveals that the majority are limited to high school and commercial college certificates, whereas the majority of employees in CSOB and CSOC have postgraduate certificates. Additionally, there was some concern about the lack of banking experience in the Syrian market, especially Islamic banking experience, which is still quite new and has had no time to develop.
Another aspect of HRM identified by the three CSOs as being problematic was recruitment. Recruitment was a main bone of contention affecting service quality, since this was not bases on professionalism according to one particular MM in the CSOA. Further, some SFEs in the CSOA and CSOB complained bitterly of favouritism and cronyism (Wasta). Wasta is an Arabic wording translated as ‗mediation‘ or ‗intercession‘, and essentially operates by people using personal relationships and/or political/economical influence to gain benefits for relatives or friends. Basically, this is corruption, and it dominates Syrian society. Hence, as mentioned by the SFEs, some CSOA employees have been appointed without qualifications. Additionally, CSOA interviewees underline two further issues regarding recruitment, the first being inconsistency in the staffing policies of different branches, such that some have more staff than others with no variation in the volume of work to be completed. The second issue relates to the tendency for state-owned organisations not to consider graduates‘ specialisms when recruiting (appointing the right people in the right place), as evidenced by the fact that in one branch there were five law graduates and two economics graduates when the branch actually needed five economics graduates and two law graduates.
In fact, recruitment in the Syrian public sector is subject to the Authority of Social Affairs and Labour criteria which are very much affected by Wasta, and hence many employees are appointed in jobs for which their qualifications are not suitable. This problem, coupled with the inconsistency in the size of the staff compliment in different branches, represents a unique factor for CSOA.
178
Empowerment is another factor mentioned by the interviewees in both CSOA and CSOC, seeming to demonstrate practices at both ends of the spectrum. In CSOA, the excessive centralism associated with state-owned banks impedes the work flexibility and restricts the ability of middle management to make any decision without consulting top management at the headquarters. Moreover, middle management‘s limited authority prevents even the most routine decisions relating to maintenance contracts or stationary purchases from being made without approval. In complete contrast, however, CSOC participants indicated a decentralised management style in the bank which empowers employees and contributes to increase the work flexibility as well as the level of service quality provided. Empowerment and involvement are discussed in detail later in section 5.4.3.2.
Another factor that attracted contradictory views from interviewees in the three CSOs is employee satisfaction, which varies from being at a low level in the state-owned bank to a high level in the private banks. The poor reward and recognition system and the unfair salaries and wages considering the workload, represent the main reasons for these attitudes in CSOA. In fact, the researcher received complaints on this issue from the majority of interviewees who she met in CSOA. This point is considered in more detail later in the chapter.
Employee commitment is an issue in CSOA and CSOC. Lack of employee commitment was indicated by some interviewees who linked the problem directly to employee satisfaction as just discussed. Moreover, the absence of attractive financial incentives is the main reason for employees leaving their jobs in both CSOs.That said, religion and culture do also play a vital role in encouraging employees who work in non-Islamic banks to leave their employment.
‗‗Employee commitment does not exist in our bank. The bank provides high salaries with a lot of other benefits. The bank also spends a lot of money, and effort on training to get professional employees. However, unfortunately the employees take the first job opportunity that pays them some more pennies. We have a real problem in creating an employment
commitment‘‘. [CSOC TM5]
Employee relationships were commented on in CSOA and CSOB, it being clear that the prevailing friendly and warm relationships between the employees themselves and, with their managers are fundamental to the creation of a productive work environment. Moreover, the