Abstract
This study explores the impact of service quality (SQ) on business competitiveness in small and medium enterprises (SMEs) in South Africa. In today’s highly competitive world, designing SQ for service organisations is a critical issue. There are several resources available on SQ management, but they rarely take customer satisfaction and business competitiveness into account. In the competitive environment in which service organisations operate, SQ is an essential mechanism for gaining a competitive advantage. Quality is a difficult concept to quantify; however, the ability to measure quality is crucial in determining whether or not the industry provides the service that customers want, as customers are the key to an organisation’s survival and success. Management professionals have a limited understanding of SQ paradigms and the effects which they have on customer satisfaction, customer loyalty, financial performance and business competitiveness. Therefore, the primary aim of this research was to gain a thorough understanding of the impact of SQ on business competitiveness in the service industry, focusing primarily on Cooperative Financial Institutions in South Africa. With the view of recommending techniques and strategies that will aid in improving growth, enhancing productivity and gaining a competitive advantage. The research adopted a qualitative method approach, two data collection instruments were conducted, a systematic literature review and semi-structure interviews, which are presented as phase one and phase two respectively. Phase one was conducted through a systematic literature review to organise the literature and identify further research gaps. Previous studies chosen had to meet certain a criteria. A total of 43 previous studies were chosen from a pool of 295 for the systematic literature review. The previous studies were evaluated based on the results obtained, which were compared to historical data in order to obtain conclusive results. Phase two, semi-structured interviews were conducted with employees working at Cooperative Financial Institutions to collect qualitative data, which were analysed using descriptive procedures. The findings of this study provide a better understanding of the impact of SQ on business competitiveness... The findings indicate that organisations face difficulties in implementing SQ. Evidence also shows that organisations face challenges in relation to the demand for a growing and more skilled workforce, more diverse customer needs and dealing with new competitors. Furthermore, it was discovered that successful SQ implementation has a significant impact on organisations: for example, in organisations, SQ had become beneficial for enhancing productivity and increasing competitiveness. The findings also revealed that implementing SQ has a positive impact on the
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organisation’s quality performance and survival in world-class competitive markets. Therefore, this research recommends that future studies conduct a more thorough review of literature on SQ management in order to identify factors that contributes to SQ management and business competitiveness. The industry needs to familiarise itself with SQ initiatives.
Keywords: Service Quality, Total Quality Management (TQM), Competitiveness, and Performance.