The Effect Of Total Quality Management On Organizational Effectiveness The Case Of Nile Insurance Company S.c

Over the last few decades, many studies have reported on the implementation of totalrnquality management (TQM) principles and methods in organizations around the world.rnHowever, there have been only a few attempts to empirically establish the link betweenrnTQM practices and organizational effectiveness in the Insurance sector, especially inrnEthiopia. The paper’s aim is to determine how the Total Quality Management practicesrnaffect an overall effectiveness of Nile insurance company. The study type is descriptivernand explanatory and in line with this both qualitative and quantitative methods werernemployed. The data has been taken from a sample of 100 employees from selectedrnbranches including the head office in Addis Ababa. The data is analysed by using arnstructural equation modelling methodology. The results indicate that the level ofrnawareness regarding TQM practices and the role found at moderate level. Concerningrnthe dimensions of TQM practises, strategic planning effectiveness and customerrnorientation found to be in low category whereas dimension to communication, leadershiprnand employee’s involvement were in moderate category. Consequently, an overallrndimension of TQM practices endeavoured categorized under moderate category. As therndescriptive findings indicate that all TQM Practices (Strategic Planning, Communication,rnEmployees Involvement, Customer Orientation and Leadership) are found to havernsignificant and positive association with both employee’s satisfaction and profitability. Asrnthe regression finding depicted, except communication other four namely strategicrnplanning, employee’s involvement, customer orientation and leadership are found to bernsignificant in employee’s satisfaction. On the other hand, except employee’s involvement,rnall variables were significant concerning about company’s profitability. Therefore,rnorganizational effectiveness has been positively impacted by TQM practices. Finally,rnappropriate remedial measures/recommendations have been forwarded for identifiedrngaps such as communication, employee’s involvement, strategic planning as well asrnrelated to information technology usage, rewarding mechanisms and on job training.

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