Resource, service quality and performance triad: A framework for measuring efficiency of banking services

A. Mukherjee*, P. Nath, M. Pal

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

58 Citations (Scopus)

Abstract

In this paper, we present the development of a theoretical framework for measuring the efficiency of banking services taking into account physical and human resources, service quality and performance. Expenditures on quality improvement efforts and the impact of service quality on financial outcomes have long intrigued researchers. Banks have traditionally focused on how to transform their physical resources to generate financial performance, and they inadvertently ignored the mediating intangible factor of service quality. A theoretical framework on the optimization triad of resource, service quality and performance is proposed here, thereby linking the marketing variables to the financial metrics. A measure for the return on quality is developed as the ratio of the potential improvements in financial performance by enhancement of service quality to the observed performance figures. Empirical results obtained from a study of 27 Indian public sector banks and their customers allow us to measure the impact of service quality on financial performance, optimal level of service quality that can be generated using existing resources and the opportunity cost for sub-optimal service delivery. Banks delivering better service are shown to have better transformation of resource to performance using superior service delivery as the medium. Our results confirm the linkage between resource, service quality and performance for services.

Original languageEnglish
Pages (from-to)723-735
Number of pages13
JournalJournal of the Operational Research Society
Volume54
Issue number7
DOIs
Publication statusPublished - Jul 2003
Externally publishedYes

Fingerprint

Dive into the research topics of 'Resource, service quality and performance triad: A framework for measuring efficiency of banking services'. Together they form a unique fingerprint.

Cite this