nwachukwu, angela amaka. pg/ph.d/06/45752 · the study is on competitive advantage of...
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COMPETITIVE ADVANTAGE OF MULTIDIMENSIONAL KNOWLEDGE ACQUISITION IN THE NIGERIAN BANKING INDUSTRY
BY
NWACHUKWU, ANGELA AMAKA. PG/Ph.D/06/45752
THESIS SUBMITTED TO THE DEPARTMENT OF MANAGEMENT
FACULTY OF BUSINESS ADMINISTRATION UNIVERSITY OF NIGERIA, NSUKKA
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
AWARD OF THE DEGREE OF DOCTOR OF PHILOSOPHY (Ph.D)
DEGREE IN MANAGEMENT
SUPERVISOR: PROFESSOR U. J. F. EWURUM
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OCTOBER, 2011
APPROVAL
The thesis has been approved by the Department of Management.
BY
…………………… …………… ..……………….. ………….... Prof. U.J.F. Ewurum Date Dr. C. A. Ezigbo Date Supervisor Head of Department
……………………………. ……………………… Prof. S. O. Unyimadu Date External Examiner
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CERTIFICATION
Nwachukwu Angela Amaka a PG student in the Department of
Management has satisfactorily completed the requirements for the
award of Doctor of Philosophy (Ph.D) degree in Management. The work
embodied in her thesis is original and has not been submitted in part or
full for any other diploma or degree of this or any other university.
Nwachukwu, Angela Amaka ……………………… ……………… (Student) Signature Date
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DEDICATION
This work is dedicated to Lord God Almighty.
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ACKNOWLEDGEMENTS
I acknowledge the thorough and precise supervisory work of my
supervisor Professor. U.J.F. Ewurum. I acknowledge all the lecturers in
the department of management who contributed positively to this study,
namely: Dr. Ezigbo C.A. who is also the Head of Department
Management., Prof. Ogbuefi, Dr. Ann Ogbo, Dr. Agbaeze E.K, Prof.
Unyimadu S.O, Prof. Onwuchekwa, Chief Eze .J.A., Chukwu C.O and
others. May the Good Lord Almighty bless you in Jesus name, Amen.
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I acknowledge the moral and educative support and advice of Professor C.C.
Alugbuo, Professor Aham Anyanwu and Professor A.C. Awujor all of Imo
State University. I acknowledge the fervent prayers of Women of Grace
Prayer Intercessors Imo State University. I acknowledge my statistical
analyst Dr. Nwobi. My precious and dearly Mother Mrs. Cecilia
Nwachukwu is hereby appreciated in high esteem for her all-round support
in my academic success in life, though a widow, but sincerely committed in
my successful education career, God bless you Mummy, I love you.
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ABSTRACT
The study is on competitive advantage of multidimensional knowledge acquisition in Nigerian banking industry. The theoretical frameworks for the study are value-based management strategy, blue ocean management strategy and business intelligent approaches. The objectives of the study are: to ascertain the extent to which the level of improvement in international standard performance rating of Nigerian banks is enhanced by multidimensional acquisition of banking knowledge; to determine whether acquisition of diversified banking knowledge is compatible with the quality of services Nigerian banks offer to the satisfaction of customers; to evaluate the impact of adequate multidimensional knowledge acquisition on financial strength, robustness and competitiveness of a bank; to determine the rate of commercial banks financial contribution to industrial sector growth in Nigeria through diversified knowledge acquisition in banking; to determine the extent to which financial support of Nigerian banks to commercialization of agricultural sector of Nigerian economy is enhanced by acquisition of multidimensional knowledge in banking; and to determine the degree to which the social development services of the Nigerian banking firms can be facilitated by the acquisition of multidimensional banking knowledge. The research design for the study is longitudinal survey. The population of the study is one thousand and forty five (1045) staff of the selected banks (Zenith bank, First bank and Oceanic bank) in Imo, Rivers and Enugu States. The sample size of six hundred (600) was drawn from the study population using Cochran Systematic Sampling. Data were obtained from primary and secondary sources. The research instrument was subject to content validity. For reliability of the research instrument, a test-retest method was adopted using Pearson’s Correlation Coefficient and the calculated result gave reliability coefficient of 0.81. Six hypotheses were proposed and tested using simple percentage analysis and regression analysis. The findings reveal that the level of improvement in international bank standard performance rating is greatly enhanced by multidimensional knowledge acquisition among Nigerian banks, diversified knowledge acquisition in banking is not compatible with the services provided to the satisfaction of Nigerian banks’ customers, adequate knowledge acquisition has positive impact on financial strength, robustness and competitiveness in Nigerian banking industry, acquisition of diversified banking knowledge in Nigerian banks has significant rate of financial support in Nigerian industrial sector growth
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and development, the level of financial support of Nigerian banks to commercialization of agricultural sector of Nigerian economy is greatly enhanced by acquisition of multidimensional knowledge in banking and social infrastructural development services of Nigerian banking firms is greatly facilitated by the multidimensional banking knowledge acquired by Nigerian banks. The study recommends the following: Nigerian banks should exploit the wealth of international accepted best practices banking knowledge; Nigeria banks should upgrade their multidimensional banking knowledge acquisition in order to improve on the quality and quantity of customer service segmentation; Nigerian banks should acquire vast knowledge in international best practices banking in order to impact positively on financial strength, robustness and competitiveness; Central Bank of Nigeria should come up with policies that will encourage and mandate Nigeria banks to contribute massively in funding industrial development and growth in Nigeria; proper funding of agricultural commercialization by Nigerian banks is recommended to ensure food security sustainability, job creation and industrial raw material production.
TABLE OF CONTENTS
Cover Page
Title Page ……………………………… i
Approval ……………………………… ii
Certification ……………………………… iii
Dedication ……………………………… iv
Acknowledgement ……………………………… v
Abstract ……………………………… vi
Table of Contents ……………………………… vii
List of Figures ……………………………… x
List of Tables ……………………………… xi
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CHAPTER ONE INTRODUCTION
1.1. Background of the Study ………………………… 1
1.2. Statement of the Problem ………………………… 8
1.3. Objectives of the Study ………………………… 11
1.4. Research Questions ……………………………… 12
1.5. Research Hypotheses ……………………………… 13
1.6. Significance of the Study ………………………… 14
1.7. Scope of the Study …………………………… 15
1.8. The Area of the Study ……………………………… 16
1.9. Limitations of the Study …………………………… 16
1.10. Profiles of the Bank Studied ……………………… 17
1.11. Criteria for selection of Bank ………………… 29
1.12. Definition of Terms ……………………………… 29
References ……………………………… 31
CHAPTER TWO REVIEW OF THE RELATED
LITERATURE 2.1. Knowledge ……………………………… 33 2.2. Knowledge Acquisition ………………………. 34 2.3. Multidimensional knowledge acquisition ……..……… 35 2.4. Theoretical Frameworks of Multidimensional Knowledge
Acquisition Adopted in the Study: Value Based Management Strategy and Blue Ocean Management Strategy…………………… 38
2.5. Acquisition of Knowledge and its Competitive Advantage
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impact in Banking Firms ……………..…………… 47 2.6. Techniques of Multidimensional
Knowledge Acquisition ………………………. 51 2.7. Services and Products provided by
Commercial Banks …………………….……… 58 2.8. Different issues of Standard Competitive
Landscape in the Global Banking Industry And their Impact on the Development And Growth of Nigeria banking Industry……….…… 59
2.9. Diversification of Knowledge in Operations And Services of Nigeria Banking Industry; A blue Ocean Strategy ……………………… 63
2.10. Role of Commercial Banks in National Economic and Industrial Development ………………….. 66
2.11. Service Quality Delivery knowledge and its Impact on Customer’s Satisfaction in The Banking Sector …………………………….. 67
2.12. Background, Nature and Concept Of competitive advantage ……………………… 66
2.13 Related research studies by other authors on multidimensional knowledge acquisition ………… 74 References ……………………………… 76
CHAPTER THREE RESEARCH METHODOLOGY
3.1 Sources of Data …………….……………… 81 3.2 Research Design ……………………………… 82 3.3 Population of the Study ……………………………… 83 3.4 Sample Size determination Method …………… …… 83 3.5 Sample Size of the Study ………………………………. 86 3.6 Data Analysis Techniques …………………………….. 86
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3.7 Description of Research Instrument ………………… 89 3.8 Validation of the Instrument …………..…………… 89 3.9 Reliability of the Research Instrument…………..…… 90
References ……………………………… 92 CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1. Simple Percentage Table Analysis…………………….. 94 4.2. Testing of Hypotheses …………………………….. 105 4.3. Discussion of results ……………………………. 126
CHAPTER FIVE SUMMARY OF FINDING,
CONCLUSION AND RECOMMENDATIONS 5.1. Summary of findings ……………………………… 135
5.2. Conclusion ……………………………… 137
5.3. Recommendations ……………………………… 138
CHAPTER SIX AREAS FOR FURTHER RESEARCH
AND CONTRIBUTIONS TO KNOWLEDGE 6.1. Areas for further research ……………………… 139
6.2. The contributions of the study to Knowledge ………. 139
Appendix ………………………………. 140
LIST OF FIGURES
Figure 2.1: Break-even-point Analysis Graph …………………. 46
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LIST OF TABLES Table 2.1. Red Ocean versus Blue Ocean………………………. 43
Table 2.2. The six principles of Blue Ocean Strategy…………… 44
Table 4.1. Education qualification of organizations respondents 94
Table 4.2. Quality of banking services your bank offers
to customers ………………………………….. 95
Table 4.3 Quality of banking technologies…………………….. 96
Table 4.4. Multidimensional knowledge in banking
services and operation of your bank………………….. 97
Table 4.5. Benefit of high rating in international
banking services and operations……………………… 98
Table 4.6. Comparison of value of customer services
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now and ten years ago………………………………… 99
Table 4.7. Customer’s satisfaction with millennium banking
services and operations………………………………….. 100
Table 4.8. Impact of multidimensional knowledge
on industrialization ………………………………….. 101
Table 4.9. Financing of small, medium and large industry
development, a multidimensional banking services …. 102
Table 4.10. Multidimensional knowledge in banking impact
on growth of agricultural sector ……………………….. 103
Table 4.11. Social responsibility, a multidimensional
knowledge acquisition in banking……………………… 104
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CHAPTER ONE
INTRODUCTION 1.1 BACKGROUND OF THE STUDY
Multidimensional knowledge acquisition in banking is the portfolio of
diversified competencies and skills needed for effective and timely banking
services and operations obtainable in international standard best practices in
banking. According to Uzor (2010), one of the Central Bank of Nigeria
(CBN) guideline policies to commercial banks in Nigeria is adoption of the
International Financial Reporting Standard (IFRS) latest December 2010.
The CBN is so adjourning Nigeria Commercial Banks to adopt broad
knowledge in international accepted best practices in banking. The portfolio
of competencies and skills in banking beside time and savings deposit
routine services include the knowledge of banking as financial partner in
progress with the government towards nation building and development of
economic sectors like agricultural sector, industrial sector, education sector
infrastructural development, and job creation through loan financing or
good–will competitive gesture. Because banks are the medium to effect
desirable changes in the real sectors, it is important for the Central Bank of
Nigeria to show how its policy changes will stimulate economic growth and
development across sectors and industries (Uzor, 2010). The need for
changes in the banking sector which is a service industry ought to be driven
by discovery of new opportunities in the banking sector that are not
warranted by new developments in a number of sectors in the real economy
are not going to be much beneficial (Uzor, 2010). Banks are servants to the
nation economy (Uzor, 2010).
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Keke (2010) quoted Monetary Credit Foreign Trade and Exchange Policy
guidelines for fiscal years 2010/2011 say, “The banks should continue to
pursue its developmental role vigorously in 2010/2011 fiscal year by
supporting specific programs/projects in view of the persistent demand-
supply gap in financing the real sectors (example agricultural sector).
Improving access to finance by Micro, Small and Medium Enterprises
(SMES) is necessary to generate employment and moderate inflation”.
Monetary policy circular number 38 2010 edited banks infrastructural
finance. Infrastructural development remains grossly inadequate relative to
the nation’s requirement due to lack of funds. To improve financing of
infrastructure development, the bank shall in 2010/2011 fiscal year in
collaboration with stakeholders launch an infrastructural finance policy and
development strategy to support the country’s development as well as make
Nigeria attractive to the private sector and foreign direct investment. There
is gross capacity under-utilization in bank portfolio of services and activities
as have been offered by Nigerian banks since 1999-2009 compared with
some international giant banks in both developed and developing countries
of the world. Using break-even point analysis or profit and loss analysis
(which is an economic analytical technique used to study the relationship
between the total costs, total revenues and total profit or loss over the whole
range of stipulated output level) to analyze the capacity utilization efficiency
of Nigerian banks. Nigerian banking industry is discovered to be operating
on financial benefit and not on wealth creation and economy development
value based. The strength of Nigerian banking industry has been on short
term or immediate financial return of extant services on time, demand and
savings deposits. The wealth creation services like sectoral economic
projects such as commercial agricultural projects financing, industrial
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development financing (micro, small, medium and large enterprises); youths
development support schemes (like youths financial empowerment and
training initiatives, youth facilitation and awareness programme on skills
opportunities and acquisition which will add value to human – capital
development and societal development) Health developmental projects like
provision of clean drinking water such as borehole water projects or schemes
which is a goodwill competitive advantage issue. Support scholarship
education projects for the indigent or active poor families children and thus
reducing their societal insecurity risk of being crime operators like armed
robbery, kidnapping, assassination and ritual killing;
The zone for maximum benefits through time, demand and savings deposits
occupies the benefits banks derived from fixed deposits, currents and
savings account deposits. This zone is within – capacities underutilization of
bank facilities, manpower, and materials. This zone is also known as red
ocean zone with so much competition, and low competitive values. This is
the zone where many banks are scrambling for few society wealthy
individuals or corporate bodies to open account mainly fixed deposits in
their respective bank. This zone has immediate or short - term benefits.
It is also a zone of very poor leadership and management team with less
vision, low creativity, weakness in business adventure, poor innovative
mind, lack of multidimensional knowledge portfolio in banking services,
operations and activities. The unsaturated blue ocean zone of wealth
creation embodies banking services and activities tailored to wealth
duplication and high long–run/continuous projects and multiple benefits.
Multidimensional knowledge in banking portfolio in this zone include
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sectoral developmental projects like various commercial agricultural
projects, industrial development financing like cottage, micro, small,
medium even large scale industries. These projects create employment
wealth or money benefit which will also go back to the banks as time/and
demand and savings deposits, empowers the idle youths and also reduce the
rate of bank armed-rubbery and bankers kidnapping cases. The social responsibility or goodwill gesture of this zone like provision of
clean drinking water, clinics and health facilities, school facilities and
education scholarship opportunities for the active poor families in the
society will create a friendly environment of operation and service to the
banks in Nigeria society. Multidimensional knowledge acquisition in
banking embraces the full capacity banking knowledge or portfolio of
competencies and skills in banking in the two zones (Zone A and B) in the
non-linear breakeven points model in figure 2.1 in chapter two. Giant or big
international reputable banks are operating in this full capacity utilization.
Value-Based Management (VBM) Concept, Red and Blue Ocean
Management Strategy and Business Intelligence Approach are the
management theoretical frameworks or philosophies on which this study
anchored. Value-Based Management Concept: Value-Based Management is the
approach that ensures that organizations are run consistently on value
(Alabi, 2010). Value-Based Management usually seeks to maximize
shareholders’ value always and every time. It consists of three major
components: creating value strategy, managing for value (through corporate
governance, change management, organizational culture, communication
and leadership), measuring value (valuation).
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The reason for Value Management is that Value becomes imperative in
managing because of its many and wide-ranging effects. Some of these
wide-ranging effects of value management are provision of returns or
profits, productivity enhancement, growth accelerations, innovativeness,
knowledge enlargement or increase and diversification of services,
operations, and cooperation portfolio. Management for value requires that
values must first be created, before it can be appropriately managed. Value-
Based Management shoulders on value-based innovation and leadership
style of the operators. Blue Ocean Strategy (BOS) is as stated by Kim and
Mauborgne (2005) a management strategy which align business or
organization environment to blue nature of an ocean which is a state of
many untapped opportunities, unsaturated activities and innovative/creative
opportunities. The Blue Ocean Strategy illustrates the high growth and profits an organization can generate by creating new demands in an uncontested market space or a “Blue Ocean”, than by competing head – to – head with other competitors for known customers in an existing industry “Red Ocean”.
Blue ocean strategy – Kim and Mauborgue (2005) say, “If an organization is already in red ocean, that is a business situation where almost all the competitors share good knowledge of the competitive games, a firm can cross over to the blue ocean where competitive games are unknown and where there is no competitors to be battling with by observing these six paths: Look across alternate industries, look across strategic groups within the industry, look across chain of buyers, look across complementary products
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and service offerings, look across functional or emotional appeal to buyers, look across time (Kim and Mauborgne (2005). According to Goran (2006) Business Intelligence (BI) is an approach to Key
Business Factors (KBF) in the banking industry. Goran Radonic stressed
that, “banks operate in one of the most dynamic environments: new markets
are being opened, new products are being launched, new competitors enter
market that were previously reserved only for banks, new regulatory
requirements are being imposed, and new customer needs are being
identified. Rapid external changes and high pressures affect banking
operators with immediate impact on development of banking Information
Technology (IT) system. Continues innovation and launch of new products
with ever shortened life cycle has led to development of many non or loosely
connected applications making banks IT a heterogeneous collection of
system and data”. The Banking industry is, and will be more oriented
towards the selling of new products that will impact rapid economic
development and growth on its business environment than towards
traditional services such as holding deposits and offering of high interest
loans. That makes a modern bank’s employee more a salesman than a
traditional banker. Armed with a timely and accurate information, a modern
banker knows all about his or her customer and all the banker’s services that
would be appealing to that particular customer, as well as the profitable and
risk-acceptable for the bank. Girish (2001) stressed that, “Having a strategy
to leverage modern information technology to gain an operation efficiency,
enhance customer service, raise productivity and profitability, the banking
industry is becoming less focused on its core business of holding deposits
and giving loans, and more on managing information.
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From the theoretical base points of this study especially with reference to
Value-Based Management Concept, Blue Ocean Management Strategy and
Business Intelligence Approaches in banking, also synchronizing these
theoretical framework with New Model banking of Central Bank of Nigeria,
common factor is deductible, that is vision, innovation and creativity is the
hallmark of modern banking. This will position banking industry as a strong
instrument of economic development and growth of the host country beside
its routine services of holding deposits and offering of loans; this is the
philosophy of multidimensional knowledge acquisition in banking industry
as a competitive advantage. A giant bank is a bank that stands with the full
portfolio of competencies and skills in modern banking services, products
and operations.
The level of achievement of a man is the level of knowledge he has.
Knowledge is the battleground on which the hope of established enterprise
must rest. They have potentially very large advantages. A clear advantage is
the knowledge that established firms have in the practice of finance. They
are fully capable of delivering everything from transactional services to
highly complex products. They have large investments in terms of both
system and staff who are able to assess risk patterns. This is probably the
key necessity for long-term success in financial services (Anthony, 2000).
Banks can compete with knowledge and information in a number of areas:
Competing for new customers, extending the relationship with current
customers and extending “wallet share”, reducing risk by better
understanding behaviour to reject or de –select potential problems, providing
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more efficient customer services and best advice, to support multiple
delivery channels (Anthony, 2000). Multidimensional Knowledge acquisition as a competitive advantages in
Nigeria banking industry will center on knowledge of various competencies,
opportunities, services and operations in the portfolio of banking firms
which make some world known big banks to be giants in banking industry as
stated by Arua (2007), such banks like Standard Bank of South Africa,
ABSA, Nedbank, Investec and First Rand of South Africa these Banks
control over 87.4% the banking industry total assets as of December 2004 in
South Africa; Royal Bank of Canada, Toronto-Domino Bank Group, Scotia
Nova Bank, Canadian Imperial Bank of commerce, Bank of Montreal and
the National Bank of Canada control over 90% of the total industry’s assets
in Canada. In Switzerland, the United Bank of Switzerland and the Credit
Swisse control over 50% of total balance sheet of banks. In Italy we have
Intesa BCI, San Paolo IMI, Unicredito, Bank dei Paschi di Sierna and Bank
Lombard control over 51% of the industry’s assets by the end of 2000. In
United Kingdom we have HSBC, the Royal Bank of Scotland, Barclays
Bank, the HBO and Loyds TSB Group dominate the United Kingdoms
banking arena. In Dutch, we have ABN Amro, Rabo Bank and ING Bank
control 90% of total bank assets.
1.2 STATEMENT OF THE PROBLEM Competitive Advantage of multidimensional knowledge acquisition in the
Nigeria commercial banking industry was conceived by the researcher after
having closer look into the services and products of Nigerian banks and
having also studied academic works done on Nigerian commercial banks’
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activities by previous researchers. The researcher identified poor knowledge
of diversified international accepted best practices banking as a major
contributing factor to instability in financial growth, unsatisfactory
customers’ services, state of poor capital and assets base, non international
standard performance qualities rating, low funding contribution to economic
sectors and many other pitfalls in Nigeria banks. Acquisition of proper
knowledge of these portfolio of competencies in banking services menu will
create a competitive advantage or superiority edge for a banking firm in the
Nigeria banking industry.
Commercial banks services and operations globally have gone beyond
“time, demand and savings deposits” activities to other competencies of
bank portfolio which will contribute positively to national economy at the
same time create more wealth opportunities for the commercial banks. When
the sectoral economy is developed, the profit or wealth proceed of such
development will still go back to the commercial banks for saving as excess
profit and indirectly returning money and quickening rapid growth in
finance and expansion of the operating bank. Knowledge of banking services
portfolio affect treasury management. Majority of the Nigerian banks apply
poor treasury management technique which lead to illiquidity and assets/
liabilities mismatch.
The portfolio of knowledge in banking services and operations include
ethical standard behaviour in banking job. Abuses of public trust by
stakeholders of a banking firm will end the individual bank on a short life
span. The practice whereby some management staff loan money fraudulently
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on selfish interest basis as against lending on acceptable banking principles
is unacceptable. Some banks in Nigeria are operating at a loss due to non-
performing loans. Most times the management of such banks take into
account the interest on non-performing loans. The loan officers should have
sound knowledge on customers profile and their respective business venture
before issuing out loans to avoid issues of bad debts.
The problem of poor fundamental banking knowledge among majority of
employees in Nigerian commercial banks is now an issue of concern as
many of these banks’ employees have no knowledge of banking from their
education degree qualification. The present attitude of Nigerian banks
employing graduates of all disciplines including pure sciences, humanity and
education based disciplines only to expose them to few weeks/months
intensive bank training and only to end up producing novice bankers who
cannot deliver appropriate bank services nor add to banking service or
product innovation and creativity. Their level of knowledge and contribution
to bank services is on the instruction given to them by their immediate
supervisors who also have poor diversified knowledge in banking. An
employee of no seasoned knowledge, no vision, no creativity and no
innovation is equivalent to a robot. Thus the study focus on the topic;
competitive advantage of multidimensional knowledge acquisition in
Nigerian banking industry.
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1.3 OBJECTIVES OF THE STUDY
The thrust of this study is the competitive advantage of
Multidimensional knowledge acquisition in the Nigerian banking industry as
a yardstick for performance enhancement. To this end, the objectives of the
study are:
i. To ascertain the extent to which the level of improvement in
international standard performance rating of Nigerian banks is
enhanced by multidimensional acquisition of banking knowledge.
ii. To determine whether acquisition of diversified banking knowledge is
compatible with the quality of services Nigerian banks offer to the
satisfaction of customers.
iii. To evaluate the impact of adequate multidimensional knowledge
acquisition on financial strength, robustness and competitiveness of a
bank.
iv. To determine the rate of Nigerian banks financial contribution to
industrial sector growth in Nigeria through diversified knowledge
acquisition in banking.
v. To determine the extent to which financial support of Nigerian banks
to commercialization of agricultural sector of Nigeria economy is
enhanced by acquisition of multidimensional knowledge in banking.
vi. To determine the degree to which the social infrastructural
development services of the Nigerian banking firms can be facilitated
by the acquisition of multidimensional banking knowledge.
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1.4 RESEARCH QUESTIONS
i. To what extent does multidimensional acquisition of banking
knowledge enhance level of international standard performance rating
of Nigerian banks?
ii. Is acquisition of diversified knowledge in banking compatible with
the quality of services Nigerian banks offer to satisfaction of
customers?
iii. Has adequate multidimensional banking knowledge acquisition
among Nigerian banks any positive impact on financial strength,
robustness and competitiveness?
iv. How sufficient is the rate of financial contribution to industrial sector
growth in Nigeria through diversified banking knowledge in the
Nigerian commercial banks?
v. To what extent is the level of financial support of Nigerian banks to
commercialization of agricultural sector of Nigeria economy
enhanced by acquisition multidimensional knowledge in banking?
vi. To what degree will the acquisition of multidimensional banking
knowledge facilitate the social infrastructural development services of
the Nigerian banking firms?
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1.5 RESEARCH HYPOTHESES
The hypotheses of the study are as follows:
HO1: Level of improvement in international banking standard performance
rating is not greatly enhanced by multidimensional knowledge
acquisition among Nigerian banks.
HA1: Level of improvement in international banking standard performance
rating is greatly enhanced by multidimensional knowledge acquisition
among Nigerian banks.
HO2: Diversified knowledge acquisition in banking is not compatible with
the services provided to the satisfaction of Nigerian banks customers.
HA2: Diversified knowledge acquisition in banking is compatible with
the services provided to the satisfaction of Nigerian banks
customers.
HO3: Adequate multidimensional knowledge acquisition has no positive
impact in financial strength, robustness and competitiveness among
Nigerian banks.
HA3: Adequate multidimensional knowledge acquisition has positive impact
on financial strength, robustness and competitiveness among
Nigerian banks.
H04: Acquisition of diversified banking knowledge in Nigerian banks do
not have any significant rate of financial support in Nigerian industrial
sector growth and development.
HA4: Acquisition of diversified banking knowledge in Nigerian banks has
significant rate of financial support in Nigerian industrial sector
growth and development.
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H05: The level of financial support of Nigerian bank to commercialization
of Agricultural sector of Nigerian economy is not greatly enhanced by
acquisition of multidimensional knowledge in banking.
HA5: The level of financial support of Nigerian banks to commercialization
of Agricultural sector of Nigeria economy is greatly enhanced by
acquisition of multidimensional knowledge in banking.
Ho6: Social infrastructural development services of Nigerian banking firms
are not greatly facilitated by multidimensional banking knowledge
acquired by Nigerian banking firms.
HA6: Social infrastructural development services of Nigerian banking firms
are greatly facilitated by the multidimensional banking knowledge
acquired by Nigerian banking firms.
1.6 SIGNIFICANCE OF THE STUDY
The study will make the following significant impact:
i. The Nigerian Banks: The study multidimensional knowledge
acquisition will impact positively on the financial strength and
robustness and competitiveness of the Nigeria banks. Application
of the right internationally accepted best practices banking in
Nigerian banks will boost the funding of sectoral economy and this
at long-run expands wealth creation and financial capacity of thee
economic sectors which will deposit their excess funds back to the
banks as deposits. Many enterprises and industries depositing
excess funds in the lending banks will increase the financial
strength, robustness and competitiveness of the funding banks.
This is currently obtainable in China as its banking industry
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properly funds the wide spread entrepreneurial development, the
enterprises at full growth will be depositing excess funds with their
funding banks.
ii. To the Customers: The segment of services, products and other
financial operations of commercial banks customers will increase.
Quality and quantity of commercial banks service offers will
improve. Commercial bank customers will be exposed to
satisfactory and convenient services. The knowledge of banking
services acquired by banks will determine the segment of banks’
services offered to customers.
iii. To Nigeria Economy and Government: The study will be
significant in sectoral economic development and growth of
Nigeria. The study will also impact positively on human capital
development and infrastructural development of Nigeria. The
positive impact of the study on Nigerian sectoral economic growth
and development is a resultant effect of acquiring right diversified
banking knowledge by Nigerian banks which is not based on
exploitative extant services of demands, savings and fixed deposits
accounts, operations but based on constructive services that have
values to national development.
1.7 SCOPE OF THE STUDY
The study will cover other integrated financial services of commercial bank
besides being an institution that deals in money and its substitutes. Those
integrated services are funding by way of loan for sectoral developmental
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projects like development and growth of Agricultural sector (Commercial
Agriculture), Industrial sector (small, cottage, micro, medium and large scale
enterprises), and provision of social services like health service projects,
literacy assisted projects (like scholarship to indigent/active poor families
and public education structures) The study will be capturing three
commercial banks (Zenith Bank Plc, First Bank Nigeria Plc and Oceanic
Bank Plc). Judgmental sample method was adopted in choosing the three (3)
study banks. The choice of three (3) States is for thorough, efficient and
effective research work and is on purposeful sample approach. The study
boundary will be 10 years of banking activities from 1999 to 2009.
1.8 THE AREA OF THE STUDY
The study was carried out in these commercial banks in River State, Imo
State and Enugu State. Zenith Bank Plc, which has the following number of
branches; Rivers state – 11 branches, Imo state – 5 branches, Enugu state - 8
branches. First Bank Nigeria Plc; which has the following number of
branches; Rivers state – 25 branches, Imo state – 18 branches, Enugu state –
23 branches. Oceanic Bank Plc, which has the following number of
branches; Rivers state – 11 branches, Imo state – 7 branches, Enugu state – 9
branches. These are as of 1st November, 2011.
1.9 LIMITATIONS OF THE STUDY
The study had some set backs like:
i. Time Constraint: The respondents’ (bankers’) very busy nature of work
and tight schedules was a constraint to the treatment of the study
questionnaires.
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ii. Financial Constraint: The researcher was limited by funds necessary to
carry such a topical study beyond three banks and three states.
iii. Attitude of the Respondents: The respondents to the questionnaire of
the study were bankers who by the nature of their work maintain high level
of secrecy in information dissemination; this constrained the volume and
value of information released to the researcher in the process of carrying out
the research.
1.10 PROFILES OF THE BANKS STUDIED
Zenith Bank Plc
Zenith bank was established May, 1990 and started operations in July, 1990
as a commercial bank it became a public limited company on June 17, 2004
and was listed on the Nigeria stock exchange on October 21, 2004 following
a highly successful initial public offering (PO). The bank presently has a
shareholder base of over one million, as indication of the strength of the
Zenith brand.
31
Zenith bank bas mission to offer a unique range of financial services that
underscore their corporate commitment to customers enthusiasm and value
creation for stakeholders. Zenith bank operate practical delivery on a highly
automated platform that makes them unique. The treasury transactions, their
knowledge in the market place, coupled with creativities in the money
market, which has a resultant competitive advantage that has been of
tremendous value. Zenith bank main service point is to create a product
focus that gives financial institutions competitive advantage in service
delivery to their customers. Zenith bank leadership assets are manifested in
the ability of their managers to combine strands of knowledge to create fact
action value for the customers. They combine vision with precision; using
creativity, skills and ideas to expand their business reach into the lives of the
customers by helping them fulfill their needs with incredible speed. Zenith
bank not only offers customers satisfactory services and products, they also
engaged in wealth creation to stakeholders including government and non
government agencies centred on institutional building and capacity
development for entrepreneurship in the following areas:
* Strong commitment to the support of small and medium enterprises as
well as development of indigenous industries
* Entrepreneurs incubation for our youths through sustained funding of
institutions responsible for entrepreneurship development
* Development of the real sector of the economy through provisions of
funds to the manufacturers at reduced cost
32
Services and products offered by Zenith Bank: Zenith bank offers the
following range of services and products to their numerous customers.
* Account opening
* Investing
* Zenith mortgage loan
* Western union money transfer
* Zenith Bureau De change
* Local money transfer
* Local money transfer
* ATM location
* Internet Banking
* Telephone / mobile banking
* Online bills payment
* Alerts
* Z- mobile
* ZECA (zenith children account)
Corporate Services
* Account opening
* Corporate Banking
* Investment banking
* Retail banking
* Corporate Internet banking
33
(ADPS PLUS)
* Automated cheque writing
* Reconciliation tool
* Automated pay roll
* Merchant services
* Trade alert z
* Swift pay
Zenith Bank Correspondence Banks
Zenith bank has established correspondence banking relationship with banks
outside Nigeria. All international transactions are routed through the
networks of the following correspondent banks:-
* Australia and New Zealand bank
* BNP peribas Paris
* Citibank N.A. New York
* Citibank N.A London
* Commercial Bank AG, Fran Furt
* Deutsche Bank London
* Fortis Bank
* HSBC Bank PLC, South Africa
* JP Morgan Chase Bank London
* JP Morgan Chase Bank New York
Zenith Bank rating
* Augusto and Co. (2003-2007) Aa a
34
* Fitch Ratings (2007) AA
* Standard and Poor’s (2007) BB
The ratings reflect adequate levels of capitalization and the potential that
capital levels will be further enhanced. The stable out look balances the
banks ability to benefit in terms of size, profitability, from strong
macroeconomic growth
Zenith bank awards and achievements
* African Bankers Award
* Best Global Bank (2008)
* Euromoney Best bank in Nigeria (2008)
* Vanguard bankers’ Awards:
Best Bank in ICT (2008)
Best Bank in Export Financial (2008)
* This Day Awards of Excellence:
Bank of the year (2008)
CEO of the year (2008)
Most corporate socially responsible company in Nigeria (2007)
Corporate citizen of the year (2008)
* KPMG Award
Most customer focused Bank (2008)
* African investor:
Africa’s Bank of the year (2007)
* Nigeria stock Exchange (NSE Quoted Company of the year (2007)
35
* Bank T. Top, African Banker award:
Most corporate socially responsible Bank in Africa (2007)
* Federal Inland Revenue service Award:
Best Collecting Bank
* Web-Jurist Award (2001, 2002, 2003, 2004, 2005, 2006 and 2008)
* Philip’s Consulting:
Best Bank Website in Nigeria, 1st over –all rating
* The Bankers Financial Times of London:
Bank of the year – (2005)
Zenith Bank subsidiaries
* Zenith General insurance
* Zenith Pensions custodian
* Zenith securities
* Zenith life assurance
* Zenith capital
* Zenith Trustees Limited
* Zenith Bank Ghana
* Zenith Bank United Kingdom
* Zenith Bank Sierra Leone
* Zenith Bank Representative office South Africa
36
First Bank Nigeria PLC
First Bank was incorporated as a limited liability on March 31, 1894 with
Head office in Liverpool by sir Alfred Johnes, a shipping magnate. The
bank has a specific goal to offer the services that customers and clients
expect from larger financial service firms in community banking
environment. First bank Nigeria financial years ends 31 March.
Services and products offered by first bank Nigeria:
First bank offers the following range of products and services:
* Checking accounts
* Savings accounts
* Business services
* Public finance group
* Merchant card services
* Resource Online
* Merchant service customers
* Convenience products
* Visa check card
* First call banking
* Online banking
* Appling for online banking
* Apply for online bill pay
* Direct Deposit
* Over-draft production
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Corporate services
* Equipment leasing
* Export Banking and finance
* Global custody
* Foreign financial institutions
Retail services of first Bank Nigeria
* Account opening
* Foreign operations
* U-first customer loans
* Lending
* Interest rate
* Mortgages
* Western union money transfer
* Alternative delivery channels
* Investor relations
First Bank Nigeria correspondence Banks
* First Bank Nigeria (United Kingdom) Limited
* Deutsch Bank Ag (Bankers Trust Company) New York, New York.
* Citibank N.A. Wall street, New York, New York United States of
America.
* HSCB Equator Bank PLC, United Kingdom.
* Banque Belgolaise Camomile street London, United Kingdom
* Standard Chartered Bank, New Jersey, United States of America.
38
First Bank Nigeria (FBN) Rating
FBN Plc. …….. Analyst Coverage and Rating.
Financial Documents Investors FAQAs.
December 2009 Annual Report Investors
Relations Downloads
S and P Rating report April 14, 2009
FBN Plc.
Global Credit Rating November 2008
First Bank of Nigeria Plc.
Standard and Poor FBN Plc. Rating Report March 2009.
FBN – Wikipedia, the Free Encyclopedia.
FBN IS A Nigerian bank and financial services firm …… with economic
financial crimes commission giving a strong rating.
Banks in Nigeria – FBN Plc. cool first bank Nigeria Plc. Rating on
question.
FBN Plc. 20/10/18/17 – S & P Credit Research…17 August 2010… The
ratings on FBN Plc. (First Bank) are constrained by the bank’s
Weakened assets quality and barely adequate.
FBN Plc. Opens N100 billion offer financialnigeria.com. 15/May 2007…
The widely expected FBN Plc N100 billion … The short-term rating is
also the biggest attainable by any institution.
39
Commercial Credit Reports for FBN Plc 10/4/2010. Fitch Affirms FBN
Plc’s Reting Dow Jones International News. 10/1/2010 Fitch Affirms
FBN’s IDR at “B+”
Are the ratings of Nigeria banks reliable? Similarly, the long-term
Nigeria scale ratings for FBN Plc, Guaranty Bank Plc, and
Intercontinental Bank Plc were lowered …
First Bank Nigeria (FBN) Award And Achievement
First Bank Nigeria Plc bags University of Ibadan Diamond Benefactor
… Banking Achievement for Africa Award 2007 – Financing market.
Achievements – Equity Bank – The Listening Caring Financial Partner.
Banks Awards 2010 nominees Anounced 15 September 2010 .. FBN
Capital Ltd Nigeria Rand Merchant Bank (RMB) South Africa.
Oceanic Bank Plc
Oceanic Bank commenced business on June 12, 1990 at the Water Front
Plaza, Plot 270 Ozurumba Mbadiwe Avenue Victoria Island Lagos. It was
listed on the Nigeria Stock Exchange on June 25, 2004. Oceanic Bank is 19
years old commercial bank with branches located in several part of Nigeria.
Its financial year is from January 1st to December 31st of every year. Present
location of Oceanic Bank Headquarter is at Hebert Macaulay Way Wuse,
Zone 6, Abuja. Oceanic Bank has a goal of “providing excellent customer
services our passion”. It has an aim “Exceeding our customer expectation
always”, that is why we are passionately committed to satisfying you”.
40
Oceanic Bank services And Products
The bank classified their products and services to:
Corporate banking
Public sector servicing
Treasury and financial
Institution servicing
Estate planning
Education planning
Financial planning
Tax planning
Discretionary account
Oceanic Bank Correspondence Banks:
Frankfort, Germany Commerce Bank
Fortis Bank, Fortish Bank SANV, London.
Standard chartered Bank, (All united kingdom offices) London.
Deutsche Bank, London, Frank Fort.
Deutsche Bank AG, Hong Kong
Deutsche Bank AG, Seoul branch, Seoul Koriea
Deutsche Bank AG, Mumbai branch India.
Oceanic Bank Rating:
* Best Brand USP consumer brand Award, COBR AA
* FT Top 1000 Banks in the World “ Aa” Rating Augusto and Co.
* “A”, + “AA” – Global Credit Rating (South Africa)
* “AA” “ Pharez Risk rating.
41
Note: “A” = Short term liquidity, is outstanding and safety is just below that
of risk free treasury Bill.
“AA” = Very high credit quality protection factors are very strong. Adverse
changes in business world not significantly increase investment Risk.
Oceanic Bank Awards and Achievements:
o EMEA- finance named Oceanic Bank, Best bank in Nigeria (2008).
o The Banker Magazine, Financial Times, London – Best bank in
Nigeria, 5th in Africa and 310th in the world in terms of tier 1 capital.
o NAPEB – Best Bank in poverty eradication in Nigeria (2008).
o Champion News papers – outstanding support to infrastructure and
economic development (2008)
o Vanguard newspaper best bank in SME financing (2008)
o Banker magazine London – Bank of the year (2006 and 2007)
o CBN (Central Bank of Nigeria) award 2003 –“Best bank in real sector
financing” leading investor in small and medium industries equity
investment
Oceanic Bank Subsidiaries
* Oceanic Home
* Oceanic Trustees
* Oceanic pension custodians
* Oceanic Health
* Oceanic life
* Oceanic capital
42
* Oceanic insurance
* Oceanic registers
* Oceanic securities
1.11 CRITERIA FOR SELECTION OF BANK:
The following criteria are demanded for a bank to qualify for this
research work: -
Must be a commercial bank, duly registered and incorporated by
Nigeria Corporate Affairs Commission and support its financing by
equity capital and shareholders funding.
Must have branches all over 36 States of Federal Republic of Nigeria
and Abuja. Also may have branches abroad.
Must have been in existence for the past ten (10) years by 2009.
Must have capital base of N 100 billion and above.
Must be indigenous bank run by Nigerian stakeholders.
1.12 DEFINITION OF TERMS
* CBN – Central Bank of Nigeria
* IFRS – International Financial Reporting Standard
* TFC – Total Fixed Cost
* TR – Total Revenue
* TC – Total Cost
* VBM – Value Based Management
* BOS – Blue Ocean Strategy
* KBF – Key Business Factor
43
* IT – Information Technology
* BI – Business Intelligent
* FBN – First Bank of Nigeria
* SME – Small and Medium Enterprises.
44
REFERENCES Arua, .N. (2007), Nigeria Bank and Globalization. Union Digest, An Economic and Business Publications of Union Bank of Nigeria Plc. 11 (1 and 2) June. Dasgupta, A.K. and Pearce, D.W. (1978), Cost Benefit Analysis; Theory and Practice. London: Macmillan Press Limited. Ebong, B.B. (2005), The Banking Industry and Nigeria Economy. Union Digest, An economic and Business Publications of Union Bank of Nigeria Plc. 9 (3 and 4) June.
Encyclopedia Britannica (2004).
Girish, G.V. (2001), Banking Business Units Challenges and Achievements, Infosys Technologies limited, Annual Investor Meet; Bangalone. Goran, Radonic (2006), Review of Business Intelligence Approaches to key Business Factors in Banking. Journal of Knowledge Management Practice, 8(511) May 2007 papers selected from Centre for Business Information Organization and Process Management (BIOPOM) 1st International Conference 2006 University of Westminster, London, UK. Grosse, Robert (1984), Competitive Advantages and Multinational Enterprises. University of Miami Discussion papers in International Business, (847) November 1984. John, O. Alabi (2010), Value-Based Management for Personal and Corporate Excellence. Unpublished paper presented at Nigeria Institute of Management (NIM) New Membership, Induction Ceremony at Nigeria University Commission (NUC) House, Maitama Abuja Nigeria. September, 22nd 2010. Marcel, Okeke (2010), Economic; Stability is the game, Zenith Economic Quarterly, Nigeria Publication of Zenith Bank Plc. 5(1) January.
Michael, E. Porter (1990), The Competitive Advantage of Nation. New York. Free Press.
45
Oboh, G.A.T. (2004), “Contemporary Management Practices and the Challenges to Banking Business in Nigeria” Union Digest. An economic and business Publications of Union Bank of Nigeria Plc. 8 (2) June.
Robert Grosse, Duane Kujawa (1991), International Business Theory and Managerial Application, United States of America. R.R. Donnelley and Sons Company.
Uzor, Mike (2010),New Banking Model in Nigeria; Opportunities and Challenges, Zenith Economic Quarterly, 5 (4). 2010. W. Chankim and Renee Mauborgen (2005) Blue Ocean Strategy. August
10th, 2010 2pm
http://www.blueoceanstrategy.com
Zenith Bank Plc 2010. July 22, 2010. 12pm http://www.google.com/zenithbank.com First Bank Nigeria Plc 2010. July 25, 2010 11am http://www. google.com/firstbanknigeria.com Oceanic Bank Plc 2010. July 26, 2010 1pm http://www. google.com/oceanicbank.com
46
CHAPTER TWO
REVIEW OF THE RELATED LITERATURE
2.1. KNOWLEDGE
Davenport and Prusak (1998) say that “knowledge is a fluid mix of framed
experience, values, contextual information and expert insight that provides a
framework for evaluating and incorporating new experiences and
information”.
Knowledge is the battleground on which the hope of established enterprise
must rest. They have potentially very large advantages, not all of which,
however, are easy to exploit. Knowledge creation is important in an
organization. Nonaka and Takeuchi (1995) assert that, “knowledge creation
is the capability of a company as a whole to create knowledge, disseminate it
through the organization and embody it in products, services and systems.
Banks can compete with knowledge and information in a number of areas:-
* Competing for new customers
* Extending the relationship with current customers and extending
“wallet share”
* Reducing risk by better understanding behaviour to reject or de- select
potential problems.
* Providing more efficient customer services and best advice
* To support multiple delivery channels.
These are the crucial factors which currently effect competition in the
Banking service sector. Even when a strategy is based on price
competitiveness, the ability to identify the right customer who meets the
right risk profile is essential. A tightly priced product needs to be supported
47
by the risk profile to ensure that the rates of default do not negate the limited
return on the product.
The key to knowledge –based strategies is to know the customer, not simply
the present balance of his or her account, but to use customer knowledge to
predict future behaviour. Indeed the role of risk management is to ensure
that risks are predictable so that pricing strategies or risk reduction strategies
are correctly geared to the risks being run.
2.2. KNOWLEDGE ACQUISITION
Gaining new knowledge requires not only that the information be available,
but also that the firm actively search and acquire the information or
knowledge (Levitt and March, 1988). In order to obtain new knowledge, an
organization can enable three types of “sensing” with which it interacts, co-
evolves and coordinates its activities with the environment. These activities
are the exposure to and awareness of something new or “sense-making”
(Weick, 1995), and experimentation with new ideas (Maula, 2006).
Mechanism for Knowledge Acquisition: The exposure firms receive from
new experiences, challenges and cues creates the possibility for them to
learn something from each market they enter (Miller and Chem, 1996). Due
to the possibilities it enables, a key asset of a firm that operates globally is
the diversity of environments in which it operates (Ghosal, 1987), however,
the diversity of environment only becomes an advantage to the organization
if it is able to acquire and gather generalizable lessons and knowledge from
its prospects and through its alliances. Kogut and Zander (2003) indicated
that the firm is a social community which utilizes mechanisms to create and
48
transform knowledge into economically rewarded products and services,
creating advantages for global firms.
2.3 MULTIDIMENSIONAL KNOWLEDGE ACQUISITION
Multidimensional knowledge according to Henry (2009) is the
comprehensive and diversified knowledge of anything. He further stated that
multidimensional knowledge in banking is diversified value of knowledge in
the services and products of banking or financial firm. Value knowledge in
banking and finance, corporate/commercial, dispute resolution, environment
and planning, financial services, property and construction, public sector,
restructuring and insolvency, workplace relations and safety, fraud
prevention and recovering banking disputes/securitisation.
In the public sector services of bank, the following services are available;
governance and strategy, infrastructure projects, property, environment and
planning, statutory interpretation and decision-making, agricultural
project/planning and monitoring. Multidimensional banking knowledge
involves customer management knowledge. Goram (2006) emphatically
states, “Customer is a focus of all business activities. This is not specific to
banking, almost any company is struggling to understand who the customer
is, what the customer wants, when, how and why the customer wants it”. It
has become essential for companies to find new ways to attract new
customers, to maximize the value of each existing customer and to retain the
most profitable ones (Lieutaud, Hammond, 2000). A modern bank that
wants to be competitive, maintain and increase the volume of its business
has to find answer to challenges such as recognizing the new expectations of
its prospects and the timely adjustment of its offer to such new expectations,
49
anticipating market trends and timely adjusting to market changes, a special
care for customer relationship has to be in place to ensure;
Control in every aspect of relation with clients.
Means to recognize and retain the most profitable customers.
New ways to attract new customers (from competition).
Efficacy of its processes and profitability of products.
Understanding of new markets and need for new product.
Multidimensional knowledge in banking embraces the knowledge of risk
management. Due to the nature of its business, risk management is inherent
to financial industry. In banking there is an ever-present risk of payment
default, fraud, theft, identity theft, and operational risk connected with
internal procedures and processes.
Bender (2005) stresses that, “Risk management is essential for banking and
to the financial industry in general. Traditionally, a bank’s risk managers
were highly skilled and experimented employees who, besides credit scoring
end risk assessment, had an important task of training of younger personnel.
Today’s bank workforce consists of predominantly young, less experienced
personnel, while staff with high level of expertise is either unavailable or too
expensive. Therefore, information knowledge and information technology
become the main resource in support of banking operations.
Knowledge of some management strategy like blue ocean strategy and
value-based management concepts are very imperative in positioning
modern Nigeria banking in international standard rating or balancing. The
blue ocean strategy as put by Kim and Mauborgne (2005) illustrate the high
50
growth and profits an organization can generate by creating new demand in
an uncontested market space, or a “blue ocean”, thereby avoiding competing
head-to-head with other suppliers for known customers in an existing
industry “Red Ocean”. Blue ocean strategy is a creativity and innovative
strategy, which will place a bank on exploration of banking portfolios which
are not yet in competition in the banking industry. Introduction of new
products and services which are not yet in the competing “red ocean” of
banking industry and harvest great wealth and profit associated with such a
patent right. No more unethical and sharp practices in banking as a survival
strategy but now on value excavation of strategic customer uncommon needs
and interests and perfectly providing solutions to such needs, interests and
expectations of segments of customers. The recent Central Bank of Nigeria
(CBN) policy on very low interest on fixed deposits will discourage the
indiscipline marketing behaviour of some commercial banks staff and
laziness of Nigerian wealthy people towards investment opportunities
(Zenith, 2010). The Nigerian banking will now follow the global banking
system which encourage and create investment opportunities to segments of
investors investing in productive sectors like Agriculture and Industry;
service sector like education and health are some values in the portfolio of
modern banking.
Provision of valuable information and key success factor of any area of
business which will guide the prospective investor in activities, management
and risk associated with intended business will help bank clients or loan
customers to efficiently and successfully utilize loan fund collected from the
bank and avoid being a liability of bad-debt to the bank.
51
Value-based management strategy as an adopted multidimensional
knowledge philosophy in banking standing on the following premise
according to Alabi (2010),
Maximizes value creation consistently.
Increases corporate transparency
Aligns top management’s interest with shareholders/stakeholders’
interest.
Improves internal communication strategy.
Sets clear management priorities.
Facilitate and improves decision-making.
Helps to balance short-term, mid-term and long-term trade-offs.
Encourages value-creating investments.
Enhances efficiency in allocation of resources.
Streamlines planning and budgeting process.
Sets effective target for compensation.
Value based management helps organization deal with globalization,
increased complexity and greater uncertainty and risk.
2.4. THEORETICAL FRAMEWORKS OF MULTIDIMENSIONAL KNOWLEDGE ACQUISITION ADOPTED IN THE STUDY: VALUE BASED MANAGEMENT STRATEGY AND BLUE OCEAN MANAGEMENT STRATEGY.
2.4.1. Value Based Management: - This is the management approach that
ensures corporations are run consistently on value (normally shareholders
value). It is useful to understand that value based management includes all
three of the following:
52
(i) Creating value (ways to actively increase or generate maximum future
value).
(ii) Managing for value (governance, change management, organizational
culture, communication, leadership).
(iii) Measuring value (valuation).
Value Based Management aims to provide consistency of:
The corporate mission (business philosophers).
The corporate strategy (courses of action to achieve corporate mission
and purpose).
Corporate governance (who determines the corporate mission and
regulates the activities of the corporation),
The corporate culture,
Corporate communication,
Organization of the corporation,
Decision process and systems,
Performance management processes and systems,
Reward processes and systems; with the cooperation purpose and
values a corporation wants to achieve (normally: maximizing
shareholders value.
Valued Based Management is dependent on the corporate purpose and
cooperate value. The cooperate purpose can either be economic
(shareholders value) or can also aim at other constituents directly
(stakeholders value).
53
Benefits of Value Based Management:
The following benefits of VBM clearly demonstrate why VBM is far most
powerful mechanism existing today to manage corporations:
VBM can maximize value creation consistently,
VBM increases cooperate transparency,
VBM helps organizations deal with globalized and regulated capital
markets,
VBM aligns the interests of the shareholders and stakeholders.
VBM facilitates communications with the investors, analysts and
communication with the stakeholders;
VBM improves internal communication on strategy;
VBM prevents undervaluation of the stock
VBM sets clear management priorities
VBM facilitates to improve decision making
VBM helps to balance short-term and long-term trade-offs,
VBM encourages value-creating investments
VBM improves allocations of resources,
VBM streamlines planning and budgeting
VBM sets effective targets for compensations,
VBM facilitates the use of stocks for mergers or acquisitions,
VBM prevents takeovers,
VBM helps to better deal with increased complexity and greater
uncertainty and risk.
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2.4.2. Blue Ocean Strategy:
According to Kim and Mauborgner, their research indicates that “the
strategic move and not the company or the industry is the right unit of
analysis for explaining the creation of blue ocean and sustained high
performance (B. Gilad, 2010). A strategic move is the set of managerial
actions and decisions involved in making a major market-creating business
offering. “The cornerstone of a Blue Ocean Strategy is value innovation
which occurs “only when companies align innovation with utility, price and
cost position. If they fail to anchor innovation with value in this way,
technology innovators and market pioneers often lay the eggs that other
companies hatch.” For Kim and Mauborgner, value innovation is about
strategy that embraces the entire system of a company’s activities. It requires
companies to reinvent the whole system towards achieving a “leap in value
for both buyers and themselves. Kim and Mauborgner explain “How to
create uncontested space where in competition is essentially irrelevant.” Kim
and Mauborgner assertion meet the innovations which enable Blue
companies to succeed with a Blue Ocean strategy did not depend upon a new
technology, rather, each company pursued a strategy which enables it to free
itself from industry boundaries. An example, for ‘Dell computer’, that means
mass production of computers sold directly to per each customer’s
specifications. Quite literally each sale is customized.”
The Red Ocean means industries are defined and accepted, and the
competitive role of the game are known. Here companies try to outperform
their rivals to grab a greater share of existing demand. As the market space
gets more and more crowded, prospects for profit and growth are reduced.
55
Products become commodity and cutthroat competition turns the red ocean
bloody.
Blue Oceans, in contrast are defined by untapped market space, demand
creation and the opportunity for highly profitable growth. While blue oceans
are occasionally created well beyond existing industry boundaries, most are
created by expanding existing industry boundaries as Cirque du Salai did in
Blue Ocean, competition is irrelevant as the rules of the games are waiting to
be set (Kim and Mauborgne, 2005).
It will always be important to swim successfully in the red ocean by out
competing rivals. Red oceans will always matter and will always be a fact of
business life. But with supply exceeding demand in more industries
competing for a share of contracting markets while necessary, will not be
sufficient to sustain high performance. Companies need to go beyond
competing. To seize new profit and growth opportunities, they also need to
create blue oceans. Unfortunately, blue oceans are largely uncharted. The
dominant focus of strategy work over the past twenty-four years has been or
competition-based red oceans strategies. The result has been a fairly good
understanding of how to compete skillfully in red waters, from analyzing the
underlying economic structure of an existing industry, to choosing a
strategic position of low or differentiation or focus, to benchmarking the
competition.
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Table 2.1: Red Ocean Versus Blue Ocean
Red Ocean Strategy Blue Ocean Strategy
Competing in existing market Creates uncontested market space
Beat competition Make the competition irrelevant
Make the value-based trade-off Break the value-cost trade-off
Exploit existing demand Create and capture demand
Align the whole system of a firm’s
activities with its strategic choice of
differentiation or low cost.
Align the whole system of a firm’s
activities in pursuit of differentiation
and low cost.
Source: Kim and Mauborgne, (2005). Blue Ocean Management Strategy
2.4.2.1. Value Innovation: The Cornerstone of Blue Ocean Strategy:
What consistently separates winners from losers in creating blue oceans was
their approach to strategy. The compasses caught in the red oceans follow a
conventional approach racing to beat the competition by building a
defensible position within the existing industry order. The creators of blue
oceans surprisingly, did not use the competition as their benchmark. Instead,
they followed a different strategic logic that we call ‘Value Innovation’.
Value innovation is the cornerstone of blue ocean strategy. We call it value
innovation because instead of focusing on beating the competition, you
focus on making the competition irrelevant by creating a leap in value for
buyers and your company, thereby opening up new and uncontested market
space.
Value innovation places equal emphasis on value and innovation. Value
without innovation tends to focus on value creation on an incremental scale,
something that improves value but is not sufficient to make you standout in
the market place. Innovation without value pioneering or futuristic-driven,
57
market beyond what buyers are ready to accept and pay for. In this sense, it
is important to distinguish between value innovation as opposed to
technology innovation and market pioneering. Value innovation occurs only
when companies align innovation with utility, price and cost positions. If
they fail to anchor innovation with value in this way, technology innovations
and market pioneers often lay the eggs that other companies hatch.
Value innovation is a new way of thinking about and executing strategy that
results in the creation of a blue ocean and a break from the competition.
Importantly, commonly accepted dogmas of competition-based strategy: the
value-cost trade-off. It is conventionally believed that companies can either
create greater value to customers at a higher cost or create reasonable value
at a lowers cost. Here, strategy is seen as making a choice between
differentiation and low cost. In contrast, those that seek to create blue oceans
pursue differentiation and low cost simultaneously.
Table 2.2: The Six Principles of Blue Ocean Strategy:
Formulation Principles Risk Factor Each Principle Attenuate
Reconstructing market boundary. Search risk.
Focus on the big picture not the numbers. Planning risk.
Reach beyond existing demand Scale risk.
Get the strategic sequence right. Business model risk.
Executive Principles Risk Factor in Each Principle
Overcome key organizational hurdles Organizational risk
Build execution into strategy Management risk.
Source: Kim and Mauborgne, (2005). Blue Ocean Management Strategy
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2.4.2.2. Application of Blue Ocean Strategy in Some Organizations:
i. Korea Bank serves small shop owners: According to Korea
Time, July 21, 2010, Koomin bank hopes to have unlocked a
blue ocean of new market space after introducing a special
tailored account exclusively for small business owners. The
product was developed after examining what business owners
valued and creating an offering that brought these factors to
light.
ii. Crique du Slei (Canada’s largest cultural export in circus
industry) Cirque du Solai success is that it did not win by taking
customers from the already shrinking circus industry, which
historically catered to children. Cirque du Solai did not compete
with big circuses like Ringling Bros. and Baron & Bailly.
Instead it created uncontested new market that made
competition irrelevant. It appealed to a whole new group of
customers: adult and corporate clients prepared to pay a price
several times as great as traditional circuses for an
unprecedented entertainment experience. By injecting the
concept of multiple productions and by giving people a reason
to come to the circus more frequently, Cirque du Solai has
dramatically increased demand.
iii. Dell computer introduced blue ocean strategy in their firm by
mass production of computers sold directly to customers per
59
each customer’s specification. Quite literally, each sale is
“customized.”
TFC, TC, TR Zone A Zone B
Figure 2.1: Break-even-point Analysis Graph Explanation of
Multidimensional knowledge Acquisition Source: Dasgupta, A.K and Pearce, D.W (1978) Cost-Benefit Analysis; Theory and Practice London, Macmillan Press Limited
Figure 2.1, TR and TC intercept each other at 2 points B1 and B2. These
points are break-even-points. All output levels below QB1 or above QB2
results in the firm making losses because total cost is greater than total
revenue (TC>TR). At Break-even-points B1 and B2, TR = TC, hence there is
neither gain nor loss. The figure also shows that the profitable range of
output lies between QB1 and QB2 units of output. Applying non linear break-
even-points analysis in multidimensional knowledge acquisition, Zone A lies
the place of capacities under-utilization. This is a place where bank facilities
and resources (both man and materials) are under-utilized. It is a place of red
ocean strategy where banking services are on extant operations of savings,
current, time-deposit and stock exchange market activities. Nigerian banks
operate more on this Zone. While Zone B is a zone of full capacities
utilization (human and materials capacities); where banks activities and
0 QB1 QB2
Zone for maximum financial benefits Through time, demand, savings, deposits B1
B2
Unsaturated blue ocean zone of wealth creation TC
TR TFC Q
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services include economic sectoral development and growth of the host
country. This is a zone of blue ocean strategy, where several untapped bank
services and operations are waiting to be harnessed for the benefit of the
banking firm and that of the environment of operation. Some of the bank
services available in Zone B are adequate funding of agricultural sector
commercialization, industrial sector development, infrastructural building,
education support and other achievements (Okeke, 2010). These bank
services will have a long term development interest and profit to the banking
industry. Nigerian banks are expected to operate on both zones of the break-
even-point analysis to achieve positive interest of both banking industry and
national economy development.
2.5 ACQUISITION OF KNOWLEDGE AND ITS COMPETITIVE ADVANTAGE IMPACT IN BANKING FIRMS According to Anthony (2000), “information is becoming a key factor of
production in the financial service sector”. For many institutions, knowledge
is the main competitive advantage that they are investing in. Information is
key to a financial service enterprise and it is a tool that makes all the other
main elements of production effective. For example, capital is clearly
defined in the industry, however, its effective exploitation is substantially
affected by the successful use of information. In investment, the benefits
derived from the exploitation of capital are measured and assessed in terms
of the information a firm has on the risks they are taking (Macoy, 2000). The
knowledge of the individual staff member is only one factor in performing
these risk calculations. They can only create these analysis by using
information resources from market data vendors, news feeds, macro-
economic data and many other information sources. Knowledge and
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information are what makes exploiting capital viable in the investment
banking markets. At present, information is the battleground of the financial
service sector. It is the exploitation of information that is a key factor in the
entry of new competitors to the sector, and of the defence strategies of
established market players. Information and knowledge of customers’
behaviours is key to the ability to target the right products at the right
customers.
2.5.1 Competing with knowledge in Banking industry:-
The process of increasing revenues can be split into a number of
separate strategies. They include: -
* Acquisition of new customers through marketing to new
customer bases.
* Retention of current customers and the expansion of the
relationship with them.
* Acquisition of new customers through the takeover of other
institutions (Anthony, 2000).
Chartered institute of Bankers research 1999 has looked at the method by
which banks are expecting to create organic growth. Retention and cross
selling is seen as the key, 71.5% of the respondents believed that improved
cross selling was vital to the competitive stance of their institution.52.4%
believed improving customer retention was a key element to their revenue
growth aims. The former is really a function of the latter, but customers
retention has a second role in increasing revenues apart from providing the
base for cross selling. If retention rates improve and more customers joins the
institution than leave it, then the overall customers base improves. This has
two effects; there are more customers to cross sell to, while cost structures
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improve because old customers cost less to retain than new customers cost to
obtain (Kare, 1991).
2.5.2 A Brief History of Bank Development of Customer Understanding:-
One of the ways to view information versus knowledge in the banking
industry is to look at the generational changes in the provisions of
information (Corrigan, 1991).
* 1st generation-customer intelligence- local knowledge era:- In the
days when only a selected portion of society used financial services and
when labor rather than capital provided the infrastructure, knowledge about
customers was held by branches and agents based on their paper records and
ledgers, which showed the progress and execution of transactions.
* 2nd generation- the data era:- In the era of 2nd generation centralized
computing, intelligence on customers was extremely limited. If on-line
access was possible, the only information a teller could give a customer was
the current balance of account, and this was early in the period of time-
shared computing techniques not commonly available until the late 1970s.
Management information on customer performance or product performance
would often be limited to batch-run reports run over night, once a week or
once a month. The reports were either standard reports or needed to be
specially requested. Even with the spread of decentralized PC computing,
access to customer information was limited because the data required still
came from the mainframe. Often marketing departments would get once-
monthly files of customer information to work on and would not be updated
outside of this (Calem, 1985).
* 3rd generation the information era:- As banks began to sell more
products and services, and as the demands of a much larger banking
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franchise developed, local banking and agents relationship began to be
ineffective. Customer Information System (CIS) were developed that made
use of the on-line capabilities of either specialist data warehouse, hardware
or data warehouse based on mainframes. These systems began to deliver
greater levels of customer information to branch bankers and agents who
acquired it. As well as current balances, reasonably detailed transaction
histories were accessible. As those systems developed the information they
covered included all products that the customers held through that channel
and through that divisions, not merely customer’s individual account
activity. The (CIS) could provide a branch banker with a view of a
customer’s relationship with the branch retail-banking subsidiary.
Additionally, increasing on-line capabilities allowed account balances,
recent transactions and product information to be delivered straight to the
customer via an ATM (Calem, 1985).
* 4TH generation –knowledge in the network-oriented age: In the
era of Internet computer Architecture, technology is about the ability to
integrate and access information in a standardized way, to create true
knowledge. The new structure will provide many advantages in terms of
opening up information and integrating it. For example, in combining
customer knowledge across banking and insurance subsidiaries or between
two marging institutions. It is not only internal data sources that can be
integrated in this manner. It will become easier to tie in resources from
credit agencies, geographic databases and information from partner
companies.
The other advantage of Internet computer Architectures is the
standardization of access. Information becomes a common accessible asset,
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not only internally, but also for customers and partner companies, assuming
that security and authorization procedures are robust enough; (Calem, 1985).
2.6 TECHNIQUES OF MULTIDIMENSIONAL KNOWLEDGE
ACQUISITION
Having defined knowledge as “a result or product of knowing. Information
or understanding acquired through experience; practical ability” (Webster’s
Comprehensive Dictionary of English Language). Generally speaking, to
impact or acquire knowledge, the following techniques are disposable
choice; lectures, guided discussions, printed materials, films, correspondence
course, case studies, programmed instruction, sensitivity training and
simulation will be selected.
* Correspondence courses: This is an instructional training technique
for impacting knowledge of facts and concepts, (Armstrong, 1993). It is
particularly suited for training individuals in technical subjects when there is
no qualified instructors, when trainees are widely dispersed or few or when
their needs are dissimilar (Barret, 1963). Unlike the lecture, it requires some
activities by the trainees in the form of achievement tests on problem-
solving exercises. Correspondence courses where popular in the sixties like
city and guide technical courses involving stage I, stage II and stage III in
which a candidate that successfully passed the three stages will be awarded
certificate equivalent to Higher National Diploma (HND) obtainable in the
polytechniques. Currently, similar methods of education as opposed to
training are the Open University system.
* Programmed instruction:- According to Connock and Vision
(1991), “a more recent form of self instruction involving the use of
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programmed texts teaching machines or similar devices”. The training
principles underlying this method are relatively simple.
The material or information to be learned is given in steps. Each step builds
upon what has been learned in preceding steps. The trainee has to do some
kind of work at each step, such as selecting the correct answer from among
several alternative responses. Each trainee knows or learns right answer
before he proceeds to the next item of information. Each trainee can proceed
at his own rate. The material gradually becomes more difficult as the trainee
proceeds to the next item of information or text. Programmed material
requires clearly defined objectives and careful sequence of subject matter.
Considerable evidence has accumulated to show that well written
programmed instruction texts may have several advantages over
conventional textbooks. They give more motivation to learn, and they enable
him to learn faster and to retain more of what he learns, (Dale and Iles,
1992).
Coaching: The coaching process is potentially the most direct and effective
way for one person to influence the behaviour of another, (Graham and
Bennett, 1992). Coaching represents a continuing learning experience in
which the individual is given opportunity to perform, is informed of the
results he is expected to accelerate his development (Barret, 1963). He may
be given special assignments, perhaps as member of a committee or a task
force, he may fill in for the boss or be delegated part of this responsibilities;
his job may be enlarged; or his may be systematically rotated through a
series of jobs. Coaching as a training technique is effective at all levels of an
organization. It occurs most often and most naturally in the superior
subordinate relationship, better than any formal programme this relationship
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provides opportunity for close and continuing shaping of behaviour within
the work environment. However, the manager, himself possesses the
knowledge or skill he is teaching, whether he correctly identify what his
subordinate needs to know or do, and whether he is able or willing to teach
this knowledge or skill. The lack of coaching ability among many managers
has led to the establishment of more formal training activities to fill the void
or to supplement their efforts (C.C. Alugbuo, 2005).
The conference method: The conference or discussion permits a wide
range of approaches and applications. Although some conference are highly
directed and include sizeable number of participants, most of them are
limited to groups of ten to fifteen to encourage active participation in the
discussion. Research has demonstrated that the conference is a better
technique than the lecture for changing group attitude and behaviour and for
encouraging participants to think through to their own solutions to problems
(Green, 1994). Like the lecture, it is suitable for training in many subjects
and at all levels. It is a more costly method than the lecture however, and
requires greater sensitivity and skill on the part of the leader (Beer, 1996).
The Case Analysis Method: The case analysis technique of instruction,
long taught in law schools, was in 1912, first applied to the teaching of
management by the Harvard Graduate School of Business and is now used
in virtually every management training programmes (Kolb and Fry, 1967).
The method is the study, analysis and discussion of concrete business
situations. Instead of relying on general principles, the case method draws on
real problems in actual companies (with the names, of course disguised) by
dealing with these problems, the trainee learns to relate the situation to the
enterprise as a whole and to perceive the interrelationships of people and
events.
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Cases can be of varying length and complexity, because they are used with
groups of diverse levels and experience. Though simplified cases are used
for employee and foremen training, the case method is most effective at the
higher levels where participants have the breadth of experience necessary for
making informal judgment on the technical or human problems of the
business (Hunt, 1986). For maximum benefit, the case method requires
careful preparations. Studying the materials on his own, the trainee
develops his capacity for analysis and his power of independent judgments.
Subsequently, by discussing the case with others, he learns that there is
rarely a single or approved solution to a problem. From this process of
analysis and discussion, insights into management behaviour are gradually
developed to form practical and viable principles of business management,
Donald (1976).
Sensitivity training:- In the 1940s, the National Training laboratories
(NTL) in the United States of America experiment with sensitivity training
or methods for improving skills in interpersonal relations. More recently,
under the name “laboratory Training” NTL and its many offshoots aims at
improving self awareness and sensitivity to others, developing leadership
and team work and facilitating changes in organizational behaviour
(Muchinsky, 1986).
Though sensitivity training is applicable to all levels, its chief value is for
those having supervisory responsibilities. In sessions normally lasting from
one to three weeks, participants meet in small training groups or T-groups.
Where the subject matter is the participant’s own immediate behaviour in the
group and the effects of this behaivour on other members of the group and
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on the group as a whole. There are also practice exercises for assuming new
behaviour and sessions where theories and research findings of behavioural
sciences are examined in the light of the group’s experiences (Torrington
and Hall, 1991). Equipped with new insights and improved interpersonal
skills, the participants are expected to apply them in dealing with the human
problems of their own organization.
Other sensitivities training techniques derived from NTL are: the kepner
tragoe programmes in problems analysis and decision making have
participant “manage” an organization for a given number of days develop
solution for its problems and analyses the effectiveness of their decisions
and their method of making them (Woodruffe, 1990). Another is the
managerial Grid programme of Dr. Robert Blake begins with an analysis of
each participant’s leadership style and the dynamics of problem analysis,
(Blake and Mouton, 1965).
Simulations
Simulations is business games, in-baskets and role –playing in trying to
marry management theory and practice, trainees have developed a number of
interesting ways of simulating the business environment. Business games,
in-basket exercises and role-playing are among the more successful
examples of this effort business games, developed first by the American
management Association in limitation of military games, have been defined
as sort of management wind tunnel (Dunnett, 1963). They enable trainees to
practice management concepts and techniques in a “training model’
representing a vastly simplified facsimile of the business or one of its
functions. The essence of the games is the interaction between the trainees,
69
who assume certain roles in the management of the company and the
business environment. The trainee perform tasks and make decision, the
results of which are feedback often with the aid of a computer to furnish the
bases, in critiques session, for analyzing what happened and why.
Broadly speaking, there are two types of management games which is
designed to provide practice in adapting to an unfamiliar environment,
making business decision under conditions of uncertainty, and developing
understanding of basic organizational relationships and management
principles (Woodward, 1980). The second type is called a functional games
which provides practice in dealing with problems or situations found in a
specific function for example, inventory management or sales planning,
(Kirk, 1972). The business can be thought of as an acted out case, and it has
many of the features and advantages of the especially suited to training
managers and it tends to broaden the participants understanding of the
management process. The well –designed game also has certain advantages
over the case study; it has better furnish insights into organizational
behaviour, it can promote teamwork among participants, and most
important, it teaches at the behavioural rather than verbal level.
The in-basket training techniques are a detailed simulation of the materials,
which a manager might find in his in-basket under certain defined
circumstances. The trainee works through the materials in an allotted period
of time, taking action exactly as he would on-the-job. For example, he writes
letters or memos on stationary which is provided or he jots comments on an
item and reroutes it, makes notes to himself about simulation and under time
pressure, he tends future data. With a realistic simulation and under time
70
pressure, he tends to behave very much as he ought to behave. Following
this “working” period each trainee is asked to recapitulate his actions and the
reasons for them, in preparation for a group discussion to follow. This
discussion enables the trainee to observe his own on-the-job behaviour and
that of others and to learn from it; (Alugbuo, 2005). With skilled critiquing,
he has an opportunity to becoming aware of and the possibly to change his
behaviour.
Role –playing is probably the most commonly used technique for providing
reality practices; role –playing involves the acting out of situation involving
two or more persons for example, superior and subordinate, salesman and
prospect, or members of a task force. Role-playing places the participants in
simulated circumstances where, under stress, they tend to act as they would
in reality. Role-plays should not be rehearsed or viewed as demonstrations
of good or bad behaviour. As with other forms of training simulation, the
learning chiefly occurs during the analysis and discussions that takes place
in the critique sessions.
Simulation is useful at other than managerial level, in a somewhat different
way. Originally, as in the link trainer, it was used to teach technical and
motor skills, and it is still used for training in procedures or the solving of
technical problems.
For examples, simulation may be used to train technicians to troubleshoot a
television set or to control processes in an oil refinery.
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2.7 SERVICES AND PRODUCTS PROVIDED BY COMMERCIAL BANKS A commercial bank is a financial institution, which receives deposits from
the public as well as creating deposits for customers via the extension of
loans (Tobin, 1963). Traditionally commercial banks lend on short terms
basis. One important fact that distinguishes a commercial bank from other
financial intermediaries is that commercial banks have debts, which circulate
as money. That is some of their liabilities, which circulate as money. As
such via the process of granting loans, commercial banks have the power to
create and destroy money.
According to Nnamocha (1999), “ the following services and products are
provided by commercial banks:
i. Transactors in the economy deposit their savings in commercial
banks. These can be in demand deposits, savings deposits and time
deposits
ii. Commercial banks pay cash in exchange for cheuqes drawn on
demand deposits. As such, they facilitate transaction in a modern
economy. You can use cheques drawn on demand deposit to pay
directly for transaction unlike time and savings deposits. Hence
demand deposits are more liquid than time and savings deposits.
iii. Commercial banks create money by making loans to investors. When
a bank makes loan, it increases the balance in demand deposit of the
person or institution receiving the loan as such it increases liability
against itself. In other words, this function of commercial banks is that
it links severs with investors in such a way as to satisfy the needs of
both category of transactors.
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iv. Commercial banks hold government securities, example, treasury bills
and such they serve as a medium via which government monetary
policy is effected.
v. The public obtains the desired amount of cash or currency from
commercial banks. This is possible by writing cheques on deposits
obtained from commercial banks.
vi. Commercial banks in some cases perform certain technical duties to
customers like economic advice, carrying outstanding orders like
regular payments for customers
vii. Individual commercial bank has its own known services and products
as is mentioned in chapter one of this study relating to Zenith bank,
Oceanic bank and First bank Nigeria (Nnamocha, 1999).
2.8 DIFFERENT ISSUES OF STANDARD COMPETITIVE LANDSCAPE IN THE GLOBAL BANKING INDUSTRY AND THEIR IMPACT ON THE DEVELOPMENT AND GROWTH OF NIGERIA BANKING INDUSTRY
Although many banking firms are recognizing the need to create and keep
up with changes in the delivery of financial products and services, they do
not necessarily have a wider view of how such changes needs to be
supported by advanced customer management and knowledge technology.
They also may not see its impact on area such as mergers and acquisition
strategies and new competitive environments in globalize markets. It should
be noted that technology and business strategies in the banking service
sector are now inseparably linked (Greenspan, 1991). In the past, new
technology may have been viewed as a threat by many in the banking sector
because it represented change. However, today the way in which banks
create values for their customers is becoming much more complex as
73
customers themselves become financially sophisticated and demand more
advanced products.
Fifty years ago, people would have been amazed that it is now possible to go
to a cash machine anywhere in the world and use a plastic card to get cash in
the local currency. Likewise the concept that a trader in Nigeria can trade
shares in Hongkong or London from the comfort of his desk by pressing the
keys on a keyboard of a computer would equally have been science fiction
(Kindleberger, (1969). The growing importance of technology to business
strategy in the financial service sector especially banking firms is leading
companies to explore new business models (Litan, 1987). Increasingly we
are seeing the development of extremely close partnership between the
suppliers sector and banking service firms. Banking firms are recognizing
their need to have access to the latest technology but, also wish to protect
themselves from technological risk. Equally, technology providers wish to
have access to financial service firms so that they can tap into business
expertise when developing their products (Pierce, 1991). In partnerships that
work, the financial service firms get access to potential competitive
advantage through advanced technologies, while being assured that the
supplier is sharing risk. Banks are faced with an ever-changing environment;
indeed, banks are having to deal with an increasing pace of change in the
competitive landscape in which they work, all of which requires some
collaboration between the business and Information Technologies (IT
strategies). The following are some key issues they face:-
* Increasing competition–there is a rapid rise in competitive pressures
from established institutions, from new competitors and from other
sectors.
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* A need to form new relationship to deliver the services customers
now require
* A strong impetus towards economies of scale through merger.
* A strong impetus towards increased economies of slope by selling
more product types and increasing customers “wallet” share.
* The development of international competitions and global banking.
* Increasing customer choice and mobility, making customer retention
harder to ensure.
* A need to develop strategies, channels and products that fit into an
increasingly customers led rather than sales –push environment.
Competition – Centralization of Delivery:- Banks are implementing new
techniques to strengthen their position in the market, which go beyond
squeezing costs, indeed, in true sense of the term reengineering as it was
originally conceived, many firms are simultaneously recreating themselves
with lower cost structures, but with greatly improved customer services
models and with new products types. They are able to work with lower
marging but simultaneously improve their value to the customer (White,
1991).
One of the biggest changes in recent years has been the seemingly
contradictory point that while many operations have been centralized they
have, in fact, improved their ability to make their services accessible to their
customers. Intuitively in the past, the concept of centralizing operations and
decision making while improving customer services and access would have
seemed impossible. While argument would be that the point of contact be
disenfranchised. It could deal with customer enquires, but would have to
75
defer to a central office for approving a loan thus slowing down customer
interactions and reducing services and sales levels, Fed Atlanta (1984).
This is no longer the case; the technology of delivering services from a
central point has not only developed, it has also become widely accepted by
the customer base as being a better way of interacting with financial service
firms like banks than using the branches.
According to Fieleke, (1977), “the key development in order of
development, in the retail financial market like banks have been:-
* Automatic teller machines.
* Telephone banking.
* Centralization of bank office functions.
* Electronic banking services.
* In-store supermarket banking kiosk branches.
* Kiosk-based multimedia terminals at off-branch sites.
* The return of the home –visiting financial salesmen, using
notebook technology.
* Internal banking.
* Integrated telephone electronic banking-mobile phone / PDA
services.
i. Competition from overseas: the potential for competition in many
commercial banks in Nigeria for overseas banking is a competitive
landmark. All the three commercial banks for this study namely.
First bank Nigeria, Zenith bank and Oceanic bank has correspondence banks
abroad. Ranging from Europe, America, Asia and African countries are the
presence of these banks.
76
ii. Competition from financial service companies increasing their
franchise space:- Obviously, one of the key forms of increasing competition
in the total financial services market place has been firms moving from one
sub-sector-into another. Almost all commercial banks in Nigeria has
subsidiaries in insurance, pension custodian, life assurance, brokers and
financial thrifts. All those cross-over to other financial space is a competitive
advantage in financial strength and robustness. The reasons for commercial
banking firms entering other parts of the financial services are quite straight
forward:-
* They already have a developed brand in financial services.
* They have knowledge of customer behaviour in buying financial
services.
* They have expertise in creating and managing financial products.
* They have distributed network.
* They have knowledge of the process involved in financial sales and
transactions.
2.9. DIVERSIFICATION OF KNOWLEDGE IN OPERATIONS AND SERVICES OF NIGERIA BANKING INDUSTRY; A BLUE OCEAN STRATEGY
Diversification of banking services and operations is a limitless resource and
valued strategies, which well distilled, experienced and master guru banker
will continuously harness to be on top in banking industry and to contribute
to building the economy of the host country. Banking industry diversified
resourcefulness is like Nigeria nation with rich natural endowments (on
massive Agricultural landscape, flourishing vegetation, oil deposit and high
human population. Nigeria economic dependence on oil is legendary and
77
worrisome as it ignores other rich natural resources it has. This now is
limiting the Nigeria GDP, per capita, standard of living, development and
growth of economic sectors. Likewise, banks’ activities when constrained to
limited or known (Red Ocean) operations and services will lead to limited
revenue, profit, expansion, economic contribution to society.
On the premise of diversification on banking activities, Ugwu (2010),
reported with various factors like regulatory requirements, prudential
standard, cost factors, performance requirement and best practices that
constrain banks from being all things to customers and institutional investors
and also force them to be disciplined in managing risk and profits, it
becomes difficult for the critical sectors of the economy to be properly
funded. The recent resolve by the Banker’s Committee to provide funding to
critical sectors of the economy in a bid to ensure sustained development in
the country by floating development bonds is laudable.
The communiqué of the Banker Committee meeting retreat held in Enugu in
August 2009 on the topic “The role of the Nigerian Financial System in
Economic Development.” The need for banks to finance critical sectors of
the Nigeria economy for sustainable economic development and growth was
the highlight of the retreat. Parts of the initiatives highlighted to facilitate the
actualization of the committee’s economic revitalization objective was the
need for them to engage state governments to identify key bank capital
projects that could be financed through issuance of development bonds. By
the resolution reached at the Bankers’ Committee national retreat, in Enugu
in August 2009, Nigerian banks plan to float development bonds to finance
infrastructure in critical areas such as power, agriculture, industries (small
78
and medium scale), transportation and education. On the significance of the
initiative, Malam Sanusi Lamido Sanusi who is the CBN governor
chairmaned the retreat and the Chief Executive Officers of banks
collectively emphasized the critical role financial institutions play in national
development, noting that unfortunately, the current structure of lending to
the Nigerian economy was such that the bulk of aggregate credit is
channeled mainly to financial market operations and oil traders to the
neglect of key aspects of the real economy such as power, agriculture,
transportation, industries and education. The Banker’s Committee also
resolved to revitalize the investment function of banks with focus on
packaging structured infrastructure finance deals, as well as, investing in
targeted capacity building for investment bankers.
The hallmark of this Bankers’ Committee retreat meeting centered on the
topic of this study, diversification of knowledge in services and operations
of Nigeria banks to rapid growth of the sector and development of Nigeria
critical economic sectors. No more restriction of banking knowledge in
service and operations to ‘fixed, current and savings’ deposits and others
that benefits the banks only. Interest now in banking services portfolio is on
the developmental economic values of the host country. The need for
Nigerian banking industry to assign roles and define the process of
implementation and monitory of the identified initiatives, as well as,
determine required involvement on the programme, including
partners/sectors, resource requirements, limiting factors, industry gaps-skills,
regulation and so on, and process for rectifying and encouraging
collaborative competition in the interest of long-term survival of banking
industry and country.
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According to a financial consultant, Raph Thomas in Ugwu (2010) citation,
“to salvage critical sectors of the economy, it should be noted that well-
capitalized banks have the opportunity to grow their loan portfolio without
adding capital; and growth in lending should be deployed to emerging
sectors in the economy, particularly small and medium-sized enterprises.
Such loan initiatives at this time would require creativity in lending,
infusions of private investors and credit guarantee and insurance
programmes, tax and other incentives provided by the public sector. These
measures should significantly expand economic activity and generate jobs
and economic growth.”
It is time for Nigerian banks to reduce expectations for the excessively high
return on invested capital that their owner/investors have enjoyed in recent
times, in fairness to the customers and reflective of the present economic
constraints. Notebooks represent the primary Mobiliser of funds and as the
main source of financing to support the national economic activities.
2.10. ROLE OF COMMERCIAL BANKS IN NATIONAL ECONOMIC AND INDUSTRIAL DEVELOPMENT
Commercial banks according to Novotel (2010) play an important and active
role in the economic development of a country. If the banking system of a
country is effective, and disciplined, it brings about rapid growth in the
various sectors of economy.
Wikipedia (2010) stresses, “that commercial banks are granting loans and
advances to all the industries based on their feasibility study report. Central
Bank of Nigeria issues out the prior sector to be concentrated based on that,
80
the commercial banks may decide about the industry to be financed more.
Apart from this, even the banks are giving guidance to start a business.
Expert advice also can be had from the banks.
2.11. SERVICE QUALITY DELIVERY KNOWLEDGE AND ITS IMPACT ON CUSTOMER’S SATISFACTION IN THE BANKING SECTOR
In any business-to-customer, satisfying a customer is the ultimate goal and
objective. More often than not, it can be quite an issue. This is perhaps due
to the fact that organization sometimes do not really understand what
actually goes on in a customer’s mind. As such this predicament has
provided a challenging task to most business conglomerates that places
strong emphasis on customers’ relationship. Jayaraman et al (2010) in their
quantitative research study on the relationship between service quality
dimensions and customer satisfaction assert, “assurance has positive
relationship but it has no significant effect on customer satisfaction.
Reliability has a negative relationship but it has no significant effect on
customer satisfaction. Tangibles have positive relationship and have
significant impact on customer satisfaction. Empathy has positive
relationship but it has no significant effect on customer satisfaction.
Responsiveness has positive relationship but no significant impact on
customers’ satisfaction. Here tangibles mean varieties or diversities of
banking services and operations offered to customers’ satisfaction.
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2.12. BACKGROUNDS, NATURE AND CONCEPT OF COMPETITIVE ADVANTAGE
Historically, 20th – Century multinational enterprises began primarily in
extractive industries, ranging from oil to bananas to copper. These
multinationals competed on the basis of their access to supplies of natural
resources and to substantial markets. By the advent of World War II many of
these advantages had been partially or completely competed away and thus
the firms were vulnerable to competition from other firms and to greater
regulation by governments (Grosse and Kujawa, 1992).
Analysis of the competitive advantages of large firms in the period after
World War II has focused on the ideas of barrier to entry. Bain (1956) define
those characteristics as arising from absolute cost advantages’ (such as
proprietary production techniques and control over limited resources by
established firms), from ‘product differentiation advantages (such as an
established brand name or a patented product) and from ‘economic of scale
(in areas such as production, advertising and purchasing). Studies of
multinational enterprises likewise have focused on barriers to entry. The
initial investigations (for example, Vemon (1966) and Kindleberger, (1969)
found that ‘proprietary technology is a fundamental basis for
competitiveness of many such firms. Many of the most successful U.S.
based multinational enterprises in the 1950s and 1960s produced high tech
products in such industries as pharmaceuticals (example Pftizer, Johnson
and Johnson and Merck), data processing (examples, IBM, Boroughs,
Honeywell), telecommunication (examples, ITT GTE), chemicals (examples
Dow, Dupont, Monsanto) and electronic instruments (examples, Eastman
Kodak, Texas instruments). The competitive advantage came from some
82
technology created or purchased by the firm that the firm was able to utilize
in production to generate better or less expensive products than those
produced by its competitors. For example, Dupont created distinctive
products such as nylon, rayon and more recently Kevlar; IBM was a leader
in moving data processing from electromechanical computations to
electronic processing; and Eastman Kodak created a higher equality paper
for photographs then its rivals (Caves, 1982).
Early analyses also focused on the marketing advantages possessed by
multinational enterprises (Vemon 1966 and Caves 1982). Particularly
important in this case is the firm’s ability to differentiate its product from
others. By establishing a brand or trade name, the firm may be able to attract
additional buyers due to name recognition and trust. Examples of industries
in which firms possess this type of advantage include electrical appliances
(examples, General Electric, Maytay, Sunbeam), health care products
(examples, Bristol Mayers, Colgate Palmolive, Procter and Gamble), foods
(examples Coca-Cola, Kraft, RIR- Nabisco), and pharmaceutical in thing
case, the advantage arises from the firms developing a reputation for high
quality products, good service after the product has been purchased and for
good value relative to competitors products. These characteristics become
identified with the brand or trade name, enabling the firm to sell more output
or charge higher prices than competitors.
More recent analysts have looked at multinational firms as holders of a
variety of such competitive assets, no one of which is necessary by itself: A
fairly extensive list of those advantages appears below:
83
Scale economies in production:
This exist when a firm is able to operate a production facility that attains
lower costs per unit at larger levels of output than the costs incurred by
competitors in production facilities that have lower output capacities. That
is, as the scale (volume) of production is increased by increasing the size of
the production facility, unit-cost can be decreased by increasing output, (this
does not mean that companies producing more of a product necessarily have
lower costs; such a result may also occur when some producers are
producing at quantities below their minimum cost level of output). Scale
economies in production are important in many industries, especially those
that are heavily capital intensive, such as the automotive, airframe
manufacturing, industrial chemical and oil industries. General Motors for
example is able to achieve substantially lower production costs for its cars
than Isuzu or Chrysler, each of which produces in smaller facilities and at
lower volume of output (Porter, 1990).
Scale economies in purchasing
This can be attained by firms that are able to buy inputs in large quantities
and thus reduce their unit costs. This competitive advantage is usually
available to large firms, which are able to purchase larger quantities than
their rivals. It also tends to arise for firms with more standardized production
as the selection of inputs becomes more predictable and larger stocks
become justifiable. By contracting to buy literally millions of Bounds of
beef on a regular basis, such companies as Burger King and McDonald’s
reduce their hamburger cost far below that of local, single –location
restaurants.
84
Scale economies in Financing
This exist for firms that are able to borrow large sums of funds, and thus can
obtain quantity discounts, IBM, because of its very large size (and also
because of its extremely good creditworthiness) can borrow at interest rates
similar to those paid by the largest commercial banks for their own funds. A
small computer manufacturer or component maker will pay far higher rates.
By borrowing in the Eurocurrency markets (which are restricted to fairly
large –scale transactions), IBM or another larger firm may find even lower
rates than those available to smaller firms (Grosse, 1984).
Scale economies in distribution
This arise when the firm is able to contract for shipping to several
destination and for larger quantities of products to serve its several markets.
The per unit cost of distributing products often falls when the selling firm
can contract for multiple shipments and high volumes (The firm may even
purchase its own distribution system if the cost of so doing is less than the
cost of contracting with outside distributors) (Grant, 1991).
Scale economic in advertising
May be attained when a firm sells products in several countries and can
standardize its promotion across countries. In industrial countries, adjusting
for language differences, such standardization can often be carried out and
advertising costs can thus be reduced. On the contrary, when products are
introduced into very different countries (example, less developed nations),
the promotion and even the product often need to be adapted to local
conditions, and these scale economies cannot be realized. Exon has used its
“put a tiger in your tank” promotional campaign successfully around the
world in the late 1980s. Beatrice Foods placed the company Logo on many
of its products around the world (as opposed to previous promotion that
85
downplayed the Beatrice connection among products with different brand
names).
Government Protection:
This is another source of competitive advantage. This type of advantage is
often ignored. Since it is based not on the firm’s activities in market, but
rather on the legal framework and negotiations with government regulatory
agencies and government customers. Nevertheless, managers should be
aware that in every country temporary or permanent protection from
competition may be obtained from the government. Whether it be operation
of the national telephone company (which AT and T monopolized in most of
the united states of America Until 1984) or establishment of an import-
replacing plant that receives tariff protections, the firm may obtained
exclusive rights or order protection from competitors by the host
government. Such protection precludes other firms from competing or
makes their entry and operations far less profitable than the protected firm’s
activities (Alchain, 1985).
The disadvantage of government protection is that it may be lost when the
government decides to alter the protection-for example, to create
competition or to assist another company and the company may not be able
to build or obtain another competitive advantage to replace the one lost. It
should be noted that government protection advantages arise from two
distinct kinds of relationship. First, the direct protection given to favored
firm in the form of tariffs or subsidies clearly can enable a firm to carve out
a successful competitive position. In addition, dealing with the government
as its supplier of products or services can generate a protected environment
86
for the firm, since government tends to stay with a reliable suppliers without
switching frequently.
Literally thousands of firms in the United State of America earn all or most
of their income from selling to the U.S.A government. Such relationship
tends to be fairly stable, and they are common in other countries as well. Human resource management
This has proved to be a very important advantage to Japanese firms
competing with U.S.A based competitors in recent years. When the firm’s
managers are able to create a working environment that stimulates
employees’ productivity, the firm can lower its unit costs and improve the
quality of the product. Countless stories have been told (example William
Ouchi Theory Z) about Japanese firm’s greater success of managing people
than their U.S rivals. Of course, many successful U.S firms have achieved
superior human resource management as well (Alchain, 1985).
Other competitive advantage areas especially for multinational firms in
international level are:
* Multinational marketing: Ability, which enables the firm to sell its
products or services in many national markets simultaneously.
* Multinational sourcing: Of production, which enables the firm to
minimize production costs by using facilities in low-cost countries.
* International diversification: Many multinational enterprises use
facilities in several countries to produce the same products for several
markets. That way, if a strike, war or just a machine breakdown
occurring in any one country, markets can be served from the other
production sites.
87
* Managerial Experience in several countries gives the firm the
advantage of know –how in dealing with business situation in
different countries.
2.13 RELATED RESEARCH STUDIES BY OTHER AUTHORS ON MULTIDIMENSIONAL KNOWLEDGE ACQUISITION
1. Multidimensional knowledge acquisition approach (Review of
Business Intelligence Approach to key) Journal of knowledge
management practice. Vol. 8 S1. Constructivity and the technology of
instruction by Thomas M. Duffy David H. Jonassen
2. Diagnostic Monitoring of Skill and Knowledge acquisition by
Norman Frederickson, Robert Glasser 1990. The contributors to
diagnostic monitory of skill and knowledge acquisition focus on two
beliefs that new kinds of tests are needed and that instruction and
learning can be improved by developing new assessment methods
3. Mohammed Koteeb (Chairman & CEO of PATH solutions) The
Institute of Islamic Banking and Finance (IIBF) of the international
Islamic University Malaysia was establishes in 2005 as one of the
research and post graduate institutes of the University. The institute
is unique as it bring together expertise from three different faculties
namely, the faculty of Economic and management Science, faculty of
revealed knowledge and Ahmed Ibrahim, Faculty of Laws, such a
diverse resource promotes multidimensional expertise in the area of
Islamic Banking and finance.
4. Multidimensional knowledge in banking and finance of Henry Davis
York provides sound technical excellence along commercial acumen.
88
5. Influence of the Strength and Behaviourial Factors on Effective
Knowledge Acquisition – A study of Korean New Product Alliance
by Ludwing Bstieler and Martin Hemmert.
89
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Calem, Paul (1985), The New Bank Deposit Markets, Good by to Regulation” Business Review Federal Reserve Kank of Philadelphia. November – December. Caves Richard (1982), Multinational Enterprises and Economic Analysis, Cambridge England. Cambridge University Press. Connock, S. and Vision, H.R (1991), Managing A Quality Workforce. Corrigan E. Gerald (1991), Blanking Progressive Change and Caution in Reforming the Financial System. Quarterly Review16 Federal Reserve Bank of New York. Dale, M and Iles, P. (1992), Assessing Management Skills London. (Kogan Page) David, S. Kidell and Richard Peterson (1987), Financial Institutions, Markets and Money. The Chicago, New York, London, Philadelphia. Dryden Press. Donald, H.L.L. (1976), Organization Developed Personnel Journal 55 Dornald Ball and Wendell Mcculloch (1993) International Business; Introduction and Essentials; United States of America. Von Hoffman Press. Dunnett, M.D. (1963), A modified Mode for Test Validation and Selection. Journal of Applied Psychology, 47(5) Eniter, Ugwu (2010), Divesification and Banker’s Committee Plan. Odili.net/news/source/2011/jan/19/25.htm. April 7th 2010 by 1pm. Federal Reserve Bank of Atlanta (1994) Economic Review March 1994. Fieleke Norman (1977), Key Issues in International Banking, Boston: A Conference Volume with good scripture material. Federal Reserve Bank of Boston. Fischer, F.E. (1967), Training in H.B Mynard (ed) Handbook of Business Administration New York. McGraw. Hill Book Company. Gilad, B. (2010) Blue Ocean Strategy. Amazon.com, Inc. USA. May 12, 2010; 3.pm
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Graham, H. T and Benneth, R. (1992), Human Resource Managemen, London. Pitman Publishing. Green, G.D (1994), Industrial Relation. London, Pitman Publishing. Greenspan, Alan (1991), Testimonies. Federal Reserve Bulletin 77. This Testimonies Presents The Fed Chairman’s Evaluation of Various Proposals for Reforming Deposit Insurance and Banking System. Grosse Robert (1981), The Theory of Foreign Direct Investment. University of South Carolina Essays in International Business, December. Grosse Robert (1984), Competitive Advantages and Multinational Enterprises. University of Miami Discussion paper in International Business, No 84.7th November. Grosse Robert (1985), “An imperfect competition theory of the MNE” Journal of international Business studies spring. Hennert, Jean Frencois (1982), The Multinational Enterprise: Ann Arbor Michigan University of Press. Henry Davis York (Multidimensional Banking Services) http://www.hdy.com.au/ou-service-finance/banking-finance.html. Hunt, J.W. (1986), Managing People At Work. London, Pitman Publishing. Jayaraman et al (2010), Service quality delivery and impact on customer satisfaction in banking sector. Journal of innovation, management and technology, 1(4), October 2010 ISSN: 2010 – 0248. John B Mccoy (2000), President and CEO of Bank One; Federal Research Bank of Chicago. Kare Edward (1991), Journal of Banking and Finance, 15( 2). Chicago. Kinddleberger, Charles (1969), Direct investment Abroad. Conn: New Haven. Yale University Press. Kirk, B.A et al (1992), Predicting Student Success in Graduate Business Courses. USA. California Management Review. 5.
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Kolb, D.A. and R. Fry (1975), Towards an Applied Theory of Experiential Learning. In C.L. Cooper (ed). Theories of Group Process. New York. John Willey. Lall Sanjaya (1980), Monopolistic Advantages and Foreign Involvement by U.S. Manufacturing Industry” Oxford Economic papers; March. Littan Robert (1987), What should Banks Do? An Excellent Discussion of the Appropriate Dominant for Banks. Washington. D.C. Brookings Institutions. Mike, Blaclcburn (2000), The Competitive Landscape. President of the Chartered Institute of Bankers U.S.A. Muchinsky, P.M. (1986), Personnel Selection Methods Organizational Psychology. New York. John Willey and Sons. Nnamocha, Patrick (1999), Money and Banking Unpublished Discussion Paper. Imo State University Owerri, Imo State, Nigeria. No 6. Novotel (2010), www.placebrand.com Ouchi William (1979), Theory Z. New York, Basic Books.
Pierce James (1991), The Future of Banking. New Haven. Porter Michael (1980), Competitive Advantage of Nation. New York. Free Press. Porter Michael (1990), “The Competitive Advantage of Nations”, Harvard Business Review; March April, p.77.
Robert Grosse and Duane Kujawa (1992), International Business Theory and Managerial Application: United States of America R.R Donnnel key and Sons company. Robert, Blake and S. Mouton (1965), Managerial Grid. Co. London.Gulf Publishing. Tobin James (1963), Commercial Bank As Create of Money, Homewood in Deane Carson (ed) Banking and money studies. Torrington and Hall (1991), Personnel Management London. Prentice-Hall, (2nd edition).
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VBM Net-Move Management planning and managing moves achieve zero downtime www.moveplan.com.uk June 8, 2010 by 2pm. Venon, Raymond (1966), International Investment Bank, International Trade in the Product Cycle. Quarterly Journal of Economics.
White Lawrence (1991), The S and L Debode. A Worthwhile Discussion by an economist who served as a director of the Federal Home Loan Bank Board. New York. Oxford University Press. Wikipedia – http/wiki.answers.com.what are the role of commercial banks in industrial development. June 5th 2010 by 11 am. Woodruffe, C. (1990), Assessment Center, London. Pitman. Woodward J. (1990) Industrial Organization: Theory and practice. Oxford. Oxford University press, 2nd edition.
Zenith Bank Plc 2010. July 22, 2010,. 12pm http://www.google.com/zenithbank.com First Bank Nigeria Plc 2010. July 25, 2010, 11am http://www. google.com/firstbanknigeria.com Oceanic Bank Plc 2010. July 26, 2010, 1pm http://www. google.com/oceanicbank.com
W. Chankim and Renee Mauborgen (2005) Blue Ocean Strategy. August
http://www.blueoceanstrategy.com. June 10th , 2010; 2pm
http://www.thinkers.com/bookextract/kimmauborgne.pdf. June 15th, 2010;
2pm
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CHAPTER THREE
RESEARCH METHODOLOGY This chapter particularly highlights the research methods used in the study.
It is concerned with the methods of data collection and tools employed. This
chapter contains sources of data, research design, , population of the study,
sample size determination method, sample size of the study, data analysis
techniques, description of research instrument, validation of the research
instrument, and reliability of the research instrument. 3.1 SOURCES OF DATA
In order to gather the needed data for the study, two main sources of data
have been used. These are primary and secondary data.
3.1.1 Primary Data
The most important primary data instrument the researcher used for the
study is questionnaire, which was personally administer to a cross section of
selected and knowledgeable staff of Zenith Bank Plc, First Bank Nigeria Plc
and Oceanic Bank Plc.
Additionally, such other data collected from unstructured observations of the
actual nature of services, operations, activities, technological applications,
personnel strength and forms, customer relationship and working
environment of the study banks made data collection more accurately
reliable, effective and interesting to the researcher. More information
gathered from the unstructured oral interview of some bank managers and
personal observations added to the high degree of authenticity of this
research work.
95
3.1.2 Secondary Data
Secondary data instrument used to generate some required information was
lifted from websites of Zenith bank Plc, First bank Nigeria Plc and Oceanic
bank, journals, magazines, quarterly publications and some scholarly works
of seasoned authors on the subject matter or related cases to the subject
matter were used as secondary data instruments.
3.2 RESEARCH DESIGN
Research design is the plan structure and strategy of investigation developed
so as to obtain answers to research questions and control variance
(Kerlinger, 1973). The plan refers to the overall scheme while the structure
is an operation of the variables. Strategy in the context of research design
refers to the methods to be used in gathering and analyzing the data.
Research design demands carefulness such that dependable and valid
answers to the questions imposed by the research are obtained. In this study,
being a non-experimental study demands non-experimental design. And the
non-experimental design employed in the study longitudinal survey (Time
series). This is a survey design where information is obtained on variables of
interest over a long period of time usually exceeding one year. The objective
of this design is to analyze changes in variables of interest overtime. And for
this study, trend studies on the performance of multidimensional knowledge
acquisition as a competitive advantage among banking (Zenith Bank, First
Bank and Oceanic Bank) firms in Nigeria for the past ten years 1999 -2009
was assessed. Judgemental sampling was deployed in selection of studied
banks (Zenith bank, First Bank Nigeria and Oceanic Bank) to ascertain the
banks that meet the criteria for selection of study centre as enshrined in
96
chapter one. While systematic sampling was used in sample size
determination as it is more precise, easy to execute without mistakes and
also saves considerable time.
3.3 POPULATION OF THE STUDY
The total population of this study is 1045 staff of the study banks. The
population of Zenith Bank Plc is 360. The population of First Bank Nigeria
Plc is 400.The population of Oceanic Bank Plc is 285.
3.4 SAMPLE SIZE DETERMINATION METHOD
The sample size determination method adopted in choosing the sample size
for this study was systematic sampling, and only for the senior staff/manager
cadre of the three selected banks. The sampling staff must be minimum of
ten (10) years working experience with the study banks and with seasoned
banking knowledge and experience.
Systematic sampling method is one of the known probability sampling. It
saves much effort and time and in some situations more efficient than the
simple random sampling. Systematic sampling is accomplished by creating n
zones of K from the population N which have been listed at randomly. K=
nN . To select a sample of n units, take a unit at random from the first K
zone and every Kth subsequent unit. The other units are identified by adding
the constant K to the starting random number j. The starting number must be
chosen between 1 and k. The sample size of n thus composed of the jth
(j+k)th [j+(n-1)k]th members in the list.
97
k k k k k J j+k j+2k j+3k …. J+(n-1)k
Source: Madu (1997)
j is the random number selected between 1 and k.. The random selection of
the first unit jth determines the whole sample. Cochran (1977) refers to this
as “every kth systematic sample’. For instance, if you have a population of
200 units and a sample size of 20 is desired, the selection of the 20 units
from a frame of 200 units will proceed as follows:
i. Determine the k zones; K = 1020200
nN
Where N = Population
n = Sample
k = Zone or determinator
ii. Between 1 and 10, select a number at random. Assume it to be 3.
iii. The first unit is the 3rd element in the list. To this first unit add 10
successively to select other 20 units which is 3, 3+(10), 3+2 (10), 3+3
(10)…. 3+19 (10). 3rd, 13th, 23rd, 33rd, 43rd , 53rd , 63rd , 73rd , 83rd , 93rd
,--- 193rd element in the list. Deduction from Cochran (1977) systematic sampling method;
i. Determination of Zenith Bank Plc Sample Size:
In Zenith Bank Plc, out of the population of 360 senior/manager staff located
in Zenith Bank Plc branches in River State, Imo State, Enugu State, only
sample size of 200 is needed.
To determine 200 samples needs,
N = 360
n = 200
i. Determine the K zones; K = N = 360
98
n 200 = 1.8
ii. Between 1 and 1.8, select a number at random. Assume it to be 1.5.
iii. The first unit is the 1.5th element in the list. To this first unit add 1.8
successively to select other 200 units; which is 1.5, 1.5 + (1.8), 1.5 + 2
(1.8), 1.5 + 3 (1.8), 1.5 + 4 (1.8), 1.5 + 5 (1.8), 1.5 + 6 (1.8), 1.5 + 7
(1.8), 1.5 + 8 (1.8), 1.5 + 9 (1.8), 1.5 + 10 (1.8), -------------- 1.5 + 199
(1.8) = 1.5, 3.3., 5.1, 6.9, 8.7, 10.5, 12.3, 14.1, 15.9, 17.7, 19.5, ------
----- 359.7.
ii. Determination of First Bank Nigeria Plc Sample Size:
Out of the population of 400 senior/manager staff of the bank located in the
three States of Nigeria namely: Imo State, River State, Enugu State, only
sample size of 200 is needed.
To determine the 200 sample size needed, we have:
N = 400
n = 200
i. Determine the K zones; K = N = 400 = 2
n 200
ii. Between 1 and 2, select a number at random. Assume it to be 1.
iii. The first unit is the 1st element in the list. To this first unit add 2
successfully to select other 200 units; which is, 1, 1 + (2), 1 + 2 (2), 1
+ 3 (2), 1 + 4 (2), 1 + 5 (2), 1 + 6 (2), 1 + 7 (2), 1 + 8 (2), 1 + 9 (2), 1
+ 10 (2), ------------ 1 + 199 (2) = 1, 3, 5, 7, 9, 11, 13, 15, 17, 19, 21,
------------ 399.
99
iii. Determination of Ocean Bank Plc Sample size:
Out of the population of 285 Senior staff or the bank located in three States
of Nigeria, namely; Imo State, River State, Enugu State, only sample size of
200 is needed.
To determine the 200 sample size needed, we have: N = 285 n = 200 i. Determine the K zones; K = N = 285 n = 200 ii. Between 1 and 1.4, select a number at random. Assume it to be 1.2
iii. The first unit is the 1.2 elements in the list. To this first unit add 1.4
successively to select other 200 units which is 1.2, 1.2 + (1.4), 1.2 + 2
(1.4), 1.2 + 3 (1.4), 1.2 + 4 (1.4), 1.2 + 5 (1.4), 1.2 + 6 (1.4), 1.2 + 7
(1.4), 1.2 + 8 (1.4), 1.2 + 9 (1.4), 1.2 + 10 (1.4) ------- 1.2 + 199 (1.4)
= 1.2, 2.6, 4, 5.4, 6.8, 8.2, 9.6, 11, 12.4, 13.8, 15.2, ------ 279.8
3.5 SAMPLE SIZE OF THE STUDY BANK
Owing to the very technical, educative and career oriented nature of this
study, a sample size of six hundred 600 was made which also limits the
sample to senior staff/managers cadre of the selected banks. Two hundred
(200) respondents from each of the three banks, located in three States in
Nigeria; namely, Imo, Enugu and Rivers States. The respondents have a
minimum of ten years bank working experience.
3.6 DATA ANALYSIS TECHNIQUES
In analyzing the data, the researcher employed a combination of methods
such as simple percentage and regression analysis. The essence is to know
how the collected data relate with the subject matter of this study.
= 1.4
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Percentage analysis is used for analyzing the responses from the
questionnaire, which were not tailored to testing the formulated hypotheses;
while, regression analysis is employed to analyze the validity of the
hypotheses stated in chapter one of this study.
Regression analysis is a statistical technique of a change in the value of one
variable on that of another variable. Regression is defined by Norman (1966)
as “the amount of change in (the value of) one variable associated with a
unit change in (the value of) another variable”.
The independent variable is that variable which can be set at desired values
(controlled) or allow to take values that can be observed (uncontrolled). Its
values are not determined by the model but, rather, predetermined. The
dependent variable, on the other hand is the variable whose values change in
response to changes in the values of the independent variables (Thomas,
1972). Its values are, therefore, determined within the model. Regression
analysis may be simple or multiple, linear or nonlinear. A linear regression
equation is customarily expressed as:
Y= a+b x+e (Koutsoyianis ,1977).
y = dependent variable say “net income from A maize farm”
x = independent variable say “size of farm
a= constant term
b = Regression coefficient
e = error term
Simple or linear regression involves one independent variable and one
dependent variable only. A multiple regression analysis equation is stated
thus:
y = a +b1x1 + b2x2 + ….. e1 Koutsoyianis (1977)
101
y = dependent variable say “demand”
a = constant
b1x1 = independent variables say “price”
b2x2 = independent variables say “income”
e = error term
(Using the economic issue on quantity demanded as a function of price and income)
Test of Significance
The null hypothesis in a regression analysis is that the independent variable
does not affect the dependent variable (Madu, 1997). In which case, the
coefficient of the independent variable is equal to zero when using statistical
formulated table.
Ho: = 0
Hi : 0
But in testing the significance of this work, P-value is used and it is opposite
of the statistical tabulated table. Using P-value; when P (0.01 or 0.05)
accept H0. If P < = 0.01 or 0.05; reject H0.
Let = 0.05
If P = 0.000 reject H0
P = 0.000 < 0.05 reject H0.
This hypothesis is tested at different levels of significance ( = 0.05 or 95%
and 0.01 or 99%).
Coefficient of Determination (R): In simple or linear regression, the
coefficient of determination (r) is the proportion of the variation in the
102
dependent variable (y) explained by variation in the independent variable (x)
(Olayemi, 1998).
3.7 DESCRIPTION OF RESEARCH INSTRUMENT The instrument of data collection in the study is primarily questionnaire. The
questionnaire contains 36 open-ended, closed-ended and multiple-choice questions. The
questions are generated from the objectives of the study and they are tailored to address
the research hypotheses. The questions generated the requisite responses
necessary for testing the hypotheses formulated in chapter one of this study.
Also contained are questions to be used in percentage analysis of data. The questionnaire is in two (2) sections. Section A introduces the
respondent’s personal data, while section B contained the main questions for
the bank staffs. The draft of the questionnaire was subjected to adequate
review, scrutiny and correction by the supervisor of this study before the
final print out.
3.8 VALIDATION OF THE RESARCH INSTRUMENT
In order for assessment to be sound, they must be free of bias and distortion.
Reliability and validity are two components that are important for defining
and measuring bias and distortion.
To ascertain the validity of the instrument, the researcher subjected the
instrument to content validity. This type of sampling validity concerns itself
with whether or not the content of an instrument adequately represents or
reflects the content of the population of the property under investigation.
Sampling validity essentially takes into consideration all the properties of
the object being measured. Sampling error is reduced the more items are
reflected in the measure (Unyimadu, 2005).
103
3.9 RELIABILITY OF THE RESEARCH INSTRUMENT
The reliability of the instrument was determined by a reliability test through
the use of pilot study (survey). The test-retest pilot study was done using
eighty (80) questionnaires distributed to the respondents in some selected
branches of the three banks namely Zenith Bank Plc, First Bank Nigeria Plc
and Oceanic Bank Plc in the three States of the study coverage namely River
State, Imo State and Enugu State. The respondents used for the test-retest
were mainly the Senior staff/Managers of the three (3) banks. The
questionnaires were administered twice to the same respondents in each of
the selected branches of the three banks for the pilot study. Out of the eighty
(80) questionnaires distributed for the pilot study, only 61 questionnaires
were completed and collected by the researcher. Using the Pearson
correlation coefficient as the statistical tool to evaluate the level of reliability
of the study instrument (questionnaire), the coefficient of reliability was
found to be high, r = 0.81, showing that there is consistency in the items of
the survey. Pearsont correlation coefficient
r = nxy - (x) (y)
nx2 - (x)2 ny2 - (y)2
Source: Olayemi (1998:34)
104
Determination of Coefficient of Reliability using Correlation Coefficient (r) Name of Bank Sampled
Banks by State (n)
Number of Distributed
Questionnaires (x)
Number of Collected
Questionnaires (Responsed) (y)
Xy X2 Y2
Zenith Bank Plc River Imo
Enugu
10 10 8
8 8 6
80 80 48
100 100 64
64 64 36
First Bank Nigeria Plc
River Imo
Enugu
8 10 8
6 10 6
48 100 48
64 100 64
36 100 36
Oceanic Bank Plc River Imo
Enugu
10 10 6
8 6 3
80 60 18
100 100 36
64 36 18
Total N = 9 x = 80 y = 61 xy = 562 x2 = 728 y2 = 445
Source: Field Survey
Pearson (product-moment) correlation coefficient formula:
r = nxy - (x).(y)
nx2 - (x)2 . n(y2) - (y)2
= 9 (562) - (80) (61)
9 (728) - (822) . 9 (445) - (612)
= 178
172 x 284
= 178
48848 = 178 = 0.81
221 The computed correlation coefficient is 0.81. The result indicated a
very strong positive relationship in the test-retest exercises (Kerlinger,
1973). This is the confirmation of the reliability and validity of the data
collection instrument.
105
REFERENCES Cochran, W.G. (1977), Sampling Techniques, New York. John Wiley and Sons. Madu F. N. (1997), “Research Methodology”, for Social Science and Business Studies. No 29 Isuochi Street, Uwani, Enugu, Nigeria. Associate press Kerlinger, F. (1973), “Foundations of Behaviour Science” UK. Holt Rimehart and Winston Inc. Koutsoyiannis, A. (1977), “Theory of Econometrics: An introductory Exposition of Econometric Methods the London. Macmillan Press Limited Norman, R. Draper, Harry, S. (1966), “Applied Regression Analysis, New York. John Wiley and sons Ins. Olayemi, J.K. (1998), “Element of Applied Econometrics”.No 15, Ago Ilortin street Mokola Ibadan Nigeria Elshanddai Global ventures Limited. Thomas, M. Little, Jackson, H. (1972), “Statistical Methods in Agricultural Research, University of California United State of America, Agricultural Extension programme. Unyimadu, S.O. (2005), Research Methods and Procedure. In social, management, Engineers and education sciences Ugbowo Benin City Nigeria Published by Harmony Books, A Division of Harmony Ventures. P.O. Box 10656.
106
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
This chapter tabulates and analyzes the data collected for the research study.
As was stated in sub-chapter 3.10 of this study, simple percentage will be
used in analyzing the data collected from some of the questions asked in the
questionnaire. The analysis was based on the four hundred and fifty eight
(458) questionnaires completed by the respondents and collected by the
researcher out of the (600) questionnaires distributed by the researcher. Each
of the analysis was tailored to strengthen or weaken the hypotheses of the
study as the case may be. The respondents comprised of 600 staff of the
three (3) studied banks (Zenith Bank Plc, First Bank Nigeria Plc and
Oceanic Bank Plc) located in three (3) States (River, Imo and Enugu) out of
36 States of Federal Republic of Nigeria.
For ease of analysis, each question was analyzed separately depending on its
level of contribution to the study.
Finally, regression analysis was used to test the hypotheses through the
leading questions in the questionnaire and their responses.
107
4.1. SIMPLE PERCENTAGE TABLE ANALYSIS
Question 4
What is your present education qualification?
Table 4:1
Education Qualification of Organizations Respondents
Respondents Option Table Name of Bank
State of Location
Responses Total Responses
Percentage Responses
Ph.D M.Sc/ MBA
B.Sc./ B.A.
OND/ NCE
Zenith
Bank Plc
River
Imo
Enugu
0
0
0
0
0
22
60
60
23
0
0
0
60
60
45
13.1
13.1
9.8
First
Bank
Nigeria
Plc
River
Imo
Enugu
0
0
0
5
37
30
40
38
15
0
0
0
45
75
45
9.8
16.4
9.8
Oceanic
Bank Plc
River
Imo
Enugu
0
0
0
1
10
23
58
35
0
1
0
0
60
45
23
13.1
9.8
5.0
Total 0 128 329 1 458 99.9
Approx. = 100
Source: Field survey November 2010. As is indicative from the above table, 0 out of the 458 respondents is Ph.D
certificate holder. 128 respondents are M.Sc./MBA certificate holder. 329
respondents are B.Sc/B.A. certificate. And 1 respondent has OND
certificate.
108
It is evidence from the above table that over 90% of the respondents are
graduates of various disciplines and working in different departments of the
three (3) banks located in Imo State, River State and Enugu State. This
makes the research more acceptable as the class of respondents are staff of
the selected banks who have good education background or foundation and
are so very knowledgeable to the response they make to the questionnaires
questions.
(Questions 7)
Please rate the quality of services your bank offers to customers on
International banking service standard.
Table 4:2
Quality of Banking Services your Bank Offers, to Customers.
Respondents Option Table Name of
Bank State of
Location Responses Total
Responses Percentage Responses
Very High
High No Quality
Very Low
Low
Zenith Bank Plc
River Imo Enugu
20 20 45
40 35 0
0 0 0
0 0 0
0 5 0
60 60 45
13.1 13.1 9.8
First Bank Nigeria Plc
River Imo Enugu
30 40 22
15 30 23
0 0 0
0 0 0
0 5 0
45 75 45
9.8 16.4 9.8
Oceanic Bank Plc
River Imo Enugu
30 15 10
30 25 10
0 0 0
0 0 0
0 5 3
60 45 23
13.1 9.8 5.0
Total 232 208 0 0 18 458 99.9
Approx. = 100
Source: Field survey November, 2000.
109
From the above table 232 or 50.7% responses affirms ‘very high’ quality
banking services offer to customers. 208 or 45.1% accepted ‘high’ quality
banking services offer to customers, while 18 or 3.1% bankers agreed
offering low quality banking services to customer compare to international
standard quality banking services. Analysis from the above table shows more Nigerian bankers accepted
offering quality banking services to their customers comparable to
international standard banking practices.
(Question 8)
Please rate your organization banking technologies on international
standard level.
Table 4:3
Quality of Banking Technologies.
Respondents Option Table Name of
Bank State of
Location Responses Total
Responses Percentage Responses
Very High
High No Quality
Very Low
Low
Zenith Bank Plc
River Imo Enugu
10 40 15
40 20 30
10 0 0
0 0 0
0 0 0
60 60 45
13.1 13.1 9.8
First Bank Nigeria Plc
River Imo Enugu
22 40 25
23 30 20
0 5 0
0 0 0
0 0 0
45 75 45
9.8 16.4 9.8
Oceanic Bank Plc
River Imo Enugu
15 10 0
25 20 13
20 15 10
0 0 0
0 0 0
60 45 23
13.1 9.8 5.0
Total 177 221 60 0 0 458 99.9
Approx. = 100
Source: Field survey, November, 2010.
110
The table above show 177 or 38.6% of the respondents rated their bank
technology very high standard compare to international banking
technological standard. 221 or 48.3% rated their bank technological standard
high compared to international bank technological standard. 60 or 13.1% of
the respondents rated their bank technological standard as just being
standard compare to international bank technological standard.
None of the respondents rated their banks low or very low in standard of
international bank technology.
(Question 13)
Do you have multidimensional knowledge in banking services and
operation?
Table 4:4
Multidimensional Knowledge in Banking Services
and Operation of your Bank
Respondents Option Table
Name of Bank State of Location
Responses Total Responses
Percentage Responses Yes No
Zenith Bank Plc River Imo Enugu
53 42 45
7 18 0
60 60 45
13.1 13.1 9.8
First Bank Nigeria Plc
River Imo Enugu
39 70 45
6 5 0
45 75 45
9.8 16.4 9.8
Oceanic Bank Plc
River Imo Enugu
43 45 17
17 0 23
60 45 23
13.1 9.8 5.0
Total 399 59 458 99.9 or 100
Source: Field survey, November, 2010.
111
399 or 87.1% of the respondents accepted their banks offer multidimensional
knowledge in banking services and operations. While 59 or 12.9% did not
accept the knowledge of multidimensional knowledge in banking services
and operations of their banks.
(Question 18)
What is (are) the benefit(s) of multidimensional knowledge acquisition
in the international standard rating of your bank?
Table 4:5.
Benefit of High Rating in International Banking
Services and Operations, an impact of
multidimensional knowledge acquisition.
Respondents Option Table Name of
Bank State
of Location
Responses Total Responses
Percentage Responses
Financial Benefit
only
Financial and customer benefits
Customer benefit
None of the
above
Zenith
Bank Plc
River
Imo
Enugu
0
0
0
60
60
45
0
0
0
0
0
0
60
60
45
13.1
13.1
9.8
First
Bank
Nigeria
Plc
River
Imo
Enugu
0
0
0
45
75
45
0
0
0
0
0
0
45
75
45
9.8
16.4
9.8
Oceanic
Bank Plc
River
Imo
Enugu
0
0
0
60
45
23
0
0
0
0
0
0
60
45
23
13.1
9.8
5.0
Total 0 458 0 0 458 99.9 or 100
Source: Field survey, November, 2010.
112
The above table indicated 458 or 100% of the respondents accepted financial
and customer benefits from their high rating in international banking
services and operations. None of the respondents accepted only financial
benefit, customer benefit and none of the above as their benefit for high
rating in international banking services and operations.
(Question 20)
Is the value of customer services provided by your bank the same ten
(10) years ago?
Table 4:6
Comparison of Value of Customer Services Now and Ten Years Ago. Respondents Option Table
Name of Bank
State of Location
Responses Total Responses
Percentage Responses Yes No
Zenith Bank Plc
River Imo Enugu
0 9 0
60 51 45
60 60 45
13.1 13.1 9.8
First Bank Nigeria Plc
River Imo Enugu
0 6 0
45 69 45
45 75 45
9.8 16.4 9.8
Oceanic Bank Plc
River Imo Enugu
8 5 5
52 40 18
60 45 23
13.1 9.8 5.0
Total 33 425 458 99.9 or 100 Source: Field survey, November, 2010. The above table analyze 33 or 7.2% of the respondents believed that the
value of customer services provided by bank today is the same ten (10) years
ago. 425 or 92.8% respondents said the value of customer services provided
by banks is not the same ten (10) years ago.
113
(Question 22) As a banker in the millennium Internet world, is the acquisition of diversified knowledge in banking compatible with the quality of services offer to the satisfaction of your customer?
Table 4:7 Customer’s Satisfaction with Millennium Banking
Services and Operations, by diversified banking knowledge Respondents Option Table
Name of Bank
State of Location
Responses Total Responses
Percentage Responses Yes No
Zenith Bank Plc
River Imo Enugu
60 60 45
0 0 0
60 60 45
13.1 13.1 9.8
First Bank Nigeria Plc
River Imo Enugu
45 75 45
0 0 0
45 75 45
9.8 16.4 9.8
Oceanic Bank Plc
River Imo Enugu
51 45 16
9 0 7
60 45 23
13.1 9.8 5.0
Total 442 16 458 99.9 or 100
Source: Field survey, November, 2010.
Table 4:7 above indicated 442 or 96.5% of the respondents acceptance of
internet services offers better customers’ satisfactory services. While 16 or
3.5% the respondents did not accept Internet banking services offers better
customers’ satisfactory services.
114
(Question 28) Has an acquisition of diversified knowledge in banking by Nigerian
banks of positive financial impact on Nigerian industrial sector?
Table 4:8 Impact of diversified Knowledge acquisition by Nigerian
Banks on Industrial funding Respondents Option Table
Name of Bank
State of Location
Responses Total Responses
Percentage Responses Yes No
Zenith Bank
Plc
River
Imo
Enugu
53
60
45
7
0
0
60
60
45
13.1
13.1
9.8
First Bank
Nigeria Plc
River
Imo
Enugu
45
65
45
0
10
0
45
75
45
9.8
16.4
9.8
Oceanic
Bank Plc
River
Imo
Enugu
54
40
18
6
5
5
60
45
23
13.1
9.8
5.0
Total 425 33 458 99.9 or 100
Source: Field survey, November, 2010.
About 425 or 92.8% respondents from the above table said,
“multidimensional knowledge in banking services has positive impact on
Nigeria industrial sector development. 33 or 7.2% of the respondents did not
believe multidimensional knowledge in banking services will positively
impact on the development of industrial sector of Nigeria econmy
115
(Question 30)
Is the rate of the Nigerian Banks financial contribution to industrial
sector growth determined by diversified knowledge in banking?
Table 4:9 Financing of Small, Medium and Large Industry Development, a
Multidimensional Banking Services. Respondents Option Table
Name of
Bank
State
of Location
Responses Total
Responses
Percentage
Responses Yes No
Zenith Bank
Plc
River
Imo
Enugu
52
44
40
8
16
5
60
60
45
13.1
13.1
9.8
First Bank
Nigeria Plc
River
Imo
Enugu
42
75
45
3
0
0
45
75
45
9.8
16.4
9.8
Oceanic
Bank Plc
River
Imo
Enugu
56
33
23
4
12
0
60
45
23
13.1
9.8
5.0
Total 410 48 458 99.9 or 100
Source: Field survey, November, 2010. Analysis of the above table shows 410 or 89.5% of the respondents agreed
that financing of small, medium and large scale industries growth and
development are determined by diversified knowledge acquisition in
banking. While 48 or 10.5% did not agree that financing of small, medium
and large scale industries growth and development are determined by
diversified knowledge acquisition in banking.
116
(Question 32)
Financial support to agricultural sector commercialization in Nigeria is
enhanced by Multidimensional knowledge acquisition of Nigerian
Banks.
Table 4:10 Multidimensional Knowledge in Banking Impact On
Growth of Agricultural Sector
Respondents Option Table
Name of Bank
State of Location
Responses Total Responses
Percentage Responses Yes No
Zenith Bank
Plc
River
Imo
Enugu
48
60
45
12
0
0
60
60
45
13.1
13.1
9.8
First Bank
Nigeria Plc
River
Imo
Enugu
40
75
45
5
0
0
45
75
45
9.8
16.4
9.8
Oceanic
Bank Plc
River
Imo
Enugu
54
39
23
6
6
0
60
45
23
13.1
9.8
5.0
Total 429 29 458 99.9 or 100
Source: Field survey, November, 2010. From the above table, 429 or 93.7% of the respondents accepted or said yes
to enhancement of multidimensional knowledge in banking on the financing
and growth of agricultural sector of Nigeria economy. While 29 or 6.3%
respondents did not accept that enhancement multidimensional knowledge in
banking will impact positively on financing and growth of agricultural sector
of Nigeria economy.
117
(Question 35)
Can the degree of social responsibility services of Nigerian Banks be
facilitated by acquisition of Multidimensional banking knowledge?
Table 4:11 Social Responsibility, a Multidimensional Knowledge
Acquisition in Banking.
Respondents Option Table
Name of Bank
State of Location
Responses Total Responses
Percentage Responses Yes No
Zenith Bank
Plc
River
Imo
Enugu
51
60
45
9
0
0
60
60
45
13.1
13.1
9.8
First Bank
Nigeria Plc
River
Imo
Enugu
40
63
45
5
12
0
45
75
45
9.8
16.4
9.8
Oceanic
Bank Plc
River
Imo
Enugu
40
39
17
20
6
6
60
45
23
13.1
9.8
5.0
Total 400 58 458 99.9 or 100
Source: Field survey, November, 2010.
Analysis of the above table shows that 400 or 87.3% of the respondents
affirmed that social responsibility is facilitated by multidimensional
knowledge in banking services. 58 or 12.7% of the respondents did not
affirm social responsibility is facilitated by multidimensional knowledge in
banking services.
118
4.2. TESTING OF HYPOTHESES
Testing Hypothesis One (HO1)
The table 4.12 below summarizes the data necessary for testing the first null
hypothesis, which states that “level of improvement in international banking
standard performance rating is not greatly enhanced by multidimensional
knowledge acquisition in banking among Nigerian banks”.
Table 4:12 (Question 16 & 17)
Respondents Options Table
Name of
Bank
State
of Location
Responses Total
Responses Plus Minus
Zenith Bank Plc
River Imo Enugu
60 60 45
0 0 0
60 60 45
First Bank Nigeria Plc
River Imo Enugu
45 75 45
0 0 0
45 75 45
Oceanic Bank Plc
River Imo Enugu
60 45 23
0 0 0
60 45 23
Total 458 0 458 Source: Field survey November, 2010.
Computer software SPSS 15 was used for the analysis using the data in table 4.12.
As stated in 3.9, the data analysis technique used in testing the hypotheses is
regression analysis. For linear regression
y = a + bx + e. For multiple regression
y = a + b1x1 + b2 x2 + b3x3 …… + ei
119
P – value is used in testing the significance of the study. When P ≥
99% or 95% 0.01 0.05
If P < (0.01 or 0.05) reject Ho.
Let = 0.01
If P = 0.000
P = 0.000 < 0.01, reject Ho.
From the computer generated analysis tables below,
Model Description
Dependent Variable RES
Independent variables 1 2 3 4
E O R Z
Weight Source Power Value
Means -2.000
Model: MOD_1
Model Summary
Multiple R .763
R. Square .582
Adjusted R Square .578
Std. Error of the Estimate 8.378
Log-likelihood Function value -1620.877
Accept Ho;
120
ANOVA
Sum of Squares
df Mean square
F Sig.
Regression 44218.803 4 11054.701 157.513 .000
Residual 31792.813 453 70.183
Total 76011.616 457
Coefficient
Unstandardized Coefficient
Standardized Coefficient
B Std. Error Beta Std. Error t Sig.
(Constant)
E
O
R
Z
66.156
-22.371
-11.620
-5.202
-2.254
.788
1.007
1.000
.912
.926
-.749
-.405
-.194
-.084
.034
.035
.034
.035
83.984
-22.215
-11.619
-5.703
-2.434
.000
.000
.000
.000
.015
(i) The regression function or line is
y= a + b1x1 + b2x2 + b3Z1 + b4Z2 + Є, we have
Contribution = 66.156 – 22.371 - 11.620 –5.202 – 2.254
Interpretation: Level of improvement in international banking standard
performance rating is related to the multidimensional knowledge
acquisition in banking among Nigerian bank. This means, if
multidimensional knowledge acquisition is upgraded in Nigeria banks,
there will be improvement in the rating of Nigeria banks in international
standard performance rate. The need to enhance banking diversified
121
knowledge is necessary to place Nigeria banks on top in performance in
global banking industry.
(ii) Coefficient of determination R = 0.763. Interpretation: 0.763 or
76.3% international standard performance rating of bank is
assessed by multidimensional knowledge acquisition, it is a
measure of goodness of fit.
(iii) Mse or Mean square error = 70.183.
(iv) Test of significance: Having stated that P-value will be used in
significance testing. From the above computer generated table, P
= 0.000 at = 0.01.
Therefore; P = 0.000 < 0.01, reject H01 and accept HA1 which states, “level
of improvement in international banking standard performance rating is
greatly enhanced by multidimensional knowledge acquisition among
Nigerian banks.
Testing hypotheses two (H02)
Table 4:13 summarizes the data necessary for testing the second null
hypothesis of the study which states “Diversified banking knowledge
acquired by Nigerian banks is not compatible with the services provided to
the satisfaction of customers”.
122
Table 4:13 (Questions 19)
Respondents Options Table Name
of Bank State
of Location
Responses Total Responses
Very high compatibility
High
compatibility
No compatibility
Very low compatibility
Low compatibility
Zenith Bank Plc
River Imo Enugu
60 60 45
0 0 0
0 0 0
0 0 0
0 0 0
60 60 45
First Bank Nigeria Plc
River Imo Enugu
45 75 45
0 0 0
0 0 0
0 0 0
0 0 0
45 75 45
Oceanic Bank Plc
River Imo Enugu
60 45 23
0 0 0
0 0 0
0 0 0
0 0 0
60 45 23
Total 458 0 0 0 0 458
Source: Field survey November, 2010
From the data in table 4:13, a computer statistical software SPSS 15
processed and did the final analysis. Simple Linear Regression Technique is
used. P-values is used in testing the significance of the study. When P ≥
(0.01 or 0.05) accept Hoi if P < (0.01 or 0.05) reject Ho.
Let = 0.05 and P = 0.000
P = 0.000 < 0.05, reject Ho.
From the computer generated analysis tables below,
123
Model Description Dependent Variable RESP 13 Independent Variables
1 2
Banks 13 States 13
Weight Source Power Value
Resp 13 -.500
Model: MOD_1.
Model Summary
Multiple R .456
R. Square .208
Adjusted R Square -.056
Std. Error of the Estimate 38.724
Log-likelihood Function value -35.438
ANOVA
Sum of Squares
df
Mean square
F
Sig.
Regression 2366.046 2 1183.023 .789 .496
Residual 8997.272 6 1499.545
Total 11363.319 8
124
Coefficient
Unstandardized Coefficients
Standardized Coefficients
B Std. Error Beta Std. Error t Sig.
(Constant)
Banks 13
States 13
38.780
-.819
7.648
17.641
5.821
6.112
-.051
-.455
.363
.363
2.198
-.141
1.251
.070
.893
.257
(i) The regression function or line is
y= bo + bix.
Contribution = 38.780 – 0.819 + 7.648 Responses
Interpretation: Diversified banking knowledge acquired by Nigerian
banks is directly related to the services provided to the satisfaction of their
customers. It means, the level or value of satisfied customers’ services
offered by Nigerian banks is determined by the portfolio of banking
knowledge the Nigerian banks possessed or acquired.
(ii) Coefficient of determination R = 0.456 Interpretation: 0.456 or
45.6% diversified banking knowledge acquired by Nigerian banks is
compatible with the services provided to the satisfaction of customers.
(iii) Mse or Mean square error = 1499.545.
(iv) Test of significance: Having stated that P-value will be used in testing
the significance of the study, from the above computer generated
table, P = 0.496 at = 0.05.
125
Therefore; P = 0.496 > 0.05, accept Ho and reject HA. HO2 is accepted, which
states, “Diversified knowledge acquisition in banking is not compatible with
the services provided to the satisfaction of Nigerian banks’ customers.
Testing hypothesis three (H03)
The table 4.14 summarizes the data necessary for testing the third null
hypothesis, which states, “Adequate multidimensional knowledge
acquisition has no impact in financial strength, robustness and
competitiveness among Nigerian banks”.
Table 4.14 (Question 25 and 26)
Respondents Option Table
Name of Bank
State of Location
Responses Total Responses Yes No
Zenith Bank Plc
River Imo Enugu
58 55 45
2 5 0
60 60 45
First Bank Nigeria Plc
River Imo Enugu
45 75 41
0 0 4
45 75 45
Oceanic Bank Plc
River Imo Enugu
51 45 23
9 0 0
60 45 23
Total 438 20 458
Source: Field survey, November, 2010.
Using the data in table 4.14, computer software SPSS 15 is employed in data
analysis. Data analysis technique used in testing the hypothesis is regression
analysis. P – value is used in testing the significance of the study. When P
126
(0.01 or 0.05) accept Ho; if P < (0.010 or 0.05) reject Ho. Let = 0.05 and P
= 0.000.
P = 0.000 < 0.05, reject Ho.
From the computer generated analysis tables below,
Model Summary
Multiple R .949
R. Square .901
Adjusted R Square .880
Std. Error of the Estimate 11.116
Log-likelihood Function value -60.653
ANOVA
Sum of Squares
df Mean square
F Sig.
Regression 15711.356 3 5237.119 42.384 .000
Residual 1729.889 14 123.563
Total 17441.244 17
Coefficient
Unstandardized Coefficient
Standardized Coefficient
B Std. Error Beta Std. Error t Sig.
(Constant)
Bank14
State14
RESP14
89.644
.300
2.433
-46.444
9.555
2.029
2.029
4.143
.012
.101
-.944
.084
.084
.084
9.382
.148
1.199
-11.211
.000
.885
.250
.000
127
(i) The regression function or line is
y = a + b1x1 b2x2 + b3x3 + b4x4 + e
Contribution = 89.644 + 0.3 + 2.433 – 46.444.
This is a multiple linear regression line.
Interpretation: Adequate multidimensional knowledge acquisition has
relationship with the financial strength, robustness, and competitiveness in
Nigerian banks. This means acquisition of vast and valued knowledge in
banking will position Nigerian banks on the ground of financial giant in
strength, robustness and competitiveness.
(ii) Coefficient of determination R = 0.949.
Interpretation: 0.949 or 94.9% adequate multidimensional
knowledge acquired by banks has positive impact on the financial
strength, robustness and competitiveness of a bank in Nigerian
banking industry.
(iii) Mse or Mean square error = 123.563
(iv) Test of significance: Having stated that P – value will be used in
significance testing. From the above computer generated table, P = 0.000 at
= 0.05.
Therefore, P = 0.000 < 0.05, reject Ho and accept HA. Adequate
multidimensional knowledge acquisition has positive impact on financial
strength, robustness and competitiveness among Nigerian banks.
128
Testing hypothesis four (HO4)
Table 4.15 summarizes the data necessary for testing the fourth hypothesis
of the study which states, “Acquisition of diversified banking knowledge in
Nigerian commercial bank firms does not have any significant rate of
financial support in Nigeria industrial sector growth and development”.
Table 4.15 (Question 31)
Respondents Options Table Name
of Bank State
of Location
Responses Total Responses
Very high contribution
High
contribution
No contribution
Very low contribution
Low contribution
Zenith Bank Plc
River Imo Enugu
7 0 0
30 45 37
0 0 0
0 0 0
23 15 8
60 60 45
First Bank Nigeria Plc
River Imo Enugu
30 23 37
15 52 8
0 0 0
0 0 0
0 0 0
45 75 45
Oceanic Bank Plc
River Imo Enugu
15 15 0
37 30 23
0 0 0
0 0 0
8 0 0
60 45 23
Total 127 277 0 0 54 458
Source: Field survey November, 2010
From the data in table 4.15, a computer software SPSS 15 processed and
analyzed the responses. Simple linear regression technique was used. P-
value is used in testing the significance of the study. When P (0.01 or
129
0.05) accept Ho; if p < (0.01 or 0.05) reject Ho. Let = 0.05 and P =
0.000.
P = 0.000 < 0.05; reject Ho.
From the computer generated analysis tables below
Model Description
Dependent Variable OUTCO ME15
Independent
Variables
1
2
3
4
BANK15
STATE15
RESP15
RESP15
Weight Source Power Value
RESP12 -2.000
Model: MOD_2.
Model Summary
Multiple R .644
R. Square .414
Adjusted R Square .338
Std. Error of the Estimate 26.732
Log-likelihood Function value -108.904
130
ANOVA
Sum of Squares
df Mean square
F Sig.
Regression 11632.123 3 3877.374 5.426 .006
Residual 16436.202 23 714.617
Total 28068.325 26
Coefficient
Unstandardized Coefficient
Standardized Coefficient
B Std. Error Beta Std. Error t Sig.
(Constant)
BANK15
STATE15
RESP15
28.500
5.702
3.310
-12.781
13.055
2.917
2.917
3.824
.312
.181
-.533
.160
.160
.160
2.183
1.955
1.135
-3.342
.040
.063
.268
.003
(i) The regression function or line is
y = a + b1x1 b2x2 + b3x3 + b4x4 + e
Contribution = 28.5 +5.702 + 3.310 - 12.781
Interpretation: Acquisition of diversified banking knowledge in Nigeria
commercial banks is significantly related to the rate of financial support in
Nigeria industrial sector growth and development. This means the broader
the knowledge of banking services and operations a bank has, the more rate
of financial support it offers for growth and development of industrial sector
in Nigeria economy.
131
(ii) Coefficient of determination R = 0.644.
Interpretation: 0.644 or 64.4% Diversified banking knowledge
acquired by Nigerian banking firms will contribute positively to the
rate of financial support in Nigeria industrial sector growth and
development.
(iii) Mse or Mean square error = 714.617
(iv) Test of significance: Having stated that P-value will be used in testing
the significance of the study from the above computer generated table;
P = 0.006 at = 0.05.
Therefore; P = 0.006 < 0.05; reject Ho and accept HA which states,
“Acquisition of diversified banking knowledge in Nigeria commercial banks
have contribution to the rate of financial support in Nigeria industrial sector
growth and development.
Testing hypothesis five (H05)
The table 4.16 below summarizes the data necessary for testing the fifth null
hypothesis, which states “the level of financial support of Nigerian banks to
commercialization of agricultural sector of Nigerian economy is not greatly
enhanced by acquisition of multidimensional knowledge in banking”.
132
Table 4.16 (Question 33)
Respondents Options Table Name
of Bank State
of Location
Responses Total Responses
Very high enhancement
High
enhancement
No enhancement
Very low enhancement
Low enhancement
Zenith Bank Plc
River Imo Enugu
22 8
38
23 52 7
0 0 0
0 0 0
15 0 0
60 60 45
First Bank Nigeria Plc
River Imo Enugu
23 45 30
22 30 15
0 0 0
0 0 0
0 0 0
45 75 45
Oceanic Bank Plc
River Imo Enugu
30 15 8
30 30 15
0 0 0
0 0 0
0 0 0
60 45 23
Total 219 224 0 0 15 458
Source: Field survey November, 2010
Using the data in the table 4.16, computer software SPSS 15 is employed in
data analysis. Data analysis techniques used in testing the hypothesis is
regression analysis.
P-value is used in testing the significance of the study. When P
(0.01 or 0.05) reject Ho; Let = 0.01 and P = 0.000.
P = 0.000 < 0.01; reject Ho.
From the computer generated analysis tables below
133
Model Description
Dependent Variable OUTCO ME16
Independent
Variables
1
2
3
BANK16
RESP16
STATE16
Weight Source Power Value
RESP12 .500
Model: MOD_3.
Using the data in the table 4.16, computer software SPSS 15 is employed in
data analysis. Data analysis techniques used in testing the hypothesis is
regression analysis.
P-value is used in testing the significance of the study. When P
(0.01 or 0.05) reject Ho; Let = 0.01 and P = 0.000.
P = 0.000 < 0.01; reject Ho.
From the computer generated analysis tables below
Model Description
Dependent Variable OUTCO ME16
Independent
Variables
1
2
3
BANK16
RESP16
STATE16
Weight Source Power Value
RESP12 .500
Model: MOD_3.
134
Model Summary
Multiple R .657
R. Square .432
Adjusted R Square .358
Std. Error of the Estimate 10.646
Log-likelihood Function value -104.203
ANOVA
Sum of Squares
df Mean square
F Sig.
Regression 1984.032 3 661.344 5.835 .004
Residual 2606.807 23 113.339
Total 4590.839 26
Coefficient
Unstandardized Coefficient
Standardized Coefficient
B Std. Error Beta Std. Error t Sig.
(Constant)
BANK16
RESP16
STATE16
33.799
-.142
-11.580
3.286
9.967
2.876
2.876
2.898
-.008
-.633
.178
.157
.157
.157
3.391
-.049
-4.027
1.134
.003
.961
.001
.269
(i) The regression function or line is
y = a + b1x1 b2x2 + b3x3 + b4x4 + e
135
Contribution = 33.799 – 0.142 – 11.580 + 3.286.
Interpretation: Level of financial support in Nigeria banks to
commercialization of Agricultural sector of Nigeria economy is related to
acquisition of multidimensional knowledge in banking. This means, if
multidimensional knowledge acquisition in banking oppression and services
is improved, it will positively reflect in the level financial support in
agricultural sector of Nigeria economy by Nigerian banks.
(ii) Coefficient of determination R = 0.657.
Interpretation: 0.657 or 65.7% level of financial support of Nigerian
banks to commercialization of Agricultural sectors of Nigerian
economy is greatly enhanced by acquisition of multidimensional
knowledge in banking. This is a measure of goodness of fit.
(iii) Mse or Mean square error = 13.339.
(iv) Test of significance: Having stated that p-value will be used in
significance testing. From the above computer generated table;
p = 0.000 at = 0.01.
Therefore; p = 0.000 < 0.01; reject Ho; and accept HA which states, “The
level of financial support in Nigeria banks to commercialization of
agricultural sector of Nigeria economy is greatly enhanced by acquisition of
multidimensional knowledge in banking”.
Testing hypothesis six (HO6)
Table 4.17 summarizes the data necessary for testing the sixth null
hypothesis of the study which states “social infrastructural development of
136
Nigerian banking firms is not greatly enhanced by multidimensional banking
knowledge acquired by Nigerian banking firms”.
Table 4.17 (Question 36)
Respondents Options Table Name
of Bank State
of Location
Responses Total Responses
Infrastructure building
Scholarship
& education
centre
Health facilities
Youths development
scheme
All of the above
Zenith Bank Plc
River Imo Enugu
8 7
15
0 53 23
0 0 7
0 0 0
52 0 0
60 60 45
First Bank Nigeria Plc
River Imo Enugu
15 30 15
30 45 22
0 0 8
0 0 0
0 0 0
45 75 45
Oceanic Bank Plc
River Imo Enugu
30 0 0
15 15 7
0 0 0
15 30 16
0 0 0
60 45 23
Total 120 210 15 61 52 458
Source: Field survey November, 2010
From the data in table 4.17, a computer statistical software SPSS 15
processed and did the final analysis. Simple linear regression technique was
used. P. Value is used in testing the significance of the study. When P
(0.01 or 0.05) reject Ho; if P < (0.01 or 0.05) reject Ho. Let = 0.05 and
P = 0.000.
P = 0.000 < 0.05; reject Ho.
From the computer generated analysis tables below
137
Model Description
Dependent Variable OUTCO ME17
Independent Variables
1 2
BANK17 RESP17
Weight Source Power Value
STATE17 1.500
Model: MOD_4.
Model Summary
Multiple R .394
R. Square .155
Adjusted R Square .115
Std. Error of the Estimate 8.343
Log-likelihood Function value -177.973
ANOVA
Sum of Squares
df Mean square
F Sig.
Regression 536.354 2 268.177 3.853 .029
Residual 2923.308 42 69.603
Total 3459.663 44
138
Coefficient
Unstandardized Coefficient
Standardized Coefficient
B Std. Error Beta Std. Error t Sig.
(Constant)
BANK17
RESP17
19.497
-.156
-3.399
5.875
2.122
1.225
-.010
-.394
.142
.142
3.319
-.074
-2.775
.002
.942
.008
(i) The simple linear regression function or line is
y = a + b1x1 b2x2 + e
Contribution = 19.497 – 0.156 – 3.399.
Interpretation: Social infrastructural development services of Nigerian
banking firms is related to multidimensional banking knowledge acquired by
Nigerian banking firms. It means, the level of contribution to social
development projects to environment of operation by Nigerian banks
depends on the value of banking knowledge they have.
(ii) Coefficient of determination R = 0.394.
Interpretation: 0.394 or 39.4% social infrastructural development
projects Nigerian banking firms renders to environment of operation
is greatly facilitated by the multidimensional banking knowledge
acquired.
(iii) Mse or Mean square error = 69.603.
(iv) Test of significance: Having stated that p-value will be used in
testing significance of the study, from the above computer generated
table; P = 0.029 at = 0.01.
139
Therefore; P = 0.029 > 0.01; accept; Ho and reject HA which states, “social
development infrastructural development services of Nigerian banking firms
is not greatly facilitated by the multidimensional banking knowledge
acquired by Nigerian banks”.
4.3. DISCUSSION OF RESULTS
This presents the findings of the data analyzed. The findings are discussed
in-line with the objectives of the study.
To ascertain the extent to which the level of improvement in international
standard performance rating of Nigerian banks is enhanced by
multidimensional acquisition of banking knowledge. From hypothesis one
testing which tested the null hypothesis statement “level of improvement in
international banking standard performance rating is not greatly enhanced by
multidimensional knowledge acquisition in banking among Nigerian banks”;
the result shows that there is a relationship between international banking
standard performance rating and multidimensional knowledge acquisition as
indicated in hypothesis one regression line of contribution (y) = 66.156 –
22.371 Enugu – 5.202 River – 11.620 Oceanic – 2.254 Zenith.
The 76.3% of coefficient of determination, which explains international
standard performance rating of bank is greatly enhanced by
multidimensional knowledge in banking acquired. The test of significance of
hypothesis one rejected null hypothesis one and accepted alternative
hypothesis one, which states, “level of improvement in international banking
140
standard performance rating is greatly enhanced by multidimensional
knowledge acquisition among Nigeria banks”. This is in agreement with
simple percentage analysis of question 18 in table 4.5 which stated the
benefits of high rating in international banking services and operations.
Hypothesis two test analysis result shows a simple regression function of
contribution (y) = 38.780 – 0.819 + 7.648 response. This explains an
existence of a direct relationship between diversified banking knowledge
acquired by Nigerian banks and the services provided to the satisfaction of
their customers.
The coefficient of determination of 0.456 or 45.6% of diversified banking
knowledge acquired by Nigerian banks is compatible with the services
provided to the satisfaction of customers. This coefficient of determination
which a measure of goodness of fit or the degree of the relationship existing
between two variables explaining the level of knowledge in international
standard banking Nigerian banks possess and value or quality of services
and products they offer to their segments of customers. If the Nigerian banks
acquire more knowledge, they will offer more of quality and valued services
and products to satisfaction of their customers. Every entity whether
individual or corporate is a value of the knowledge it has. An entity cannot
offer more than what it has. It becomes necessary for Nigerian banking
industry to upgrade the value of banking knowledge it has by expanding its
coast to blue ocean area of banking services and operations and exploit rich
and available opportunities that are not in competitive state of saturation.
141
From the test of significance, null hypothesis two which states, “Diversified
knowledge acquisition in banking is not compatible with the services
provided to the satisfaction of Nigerian banks’ customers is accepted as the
P-value 0.496 is > 0.05 significant level. Since the multidimensional
banking knowledge acquired by Nigerian banks is not compatible to the
provision of valued services to the satisfaction of customers, the need to
adopt every technique or approach to knowledge acquisition in international
banking services and operations become a primary and imperative issue in
order to place Nigerian banks among giant banks of the global village or
world.
Discussing this result in line with the objective two of this study which
states, “to determine whether acquisition of diversified banking knowledge
is compactable with the quality services Nigerian banks offer to the
satisfaction of customers”, one can say that Nigerian banks need to acquire
more diversified knowledge in banking in order to satisfy their customers
with the best practices in banking services and products.
In a quantitative research study on the relationship between service quality
and customer satisfaction, Jayaraman et al (2010) assert that, “tangibles have
positive relationship and have significant impact on customer satisfaction.
Tangibles here refer to variety of services and products banks offer to
customers. Offering of quality customer satisfaction service and products
place a bank at an edge above others in the industry. Satisfactory banks
142
services and products can only be achieved through diversification of
banking knowledge.
The discussion in hypothesis three test analysis reveal a regression function
of contribution (y) = 89.644 + 0.3 + 2.433 – 46.444. This is a multiple linear
regression line, which shows adequate multidimensional knowledge
acquisition has relationship with the financial strength, robustness and
competitiveness in Nigerian banks. It explains a cordial relationship between
the value of knowledge in baking portfolio acquired by Nigerian banks and
the corresponding value of positive impact on the financial strength,
robustness and competitiveness of the banks. When a bank acquired
contemporary seasoned knowledge in international best practices in banking,
services and operations, it will reflect in its rapid growth in financial
strength, robustness and competitiveness.
The coefficient of determination of 94.9%, which is 94.9% of adequate
multidimensional knowledge acquired by banks has impact on the financial
strength, robustness and competitiveness of the bank in Nigerian banking
industry. This is a test of goodness of fit. A high level of 94.9% of
appropriate banking knowledge acquired by Nigerian banks will uplift their
financial strength, robustness and competitiveness. Nigerian banking
industry is encourage to adopt knowledge approaches in the international
standard best practices in banking in order to expand the value of their
143
services and products and so reap the financial strengths, robustness and
competitiveness enriched in them.
The significance test of hypothesis three rejected null hypothesis and
accepted alternative hypothesis, which states, “Adequate knowledge
acquisition has positive impact on financial strengths, robustness and
competitiveness among Nigerian banks. P-value 0.000 is < 0.05 significance
level. This is in agreement with the regression function and the coefficient of
determination.
To evaluate the impact of adequate multidimensional knowledge acquisition
in financial strengths, robustness and competitiveness of a bank, the analysis
of hypothesis three in all parameters of regression statistics, that is; the
regression function, coefficient of determination or test of goodness of fit
and the significance test show the strong bond-link between adequate
multidimensional knowledge acquisition and financial strengths, robustness
and competitiveness among Nigerian banks. This is confirmed by Kogut and
Zander (2003) which indicate that, “the firm is a social community which
utilizes mechanisms to create and transform knowledge into economically
rewarded products and services, creating advantages for global firms.”
Hypothesis four test analysis indicated a simple regression function of
contribution (y) = 28.5 + 5.702 + 3.310 – 12.781. It shows a relationship
between acquisition of diversified banking knowledge in Nigerian
commercial banks and the rate of financial support by these banks in
144
Nigerian industrial sector growth and development. This relationship explain
a strong link multidimensional knowledge acquisition has with industrial
development in Nigeria economy if the banking sector will fully exploit
wealth of knowledge in the portfolio of banking.
Coefficient of determination (R) of hypothesis four is 0.644 or 64.4%. This
64.4% of diversified banking knowledge acquired by Nigerian banking firms
will contribute positively to the rate of financial support or assistance in
growth and development of Nigeria industrial sector. If Nigeria banking
industry will adopt integrated standard banking knowledge, industrial sector
of the economy will receive a boast because world-wide, banks fund the
development and growth of the different types of industries.
Test of significance of hypothesis four accepted alternative hypothesis four
which states, “Acquisition of diversified banking knowledge in Nigeria
commercial banks has significant rate of financial support in Nigeria
industrial sector growth and development”. The P-value 0.006 is less than
both 0.01 and 0.05 significance levels. To determine the rate of commercial
bank contribution to industrial sector growth in Nigeria through diversified
knowledge acquisition in banking according to objective four of this study,
the study analysis and findings shows that the more standard banking
knowledge acquired by Nigerian banks, the better the financial funding and
assistance they offer to industrial sector of Nigeria economy. Ugwu, (2010)
states, “that interest now in banking services portfolio is on the
developmental economic values of the host country.” It further says, that
145
“Nigerian banks are into diversification of banks knowledge in services and
operations to rapid growth of the sector and development of critical
economic sectors like industries, agriculture, power and transportation.”
The result of hypothesis five analysis shows a simple linear regression
function contribution (y) = 33.799 – 0.142 – 11.580 + 3.286 response, which
indicates a relationship between the level of financial support of Nigerian
banks and commercialization of agricultural sector of Nigerian economy is
greatly enhanced by acquisition of multidimensional knowledge in banking
services and operations. This means proper acquisition of wealth of
knowledge in banking services and operations by Nigerian banking industry
will stimulate the level of funding of agricultural sector of Nigerian
economy especially its commercialization.
Coefficient of determination R = 0.657 or 65.7%. This mean 65.7% funding
of agricultural commercialization projects by banks will be stimulated by
acquisition of multidimensional knowledge in banking services and
operations in Nigeria banking industry.
Test of significance of hypothesis five rejected null hypothesis and accepted
alternative hypothesis which states, “The level of financial support of
Nigerian banks to commercialization of Agricultural sector of Nigeria
economy is greatly enhanced by acquisition of multidimensional knowledge
in banking”. The objective five of this study, which is, “to determine the
extent to which the level of financial support of Nigeria banks to
commercialization of agricultural sector in Nigeria economy is enhanced by
146
acquisition of multidimensional knowledge in banking is hereby positively
addressed by the established relationship between funding of agricultural
commercialization in Nigeria by banks through acquisition of the right
knowledge in banking services and operations. The 65.7% funding support
of commercial agriculture by Nigerian banks is enhanced by appropriate
multidimensional knowledge acquired in banking services and operation; the
significance test acceptance of alternative hypothesis five of this study
indicate high level of impact multidimensional knowledge acquisition in
banking services and operations can make in funding of commercial
agriculture by Nigerian banks. According to Novotel (2010), “Commercial
banks play an important and active role in the economic development of a
country.” It further states, that, “if the banking system of a country is
efficient and disciplined, it brings about rapid growth in the various sectors
of economy, especially Agriculture, and infrastructure development.”
From the analysis of hypothesis six (Ho6) which has a regression function:
contribution (y) = 19.497 – 3.399. This shows existence of relationship
between social development infrastructural development services of
Nigerian banking firms and multidimensional banking knowledge Nigerian
banks acquired.
Coefficient of determination (R) of 0.394 or 39.4% social development
services provided by Nigerian banks to the communities of their operations a
determinant of multidimensional banking knowledge Nigerian banks
acquired. This shows a very low knowledge of social responsibility arts or
works as item of international standard and best practices portfolio of
banking services among Nigerian banks. An organization that has non or
147
low social infrastructural development services to its environment of
operation is on exploitative business activities to its host community and not
on complementary business activities. Nigerian banks present behaviour on
social infrastructural development to their business environments or
community need to turn a new leave. The need for Nigerian banks to
understand the knowledge of social infrastructural development or good-will
gesture as part of banking business is now a matter of necessity as there are
great benefits associated with such art.
Test of significance of hypothesis six (Ho6) indicates P-value = 0.029 >
0.001 level of significance the study is subjected. This means, as the P-value
is more than 0.01 significance, null hypothesis is accepted and alternative
hypothesis is rejected which states, “Social infrastructural development
services of Nigerian banking firms is not greatly facilitated by the
multidimensional banking knowledge acquired by Nigerian banks. If
Nigerian banks are to be rated high in international standard best practices in
banking, the knowledge of social infrastructural development should be
incorporated as part of their routine banking businesses or services. Uzo
(2010) says, “Infrastructural development remains grossly inadequate
relative to the nation’s requirement due to lack of funds”. Banks should
complement the place of business operations by contributing to its
development and not exploiting its available resources. Era of exploitative
banking should be over to herald complementing banking through
multidimensional banking knowledge acquisition by Nigerian banking
industry.
148
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND
RECOMMENDATIONS
5.1 SUMMARY OF FINDINGS
The findings of the research study include the followings:
1. The significance test result accepted alternative hypothesis one, which
states that, “level of improvement in international banking standard
performance rating is greatly enhanced by multidimensional knowledge
acquisition among Nigerian banks”. The 0.763 or 76.3% coefficient of
determination implied, ‘level of international standard performance rating by
banks is greatly enhanced by multidimensional knowledge acquisition in
banking services and productions’.
2. The significance test result accepted null hypothesis two, which states
that, “diversified knowledge acquisition in banking is not compatible with
the services provided to the satisfaction of Nigerian banks customers”.
Statistical analysis of hypothesis two made a positive relationship in the
regression function between diversified knowledge acquired by Nigerian
banks and the services provided to the satisfaction of the customers. The
coefficient of determination shows a low value of 0.456 or 45.6% diversified
banking knowledge acquired by Nigerian banks and the services provided to
the satisfaction of their customers. The test of significance accepted null
hypothesis two of the study.
3. The significance test result accepted alternative hypothesis three, which
states, “adequate multidimensional acquisition has positive impact on the
financial strength and competitiveness in Nigerian banks”. The coefficient of
determination of 0.949 of 94.9% which strongly confirmed that adequate
149
multidimensional knowledge acquired by banks has positive impact on the
financial strength, robustness and competitiveness in Nigerian banking
industry.
4. The significance test accepted alternative hypothesis four, which states
that, “acquisition of diversified banking knowledge in Nigerian banks have
significant rate on financial support in Nigeria industrial sector growth and
development”. The coefficient of determination of 0.644 or 64.4% says, that
‘the diversified banking knowledge acquired by Nigerian banking firms will
contribute positively to the rate of financial funding of industrial sector
growth and development in Nigeria’.
5. The Significance test accepted alternative hypothesis, which states that,
“the level of financial support of Nigerian banks to commercialization of
agricultural sector of Nigerian economy is greatly enhanced by acquisition
multidimensional knowledge in banking”. The coefficient of determination
of 0.657 or 65.7% notes positively that funding of agricultural
commercialization projects by banks will receive a boost by acquisition of
multidimensional knowledge in banking services and operations in
Nigerian banking industry.
6. The test of significance accepted null hypothesis six which states, “social
development services of Nigerian banking firms is not greatly facilitated by
the multidimensional banking knowledge acquired by Nigerian banks”. The
coefficient of determination shows 0.394 or 39.4% of social development
services provided by Nigerian banks to their environmental of business
operations.
150
5.2 CONCLUSION
The study concludes that level of improvement in the international best
practices bank standard performance rating is increased by multidimensional
knowledge acquisition in Nigerian banking industry. Diversified knowledge
acquisition in banking is not equivalent to the services Nigerian banks offer
to satisfy their segments of customers. Sufficient knowledge acquisition has
positive impact on financial strength, robustness and competitiveness in
Nigerian banking industry. Possession of diversified banking knowledge in
Nigerian banks has reasonable rate of financial support in Nigerian industrial
sector growth and development. Proper funding of agricultural sector
commercialization is improved by acquisition of multidimensional banking
knowledge by Nigerian banks. The study also concludes that the magnitude
of social infrastructural development services of Nigerian banks will
improve by the acquisition of multidimensional banking knowledge in the
Nigerian banking industry.
151
5.3. RECOMMENDATIONS
From the findings of the study, the following recommendations are made:
i. Nigerian banks should exploit the wealth of international
accepted best practices banking knowledge to stand a good
chance of rating high in international standard performance
banking.
ii. Nigerian banking firms should upgrade their multidimensional
banking knowledge acquisition in order to improve on the
quality and quantity of banking services and products offer to
the satisfaction of their customers.
iii. As adequate or appropriate banking knowledge acquisition
impact positively on financial strength, robustness and
competitiveness, Nigerian banks are encouraged to approach
the vast knowledge in internationally accepted best practices in
banking to be able to be classed among giant banks in the world
in financial strength, robustness and competitiveness.
iv. Central Bank of Nigeria should come-up with policies that will
encourage and mandate commercial banks to contribute
massively in funding industrial development and growth. Also
widely publicized educative programmes and training on
industrial development and banking should be introduced to
commercial banks. This has a positive multiplier effect both to
the banks and Nigeria as a nation.
v. Proper funding of agricultural sector of Nigerian economy by
Nigeria banks is recommended to ensure intensive commercial
agricultural business, food security sustainability, job creation
and industrial raw material produce in Nigeria.
152
CHAPTER SIX
AREAS FOR FURTHER RESEARCH AND
CONTRIBUTIONS TO KNOWLEDGE.
6.1. AREAS FOR FURTHER RESEARCH
From the inception of this study the researcher made it clear that financial and time constraints limit the scope of this study. Based on the above issues, the researcher hereby suggests for further studies on multidimensional knowledge acquisition on the following areas: - (a) Multidimensional knowledge acquisition, a key success factor to mass
literacy in Nigeria. (b) The developmental impact of multidimensional knowledge acquisition
in Nigeria health sector. (c) Impact of multidimensional knowledge acquisition in Nigeria
Agricultural sector.
6.2. THE CONTRIBUTION OF THE STUDY TO KNOWLEDGE This study has made the following contributions to knowledge:
(1) The study discovered wealth of untapped and uncontested knowledge in banking services and products, which if properly exposed to and utilized by Nigerian banks will place them on a high standard performance rating on international best practices banking.
(2) The study discovered that banking services is not all about routine or extent services of demands, savings and fixed deposits. The knowledge of banking as a service institution is more to serving the national economic sectors and social infrastructural development.
153
APPENDIX QUESTIONNAIRE
School of Postgraduate Studies, Department of Management, Faculty of Business Administration, University of Nigeria, Enugu Campus, (UNEC)
………………………….. ………………………….. ………………………….. Dear Respondent, Please the researcher is a student of the above institution. I am conducting a research on “Competitiveness advantage of multidimensional knowledge acquisition in Nigerian banking industry”. A case study of selected banks in Imo, Rivers and Enugu States, and your bank is among those selected for the study. I therefore appeal to you to read and complete the attached questionnaire. Your responses will be treated confidentially and be used for research purposes, which is purely academic. T therefore, solicit for your sincerity and honesty in responding to the questions. Thanks for your anticipated cooperation. Yours sincerely,
Nwachukwu Angela Amaka
154
INSTRUCTION: please tick (x) as appropriate in the blocks
provided
SECTION A PERSONAL DATA 1. Are you a banker (a) Yes (b) No
2. If yes, name your bank………………………………………
3. What is your position in the bank?……………………..
4. What is your present educational qualification?
(ii) Ph.D
(iii) MSc./MBA
(iv) B.Sc/BA
(v) OND/NCE
5. How long have you been with the bank?…………….
SECTION B 6. What scope of banking services/operations do you
render to your customers?
a. Personal service
b. Corporate services
c. ADPS
d. All of the above
7. Please rate the quality of services your bank offers to
customers on international banking service standard
a. Very high
b. High
c. No quality service
d. Very Low
e. Low
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8. Please rate your organization banking technologies on
international standard level
a. Very High Standard
b. High standard
c. Standard
d. Very low standard
e. Low standard
9. Can you mention banking services of high
technological operation in your bank?
…………………………………………………………………..
………………………………………………………………….
10. Have your bank technological services been digitalized?
Yes No
11. If yes, when did you digitalized your banking services
and operation technologies?
a. At the beginning of your establishment
b. Ten years ago
c. Five years ago
d. If non of the above, state the year
12. In your own opinion, is the present digital and online
technological services more acceptable and benefit to
your customers than analogue system ……………..
…………………………………………………………………
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13. Do you have multidimensional knowledge in banking
services and operations Yes No
14. If yes list some of the knowledge in banking services
and operations peculiar to your bank……………………
…………………………………………………………………….
15. Are these unique banking knowledge in services or
operations in your bank of a competitive advantage
to the banks in the Nigeria banking industry? Yes No
16. Is the level of improvement in international standard
performance rating of your bank a plus or minus
enhancement of multidimensional acquisition of banking
knowledge? Plus Minus
17. If plus, what new knowledge in banking services and
operations that scored your bank a high rate in
international banking standard? …………………………
……………………………………………………………………
18. What is (are) the benefit(s) of multidimensional
knowledge acquisition in the intentional standard rating
of your bank?
a. Financial benefit only
b. Financial and enlarged customer benefits
c. Enlarged customer
d. Non of the above
e. Other benefits
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19. Assess the compatibility of diversified banking knowledge
acquired by your bank with the qualities of services offer
to the satisfaction of customer.
a. Very high compatibility
b High compatibility
c. Compatibility
d. Very low compatibility
e. Low compatibility
20. Is the value of customer services provided by your bank
the same ten (10) years ago? (a) No (b) Yes
21. If No, what contributed to the enhanced services?
a. Acquired new knowledge of banking services and
operations
b. No reason
22. As a banker in the millennium/Internet world, is the
acquisition of diversified knowledge in banking
compatible with the quality of services offer to the
satisfaction of your customer?
(a). Yes (b). No
158
23. If yes, what motivate customers’ satisfaction in your
banking services?
a. Introduction of new and more convenience
banking services and operations
b. No reason
24. Can you mention some of the millennium banking
services and operations that have positively affected
customer satisfaction?…………………………………………
………………………………………………………………………
25. Multidimensional banking knowledge is of adequate
impact in financial strength, robustness and
competitiveness of a bank.
Yes No
26. If yes, mention new knowledge in banking services and
operation that have affected your bank most ………………
…………………………………………………………………………
27. What other banking knowledge will you like your bank to
diversify into in order to create more wealth and
increases its financial strength…………………………………
…………………………………………………………………………
28. Has acquisition of diversifies knowledge in banking by
Nigerian Banks of any positive impact in Nigerian
industrial sector. Yes No
159
29. If yes, how has your bank contributed to national or state
industrialization …………………………………………………..
…………………………………………………………………………
30. Is the rate of Nigerian Banks financial contribution to the
industrial sector growth determined by diversified
knowledge acquisition in banking? Yes No
31. If yes, access your bank in its contribution to industry
development in Nigeria.
a. Very high contribution
b. High contribution
c. No contribution
d. Very low contribution
e. Low contribution
32. Financial support to agricultural sector
commercialization in Nigeria is enhanced by
multidimensional knowledge acquisition of Nigerian
Banks. Yes No
33. If yes, state extent of enhancement banking services have
made to the commercialization of agricultural sector of
Nigeria economy.
a. Very high enhancement
b. High enhancement
c. No enhancement
d. Very low enhancement
e. Low enhancement
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34. Mention agricultural financial packages offered by your
bank.
i……………………………………………………………………..
(ii) …………………………………………………………………
(iii)………………………………………………………………….
35. Can the degree of social infrastructural development
services of Nigerian Banks be facilitated by acquisition of
multidimensional banking knowledge Yes No
36. If yes mention some social infrastructural development
services your bank has carried out to its host community
(a) Infrastructural building
(b) Scholarship education
(c) Health facilities
(d) Youth development
(e) All of the above
161
ORAL INTERVIEW GUIDE 1. Structured Oral Interview: This form of oral pages has it questions
written down. The interviewer holds it and interview each of the
interviewees on the same question. The intellectual, experience and
knowledge capacities of an interviewee is scored on the scoring scale
of each of the written structured question.
2. Unstructured Interview: The interviewer interviews every
interviewee on questions which are not written down but
spontaneously framed orally by the interviewer on a given topic or
area of study. The interviewer determines what to score the
interviewee based on his/her expected answer.