Recent orders
THE HUMAN RESOURCE DEPARTMENT IS RESPONSIBLE FOR TRANSLATING THE ORGANISATION’S STRATEGIC VISION INTO REALITY THROUGH THE WAY
Strategic Human Resources Management
Contents
TOC o “1-3” h z u HYPERLINK l “_Toc377209795” STRATEGIC HUMAN RESOURCE MANAGEMENT PAGEREF _Toc377209795 h 2
HYPERLINK l “_Toc377209796” EXAMPLES PAGEREF _Toc377209796 h 5
HYPERLINK l “_Toc377209797” THEORETICAL PERSPECTIVES PAGEREF _Toc377209797 h 7
HYPERLINK l “_Toc377209798” CONCLUSION PAGEREF _Toc377209798 h 8
HYPERLINK l “_Toc377209799” REFERENCES: PAGEREF _Toc377209799 h 9
“THE HUMAN RESOURCE DEPARTMENT IS RESPONSIBLE FOR TRANSLATING THE ORGANISATION’S STRATEGIC VISION INTO REALITY THROUGH THE WAY IT MANAGES ITS PEOPLE”.
INTRODUCTION
In the operations of any organisation, it has been noted that one of the most significant focal point of all the activities and decisions would be its people, who are also regarded as its most valuable assets. The human factor, which has been noted as the only animate resource which assumes a vital role in the accomplishment of organizational goals, has been receiving growth in attention in the recent years. It is essential in increasing the productivity of the employees, which in turn, will be helpful in improving business performance for the long-term and to aid in the achievement of business goals (Goyal, 2005).
In this paper, the author will provide a critical evaluation of the statement which was mentioned in the beginning part of this paper. The discussions which will be provided on the remaining parts of this paper will be focused on the assumption that the human resource department holds the supreme responsibility with regards to the translation of the organisation’s vision into reality. Such, as stated in the statement which will be subjected into evaluation in this paper, is made possible through the human resource management’s capability of effectively and efficiently managing the members of the workforce who are highly influential in the success of their business performance. The evaluation of the abovementioned statement will be focused on the string link between Strategic Human Resource Management and the mission and vision of an organization. To be able to carry out such objective, the discussions will be focused on the applications of the statement mentioned above in the context of the operations of the hospitality and tourism industry.
STRATEGIC HUMAN RESOURCE MANAGEMENT
The strategic approach towards human resource management has been regarded by many as a foundation for the development of practices related to enhancing the skills and competencies of people within an organisation. Strategic human resources management places a great deal of emphasis on the development of practices and activities which the management wishes for potential engagement in the long-term for the achievement of the integration in personnel and development which will allow the business to achieve its goals, more so, the translation of the organizations mission and vision into reality. Strategic human resource management, as a tool towards making the real the organisation’s vision and mission, would require significant changes and paradigm shifts with regards to culture and structure, organisational performance and effectiveness, making human resources fitted for future requirements of the organisation, development of intellectual capital and distinctive capabilities, and the management of change. Furthermore, strategic approach towards human resource management is given attention by many organisations basically because of the belief that it is an essential tool for the development of approaches in the management of the workforce in the long-term being vital in the achievement of success in business performance (The Association of Business Executives, n.d.).
The competitive environment of the businesses of the future will be all about the inclusion of human resource department as a strategic partner of the organisation and as a bottom-line decision- maker. In the future, the said department will not be solely focused on their task towards personnel administration. Rather, it will be highly supportive of the achievement of the competitive advantage of the organisation through the provision of a high quality workforce helping the management towards making possible strategic planning. By being a strategic partner of the organisation, it can be assumed that the human resource management will not only be able to provide administrative support to the organisation but it can also be a significant partner in charting business strategies (Rowden, 1999). Effective and strategic management of the human resources of an organisation will therefore be significant given the current challenging and complex competitive opportunities and threats which are confronting many contemporary firms. More than labour productivity, strategic approach towards the management of the organisation’s workforce will help in the implementation of business practices and activities which will help improve the firm’s performance in the long-term (Hassan et al, 2006).
It has been noted that the human resource management, in a strategic approach, requires the development of five core areas and activities, which will be given significant attention below:
Staffing – This is a decision-making activity which should be given emphasis by an organization in its strategic approach towards the management of the workforce. Proper staffing practices should be given priority by the organisation because of the fact that problems such as underemployment can lead into potential and significant lost of investment. In the tourism and hospitality industry, for instance, an untrained staff on the front desk and high employee turnover are some of the staffing problems which should be given attention. Failure to give emphasis on the solutions to such problems can lead into the eventual failure of the realization and achievement of the mission and vision of the organisation (Crystal Pool Resort, n.d.).
Rewards – One of the most important factors which should be highlighted with strategic human resources management would be the presence of employee motivation, and one of the things which can be done in order to possibly achieve such would be through the presence of rewards. A satisfactory wage, along with benefits and rewards, would be enough in order to energize the workforce and give them enough motivation to be productive at work. Keeping employees motivated through the deployment of appropriate reward systems can be regarded as a vital activity towards making the goals of the organisation real, basically because there are motivated and productive people who would be working towards the achievement of such goals (Kovach, 1996).
Employee Development – In the strategic approach towards human resource management, there is a need to analyse the training requirements of the employees in order to allow them to demonstrate satisfactory job performance and to allow them to advance within the organisation. There should be an identification of the skills and competencies which are needed and the management should be able to demonstrate an active involvement in enhancing learning activities of the employees towards making them relevant in the achievement of business and corporate objectives. The resources of the organisation should be devoted only to specific training and development activities which will be significant in the achievement of its mission and vision, more so, on employee development activities which would effectively promote its objectives (Fombrum et al., 1984).
Employee Maintenance – Another important activity which should be highlighted in the presence of a strategic approach towards human resource management would be through the evaluation and administration of various activities of the firm towards the promotion of workplace safety, and the health and welfare of the employees. This is a vital activity which will be influential towards the achievement of the goals identified by the organisation. Employee maintenance has been highlighted as one of the most important activities which can increase the productivity of the employees and which can be able to make them more instrumental towards the achievement of expectations of the management and of the public from the business performance of their organisation (Dessler et al., 2007).
Employee Relations – This has been regarded as an important factor with regards to the relationship of the organisation with the members of its workforce. It is of utmost importance that the organisation should be engaged in the development of employee relation, through the promotion of an atmosphere of goodwill wherein there is an alignment among departments in the provision of assistance to each other with the goal of the provision of better customer service, which can be regarded as one of the many ways in which the strategic objectives of the organisation can be translated into reality (Dessler et al., 2007).
EXAMPLESOne of the most practical applications which would demonstrate the significance the strategic approach towards human resource management can be reflected from the case of Holiday Inn, a hotel chain known all over the world for the quality of its service and amenities. In the said hotel chain, the senior managements were trained on projects which involved spending short periods of time at operative levels. This has resulted into the realization that the members of the front-line staff of their hotels should be given the authority and autonomy to solve non-routine problems which are confronting their operations. Tis will be highly influential towards positively influencing the customer’s perception of service quality as experienced from their hotels. Because of this realization, the organisation has demonstrated the initiative to equip workers with training and education programs which shall allow them to partake on additional responsibility to solve problems which they are confronted, without the need for frequent consultation with senior managers (Johnson, 1999).
In addition, it has been noted that another importance of strategic human resource management in the tourism and hospitality sector is that such approach to the management of the organisation makes is possible to empower the employees and achieve a high level of commitment from the workforce in order to delight the customers through the demonstration of excellence in service. A total quality culture should be embedded on the organisation, and the way to achieve such would not only be through administrative support to the employees, but through a holistic management approach, such as through strategic human resource management. In addition, strategic management of people in the tourism industry, much like in any other nature of organisations, would entail a number of activities which will be vital towards the translation of the visions of the organisation towards something which is real or concrete. One possible way of doing so would be thorough through participation. In this regard, employees are given the authority to make their own decisions, such as what has been demonstrated in the case of Holiday Inn as mentioned in the earlier part of this section. Through increasing employee participation, which is an element of strategic human resource management, it would be more possible for the organisation to achieve the realisation of its operations and the achievement of the goals of the firm. Furthermore, another vital activity in the strategic approach towards human resource management would be triggering a higher level of commitment. This can be directly linked to the earlier discussions made on rewards and employee development, as those are some of the factors which will make it possible for employees to be motivated, thereby increasing their level of commitment to the organisation (Moutinho, 2011).
THEORETICAL PERSPECTIVES
There are three theories which can be linked on strategic human resources management, each will be given a brief discussion in the succeeding sections of this paper:
Universalist Approach – This calls for the need for one universal approach towards managing the human resources of an organisation. Such approach can be regarded as the best practice and held applicable within the entire industry with results which are almost the same in the extent of its applications. It is related on the premise that a single model of labour management can be employed and it can lead into the realization of the goals of the organisation (Torrington et al., 2005).
Fit or Contingency Approach – This is based on two critical forms of fit – external fit and internal fit. The fit or contingency approach in strategic human resource management includes a wide array of activities which can prove to be highly significant in the unification and design of organisational practices to give support to the various strategies of the organisation. This approach is helpful for the management with regards to the fact that it aids in the selection, appraisal, development, and rewards which can be developed by the organisation in the management of its workforce, with the goal that they will be helpful in the realization of the organisation’s goals (Torrington et al., 2005).
Resource-based Approach – The resource-based model, as applicable in the field of strategic human resource management, is concerned with the linkages between internal resources, including human resources, strategy, and the performance of the organisation. This calls for the need of the development of human resources of the organisation, being a valuable investment fro the firm., as such can be a source of a sustainable competitive advantage which cannot be replicated by its competitors. Such approach towards human resource management also calls for the need towards capturing a stock of exceptional human talent, which should be managed strategically, and can lead into making real the mission and vision which guides the operations of the organisation (Salaman et al., 2005).
CONCLUSIONThe discussions which were provided in the earlier sections of this paper noted the significance of the strategic approach towards human resource management, specifically in the context of the tourism and hospitality industry. As the discussions have provided, today, more than ever, there is an increasing concern for new contemporary and more effective and efficient approaches towards the management of the workforce as one of the means towards achieving sustainability and competency in the firms’ business performance. The traditional approach in human resource management, mainly composed of administrative support and functions, are no longer sufficient in today’s context. In order to achieve the realization of the vision and mission of an organisation, there is a need to employ a strategic approach, one which is geared for the long-term and includes an extensive list of human resource functions which are significant in improving the workforce and making them more productive to be helpful in the achievement of business goals. A proactive management of people is needed, in the case of the hospitality and tourism industry, in order to trigger a higher level of customer satisfaction and to increase the customer perception and experience, not only on the basis of the amenities which were provided, but also on the service which were received from the people working for the organisation. Meeting the needs of the needs of the employees is vital towards having an assurance that they will perform in accordance with expectations and in accordance with the level of performance necessary in order to achieve organisational goals and objectives. With this, strategic human resource management is a significant component of a successful business performance.
REFERENCES:Crystal Pool Resort, n.d. Crystal Pool Resort. [Online]. Retrieved from HYPERLINK “http://www.aaaessays.com/sample/International_HRM.pdf”http://www.aaaessays.com/sample/International_HRM.pdf [Accessed on 8 August 2011].
Dessler, G., Griffiths, J., and Lloyd-Walker, B., 2007. Human resource management. Frenchs Forest: Pearson Education
Fombrum, C.J., Tichy, N.M., and Devanna, M.A. 1984. Strategic human resource management. New York: John Wiley & Sons, Inc.
Goyal, R.C., 2005. Hospital administration and human resource management. New Delhi: Prentice-Hall of India Private Limited
Hassan, M., Haggen, A., and Daigs, I., 2006. Strategic human resources as a strategic weapon for enhancing labor productivity: empirical evidence. Academy of Strategic Management Journal. 5. Pp. 75+
Johnson, R., 1999. Case 2: Holiday Inn Mayfair: Feature HR and the Bottom-line, People Management. Journal of the Chartered Institute of Personnel and Development. 42
Kovach, K.A., 1996. Strategic human resource management. Maryland: University Press of America
Moutinho, L., 2011. Strategic management in tourism. Massachusetts: CABI
Rowden, R.D., 1999. The potential roles of the human resource management professional in the strategic planning process. SAM Advanced Management Journal. 64 (3). Pp. 22 +
Salaman, G., Storey, J., Billsberry, J., 2005. Strategic human resource management: theory and practice. London: SAGE Publication Ltd.
The Association of Business Executives, n.d. Strategic human resource management. [Online]. Retrieved from HYPERLINK “http://www.nishanw.org/_STRATHRMAN.PDF”http://www.nishanw.org/_STRATHRMAN.PDF [Accessed on 8 August 2011].
Torrington, D., Hall, L., and Taylor, S., 2005. Human resource management. London: Pearson Education Limited
A better measurement model for post adoption user perception of mobile banking services with a keen interest in the key drivi
A better measurement model for post adoption user perception of mobile banking services with a keen interest in the key driving factors for mobile banking services adoption and continued use
ABSTRACTWith liberalization and internalization in the financial market and progress in information technology, banks and other service industry players face dual competitive pressures to provide service quality and administrative efficiency. Mobile Commerce is gaining increasing acceptance amongst various sections of the society as a service channel of choice. Mobile Banking, the offering of bank-related financial services via mobile devices, builds a cornerstone of Mobile Commerce. Kenya has in the recent years witnessed tremendous growth in the use of mobile money transfer services. This growth can be partly traced back to technological and demographical developments that have been influencing important aspects of the socio-cultural behavior in today’s world. The need/wish for mobility seems to be the driving force behind Mobile Commerce in general. However, taking it that these recent developments are fueled by technology alone might misleadingly suggest that the adoption of mobile banking is largely based on technological criteria. This study therefore seeks to establish a better measurement model for post adoption user perception of mobile banking services with a keen interest in the key driving factors for mobile banking services adoption and continued use. The study will make use of a descriptive research design where a sample of m-banking services users and potential users will be used as the population for the study. The study will be carried out in two geographical locations; Nairobi and Busia representing urban and rural population respectively.
TABLE OF CONTENTS TOC o “1-5” h z u HYPERLINK l “_Toc285625622″ABSTRACT PAGEREF _Toc285625622 h 1
HYPERLINK l “_Toc285625623″TABLE OF CONTENTS PAGEREF _Toc285625623 h 2
HYPERLINK l “_Toc285625624″LIST OF ABBREVIATIONS PAGEREF _Toc285625624 h 4
HYPERLINK l “_Toc285625625″CHAPTER ONE PAGEREF _Toc285625625 h 5
HYPERLINK l “_Toc285625626″1.0INTRODUCTION PAGEREF _Toc285625626 h 5
HYPERLINK l “_Toc285625627″1.1Background of the Problem PAGEREF _Toc285625627 h 5
HYPERLINK l “_Toc285625628″1.2Statement of the Problem PAGEREF _Toc285625628 h 9
HYPERLINK l “_Toc285625629″1.3General Objective PAGEREF _Toc285625629 h 10
HYPERLINK l “_Toc285625630″1.4Specific Objectives PAGEREF _Toc285625630 h 10
HYPERLINK l “_Toc285625631″1.5Importance of the study PAGEREF _Toc285625631 h 11
HYPERLINK l “_Toc285625632″1.5.1To Businesses, Investors and Individuals PAGEREF _Toc285625632 h 11
HYPERLINK l “_Toc285625633″1.5.2To the Banks PAGEREF _Toc285625633 h 11
HYPERLINK l “_Toc285625634″1.6Scope of the study PAGEREF _Toc285625634 h 12
HYPERLINK l “_Toc285625635″1.7Definition of Terms PAGEREF _Toc285625635 h 12
HYPERLINK l “_Toc285625636″1.8Chapter summary PAGEREF _Toc285625636 h 13
HYPERLINK l “_Toc285625637″CHAPTER TWO PAGEREF _Toc285625637 h 14
HYPERLINK l “_Toc285625638″2.0LITERATURE REVIEW PAGEREF _Toc285625638 h 14
HYPERLINK l “_Toc285625640″2.1Introduction PAGEREF _Toc285625640 h 14
HYPERLINK l “_Toc285625641″2.2Mobile Banking Awareness PAGEREF _Toc285625641 h 14
HYPERLINK l “_Toc285625642″2.2.1Employment of Mobile Technologies in the Banking Sector PAGEREF _Toc285625642 h 14
HYPERLINK l “_Toc285625643″2.2.1.1 Mobile Accounting PAGEREF _Toc285625643 h 15
HYPERLINK l “_Toc285625644″2.2.1.2 Mobile Brokerage PAGEREF _Toc285625644 h 16
HYPERLINK l “_Toc285625645″2.2.1.3 Mobile financial information PAGEREF _Toc285625645 h 16
HYPERLINK l “_Toc285625646″2.2.2Mobile banking Business models PAGEREF _Toc285625646 h 18
HYPERLINK l “_Toc285625647″2.2.2.1 Bank-focused Model PAGEREF _Toc285625647 h 18
HYPERLINK l “_Toc285625648″2.2.2.2 Bank-led model PAGEREF _Toc285625648 h 18
HYPERLINK l “_Toc285625649″2.2.2.3 Non-Bank-led model PAGEREF _Toc285625649 h 19
HYPERLINK l “_Toc285625650″2.2.3Mobile Banking Regulations PAGEREF _Toc285625650 h 20
HYPERLINK l “_Toc285625651″2.2.4Effect of awareness on Mobile banking usage PAGEREF _Toc285625651 h 22
HYPERLINK l “_Toc285625652″2.3Perceived Security of mobile banking Services PAGEREF _Toc285625652 h 22
HYPERLINK l “_Toc285625653″2.3.1General Security features of mobile banking products PAGEREF _Toc285625653 h 22
HYPERLINK l “_Toc285625654″Figure 2.1 GSM components PAGEREF _Toc285625654 h 23
HYPERLINK l “_Toc285625656″2.3.2General Security Concern in GSM PAGEREF _Toc285625656 h 23
HYPERLINK l “_Toc285625657″2.3.3The risk barrier to m-banking usage in Kenya PAGEREF _Toc285625657 h 23
HYPERLINK l “_Toc285625658″2.4Perceived Usefulness of M-banking products PAGEREF _Toc285625658 h 24
HYPERLINK l “_Toc285625659″2.4.1Match between offerings and need PAGEREF _Toc285625659 h 27
HYPERLINK l “_Toc285625660″2.4.2Pricing vis-à-vis alternate channels PAGEREF _Toc285625660 h 27
HYPERLINK l “_Toc285625661″2.4.3Reliability with respect to informal channels PAGEREF _Toc285625661 h 28
HYPERLINK l “_Toc285625662″2.5Ease of use PAGEREF _Toc285625662 h 28
HYPERLINK l “_Toc285625663″2.5.1Technology Discomfort PAGEREF _Toc285625663 h 30
HYPERLINK l “_Toc285625664″2.5.2Self-efficacy PAGEREF _Toc285625664 h 30
HYPERLINK l “_Toc285625665″2.5.3Ease-of-use as a barrier to M-Banking usage PAGEREF _Toc285625665 h 31
HYPERLINK l “_Toc285625666″2.6Chapter Summary PAGEREF _Toc285625666 h 31
HYPERLINK l “_Toc285625667″CHAPTER THREE PAGEREF _Toc285625667 h 32
HYPERLINK l “_Toc285625668″3.0 Research methodology PAGEREF _Toc285625668 h 32
HYPERLINK l “_Toc285625669″3.1 Introduction PAGEREF _Toc285625669 h 32
HYPERLINK l “_Toc285625670″3.2 Research Design PAGEREF _Toc285625670 h 32
HYPERLINK l “_Toc285625673″3.3 Population and Sampling Design PAGEREF _Toc285625673 h 33
HYPERLINK l “_Toc285625674″3.3.1 Population PAGEREF _Toc285625674 h 33
HYPERLINK l “_Toc285625675″3.3.2 Sampling Design PAGEREF _Toc285625675 h 33
HYPERLINK l “_Toc285625676″3.3.2.1 Sampling Frame PAGEREF _Toc285625676 h 34
HYPERLINK l “_Toc285625677″3.3.2.2 Sampling Technique PAGEREF _Toc285625677 h 34
HYPERLINK l “_Toc285625678″3.3.2.3 Sample Size PAGEREF _Toc285625678 h 35
HYPERLINK l “_Toc285625679″3.4 Data Collection Methods PAGEREF _Toc285625679 h 35
HYPERLINK l “_Toc285625680″3.5 Research Procedures PAGEREF _Toc285625680 h 36
HYPERLINK l “_Toc285625681″3.6 Data Analysis Methods PAGEREF _Toc285625681 h 36
HYPERLINK l “_Toc285625682″3.7 Chapter Summary PAGEREF _Toc285625682 h 37
HYPERLINK l “_Toc285625683″REFERENCES PAGEREF _Toc285625683 h 38
HYPERLINK l “_Toc285625684″APPENDICES PAGEREF _Toc285625684 h 44
HYPERLINK l “_Toc285625685″Appendix 1: COVER LETTER PAGEREF _Toc285625685 h 44
HYPERLINK l “_Toc285625686″Appendix 2: QUESTIONNAIRE PAGEREF _Toc285625686 h 45
HYPERLINK l “_Toc285625687″Appendix 3: RESEARCH BUDGET PAGEREF _Toc285625687 h 51
HYPERLINK l “_Toc285625688″Appendix 4: WORK PLAN PAGEREF _Toc285625688 h 51
LIST OF ABBREVIATIONSATM:Automated Teller Machines
CBK:Central Bank of Kenya
Et al:(et alia): and others
FIs:Financial Institutions
G.o.K:Government of Kenya
ICT:Information Communication and Technology
Ksh:Kenyan Shilling
PC:Perceived cost
PEOU: Perceived Ease of Use
PR: Perceived risk
PU: Perceived usefulness
RAs:Research Assistants
SE: Self efficacy
SMS: Short message service
SPSS:Statistical Package for Social Scientists
TAM: Technology Acceptance Model
CHAPTER ONE INTRODUCTIONBackground of the ProblemWhile mobile services and mobile service consumption have lately become a hot topic among information systems and marketing scholars, service providers are putting great efforts to take advantage of the business opportunities offered by wireless technology. This may be due to the fact that value-adding mobile services are becoming increasingly important in gaining a competitive edge in the marketplace (Wang, Guriting, Ndubisi, 2006).
In the financial services sector mobile banking represents an additional service for certain occasions adding the element of true mobility to Internet banking used over fixed networks. Some bank customers, for example, find mobile banking valuable when being out of home on a country cottage, on the road or in case of acute need for money transfer (Laukkanen and Lauronen, 2005). Indeed, while Internet banking services provide economic benefits for the banks, mobile services serve rather as a way to offer customers value added (Laukkanen et al., 2005). In Finland, already two thirds of the population pays their bills primarily over the Internet (Federation of Finnish Financial Services, 2007) but the adoption rates of mobile phones for banking are in their infancy.
Kenya’s financial system is among the largest and more developed in Sub-Saharan Africa, with a fairly large banking sector. The sector is a cutthroat business arena, with over 44 players including multinationals all scrambling for a slice of the pie. According to World Bank estimates, the banking sector accounts for up to about 40% of the country’s GDP. Notable however is the fact that much of the Kenyan banking sector’s activity is concentrated among the richest 20% of the population (World Bank, 2008).
According to Financial Sector Deepening Kenya (2008), the most recent data available indicates that only 19% of adult Kenyans reported having access to a formal, regulated financial institution while over a third (38%) indicated no access to even the most rudimentary form of informal financial service. This leaves more than 80% outside the bracket of the reach of mainstream banking. The population is massively under-banked, largely because more than half of the people in Kenya live in rural areas where banking services are non existent and their earnings are paltry.
Recent indication of growth in incomes and rapid urbanization in Kenya however is already pushing up demand for banking services. Financial services growth, which was muted in the recent past, is clearly poised for a take-off in Kenya, on the back of a strengthening economy, advent of technology and systematic reforms of the sector.
An appropriate banking environment is considered a key pillar as well as an enabler of economic growth (Koivu, 2002). Initially, banks in Kenya responded to the growing demand for banking services by opening up new bank branches at the grass roots closer to their potential customers. However, with the continuously emerging wave of information driven economy, the banking industry in Kenya has inevitably found itself unable to resist technological indulgence in order to meet customer needs. Koivu asserts that the need for convenient ways of accessing financial resources beyond the conventional norms has seen the recurrent expansion and modernization of banking patterns. Given the huge demand for finance oriented services, even institutions beside the historical banks such as the mobile phone service providers have joined the fray in an attempt to grab a piece of the perceived cake of opportunity within the banking industry.
The challenging business process in the financial services pressurized banks to introduce alternate delivery channel to attract customers and improve customers’ perception. Electronic Banking or simply e-banking due to its flexibility and perceived convenience has increasingly become the distribution channel of choice for most retail banks. E-banking is an umbrella term for the process by which a customer may perform banking transactions electronically without visiting a brick-and-mortar institution (FinCen, 2000). E-banking encompasses the use banking services delivery channels such as ATMs, telephone, use of plastic money, mobile phone banking and electronic funds transfers.
According to the HYPERLINK “http://en.wikipedia.org/wiki/GSM_Association” o “GSM Association”GSM Association and HYPERLINK “http://en.wikipedia.org/wiki/Ovum_Ltd.” o “Ovum Ltd.”Ovum, over the last few years, the mobile and wireless market has been one of the fastest growing markets in the world with over 2.4 billion cell phone users and it is still growing at a rapid pace. In Kenya, there are more than 20 million mobile phone users slightly over half the population of the country (KNBS, 2009).
The unprecedented uptake of mobile phones in Kenya and rapid absorption of mobile-based banking services is of vital significance. This trend of continued reliance on mobile devices to execute monetary transactions is steadily gaining momentum. Mobile Banking or simply M-banking is one of the newest approaches to the provision of financial services through ICT, made possible by the widespread adoption of mobile phones even in low income regions of Kenya.
Mobile banking takes several dimensions of execution all representing a new distribution channel that allows financial institutions and other commercial actors to offer financial services outside traditional bank premises. M-banking services in Kenya started with the creation of mobile phone sms services by banks. These services included Top-up of mobile phone air time, Minimum/Maximum Threshold Balance Notification, Bills payment, Overdraft notification, Fraud alerts and notification, Daily transaction limit notification, Monthly transaction limit notification, Daily balance notification, Account debit notification, Account withdraw, Transaction status updates for non real time transactions, Loan process status updates, Loan transaction summary, Monthly interest summary etc. These facilities were aimed at enabling customers’ access information relating to their accounts.
Subsequent innovations have seen the mobile banking phenomena continue to grow steadily in Kenya. M-PESA, a mobile money transfer service for instance is one such land mark innovation. M-PESA was first piloted in 2005 where the service was used to disburse loans from a Faulu Kenya to its clients and then to collect repayments via designated Safaricom airtime agents. The commercial version of M-PESA was launched in early 2007 and its success paved the way for numerous mobile banking schemes. Today, different institutions and business are offering m-banking services in Kenya. Some are offered entirely by banks, others entirely by telecommunications providers, and still others involve a partnership between a bank and a telecommunications provider. Regulatory factors play a strong role in determining which services can be delivered via which institutional arrangements (Mortimer-Schutts, 2007).
The mobile banking services are available to mobile phone users of the three main mobile service providers namely Safaricom, Zain and Econet wireless. Safaricom’s service is branded “Mpesa”, Zains service goes by the “Zap” brand name whereas Econet’s services is called U-Cash. The other mobile service provider Telkom wireless/Orange is also expected to roll out its mobile banking service in the course of time. Partnership between Banks and these telecommunication firms to develop mobile applications is in top gear. Products such as M-Kesho of Equity bank’s, Family Bank’s Pesa Pap, and Standard Chartered Bank’s mBanking are just but a few m-banking applications arising out of these partnerships.
While mobile banking applications are rapidly gaining popularity within the banking sector in Kenya, there is not enough evidence of its acceptance amongst consumers. Robinson (2000) reported that half of the people that have tried e- banking services would not become active users. Another author claims that e-banking is not living up to the hype (Weeldreyer 2002). According to Njenga (2009), the effects of usage associated with mobile phone banking in Kenya are yet to be consolidated or quantified in a well-documented fashion.
Lee and Lin (2005) highlighted the need for further research to measure the influence of e-service on customer-perceived service quality and satisfaction (Ibrahim et al, 2006). The perception is formed as a result of interpreting the customer’s experience with the services. (Hiltunen et al., 2002) notes that there is a growing interest in understanding the users’ experience since it has been observed to be a larger concept than user satisfaction. This study seeks to ascertain the users’ perception of M-banking in Kenya by considering four factors; perceived usefulness, perceived ease of use, consumer awareness about m-banking and perceived risks associated with mobile banking. The study aims at examining the impact of these four factors in the move to embrace m-banking in Kenya.
Statement of the ProblemThe pervasiveness of the mobile phone in developing countries has recently instigated the development of applications, which are designed to enhance customer service. One of the most recent is m-banking—a platform for the delivery of financial services via the mobile phone. The main concern within the m-banking literature however is related to its adoption. Many studies pose the question of whether or not these applications have the potential to be appropriated by a large segment of the population. Mols et al., (1999) stated that the diffusion of any form of e-banking is more determined by customer acceptance than by seller offerings. According to Bauer et al (2005), Customer satisfaction and customer retention are increasingly developing into key success factors in e-banking. Any form of e-banking requires perhaps the most consumer involvement, as it requires the consumer to maintain and regularly interact with additional technology. Consumers who use e-banking use it on an ongoing basis and need to acquire a certain comfort level with the technology to keep using it (Servon and Kaestner, 2008) hence the need for regular feedback about their experiences.
Research on consumer attitude and adoption of e-banking showed that there are several factors predetermining the consumer’s attitude towards e-banking such as person’s demography, perceived risk, ease of use of the service and ones behavior towards technology. It has also been found that consumer’s attitudes toward e-banking are influenced by the prior experience of computer and new technology (Laforet and Li, 2005.
Though customer acceptance is a key driver determining the rate of change in the financial sector, empirical studies on what may be hindering total embrace of e-banking by customers have been few (Sathye, 1999). To date, there is very little empirical work examining the customer experience and adoption of m-banking applications in Kenya and discussing the numerous barriers to this process. This survey therefore seeks to bridge that gap by establishing what the users’ perception of the mobile banking products is and what are the main driving factors towards/against the use of the mobile banking products in Kenya. Besides, this study is founded on the knowledge that assessing user experience is an essential part of any new technology product and services particularly in a highly risky and competitive industry such as banking.
General ObjectiveThe general objective of this study is to determine customers’ perception of the various mobile-banking services in Kenya.
Specific ObjectivesTo assess the customers’ level of awareness and their knowledge about m-banking services.
To establish the customer’s perceived ease of use of the m-banking services.
To establish customers perceived usefulness of the mobile banking services/products in Kenya.
To determine customer say regarding the risk associated with use the m-banking services.
Importance of the studyTo Businesses, Investors and IndividualsThe survey will also provide a platform through which users and non-users of mobile banking services will voice their concerns and complements. So far, there are no clear channels through which consumers of potential consumers of m-banking services can voice their concerns and therefore this study will present them with that much needed platform.
To the BanksThis research may help banks to better strategize and better see the future opportunities relating to m-banking. The findings of this study will help decision makers in the banking sector to identify gaps between their expectations of the mobile banking services and the actual customers’ experience. This will go a long way in assisting banks understand better their customer needs and in designing other mobile products and services hence offering better services to their customer, an important ingredient of strategic advantage.
1.5.3 To the Government
Through the Central Bank of Kenya, the Government could greatly benefit from this study. The findings and recommendations could help the Government to better tap and fully explore the opportunities of the mobile Banking models and assist in establishing any missing regulatory needs necessary for the smooth running of these services.
1.5.4 To Academicians and Researchers
For this group, the outcome of this research will inspire further research in the area. It can constitute a starting point of reference and a source for secondary data for further scrutiny in the area. More importantly, the study will at least fill a knowledge gap in that the findings and conclusions will identify some important factors that would affect the adoption of mobile banking in Kenya. As for students of finance and banking and Marketing, this study will be of great help as it will assist them to clearly understand the concept of mobile banking and its applicability.
Scope of the studyThe key intention of this study is to evaluate those factors that determine the perception of retail banking customers towards mobile-banking products in Kenya. The study will focus on the m-banking customers around Nairobi area and the survey will be conducted between the month of June 2011 and July 2011.
Definition of TermsE-Banking -The process by which a customer may perform banking transactions electronically without visiting a brick-and-mortar institution (FinCen, 2000)
M-Banking -The use of a mobile phone or another mobile device to undertake financial transactions linked to a client’s account (Anderson, 2009)
Mpesa -Mobile money transfer service provided by the leading mobile phone service provider Safaricom (Indrani M. et al, (2009).
Mkesho- Equity banks’ m-banking product that link customer account Mpesa service. (Indrani M. et al, (2009)
Customers- Consumers and potential consumers of Mobile Banking products
Chapter summaryThis study seeks to offer an insight into the customer experience with the mobile banking services in Kenya that has not previously been investigated. It focuses on customers’ perception of the various mobile-banking services in relation to usefulness, ease of use, risks and customer awareness of m-banking. The study recognizes the prior research efforts to establish the status of mobile banking usage in Kenya but builds on these findings by seeking the customers’ feedback on the usage of the services. A survey based on the objectives of the study will be conducted between the month of February 2011 and March 2011 in Nairobi.
The subsequent chapter reviews the existing literature on the concept of mobile banking and consumer adoption of m-banking products and Chapter three is a narrative of the research methodology.
CHAPTER TWOLITERATURE REVIEWIntroductionThis chapter presents a review of the literature related to the purpose of the study; “Towards Mobile Banking in Kenya- a customer perspective”. The chapter is organized according to the four specific objectives developed in the previous chapter which include assessing customers’ level of awareness and knowledge about m-banking services and establishing customers’ perceived usefulness and ease of use of the m-banking services/products in Kenya. Finally, chapter discusses customers view regarding the risk associated with use the m-banking services. At the end of the chapter, a chapter summary is provided to give an overview of the related literature review and a description of what the next chapter will cover.
Mobile Banking Awareness
Employment of Mobile Technologies in the Banking SectorAccording to Tiwari, Buse and Herstatt (2006), a cornerstone of Mobile Commerce is built on Mobile Banking which is the provision of bank-related financial services via mobile devices. It comprises of services in the field of accounting, brokerage and financial information. He further notes that Mobile Banking is increasingly being employed by many banks around the world to generate additional revenues, reduce costs or to increase customer satisfaction, often with greater success.
Unlike in the past, when banks offering mobile services suffered a severe setback due to lack of customer interest and unripe technologies, the time seems to be now ripe for (re-)launching mobile services(Tiwari R., et al 2006). Mobile Banking is usually defined as carrying out banking business with the help of mobile devices such as mobile phones or PDAs. The offered services may include transaction facilities as well as other related services that cater primarily to informational needs revolving around financial activities.
2.2.1.1 Mobile AccountingMobile Accounting is sometimes characterized as transaction-based banking services that revolve around a bank account and are availed using mobile devices (Georgi and Pinkl 2005). Not all Mobile Accounting services are however necessarily transaction-based. A more precise definition of Mobile Accounting would therefore characterize it as “availment of account-specific banking services of non-informational nature (Tiwari et al). Mobile Accounting services may be divided in two categories to differentiate between services that are essential to operate an account and services that are essential to administer an account.
Table 2.1: Services in Mobile Accounting
Mobile Accounting
Account Operation Account Administration
Money remittances & transfers Access administration
Standing orders for bill payments Changing operative accounts
Money transfer to sub-accounts Blocking lost cards
Subscribing insurance policies Cheque book requests
Source: Tiwari R.,et al (2006)
2.2.1.2 Mobile BrokerageBrokerage, in the context of banking- and financial services, refers to intermediary services related to the bourse, e.g. selling and purchasing of stocks. Mobile Brokerage can be thus defined as transaction based mobile financial services of non-informational nature that revolve around a securities account (Georgi and Pinkl, 2005). Mobile Brokerage, too, may be divided in two categories to differentiate between services that are essential to operate a securities account and services that are essential to administer that account. (Georgi and Pinkl, 2005).
Table 2.2: Services in Mobile Brokerage
Mobile Brokerage
Account Operation Account Administration
Selling & purchasing financial instruments (e.g. securities) Access administration
Order book administration
Source: Tiwari et al (2006)
2.2.1.3 Mobile financial informationMobile Financial Information refers to non-transaction based banking- and financial services of informational nature (Tiwari, R. and S. Buse). Mobile Financial Information services include subsets from both banking and financial services and are meant to provide the customer with anytime, anywhere access to information (Georgi, F. and J.Pinkl 2005). The information may either concern the bank and securities accounts of the customer or it may be regarding market developments with relevance for that individual customer.
According to Georgi and Pinkl (2005), this information may be customized on the basis of preferences given by the customer and sent with a frequency decided by him. The information should be provided, ideally, on both, pull and push basis. Information services are an integral part of Mobile Accounting and Mobile Brokerage but they may also be offered as a stand-alone, independent module, i.e. Mobile Financial Information can be offered without offering Mobile Accounting or Mobile brokerage but vice versa is not feasible.
Table 2.3: Services in Mobile Financial Information
Mobile Financial Information
Account Information Market Information
Balance inquiries / Latest transactions Foreign exchange rates
Statement requests Market and bank-specific interest rates
Threshold alerts Commodity prices
Returned cheques / cheque status Stock market quotes and reports
Credit card information Product information & offers
Branches and ATM locations –
Helpline and emergency contact –
Information on the completion status –
Source: Tiwari et al. (2006)
Mobile banking Business modelsA wide spectrum of Mobile/branchless banking models is evolving. However, no matter what business model, if mobile banking is being used to attract low-income populations in often rural locations, the business model will depend on banking agents, i.e. retail or postal outlets that process financial transactions on behalf telecoms or banks (Wambari, 2009). The banking agent is an important part of the mobile banking business model since customer care, service quality, and cash management will depend on them. Many telecoms will work through their local airtime resellers. In Colombia, Brazil, Peru, and other markets however, the use of pharmacies, bakeries, etc as agents is common. These models differ primarily on the question that who will establish the relationship (account opening, deposit taking, lending etc.) to the end customer, the Bank or the Non-Bank/Telecommunication Company (Telco). Another difference lies in the nature of agency agreement between bank and the Non-Bank (Infogile, 2007). Models of branchless banking can be classified into three broad categories; Bank Focused, Bank-Led and Nonbank-Led.
2.2.2.1 Bank-focused ModelThe bank-focused model emerges when a traditional bank uses non-traditional low-cost delivery channels to provide banking services to its existing customers (Infogile, 2007). In this model the technological/physical infrastructure of a mobile operator / retailer is used to provide some basic banking services like balance enquiry, A/c to A/c fund transfer, payments for goods / services at merchant outlets using bank account (through ATM/ Debit card / Phone SMS ). Most of these services are already being provided by banks and are covered under existing regulations. So this model poses little specific regulatory issues (Infogile, 2007).
2.2.2.2 Bank-led modelAccording to Ratha., Sanket and Vijayalakshmi, (2009), The bank-led model offers a distinct alternative to conventional branch-based banking in that customer conducts financial transactions at a whole range of retail agents (or
A Behavioral Concept in Psychology
A Behavioral Concept in Psychology
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Attitude and Behavior Consistency
Attitude and behavior consistency is defined as the level at which individuals behaviors depends on their mind-set associated with an object. For instance, positive mind-sets are believed to be connected with approach behaviors while negative attitudes linked with withdrawal behaviors. Therefore, attitude and behavior consistency of human beings can be can be assessed by establishing whether they behave in a manner that that is similar with their attitudes. A number of researches have been carried out to establish the relationship between attitude and behavior of an individual (Weiner, Millon & Lerner, 2003). Various studied carried out have recognized one type of reasoning based on attitudes as the major cause of attitude-behavior consistency increment. On the other hand, the other investigative reasons for feelings are believed to be playing an important role in reducing consistency. Arguably, the difference between the two outcomes is created since there were various types of introspection carried out. The difference can also be brought by the dissimilarities between the studies like the preliminary accessibility of an attitude.
According to Laran and Janiszewski, it has been discovered that a number of people do not do what they say (2008). This problem is majorly caused by the lack of connection between what people say and what they do. In psychological terms, lack of connection between the two fundamentals is termed as attitude-behavior gap. Consequently, this clearly explains why there is no consistency between the behavior and attitude of an individual. A lot of confusions are being caused by contradictions considering that natural attitudes are most probably connected with behaviors. Years of research on attitude have not succeeded in establishing whether attitude and behavior are closely related. An attitude’s bad analytical legality is particularly striking when common attitudes are taken into consideration. Moreover, it is also striking when intuitively linked particular behaviors are taken into consideration. According to the studies carried out approximately sixty years ago, observed attitude-behavior unpredictability came from ignoring behavioral costs.
Most of the researchers, during this time believed that the attitude-behavior gap is not real. Instead they believe that oral assertion and some of the obvious behaviors toward an attitude all originate from a single underlying behavioral character, considered to be a common attitude. However, statements are normally simple to perform than obvious actions. Contrary to other mainstream researches, Campbell’s model states that attitudes and behaviors are axiomatically reliable. The reliability is properly found when two factors are taken into consideration when guessing an individual’s behavior. The two factors to be taken into consideration when predicting an individual’s behavior are; the degree of an individual’s common attitude and the costs involved when executing a behavior. When two cross-sectional studies were carried out, it was established that the reliability between evaluative and behavioral signs of a common attitudinal disposition exist. Rasch paradigm can be used to prove that evaluative declarations and corresponding behaviors can be seen on one dimension. Evaluations are also considered to be easy compared to behaviors.
Through various experiments which have been carried out in the laboratories, it has been discovered that the performance of an independently difficult behavior can be guessed based on the degree of individual’s previously recognized attitude towards an environment. Consequently, a complete internet study was carried out while making a guess in the reverse direction. People’s common environmental attitudes were inferred on the basis of whether demanding environmental behavior was carried out or not (Ajzen, 2007). In connection with the Campbell’s paradigm, it was established that individuals who supported extremely demanding behaviors also recorded a higher degree of an attitudinal disposition. With a complete experimental field study, the availability of spillover effect was validated. Spillover effect is considered to be the observable facts of numerous behaviors changing due to the change in an individual’s attitude. It was indicated that improving a common ecological attitude results into the performance of environmental behaviors from a number of areas like recycling mobility and transportation. The presence of the spillover clearly proves that there is formal and self-evident reliability between common attitudes and numerous specific behaviors.
The central principle of the current research is that present theories of the function of knowledge in attitude-behavior consistency are not complete. This is because other psychological methods, which were not known earlier in the literature, also play an important role to the effect of knowledge on attitude-behavior reliability. Particularly, it is suggested that when taking into account the role of knowledge, it is important to form an idea that attitude-behavior consistency is an assumption process. One long recognized but underappreciated discovery is that even when an individual has a highly sensitive attitude that is made active during behavior, the attitude may not necessarily transform into behavior. It is also important for an individual to recognize that the attitude is a significant guide to the behavior in this context (Kusluvan, 2003). Consequently, when faced with a behavior connected to an attitude object, it is necessary for individuals to think about how instructive their attitudes are to the particular behavior in question.
Even though there are numerous ways in which attitude and behavior consistency can be measured, the most recognized method is to study a relationship or regression factors between attitude scores evaluation of behavior. When the connection is established to be higher, then it would imply that there is an elevated level of attitude-behavior consistency. Regulators of attitude and behavior consistency are then studied by investigating the degree to which the amount of the correlation or regression coefficient is not similar across levels of the suggested moderator. When faced with a behavioral choice, individuals certain times engage in presumption processes concerning how enlightening their attitudes are for the behavior in this context. The above presumption process is controlled by properties of attitude-relevant knowledge. This assumption was supported based on the idea that attitudes have stronger effect on behavioral objectives when information essential to attitudes was considered to be of high-behavioral significance. Experiments carried out by both Miller and Tesser indicated that individuals may take their attitudes to be improper, when measured against cognition.
However, current experiments suggest that when there is similarities between the emotional and cognitive nature of attitude and behavior, individuals have the tendency of believing that their attitude is an uninformative assistance to behavior. This implies that it may also be essential for the mind-set and behavior to be similar at certain aspects of affect and cognition with regard to mind-set and behavior and not at the general level. Other experiments carried out indicate that there is the likelihood of knowledge-behavior corresponding effects to take place under intentional and unintentional conditions. Under situations of reduced thought, individuals made use of their universal attitudes regardless of whether the attitudes offered improper guidance based on behavioral tasks or not. Conversely, individuals did not depend on their universal attitudes under conditions of high thoughts. This implies that a number of individuals positively respond to the suitability of their mind-sets as guides to behavior when in low deliberation.
Previous studies carried out indicated that attitude is considered to be inappropriate since it is not consistent with the measurement of knowledge most appropriate to the objective of the decision. In other cases, attitude has been found to be dependable with its precise measurement of knowledge, but is considered to be improper since the measurements of knowledge have very little significance to the objective of the behavior. This implies that individuals tend to be quite dependent in the application of their attitudes when in high-deliberation situations. Conversely, in low-deliberation situations, individuals are not sensitive to the identification of the attitude in this context.
According to Smith and Swinyard, the behavior of customers is majorly determined by their attitudes based on the traditional attitude theory (2010). For instance, they would always want to purchase goods and services they like most. Nevertheless, increasing evidence shows that attitudes cannot be effectively used to predict the obvious behavior of an individual. Integrated model has been found to be effective since it is capable of distinguishing behaviors based on commitment. Behaviors which are considered to have a lot of loyalty are those with huge economic, collective, or mental costs. According to this perception, customers will have the tendency of making committed choices without powerfully held favorable attitudes. Moreover, attitudes of the customers are considered to be more intense or assertively held for goods on trial than those goods that are being advertised.
This implies that attitude and behavior consistency is higher for those goods and services on trial than those goods which are being advertised. Attitude-behavior consistency can also be measured by comparing the behavioral assurance with attitude strength. Lower order attitudinal strength implies that the customers can either take part in the trial purchase or not hence it is more likely that attitude-behavior consistency will be moderate or low. Unlike the consumer who have positive attitude, customers with negative attitudes tend to spend less money in purchasing products without value. This implies that the attitude-behavior consistency is high. Moderate levels of attitude-behavior consistency are expected to continue regardless of the increase or decrease in the cost and commitment of the customers’ behavior.
Hernandez, Rubio, Revuelta and Santacreu states that behavioral consistency is created by objective concept activation (2006). The combination of a goal and a behavior may control behavioral consistency through a process and not presumption of objective commitment and progress. The presence of presumption events can help regulation in cases where individuals believe that their previous behavior has interfered with their progress toward regulation. A number of studies have constantly indicated that people’s behaviors approximately similar to their behavioral intentions. They have also indicated that people’s behavioral intentions are similar to their attitudes and social beliefs. For instance, people who visit gyms are always tempted to use steroids to improve their appearances. Conversely, an individual with a strong attitude coupled with motivation and social beliefs on steroids would refrain from taking the drugs. This is because that was their behavioral intention.
References
Ajzen, I. (2007). Attitudes, Personality and Behavior. Maidenhead: McGraw-Hill International (UK) Ltd.
Hernandez, J., Rubio, V., Revuelta, J & Santacreu, J. (2006). A procedure for estimating intrasubject subject behavior consistency. Retrieved from HYPERLINK “http://www.uam.es/proyectosinv/psimasd/consistencia-epm.pdf”http://www.uam.es/proyectosinv/psimasd/consistencia-epm.pdf
Kusluvan, S. (2003). Managing employee attitudes and behaviors in the tourism and hospitality industry. Hauppauge, New York: Nova Science Publishers.
Laran, J & Janiszewski, C. (2008). Behavioral consistency and inconsistency in the resolution of goal conflict. Retrieved from HYPERLINK “http://moya.bus.miami.edu/~jularan/Papers/SR_Laran_Janiszewski_JCR.pdf”http://moya.bus.miami.edu/~jularan/Papers/SR_Laran_Janiszewski_JCR.pdf
Smith, R & Swinyard, W. (2010). Attitude-behavior consistency: The impact of product trial verses advertising. Retrieved from HYPERLINK “http://www.marketingpower.com/ResourceLibrary/Publications/JournalofMarketingResearch%28JMR%29/1983/20/3/5001844.pdf”http://www.marketingpower.com/ResourceLibrary/Publications/JournalofMarketingResearch%28JMR%29/1983/20/3/5001844.pdf
Weiner, I. B., Millon, T., & Lerner, M. J. (2003). Handbook of psychology: Volume 5. New York: Wiley.