The effect of quality circles on perceived service quality in financial services

Over the past decade much has been written on service quality (SQ) in the financial services industry and on the value of quality circles (QCs) in service industries in general. The SQ literature propounds the competitive importance of achieving high standards of SQ in service companies and documents the advantages and difficulties of maintaining these high standards. In a different area of management, quality circles (QCs) have been developed as a method of improving processes within companies, with a literature citing widely held beliefs about the benefits of running QC programmes. However, few, if any, previous writers have analysed how QCs and their advantages relate to SQ, despite the potential synergies between the two areas. Reviews both service quality and quality circles, identifies the relation between the two within the framework of gap analysis, and presents empirical work carried out within Midland Bank, investigating this relationship. Finally, presents a 12‐stage approach to implementing a QC programme.