IDEAS home Printed from https://ideas.repec.org/a/inm/orinte/v29y1999i2p62-72.html
   My bibliography  Save this article

Return on Quality at Chase Manhattan Bank

Author

Listed:
  • Roland T. Rust

    (Owen Graduate School of Management, Vanderbilt University, Nashville, Tennessee 37203)

  • Timothy Keiningham

    (Marketing Metrics, Inc., 305 Route 17, Paramus, New Jersey 07652-2905)

  • Stephen Clemens

    (HealthStream, 209 10th Avenue South, Nashville, Tennessee 37203)

  • Anthony Zahorik

    (Burke Institute, 517 32nd Avenue South, Nashville, Tennessee 37212)

Abstract

A method called “return on quality (ROQ)” has been proposed to evaluate the financial impact of efforts to improve service quality. It quantifies the projected net present value of an improvement project and calculates return on investment. During 1995 and 1996, Chase Manhattan Bank applied the method in a controlled experiment with four test branches and four control branches within the retail banking network, with a two-day training program aimed at enhancing service delivery and customer satisfaction. Its primary purpose was to assess the usefulness of the ROQ approach in improving customer service. Largely because of the bank's merger with Chemical Bank, the study was not executed as planned. Despite this, the study showed favorable results from the training effort. The ROQ model facilitated interpretation of the study and appears useful for estimating the financial returns arising from service quality initiatives.

Suggested Citation

  • Roland T. Rust & Timothy Keiningham & Stephen Clemens & Anthony Zahorik, 1999. "Return on Quality at Chase Manhattan Bank," Interfaces, INFORMS, vol. 29(2), pages 62-72, April.
    • Handle: RePEc:inm:orinte:v:29:y:1999:i:2:p:62-72
    DOI: 10.1287/inte.29.2.62
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/inte.29.2.62
    Download Restriction: no
    File URL: https://libkey.io/10.1287/inte.29.2.62?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kevin B. Hendricks & Vinod R. Singhal, 1997. "Does Implementing an Effective TQM Program Actually Improve Operating Performance? Empirical Evidence from Firms That Have Won Quality Awards," Management Science, INFORMS, vol. 43(9), pages 1258-1274, September.
    2. Easton, George S & Jarrell, Sherry L, 1998. "The Effects of Total Quality Management on Corporate Performance: An Empirical Investigation," The Journal of Business, University of Chicago Press, vol. 71(2), pages 253-307, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yuhan Ge & Qing Yuan & Yaxi Wang & Keunsoo Park, 2021. "The Structural Relationship among Perceived Service Quality, Perceived Value, and Customer Satisfaction-Focused on Starbucks Reserve Coffee Shops in Shanghai, China," Sustainability, MDPI, vol. 13(15), pages 1-19, August.
    2. Gabriel R. Bitran & Juan-Carlos Ferrer & Paulo Rocha e Oliveira, 2008. "OM Forum--Managing Customer Experiences: Perspectives on the Temporal Aspects of Service Encounters," Manufacturing & Service Operations Management, INFORMS, vol. 10(1), pages 61-83, July.
    3. Chen, Kuan-Yu, 2014. "Improving importance-performance analysis: The role of the zone of tolerance and competitor performance. The case of Taiwan's hot spring hotels," Tourism Management, Elsevier, vol. 40(C), pages 260-272.
    4. Roland T. Rust & Tuck Siong Chung, 2006. "Marketing Models of Service and Relationships," Marketing Science, INFORMS, vol. 25(6), pages 560-580, 11-12.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Charles J. Corbett & María J. Montes-Sancho & David A. Kirsch, 2005. "The Financial Impact of ISO 9000 Certification in the United States: An Empirical Analysis," Management Science, INFORMS, vol. 51(7), pages 1046-1059, July.
    2. David I. Levine & Michael W. Toffel, 2010. "Quality Management and Job Quality: How the ISO 9001 Standard for Quality Management Systems Affects Employees and Employers," Management Science, INFORMS, vol. 56(6), pages 978-996, June.
    3. Sadikoglu, Esin & Zehir, Cemal, 2010. "Investigating the effects of innovation and employee performance on the relationship between total quality management practices and firm performance: An empirical study of Turkish firms," International Journal of Production Economics, Elsevier, vol. 127(1), pages 13-26, September.
    4. Sveen, Finn Olav & Torres, Jose M. & Sarriegi, Jose M., 2009. "Blind information security strategy," International Journal of Critical Infrastructure Protection, Elsevier, vol. 2(3), pages 95-109.
    5. Vera Ferrón Vílchez & Nicole Darnall, 2016. "Two are Better Than One: The Link Between Management Systems and Business Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 25(4), pages 221-240, May.
    6. Lamberson, P.J. & Page, Scott E., 2012. "The effect of feedback consistency on success in markets with positive feedbacks," Economics Letters, Elsevier, vol. 114(3), pages 259-261.
    7. Tari, Juan Jose & Sabater, Vicente, 2004. "Quality tools and techniques: Are they necessary for quality management?," International Journal of Production Economics, Elsevier, vol. 92(3), pages 267-280, December.
    8. Corredor, Pilar & Goñi, Salomé, 2011. "TQM and performance: Is the relationship so obvious?," Journal of Business Research, Elsevier, vol. 64(8), pages 830-838, August.
    9. Nicolau, Juan Luis & Sellers, Ricardo, 2010. "The quality of quality awards: Diminishing information asymmetries in a hotel chain," Journal of Business Research, Elsevier, vol. 63(8), pages 832-839, August.
    10. Ana Kundid Novokmet & Andrijana Rogošiæ, 2017. "Long-Term Financial Effects of Quality Management System Maturity Based on ISO 9001 Principles," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 19(S11), pages 1003-1003.
    11. Kevin B. Hendricks & Vinod R. Singhal, 2001. "The Long-Run Stock Price Performance of Firms with Effective TQM Programs," Management Science, INFORMS, vol. 47(3), pages 359-368, March.
    12. Tari, Juan Jose & Molina, Jose Francisco & Castejon, Juan Luis, 2007. "The relationship between quality management practices and their effects on quality outcomes," European Journal of Operational Research, Elsevier, vol. 183(2), pages 483-501, December.
    13. Joshua G. Rosett & Richard N. Rosett, 1999. "Characteristics of TQM: Evidence from the RIT/USA Today Quality Cup Competition," NBER Working Papers 7241, National Bureau of Economic Research, Inc.
    14. Irina I. Frolova & Emma N. Gilyazeva, 2018. "Foreign Experience of TQM Application in Practice," Journal of New Economy, Ural State University of Economics, vol. 19(2), pages 36-49, April.
    15. Charles J. Corbett & Robert D. Klassen, 2006. "Extending the Horizons: Environmental Excellence as Key to Improving Operations," Manufacturing & Service Operations Management, INFORMS, vol. 8(1), pages 5-22, March.
    16. Lin, Chin-Sen & Su, Chao-Ton, 2013. "The Taiwan national quality award and market value of the firms: An empirical study," International Journal of Production Economics, Elsevier, vol. 144(1), pages 57-67.
    17. Hazhir Rahmandad & Nelson Repenning, 2016. "Capability erosion dynamics," Strategic Management Journal, Wiley Blackwell, vol. 37(4), pages 649-672, April.
    18. Bichescu, Bogdan & Raturi, Amitabh, 2015. "The antecedents and consequences of plant closing announcements," International Journal of Production Economics, Elsevier, vol. 168(C), pages 197-210.
    19. Mihail Busu & Alexandra Catalina Nedelcu, 2017. "Sustainability and Economic Performance of the Companies in the Renewable Energy Sector in Romania," Sustainability, MDPI, vol. 10(1), pages 1-16, December.
    20. Yaser Mansour Almansour, 2015. "The Impact of Total Quality Management Components on Firms Performance," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 6(8), pages 384-394.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:orinte:v:29:y:1999:i:2:p:62-72. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.