Corporate Governance-Based Evaluation of Alternative Distribution Channels in the Turkish Banking Sector Using Quality Function Deployment With an Integrated Fuzzy MCDM Method

Corporate Governance-Based Evaluation of Alternative Distribution Channels in the Turkish Banking Sector Using Quality Function Deployment With an Integrated Fuzzy MCDM Method

Hasan Dinçer (Istanbul Medipol University, Turkey), Serhat Yüksel (Istanbul Medipol University, Turkey), Mustafa Tevfik Kartal (Borsa İstanbul, Turkey) and Gökhan Alpman (Istanbul Medipol University, Turkey)
DOI: 10.4018/978-1-5225-8003-4.ch003

Abstract

The aim of the chapter is to evaluate the effect of corporate governance in alternative distribution channels for the Turkish banking sector. For this purpose, an integrated fuzzy MCDM model is structured to analyze the multi-dimensional effects of corporate governance for ranking the performance of alternative distribution channels by using the phases of quality function deployment. The method is constructed with the hybrid model by considering the fuzzy DEMATEL and fuzzy TOPSIS. Initially, the consumer needs and other internal and external factors that present the dimensions of the corporate governance are defined to analyze the results using the quality function deployment approach, and then the fuzzy DEMATEL method is used for the weights of dimensions for each perspective of house of quality. The fuzzy TOPSIS is used for ranking the alternative distribution channels in the Turkish banking sector. It is concluded that in the Turkish banking sector, branch is the most preferred alternative distribution channel whereas the importance of ATM and social media is very low in comparison with others. Hence, it is believed that using other channels, such as social media and ATM, has an increasing effect in order to increase the effectiveness of the banking sector. Therefore, it can be said that necessary infrastructure should be provided to attract the attention of the parties to make banking transactions through social media and ATMs.
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Introduction

Corporate governance refers to the system in which the set of rules and controls is transparent in the company (Harford et. al., 2012). Owing to this aspect, it can be said that it has a contribution to manage the company in a fairer way. Hence, the interests of all stakeholders, such as customers, employees and suppliers are taken into the consideration. It is believed that this situation has an increasing effect on the financial performance of the companies. Because of this issue, companies started to give much more importance to the concept of corporate governance in order to increase their power in the market. Otherwise, it may not be possible for these companies to survive in the competitive business environment (La Porta et. al., 2000; Griffin et. al., 2017).

The issue of corporate governance has lots of advantages for many different parties. Firstly, in a business environment in which there is effective corporate governance, employees trust more to their companies (Aguilera et. al., 2018; Shi et. al., 2017). This situation leads to increase in the motivation of these employees. In addition to them, investors have a right to learn about the financial condition of the companies. By implementing transparent policies, such as detailed and accurate financial reports, the needs of these investors can be satisfied (Tunay and Yüksel, 2017; Schmidt and Fahlenbrach, 2017). Moreover, this issue gives also beneficial information to the customers. Consequently, it can be said that effective corporate governance creates a balance between top management and stakeholders.. Therefore, it has a significant influence to improve the quality in the companies (Laoworapong et. al., 2018).

Quality function deployment is an important concept in which customer requests are taken into the consideration in product or service process (Chen et. al., 2017). In other words, this methodology focuses on satisfying customers’ needs and expectations effectively. Within this framework, it has four different steps to reach this objective. First of all, there should be a planning process. After that, customer requirements are identified with the aim of providing better services. Next, quality house is created in which the expectations of customers and companies are compared. In the final step, the results are identified according to this comparison. As it can be understood, quality function deployment method plays a key role in the critical decision-making process of the companies (Popoff and Millet, 2017).

Due to the aspects emphasized above, it is understood that strategic business policies should be adapted to quality function deployment methodology. The main reason behind this aspect is that it gives significance to the expectations of the customers. Because it is obvious that there is no chance for a company to survive without considering customers, this methodology makes an important contribution to the performance of the companies. Otherwise, these companies may face many different problems although there is no problem regarding quality in the products. As a result, it can be said that the quality function deployment-based policies have a significant relation with business success (Liao et. al., 2017).

Banking sector has a critical role in the economic performance of the countries because it causes the investments in the countries to go up by providing funds to the investors (Yüksel et. al., 2017). However, especially after the globalization, it can be seen that the competition in this sector increased very much. Thus, banks start to spend too much money to identify the correct actions to overcome this problem. Hence, it is understood that quality function deployment methodology should be implemented by the banks to reach this objective. Owing to this method, it will be possible for the banks to take corrective actions by considering the requirements of the customers (Dinçer et. al., 2017).

Key Terms in this Chapter

Mobile Banking: It means making bank operations with the application uploaded on mobile phone.

Internet Banking: Making bank transactions by using internet.

ATM: It is the machinery of the banks in which banking operations can be made.

Customer-Oriented Service Design: It means considering the expectations of the customers in developing new services.

Corporate Governance: It refers to the giving importance of the expectations of all shareholders to increase the performance of the companies.

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