JigJiga University

College of Business and Economics

Department of Management

An Assessment of Service Delivery System in Commercial Bank of

Ethiopia
(The Case of JigJiga Branch)

A Research Proposal

Submitted to the Department of Management as a Partial Requirement for the

Award of Bachelors of Arts (B.A) Degree in Management

By: 1. Yehualashet Zenebe R/3249/12

2. Tilahun Eskizia R/3075/12

Advisor: Yitbarek Kiros (MSc)

March, 2023
JigJiga, Ethiopia

1|Page
 Abstract
This study is going to try to assess the service delivery of Ethiopian Commercial Bank, by
taking, JigJiga branch as a case study. The focus of this study will be to identify the basic
service delivery system looks like by taking Commercial bank of Ethiopia, JigJiga Branch..
The researcher’s proposes to use both primary and secondary data. The researcher’s will
use a descriptive research design by employing census as a method of primary data
collection technique. The primary data will be collected using an open and closed ended
questionnaire. The research will also use a secondary data that will be collected from
different secondary sources, such as research articles, books, internet, bank manuals and
other secondary sources. Finally, after coding, editing and presetting the data collected
form respondents, the research will use a deceptive method of analysis, such as ratios,
percentages and averages to analysis the data collected, drawn a conclusion and finally
recommend a possible solution for the problems witnessed with regard to the service
delivery of the bank.
Key Words: Service, Delivery System, Commercial Bank of Ethiopia, JigJga, Ethiopia

2|Page
 Table of content
Abstract.......................................................................................................................................................2

Table of content..........................................................................................................................................3

1. Introduction.........................................................................................................................................4

1.1 Background of the study..................................................................................................................4

1.2 Statement of the problem...............................................................................................................4

1.3 Research Questions.........................................................................................................................5

1.4 Objective of the Study....................................................................................................................5

1.4.1 General Objectives...................................................................................................................5

1.4.2 Specific objectives....................................................................................................................5

`1.5 Significance of the Study......................................................................................................................6

1.6 Scope of the study..........................................................................................................................6

1.7 Organization of the Paper................................................................................................................6

2. Review of Related Literature...............................................................................................................7

2.1 Definitions and concepts of Service.................................................................................................7

2.2 Types of Service...............................................................................................................................8

2.3 Retail Banking Services....................................................................................................................8

2.4 Characteristic of Service..................................................................................................................8

2.5 Service Design and Development..................................................................................................9

2.6 Role of Technology in Banking Industry.........................................................................................10

3. Research Methodology......................................................................................................................10

3.1 Description of the Study Area........................................................................................................10

3.2 Research Design.............................................................................................................................11

3.3 Sample Design and Sample Size..................................................................................................11

3.4 Data Type and Source..................................................................................................................11

3.4.1 Primary Data Source..............................................................................................................11

3.4.2 Secondary Data Source..........................................................................................................11

3|Page
3.5 Method of Data Collection.............................................................................................................11

3.6 Method of Data Analysis................................................................................................................12

4. Budget Break Down and Work Schedule..........................................................................................12

4.1 Budget Break Down............................................................................................................................12

Reference..................................................................................................................................................13

4|Page
 1. Introduction
1.1 Background of the study
How a day’s one of the big issues in recent year has been a growth of phenomenal at a
service in the world service is growing even faster in the world economy making up
quarter of the value of international trade (Kotler. 2006).
Among those industries who are engaged in service delivering activity, the banking
industries are playing major role. The bank industries are playing a major role. The bank
industry gets new client who opens checking and saving account. Ethiopia which is one of
developing countries has been shown tremendous improvement in service sector change
the features of economy among other banking sector on selected size of country due to
political problem government bureaucracy (Philip kotler 2003).
Banks are financial institution that deposit and make loan so as to make money. Included
under the term banks are firms such as commercial banks, saving and credit union banks
are financial intermediaries that the average person interact with most frequent.
Commercial banks are one of the financial included under the banking categories that can
be denied as : commercial banks are privet banks that are in business to made profit by
providing a full range of banking service including checking accounts saving , deposit and
electronic banking service . But other system would be their own draw back such as lack of
skilled manager, lack of enough amount of capital to loan and some lack of technological
advancement.
1.2 Statement of the problem
According to Sharma2003), today’s service delivery system is important for all
organizations whether small or big sector. But most organization to day do not understand
how to manage service delivery system, particularly in baking sector is difficult than
measuring in quality of manufacturing goods.
Service delivery system is challenging and depends on many factors that cannot be
controlled by the service provider on careful inspection and dimensions of service delivery
system. A major focus rests in component of human interaction in service delivery system
especially in commercial bank of Ethiopia on service delivery system may fact some
problem that affect the successful of service delivery system . The problem includes lack of
commitment and lack of relationship between employee and their employee. This problem
can be hinder the effective way of the delivery system of the bank there for this problem

5|Page
can be alleviated or reduced by committing the employees in their working areas and
create in good relationship with their bosses.
1.3 Research Questions
The following are the basic research questions that this research tries to answer. These
are:-
1. How is the service delivery locks like in Commercial bank of Ethiopia, JigJiga
Branch?
2. What are the criteria used by the bank to measure its service delivery quality?
3. What are the challenges encountered by the bank in delivering its services?
4. What are the possible solutions to be used by the bank in solving its problems with
regard to its service delivery?
1.4 Objective of the Study
1.4.1 General Objectives
The general objective of the study is to assess the service delivery system of commercial
bank of Ethiopia in JigJiga branch.
1.4.2 Specific objectives
The specific objectives of this study will be: -
1. To know how the service delivery system of the commercial bank of
Ethiopia, JigJiga looks like.
2. To identify the criteria used by the bank to measure its service delivery
quality.
3. To identify the challenges observed in delivery the services of the bank.
4. To forward possible recommendation for problems and challenges
observed in service delivery of the bank.
1.5 Significance of the Study
 It provides input to the management of the bank to re-examine and revise its service
delivery system and policy.
 It is expected that such research works have grate impact in developing the research
skill of researchers. Hence, the researcher expects to gain additional research skills
and exposures by undertaking this study.
 It can be used as a reference material for other interested researchers who want to
carry out more extensive study on subject matter in depth.

6|Page
1.6 Scope of the study
Conceptually, the study would be focused on assessing the service delivery system so as to
enhance the performance banking industry in case of commercial bank of Ethiopia bank,
JigJiga branch.
1.7Organization of the Paper
The research paper will be structured in to five main chapters. The first chapter will describe the
introduction of the study that will include the background, statement of the problem, background
of the organization, research question, and objective of the study, significance and scope of the
study. Chapter two presents a review of related literature and the concepts and definitions of
different terminologies. Chapter three will discuss a brief description of the study area and
research methodology of the study that will be used and this will include the sample size and
sampling techniques, method of data collection and methods of data analysis of the study.
Chapter four will present results and discussions of the research outcomes that will be obtained
from the survey questionnaire, observation and interviews. Finally, chapter five will contain
conclusions and recommendations of the research paper.
Figure 1.1: Graphical Representation of Research Paper

Chapter One
Introduction Chapter Two
Literature Review

Chapter Three
Research Methodology
Chapter Four
Data analysis and
Interpretation

Chapter Five
Conclusion and
Recommendation
Source: Researchers Own Design, (2023)

7|Page
 2. Review of Related Literature
2.1 Definitions and concepts of Service
According to Charles W.Lamb and cart, McDaniel, 2001, it is a marketing process described
in some for all types of products whether they are goods and services.
According to them service have some unique characteristics that distinguish them from
goods and marketing strategies need to be adjusted for these characteristics. Service is
deeds, processes and performance. These definitions give a clue about the nature of service
as processed rather than product (Zeithmal, 2006).
According to zenithal defines service to include all economic activity whose output is not
physical products or constructions is generally consumed at the time it is product and
provides added value in terms of connivance amusement timeless comfort, or healthy that
are essentially intangible concerns of its first purchaser.
According to kotler (2003) service as an activity that has Avery long history however, it is
only within 3 years that it has been marked out for special attention. All organization
offered service in some degree or other however a growing number can accurately be
described as service organization for such organization A service is a result of applying
human or mechanical effort to people or objective service involves a deed performance or
an effort that cannot be physically possesses ( marketing 2001) service requires on
operating and delivery system in order to function that system will be designed in such
ways as to offer effective customer service through an efficiently operated process.
2.2Types of Service
According to lack (2002) service divided into four distinct groups:-
 Service industries and companies
 Service product
 Customer service
 Delivered service
 Service industries and companies: Those industries and companies typically
classified with in sector whose core product is a service

8|Page
  Service as a product: Wide ranges of Intangible product offering that customer value
and pay for in a marketplace.
 Customer service: Service that is provided in support of company’s core product.
 Delivered service: The volume of a service provides the benefit and customers
receive firm using service.
2.3 Retail Banking Services
According to Bingham JR (1998), retail banking refers to the types of banking operation in
which bank undergo transaction directly with customers rather than corporation or other
banks. The service offered include saving account, checking account and mortgage
 Saving account: Account maintained by retail financial institutions that pay interest
but cannot be used directly as money (e.g. Checking account).
 Checking account : It refers to transactional account where by customer can with
draw money or money using check
 Mortgage: It is the pledging of property to lender as security for mortgage loan
while mortgage lender. other conditions that interest will be returned to the owner
of the asset when the terms of mortgage have been satisfied or performed
2.4 Characteristic of Service
The qualities of service can be divided in to two implied parts the major parts are:-
A. Intangibility
B. simultaneity
The two implied qualities are
I. Perishables
II. Heterogeneity
 Intangibility
The characteristic of service that cannot be seen felt tested or touched in the same manner
that you can sense tangible goods. It is most significance quality of the service quality
evaluation cannot be made before and sometimes after purchasing service unlike goods;
customers can make choice and evaluate their quality before committing to purchasing it.
 Simultaneously
The characteristic of service where by customer does not only receive the service but
participants in service process as well as in production process. Goods are produced and

9|Page
consumed at the same time so, simultaneity means that because consumer must present
during the production (delivery of the service).

 Perishable
This characteristic of the service means that it cannot be stored, inventoried once produced
it has to be consumed. This implication of characteristic it is demand for most service
(Sharma BS international marketing, 1975).
 Heterogeneity
It Means that service tend to be less standard and uniform than goods (MC Daniel, 2001).
Employees delivering the service becomes the service in the eyes of the customer the
implication is that insuring consistent service quality challenging and depend on many
factors that cannot be controlled by the supplier .
II.5 Service Design and Development
According to kotler (2003), he defines that products that are designed and introduction
through the steps in structured planning frame work have greater like hood of ultimate
success than those not developed within framework. The fact that services are intangible
makes it even more imperative for new service development system to have four basic
characteristic.
It must be objective not subjective
 It must be precise not vague
 It must be fact driven not opinion drive
 It must be methodological not philosophical
II.6 Role of Technology in Banking Industry
According to William Stevenson (2005, OM. 8thedition) technology will continues to be a
focus but it will gradually become embedded in baking business. In future the business
model will be technology and marketing applied to finance. According to him technology
has tremendously stimulated expansion of banking network and range of offered service
online electronic banking; Mobil banking and internet banking are little technology has
been one of stepping stone of recent financial sector reforms aimed at increasing the speed
and reliability of financial operation and initiative to strengthen the banking sector.
Technology has facilitated the introduction of new delivery channel in the form of banking

10 | P a g e
mobile banking and others banking are across branches in their cities but also to other
geographical location with high speed network infrastructure and setting up local area
network and wide area network and connecting them to the internet (www.find).
3. Research Methodology
3.1Description of the Study Area
Somali regional state is the largest and eastern most of the nine ethnic divisions (Kelils) of
Ethiopia. Somali regional state is subdivide to in to eleven administrative zones and six
special zones. The state borders the Ethiopian states of Afar, the chartered city Dire Dawa,
and Oromia to the west, as well as Djibouti to the north, Republic of Somalia to the
northeast, and south, and Kenya to the south west. The region covers an area 279,252 km2.
As per the CSA of population projection (2007 up to 2037), the population of Somali
regional state estimated to be 6,051,000 in 2019. Somali regional state urban
unemployment is estimated to be18.9% with male urban unemployment 9.9% and female
urban unemployment is 29.8%. The unemployment rate is 28% at regional level and male
unemployment rate is 12.3% and female unemployment rate of 43.9% (CSA, 2018). Somali
regional state registered also registered the highest Economic Dependency Ratio (EDR) of
271 persons as compared to the national EDR of 149 persons. This means for each 100
employed persons, there are almost 271 dependents to be supported in terms of food,
clothing, health, education and so on. This means that there were 271 unemployed persons
per one hundred employed persons. The EDR of males and females in Somali regional state
is 196 and 387 respectively (CSA, 2018). JigJiga is the capital city of the Somali regional
State. As per CSA report of 2018, the total population of JigJiga is estimated to be 159,143
with total male population of estimated to be 75,88 (47.7%) and female population
estimated to be 83,255 (52.3%). The unemployment rate in JigJiga is estimated to be 20%,
with male urban unemployment rate of 10.3% and female urban unemployment rate of
32.2% (CSA, 2018).
3.2Research Design
In the study intends to describe the service delivery systems of banking industry looks like
by taking commercial bank of Ethiopia, JigJiga Branch as its case study. To achieve the
objective of the study, this research study will use descriptive research as it is describing
the existing situation and to come up with certain possible recommendations for problems
observed.

11 | P a g e
 3.3Sample Design and Sample Size
To conduct the study the research will be use census method. Thus is because, Commercial
bank of Ethiopia, JigJiga branch has a very few employees. As it is acquired from the bank
branch manager of the JigIiga branch currently has only 33 employees and one bank
branch manager. Hence, the target population of the study is very small; it is recommended
that census will be an appropriate method of primary data collection instrument.
3.4Data Type and Source
Two sources of data collection methods will be used to obtain the necessary information
that is needed for effective writing of this research work. These two sources of data will be
the primary source and the secondary source of data.
3.4.1 Primary Data Source
The primary data will be collected by using data collection tools such as questionnaires,
interview and observation of the researcher by personally vesting the college. An interview
will be conducted with branch manager of the JigJiga breach.
3.4.2 Secondary Data Source
The secondary data source will be gathered from different sources like published and
unpublished documents, proclamation and reports of the college as well as journals and as
well as books and other materials deemed necessary will be used.
3.5Method of Data Collection
To get more specific information concerning as well as per the requirement of the
statement of problem and as per the research objectives and questions, the study will use
both primary and secondary type of data. The primary data will be collected by using data
collection tools such as questionnaires, interview and observation, that is, the researchers
will personally visiting of the bank. The secondary data will be gathered from different
sources like journals, published and unpublished documents, and reports of the branch of
the bank as well as books and other materials.
3.6Method of Data Analysis
Analyzing the data is a crucial part of the research study. The researcher will use
qualitative research approaches using the appropriate tools and instruments such as
percentage, tables, charts and others to facilitate the interpretations of the data and the
presentation of findings. The method of data analysis that will be applied in this study is

12 | P a g e
descriptive analysis in that the collected data will be analyzed by using the methods of
descriptive Statistics.

4. Budget Break Down and Work Schedule

4.1 Budget Break Down
The required budget for this research budget is presented in the following tables below.
Part I: Sstationary Cost
No. Item Measuremen Amount Unit Cost Total Cost
t
1 Paper Pad 5 150 750.00
2 Pen Piece 10 5 50.00
3 Pencil Piece 5 3 15.00
4 Eraser Piece 2 5 10.00
6 Small Note books Piece 2 30 60.00
7 Printing & binding Lump sum -------- --------- 500.00
8 Questionnaire duplication Lump sum ---------- ----------- 1000.00
Sub-Total 2385.00
Part II: Per-diem Cost
No. Item Measurement Amount Unit Cost Total Cost
1 Researcher (1) Per Person Per Day 20 days 200 4000.00
2 Enumerators (3) Per Person Per Day 10 days 200 6000.00
Sub-Total 10,000.00
Part III: Summary of Budget
No Budget Item Budget for each item
1 Stationary Cost 2385.00
2 Per-diem Cost 10,000.00
Total Budget 12,385.00
2.

13 | P a g e
 Reference
Christian Gronroos. (2005) service Marketing and marketing 3 rd edition,
the Hanken swedish school of economics & business administration,
finland.

Hatt Michael D. (2006) Business marketing management 4th edition

Frank G.Bingaam JR (1998). Business marketing management 4 th

edition

Dharma Bs. (1995) international marketing 2 nd edition, comic book

resspirce, trinitly university in sanantonio.

http://www.Rechard. Marketing Management.com

Sharma BS (international marketing 1975, adam Blevey India.

William Stevenson Operational Management. 8 th edition) 2005, Mc, Graw.

Hill, New your.

Zeithmal (service marketing 2006), Mc graw. Hill company the University

of Culitormia.

Philip Kotler. ( Marketing Management) 2003, plinkade holls plc, Delhi.

Afitsimmos 1998 (customer complaints 2nd edition

Plamer Adrian (1995) service quality chain

14 | P a g e
15 | P a g e