Assessing the effectiveness of service delivery reform. The quest for customer satisfaction in public institutions of Arba Minch town

Master's Thesis 2016 123 Pages

Business economics - Offline Marketing and Online Marketing





List of Tables

List of Figures



1.1 Background Of The Study
1.2 Background to the Study Area
1.3 Statement of the Problem
1.3.1 Research Questions
1.4 Objectives of the Study
1.4.1 General Objective of the Study
1.4.2 Specific Objectives of the Study
1.5 Delimitation and Limitations of the Study
1.5.1 Delimitation of the Study
1.5.2 Limitations of the Study
1.6 Significance of the Study
1.7 Definition of Key Terms
1.8 Organization of the Paper

2.1 Introduction
2.2 Concept of Service
2.2.1 Service Delivery
2.2.2 Public Service Delivery
2.2.3 Service Quality
2.3 Theories and Concepts related to the NPM and Public Service Reforms
2.3.1 New Public Management Theory
2.3.2 Public Choice Theory
2.3.3 Agency Theory
2.4 Public Service Reforms and Service Delivery
2.4.1 Public Service Reforms in Africa
2.4.2 Public Service Reforms in Ethiopia
2.5 Customer satisfaction
2.5.1 Theories of Customer Satisfaction
2.5.2 Customer Expectations
2.5.3 Managing Customers’ Expectations
2.6 Compliant Handling
2.7 Service Encounters
2.8 Effectiveness
2.9 Review of Empirical Studies
2.10 Conceptual Framework

3.1 Introduction
3.2 Research Approach
3.3 Data Type and Sources
3.4 Methods of Data Collection
3.5 Sampling Design
3.5.1 Population, Sampling Unit, and Sampling Frame
3.5.2 Method of Sampling
3.5.3 Sampling Procedure and Sampling Size
3.6 Method of Data Analysis
3.7 Ethical Consideration
3.8 Summary

4.1 Introduction
4.2 Response Rate of the Respondents
4.3 Characteristics of the Respondents
4.3.1 Characteristics of the Respondents of Questionnaire
4.4 Status of the existing service delivery in public institutions
4.4.1 Working environment
4.4.2 Service standards
4.4.3 Awareness level of customers Awareness of Customers about Citizen’s Charter
4.4.4 Service provision Provision of fair service
4.5 Handling Customer’s Complaints
4.5.1 Customer handling
4.5.2 Cooperation And Communication
4.5.3 Willingness of the employees to help customers
4.5.4 Engage the customers as a stakeholder
4.5.5 Managing and handling complaints Managing complaints Handling complaints Responsiveness of the institutions to customer’s complaints
4.6 The gap between customer expectations and the existing level of service provision
4.6.1 Enough skilled manpower
4.6.2 Allocation of adequate budget and material resources
4.6.3 Technology usage of the institutions
4.6.4 Satisfaction of employees with their job occupation
4.6.5 Motivation of Employees
4.6.6 Understanding the difference between public expectation and the existing service
4.6.7 Exceeding customer’s expectations
4.7 Implementation of service delivery the reform sub-program
4.7.1 Perception and Awareness level of the Civil servants
4.7.2 The management system of service delivery reform sub-program Processes coordinators’ roles The support given by immediate leaders Political leaders roles
4.8 Summery

5.1 Introduction
5.2 Summary of key Findings
5.2.1 The status of the existing service delivery
5.2.2 Handling Customer’s Complaints
5.2.3 The gap between customer expectations and the existing level of service provision
5.2.4 Implementation of service delivery the reform sub-program
5.3 Conclusion
5.4 Recommendations
5.4.1 For the Public institutions
5.4.2 For Policy makers
5.4.3 For Community at large
5.4.4 For Future researchers


APPENDIX 1: Questionnaire to Employees
APPENDIX 2: Questionnaire to Customers
APPENDIX 3: Interview Questions to Head of Offices
APPENDIX 4: Interview Questions to Kebele Managers
APPENDIX 5: FGD guide to AMTA Steering Committees
APPENDIX 7: Observation Check-list
APPENDIX 9: Location of the study Area


This thesis is dedicated to the loving memory of my parents.

My mother, the late W/ro Tewabech Gizaw did not only raise and care for, but also she played great role for me to be here.

My father, the late Ato Ayenew Mhirete had the strenuous task for eight years by raising eight incorrigible children by himself, after the untimely death of my mother.



I am incredibly thankful to my God and St. Mary in helping me in every aspect of my life and made the whole thing beautiful through my journey.

Firstly, my appreciation is goes to my advisor Nigusie Dhaba (MA) for his unreserved supports, guidance, constructive comments, technical, and professional supports throughout the research work.

Secondly, I would like to extend my special thanks to my cousin Befekadu Esayas (Ph.D Candidate in AAU), to his support and advice starting from the proposal up to the thesis work.

Thirdly, I am extremely grateful to AMTA Leaders and Employees for their unrestricted and genuine support for the success of the research work. My especial thanks to AMTA peoples for their cooperation in giving genuine information for the realization of the research work.

Finally, I would like to express my heartfelt thanks to my families especially to my sisters and brothers, my staffs, and my friends for their unrestricted love and support. My warmest thanks and wonder is goes to my sons Fikir (Dupi) and Yamlak (Ababi) for their love, respect, and their patience for staying two years without mother’s love, care, and treatment.

List of Tables

Table 3.1 Sample of the respondents

Table 4.1 Summary of the Characteristics of Employee respondents

Table 4.2 Summary of the Characteristics of Customer respondents

Table 4.3 Response of employees on pre-determined service standards

Table 4.4 Response of customers on Awareness about service provided

Table 4.5 Response of the customers on the Service provision

Table 4.6 Response of the customers on the provision of fair service to customers

Table 4.7 Response of the employees on customer handling

Table 4.8 Response of the employees on the cooperation and communication

Table 4.9 Response of customers on the Willingness of the employees to help customers

Table 4.10 Response of the customers on Participating as stakeholder

Table 4.11 Response of customers on the responsiveness of the institutions to customers’ complaints

Table 4.12 Response of Employees on enough skilled manpower

Table 4.13 Response of Customers on enough skilled manpower

Table 4.14 Response of Employees on allocation of adequate budget and material

Table 4.15 Response of Employees on Technology usage

Table 4.16 Response of Customers on Technology usage

Table 4.17 Response of Employees on the motivation level of employees

Table 4.18 Response of Employees on exceeding customers’ expectation

Table 4.19 Response of Employees on processes coordinators roles

Table 4.20 Response of Employees on the support given by the immediate leaders

Table 4.21 Response of Employees on the Political leaders’ roles

List of Figures

Figure 2.1 Conceptual Framework

Figure 4.1 Response of employees on the conduciveness of working environment

Figure 4.2 Response of customers on the conduciveness of working environment

Figure 4.3 Response of customers on pre-determined service standards

Figure 4.4 Response of Customers on the awareness of Customers about Citizen’s Charter

Figure 4.5 Response of customers on customer handling

Figure 4.6 Response of employees on participating customers as a stakeholder

Figure 4.7 Response of Employees on satisfaction of their job occupation

Figure 4.8 Response of customers on exceeding customer expectation

Figure 4.9 Response of Employees on awareness of employees about the reform programs


Abbildung in dieser Leseprobe nicht enthalten


Public services are funded by taxpayers’ money. Thus, the ultimate goal of public institutions is providing services to citizens’ in an effective way. This day improved services are provided by public institutions due to the implementation of different tools such as BPR, BSC, change army, and citizens’ charter. In addition, the services provided by the institutions are causes of satisfaction and dissatisfaction of citizens’. Accordingly, to improve the quality of the services provided by the institution continuous follow up and study is needed. Therefore, this study was conducted to assess the effectiveness of service delivery reform, the quest for customer satisfaction in public institutions of AMTA. Accordingly, the study has examined the status of the existing service delivery of the institutions of AMTA. Additionally, attempts have been made to investigate the factors that affect the effectiveness of service delivery of the institutions. To this purpose, data was gathered through questionnaire, interview, FGD, and review of published and unpublished documents. A total of 203 individuals were consulted from 4 institutions and 2 Kebeles i.e. 65 employees, 88 customers, 4 head of offices, 2 Kebele managers, 44 management bodies of the offices and AMTA steering committees. The study result revealed that the service delivery of the institutions is relatively effective; customers of most of the institutions have awareness about the service standards; majority of the institutions have compliant collecting and handling methods; the employees have awareness about the reform programs and service delivery; working environment of majority of the institutions is not conducive; absenteeism; lack of punctuality; and have shortage in IT materials. In order to alleviate the challenge, it is recommended that the implementation of the reform programs needs serious follow up and attention of decision makers. Additionally, to the improvement of the services, participation of the service takers must take in to account.

Key words: Service, Satisfaction, Customer expectation, Customer satisfaction, Effectiveness


This chapter is deals with background of the problem and introduces arguments why service delivery needs an investigation regarding customer satisfaction. It also concerned with statement of the problem, objectives of the study, significance of the study, delimitation/limitations of the study, background of the study area, and organization of the study.

1.1 Background Of The Study

Any government can provide an efficient and effective public service with the intention to ensure its existence and trust of its citizens. Delivering a high quality service is a means in favor of a continuous competitive benefit. We live in a competitive world that needs a continuous improvement with the aim of providing an effective public service delivery to improve customer satisfaction, for the reason that customer satisfaction has a positive impact in an institution’s profitability and it builds trust (Angelova, 2011).

According to USAID (2013), an efficient service delivery uses benefits of the natural possessions, demographics, plus economic associations near in town districts. Governments might guarantee improved responsiveness for customer complaint plus suitable billing-payment structure. That raises cost improvement by means of delivering services during competitive stage of government near to the targeted customers.

On the other hand, various societies have dissimilar perceptions towards the quality or effectiveness of service delivery. Accordingly, it depends on attaining the challenging goals and expectations with the aim of satisfying the stakeholders (OECD, 2008).Through different types of services, customers also play critical roles such as producing service outcomes plus finally increasing or doubting based on the satisfaction and the worth they expected. In different stages of participation, customers can play three crucial roles. These are: customer as productive source, provider to quality and satisfaction as well as value, and participant to the service organization (Bitner, Faranda & Hubbert, 1997).

Africa being in developing economies, where the concept of service delivery links the new public management (NPM) and it gives extra weight to developmental state. A project review conducted on service delivery in Nigeria in 2003, indicates that the study is conducted by giving emphasis to the environment of service delivery in the institutions other than giving emphasis to the views and experiences of people’s. The final result shows that the services are not helping people when they are not accessible as well as unresponsive toward customer wants; the public has poor confidence; organizational preparations are puzzling and extravagant; service delivery programs be obliged to somewhat react to society and customers demand; the service privileges and rights or together with timeframes and fees might be correspond to the citizens (Sheikh & Dyk-Robertson, 2008).

In Ethiopia, public administration is a recent phenomenon. It was started in 1909 with the appointment of the nine ministries during the reign of Menilik II who announced the decent of modern bureaucracy. By then, different civilizations emerged in the country in different sectors. When we see the civil service reform programs in the country during regimes of Haile Silasie (Regent 1917-1930, Emperor 1930-1974), it had the greatest emphasis of instituting modern public administration and it was ongoing by his predecessor. Since then, the civil service expanded with increasing consolidation among the political applies of centralization. In addition, the civil service Agency was established in 1962 as central Personnel Agency by order No.28/1962. During this time, modernization of the states reached a reasonably advanced stage. In the period of Derge (from 1974 to 1991), the civil service endured through insignificant changes for 17 years. The current government, EPRDF came into power in 1991, and focused on the structural modification with economic liberalization and structure reform in public sectors. As a result, civil service reform program has been mainly necessitated by the proclamation no. 1/1995 (Taye, 2008).

In 2001, the civil service reform programs were designed for the first time under the capacity building programs with five sub programs. The sub-programs were: Top Management Systems (TMS); the Human Resource Management (HRM); Service Delivery (SD); Expenditure Management and Control (EMC); and Ethics sub-program. The programs were guided by the former Ministry of Capacity building. Ibid

The Ministry of Capacity Building was replaced by Ministry of Civil Service in 2010 to run the civil service reform programs. Then Ministry of Civil Service revised civil service reform programs in April 2013 (Ministry of Civil service, 2013).

Any government needs a research on the implemented policies and strategies in order to revise, change and/or to improve the standards of services provided by the public institutions. Thus, numerous researches were conducted in Ethiopia on the implementation of reform programs (Adebaby, 2011; Getachew & common, 2006; Abdu, 2013; Paulos, 2001).

Then the research results revealed that there are several factors that influence the effectiveness of services delivery. Thus, service delivery is a continuous process and needs feedback, evaluation and highly depend on the quality of the employee. In view of this, Adebabay (2011) indicated that the quality of service depends on the quality of employee who provides the service. Therefore, reforming of the civil service programs help to provide a quality service by a talented and inquisitive employee. While the civil service institutions can reduce, the challenges by facilitating eye-catching working conditions based on intrinsic incentive schemes as well.

Also another research conducted in two ministries, ministry of Trade and Industry, and ministry of Education indicates that the improvements of service delivery in government institutions occurs when commitment, ownership, and the drive for changes are all set (Getachew & Common, 2006).Followed by the implementation of various performance management tools in public institutions there is improvement in the efficiency and performance of service delivery.

This study also revealed that, after the implementation of business process reengineering (BPR), the efficiency and performance of services delivered through the departments and units were enhanced (Getachew & Common, 2006). In addition to this, another research proved that after the implementation of protection of basic service programs in 2006, Ethiopia has showed progress to increase and enhance the delivery of basic services. As a result, it showed progress in 2009 in enhanced enrollment rate, an improved child immunization rate, and increased rural access to potable water in relation to that of the 2005 (Ethiop Journal of Health Science, 2011).

Finding from recent research revealed that, service delivery as a governance practice of government institutions are found to be poor for the customers and the employees. This is because most of the customers and the employees of the organizations did not participate in decision-making processes of the sectors, as well as in the issues related to work and compliant handling with the leadership of the sector (Abdu, 2013).

For that reason, the existence of divergent perspectives in service delivery, reforms, and inconsistencies of research results over similar issues was one of the motive factors that lead to research on this topic. Studies mainly discussed about the positive impacts and negative impacts of the implementation of the civil service reform programs, and the effectiveness of service delivery. However, there is no clear indication about the relations between service delivery and customer satisfaction. Hence, the civil service program is a never-ending process that needs a continuous change to provide an effective public service delivery in the way to enhance customer satisfaction and build trust on government institutions.

Thus, the civil service reform programs were launched in all regional states including SNNPR regional state. The same is true for Arba Minch Town Administration (AMTA), where all reform programs are being implemented in all governmental institutions. Followed by this, in current time BSC, change army and Citizens’ charter are being implemented. The BSC implementation was started since 2010 and until now it is functioning as a tool for planning and performance measuring.

Therefore, the purpose of the study is to explore the relations between effectiveness of the service delivery and customer satisfaction; and to provide discussion and comments on the impacts of effective service delivery on customer satisfaction in AMTA. In addition, to suggest better and effective method that enhances effectiveness of service delivery and customer satisfaction in the town as well as to provide alternative solutions to policies and programs.

1.2 Background to the Study Area

Arba Minch Town is one of the 22 SNNPRS reform towns. It is the center of Arba Minch Zuriya Woreda and Gamo Gofa Zone. It is located at 505 Km South of Addis Ababa while 275 Km South of Hawassa, the regional capital. Astronomically, Arba Minch town is located at 602' N Latitudes and 37033' E Longitudes. The astronomic location of Arba Minch town is 060 05' North and 37038' East. Its location above sea level is 1300 to 1500. In addition, the town is bounded by Lake Abaya in the directions north, north east, and by Genta massive in the west and North West. The town was founded in October 1962 and currently, it is the capital of Gamo Gofa Zone and Arba Minch Zuria Woreda (AMTA Government Communication Office, 2013).

Its beauty comes from its tourism attraction natural resources such as lakes Abaya and Chamo both semi circles it; more than 40 springs; ‘ Nech Sar ’ park with its especial endemic animals Zebra and ‘Salaysh’; and ‘Azo Erbata’. Additionally, there are various tourism destination lodges such as Paradise, Soma; Swaynes etc. The town administration has four sub-cities (Secha, Sikela, Abaya, and Nech Sar), 11 kebeles, 17 government organizations & 2 unit-offices with 1636 employees. In addition, Arba Minch University with its five campuses, Arba Minch Textile Factory, Arba Minch Prison (‘Maremia bet’), Arba Minch General Hospital, all zonal institutions, and other public institutions are also found in the town. The area of the town is 5557 hectare and according to 2007 census the number of the residents were 74,879, but the number of population [in 2015 with average population growth rate 4.8% increased to 108,956 and from this 57,050(52.36%) are males and 51,906(47.64%) are females] (GG ZA, GG ZDA, and AMTA, 2014).

Government documents indicate that before the naming of Arba Minch Town Administration, that means from 1991-2003, the town was called as Arba Minh Town. It served as the town of Gamo Gofa Zone and Arba Minch Zuria Woreda. The town structure was administered by Arba Minch Town Municipality and it was accountable for Arba Minch Zuria Woreda Administration. Followed by this, in 2003 Arba Minch Town Administration became one of the 22 reform towns in the region. The organization of the town structure was modified and also the structures of some government institutions were added. Starting from 2008 the town was administered by the AMTA Mayor and by the AMTA Council. Consequently, different government policies and programs, including civil service reform programs are being implemented in different government institutions in the town (GG ZA, GG ZDA, and AMTA, 2014).

The AMTA is of the three government levels and it is implementing government policies and strategies in all of its public institutions. In order to provide a quality service and to satisfy its residents, all reform programs are being implemented. Recently, the town was implemented performance management tools such as BPR since 2008. Whereas the BSC was adopted and introduced in our country in 2009, it is being implemented in SNNPRS since 2009 and in AMTA in 2010(SNNPRS Capacity Building Bureau, 2010).

Nowadays, government institutions all are implementing the balanced scorecard to improve service delivery. Therefore, in the town GTP plan was designed from 2010/2011 to 2014/2015, and also prepared the ongoing five-year strategic BSC plan from 2010/2011 to 2014/2015. In addition, the revised civil service reform programs are being implemented including citizens’ charter and the change army (yelewut serawit) to improve citizen’s satisfaction in the town.

Followed by the implementation of BPR, the structures and working culture of the public institutions are modified. As a result, the public institutions in relation to the previous times provide fast, effective and efficient services. However, a survey study conducted in eleven public institutions by AMTA Civil Service Office (2012) indicates that there are various factors which minimize the effectiveness of service delivery. For instance, the support given by the leaders to the experts from planning up to implementation were not sufficient; the trend of giving feedback to employees was not adequate; and there were gaps in the implementation of Change Army. Discussions and feedbacks given are not enough or less than the one indicated in the manual. Additionally, the participation of the stakeholders or customers of the institutions during planning, implementation, and evaluation are not sufficient.

1.3 Statement of the Problem

This research is designed to assess the gaps in research regarding effectiveness of service delivery and customer satisfaction. Thus, civil service reforms are continuous processes and always need studies. While the civil service sectors are soul of the government policies and programs. For that reason, it is significant to improve the service delivery in all government sectors to increase public satisfaction. The reform programs whether practically led the public sectors to improve the service delivery or needs a continuous follow up; also helps to know the level of civil servants willingness to give a better service delivery to citizens in order to enhance customer satisfaction. To modify civil service reform programs various researches were conducted and extracted different things in the area. In developing countries like Ethiopia the implementation of civil service reform programs are affected due to problems such as insufficient administrative systems, reduced civil service pay and reward system, lack of trust, respect and confidence by the politicians of the civil service career (Paulos, 2001).

As discussed in the background section, there are gaps in researches that clearly indicate the effectiveness in service delivery. On other hand, there are gaps in researches in representing the relations between effective service delivery and customer satisfaction. Service delivery is never an ending process that needs a continuous research, because massive resources are used to run public sector reforms. Therefore, the extent of accountability and transparency may require a critical evaluation in order to give emphasis, because optimal resources are used to foster the required development. For that reason, issues such as institutions, communication, financial resources, structures, managers and working environments can affect public services; when the government provides public trust via good quality of managing and delivering services to the nation (Wanjau, Muiruri & Ayodo, 2012; Olum, n.d.).

Studies conducted in two ministries, Ministry of Trade and industry, and Ministry of Education, on the implementation of civil service reform program indicates that after the implementation of BPR the chain or the length of service delivery process is decreased. In addition, the drive of the reform was improved; there was a considerable and positive change in the sectors in an uncertain environment (Getachew & Common, 2006). Consequently, another research indicates that, in Ethiopia the difficulty of lack of institutional facility that may outlay on the country’s ability to expand and sustain civil service reforms (Mengistu &Vogel 2006 cited in Getachew & Common, 2006). While the present culture of the government institutions was one of the challenges that face the civil service reform programs during implementation. To change those institutional cultures it needs time and a never-ending process to settle the new situations (Sirgut, 2006).

Furthermore, the implementation of BPR has several problems because there are different management and technical problems like IT; convenient working environment; inappropriate job placement; control related factors; and unclear work procedures (Tesefaye & Atkilt, 2011). However, the studies did not deal with the factors that decrease the effectiveness of service delivery at local institution level and how they affect customer satisfaction in the local public institutions.

Research findings within Ethiopian Ministry of Health and Gambella Regional Health Bureau indicated that using information technology can enhance the quality of services by minimizing costs and cycle times, but there is inability of organizations to use the information technology (Samuel, 2012). However, the study did not identify other factors like awareness of the customers, employees, and attitudes towards using technology to enhance the quality of the services.

A study conducted in Ethiopian Electric Power Corporation (EEPCo) in south Addis Ababa region (SAAR), has come up with a result that the institution has malfunction towards capacitating the sector both in skilled man power plus material resources. This was considered as one of the reasons for the inability of the institution to provide quality service to satisfy its customers (Zegeye, 2013).However, this study also did not assess the factors like the leadership roles, customer management, customer handling. Therefore, the current study would deal with these issues that determine the effectiveness of service delivery at local institution level.

Hence, AMTA is one of the government’s bodies that implements the civil service reform programs, in general and in its different sectors, in particular. Therefore, the researcher gathered information from the primary data and it shows that the service delivery in AMTA was affected by conduciveness of working environment; appropriate job placemat; stakeholder engagement; communication; IT, employees motivation; skilled manpower; budget and resource allocation; and support given by political leaders and process coordinators. These problems lead the researcher to provide alternative solutions to AMTA with regard to effectiveness of service delivery as a quest for customer satisfaction.

1.3.1 Research Questions

Based the stated problems, the study attempted to answer the following questions:

1. What is the status of the existing service delivery in public institutions?
2. How do the institutions handle the customers’ complaints?
3. What gaps are there between public expectations and the existing level of service provision?
4. What is the awareness level of the civil servants to the service delivery reform sub-program?

1.4 Objectives of the Study

1.4.1 General Objective of the Study

The main objective of this study is to assess the effectiveness of service delivery reform the quest for customer satisfaction in public institutions of AMTA and to provide suggestions to improve service delivery as well as to provide inputs to policies.

1.4.2 Specific Objectives of the Study

The specific objectives of the study are to: -

1. Assess the status of the existing service delivery in public institutions.
2. Examine how the institutions handle customers’ complaints
3. Identify the gap between public expectations and the existing level of service provision
4. Identify the awareness level of the civil servants to the service delivery reform sub-program.

1.5 Delimitation and Limitations of the Study

1.5.1 Delimitation of the Study

The civil service reform programs are key government programs; however, these programs are multidimensional and applied entirely in civil service sectors. There are five reform sub-programs: top management systems; the human resource management; Service delivery; Expenditure management and control; and Ethics sub-program. By considering time and resource constraints, in this study an attempt would be made to investigate one of the reform sub-programs, the effectiveness of service delivery to the quest for customer satisfaction in public institutions. However, the study covered geographically one Town i.e. AMTA which is found in the SNNPRS in Gamo Gofa Zone. Then the study used cross sectional study method by taking data from the targeted respondents and institutions in the time scope from 2010 up to 2015, and also the research was conducted from February up to June 2015.

1.5.2 Limitations of the Study

The study has covered only the some institutions and Kebeles of AMTA, by considering cost and time. This may reduce the extent of generalization on the results of the study. In addition to this, the sample of the respondents consists of few employees of the institutions and customers. Hence, the unwillingness of the respondents to give information spontaneously and about 5-6 cycles to get information challenged the researcher. Another limitation to the study was lack of sufficient secondary data or policy documents in the institutions to review and evaluate the selected study topic. Therefore, future studies could concentrate on some of these research limitations.

1.6 Significance of the Study

Any governmental institution achievement can be measured primarily through provision of quality service to its beneficiaries. This can be achieved through well-formulated plans and programs based on government policies, programs, and strategies. Additionally, by allocating resources, making conducive working environment, assignment and retention of skilled workers to create knowledgeable staff. However, in AMTA it is not as mentioned above, so that the study tried to investigate problems related to the effectiveness of service delivery reform sub-program in public institutions in the town. Therefore, it is expected that the outcomes of this study will have the following significance.

1. Public Institution s: The research result will assist public and governmental organizations as well as those found at federal, regional, and local level on the way to recognize how service delivery affects organization’s customer satisfaction. In addition, the research result will provide information and understanding on the determinants of effectiveness of service delivery.

2. Policy Makers: The research result will provide knowledge for policy makers on how awareness and attitudes of individuals towards reform programs, leadership roles, customer management, and customer handling contribute for public institutions achievement by enhancing customer satisfaction.

3. Community at Large: The study result will bring understanding on the topic effective service delivery; and the result of the research will provide information about how community level issues influence the public institutions achievement.

4. For Future Researchers: The research result will serve as a springboard for interested researchers on the area, to carry out future studies on the issue.

1.7 Definition of Key Terms

Service is a term that can be defined as every action or advantage that one body is able to provide to the other, it is basically insubstantial as well as it cannot result within the possession of something (Kotler & Armstrong, 2006 as cited in Zegeye, 2013).

Effectiveness is the degree to which stated objectives are meeting or the policy attains what it is planned to attain. The objective might be very wide or very narrow when it is considered as suitable or a range appears variety as of attaining extremely specific to extremely general results (Australian Government’s Productivity Commission Staff, 2013).

Customer satisfaction is taken as one of the major essential outcomes of all market activities in a market-oriented firm and become the most essential forecaster of expectations the behavioral intention (Abdallat & Emam, n.d. p.5). The term Satisfaction is a result of purchase and the use of consequential as of the buyer’s contrast of the rewards and price of the purchase relative to the estimated outcomes. Various researches find that elevated levels of customer satisfaction direct to superior customer loyalty (Anderson, Fornell, & Rust, 2011).

Customer expectation is attitude concerning a service delivery that provide as standard besides a performance is completed (Nabi, 2012).

1.8 Organization of the Paper

This research consists of five chapters. Chapter 1 deals with general background of the study, background of the study area, statement of the problem and research questions, objectives of the study, significance of the study, delimitation of the study, limitations of the study, and definitions of key terms. Chapter 2 consists of introduction, discussion of concepts, review of theories, review of empirical studies, and conceptual framework. Chapter 3 contains research methodology, research approach, data type and sources, methods of data collection, sampling design, method of sampling, method of data analysis, and ethical consideration. Chapter 4 contains data presentation, analysis, and interpretation. Finally, chapter 5 deals with summery of key findings, conclusion, and recommendations.


The study was mentioned background of the study and the study area. Based on the research gaps statement of the problem was clearly addressed and also objectives of the study were designed. Therefore, the study was attempted to identify the relations between effective service delivery and customer satisfaction, as well as identified the challenges regarding the issue.


2.1 Introduction

This chapter deals about concepts, definitions, and theories that are concerned with the study. Reviews of empirical studies that related to the factors that determine the effectiveness of service delivery are also included in this part. In addition, it describes the conceptual framework of factors that determine effectiveness of service delivery and customer satisfaction at institutional and individual levels.

2.2 Concept of Service

Services are a series of knowledge-capturing products, noting which it has variety of similar behavior as if goods in the possession privileges above the products could be well known as well as these could be used continually. There are two main types of services. These are: change-effecting services and margin services. The change effecting services can be applied whether to goods or to people; and also the margin services are applied for both goods and services. The characteristics of the margin as well as the change-effecting services both are not separate entities more than which “ownership rights” could be recognized. These could not survive or deal independently as of their construction (SNA, 2008 as cited in Drake-Brockman, 2011).

Service is greatly uncomplicated job provided that it is carried out appropriately. Different scholars argue that service concept has different meanings. Service concept is the method in which an institution wants to have its services supposed through its consumers, staffs, partners and lenders, that means the institution’s business plan (Makanyeza, Kwandayi & Ikobe, 2013).

Service concept is the beginning of service delivery processes during its actual design. It also provides linkage between service strategy and the service delivery process. Service concept explains in detail accurately what the consumers’ necessities are in the case of how they distinguish worth as well as how they will be satisfied. In addition, the service concept includes the following four elements: 1) the service process is the precise style of the service delivery; 2) The service experience is the consumers’ direct understanding about the service; 3) The service outcome is the benefits and consequences in favor of the customer getting services; and 4) The value of the service is the advantages that customers distinguish as of services in contrast to the price of the services (Davis & Heineke, 2009).

Service concept is a model on behalf of service plus it is defined as a comprehensive explanation of how to serve customers, what requirements and desires will be fulfilled? How this will be performed? (Makanyeza, Kwandayi & Ikobe, 2013) The service concept indicates towards the outcome that customer receive and also is composed of a collection of main and assisting elements that are substantial and insubstantial (Ponsignon, Smart & Maull, 2011).

“Services” include extremely broad and varied range of actions. Other than, be inclined to be insubstantial and tricky to determine. Within extreme sense, the service provider is inclined to be thinking of unhelpfully, services specifically comprise every one of economic activities which is not mining, manufacturing, agriculture, forestry, and fishing. On the other hand, services are usually poorly understood, consequently, as actions that do not create concrete things or goods (Drake-Brockman, 2011).

The service style indicates the “how” of the service delivery processes. The Customers might be expecting a specific disposition or the character and atmosphere of the place to be related among the service. The impression when making a direct contact with service creates the following senses: sight, hearing, smell, and even tactile sensations (Davis & Heineke, 2009).

2.2.1 Service Delivery

Service delivery refers to receiving services in effective and well organized as possible to the planned recipient. In various occurrences, service delivery indicates a level of excellence on the part of the institution as well as it is a trademark of economies that have encouraged past the fabrication stage (http://www.ask.com/question/what-is-service-delivery 2014).

According to www.wmo.int/pages 2015, web site, the World Metrological Organization defined Service delivery as a continuous and a cyclical process to develop and deliver a customer focused services. The service delivery system consists of several mutually dependent service activities; hence, the total elements of co-dependent service processes comprise sequentially organized process designs. Designing service delivery systems engages the essentials of the responsibility of customers, technology, services, tools, outline, and activities that produce the service outcome (Ponsignon, Smart & Maull, 2011).

2.2.2 Public Service Delivery

Public service is an expression that is defined as a service that is primarily or totally funded via taxation. By itself, public service can be different obviously from commercial private organization services in different ways (Humphreys, 1998).

According to www.fundingcentral.org.uk2014, web site, public service delivery is a service which is funded by the public money and provided by the state or in support of the state for instance by an unpaid and community organization or Private Sector Company. Public service delivery is regularly mission-oriented. On the contrary, the aim of private institutions is income maximization (Makanyeza, Kwandayi & Ikobe, 2013). According to Davis & Heineke (2009), the structural decisions that influence the design of service delivery process are Layout, Capacity, Technology, Self-service, and Vertical Integration”.

2.2.3 Service Quality

Quality is a situation, which occurs in several dimensions. Therefore, to know about service quality distinguishing the features of quality will be needed. Quality has three dimensions these are: technical quality, service performance quality, and organization’s mental picture (Mosahab, Mahamad & Ramayah, 2010). The original service quality instrument has 22 substances, but the information in the 22 attributes is classified in to five scopes. These are: Tangibles, Reliability, Responsiveness, Assurance, and Empathy (Nabi, 2012).

1. Tangibles include forms of the corporations legislative body, services, resources, and equipment that give physical descriptions or pictures of the service that consumers mainly new and might use to assess quality.
2. Responsiveness is the well timed response to the customers' wants. Customers anticipate staffs complete services.
3. Assurance is mainly important on behalf of customers when they think high risk as well as unsure regarding the service
4. Empathy occurs when employees’ look for clarifications (Nabi, 2012).

2.3 Theories and Concepts related to the NPM and Public Service Reforms

2.3.1 New Public Management Theory

The movement of the New Public Management (NPM) was started in the late 1970s and early 1980s, and the origins of the NPM were the public-choice theory and managerialism. For first time it was practiced in UK under Prime Minister Margaret Thatcher, and in the United States municipal governments such as in Sunnyvale and California. Thus, the NPM endured seriously as of the economic recessions plus tax revolts. Subsequently, other countries like New Zealand and Australia joined the movement. As a result, the NPM administrative reforms became agendas of the OECD countries and other countries (Gruening, 2001). The NPM gives attention on improving civil service delivery, improving the crisis of budget deficits, measuring the achievements of civil service institutions, as well as enabling them accountable and responsible on behalf of their activities (Tesfaye, 2009).

The NPM perspective is regularly related with the presence of action-oriented expressions such as: reinventing government, re-engineering, renaissance of the public service, institutional transformation, total quality management, model shift, entrepreneurship, empowerment, outcomes over practices, downsizing, currently rightsizing, lean and mean, giving contracts, off-load or outsource, direction-finding rather than rowing, encouraging rather than serving and obtaining rather than payments. Therefore, the NPM considered as a body of managerial initiative or it is taken as an ideological thinking method depending on ideas created in the private entities as well as introduced into the public organizations. Then the NPM controls the majority of the structural, institutional, and administrative changes, which performed in the public services (Ayee, 2005).

2.3.2 Public Choice Theory

Public Choice is a sub-discipline in economics that is defined as the practical part of the rational choice model of decision-making for things different from that of market. Public choice thought was started in the mid of 20th century and it has a retrospective view. In a comprehensive sense, it is intended as the application of economics to that of political discipline (Hill, 1999).

According to Buchanan (2003), one of the founders of public choice theory, states that public choice experiences the application of catallactics, or it is the science of interactions or exchange. It shows that the practical existence of looking to government to fix occurrences might regularly direct to extra mischief than high quality. Public choice might be understood as a study programs rather than a regulation or even sub-part of economics.

The public choice theory is a well-built alternative of the rational choice theory. It is concerned with the stipulation of the commonly designed public goods or goods that are provided by government that are different from those provided by market. Hence, the theory assumes that political culture is constituted of self-interested persons who combined together into organized benefits. Whereas interest groups are move to form particular issues of unique value to their affiliates. Persons who are seeking particular self-centered aspirations form interest groups. Therefore, these individuals join by other self-centered individuals to gain chance to the public assets. In general, the central idea of the public-choice theory is the assumption of maximizing self-interest (Ayee, 2005).

The theory provides justification to the motivation of public officials to react to the pressures, opinions of lobbying groups and other types of particular interests. In addition, it also provides clarification to a policy choice, which is disadvantageous to society in general, for both short and long term. It also offers a means of understanding the limitations on policy changes which develop more than a time. On the other hand, the theory is able to give details about how, why, or when reforms occur, only through actions or manifestations of prudent public officials or technocrats who, for unsolved causes, and it display behavior, which is politically unreasonable (Ayee, 2005). Hence, the aim of the public officials is to maximize their self interest, but the need of the public is to get quality service from public institutions. Therefore, to narrow the difference of this two extreme needs of both officials and citizens, engagement of customers of the institutions as stakeholder is needed.

2.3.3 Agency Theory

Agency theory is a theory, which glances at how to guarantee the agents such as executives, and managers act in the best benefits of the principals like owners and shareholders of an institution. It is a theory that addresses the connection somewhere in a contract ‘individual or group of persons or principals appoint an additional person or the agent to carry out several service on their behalf that engages giving various decision making ability to the agent’. In addition to this, the theory deals with the design of the contracts. Particularly, it gives emphasis to the relationship among the principals and the agents who apply power on their interests (Ayee, 2005).

Agency theory mainly worried about resolving troubles that arise in agency interactions. These are firstly the agency problem, which happens due to the disagreement in the need or goal of the principal and agent; and when it is tricky or costly for the principal to confirm what the agent is really performing. The second one is the problem of hazard or risk sharing which occurs when the principal and agent have dissimilar stance to the risk (Eisehardt, 1989).

In this theory, the principal decides to contract with the agent for two reasons both cost and expertise. The principal make a decision, when the institution lacks expertise or inputs needed to provide goods or services. The contract agreement between the principal and the agent contains several important issues such as resources, processes, outcomes, service quality and satisfaction dimensions, monitoring and performance reporting necessities that help to provide quality goods and services. Hence, the agent is paid for accomplishing the work of the principal, and also the sanctions will result when the principal identifies the agent follows his/her own target greater than the principal’s objectives (Van Slyke, 2006).Thus, public services are provided by the public institutions, hence, the citizen’s act as a principal and while the employees as an agent, so, citizens need services which exceed customer’s expectation.

2.4 Public Service Reforms and Service Delivery

Public sector reforms are defined as the processes and practices that are concerned by improving the capability of organizations to make policy as well as delivering services in a competent, valuable, and accountable style. Additionally, it includes the growth and managing of the public organizations. Then the measures of the reforms consists of improving corporate regulatory frameworks, the decen­tralization, civil service reforms, the financial and fiscal reforms, the reforms of privatization and deregulation, the legal and judicial reforms, and enhancing accountability (Economic Commission for Africa, 2010).

Many countries in the world are structurally and constitutionally interconnected to the civil service. In the case of Africa, most of the countries are included in the circle of public sector reforms. Thus, good governance and effective public administrations are considered as a dreaming when they lack the public sector reforms. Therefore, the motive of the public sector reform is providing effective, efficient, and responsive service to the public. Public service reform is a planned interference to improve the quality and performance of public services. Then the main purpose of the public service reform is to gain incredible progress or effectiveness, efficiency, and responsiveness in the public service delivery (Olufemi & David, 2010).

The civil service reform experiences of the African countries such as Ghana, Kenya, Nigeria, and South Africa were influenced via the NPM thought, by the exclusion of South Africa and by the realization of structural adjustment programmes (SAPs). Then the efforts of civil service reforms in these countries were designed at accruing savings, competence, and efficacy and were implied as component of the rising intercontinental NPM enterprises (Economic Commission for Africa, 2010).

2.4.1 Public Service Reforms in Africa

The civile service reform programs begun in Africa in recent decades as indicated in the IMF working paper. The Sub-Saharan Africa started the civil service reform in 1980s. This study indicates that Ethiopia was one of the 32 countries in which the research was conducted. Then civil service was implemented in the countries with an objective to maximize the significance of each dollar spent on every one of the government workers. On the other hand, it has three specific objectives these were first; downsize the civil service with the intention that it is reasonable and corresponding to the function of government assign itself. Second, afford encouragement, skills, and impetus to civil service recruits to allow them to provide important public goods as well as services; and third, increase civil service managing and accountability in the entire levels (IMF, 1997). In addition, in the case of developing countries the decision makers accept the civil service reforms as a tool to recover their service delivery and to manage the budget scarcity (Tesfaye, 2009).In Africa, the Public sector reforms were motivated by the economic reform, democratization as well as the look for managerial efficiency by the outlook of improving the value of goods and services provided to the community (Economic Commission for Africa, 2010).

2.4.2 Public Service Reforms in Ethiopia

The idea of administrative reform is relatively inadequate in developing countries such as sub-Saharan Africa; the same is true for Ethiopia. In the broader context of administrative reform in Africa, the public bureaucracy reform is fundamental to the public service delivery modernization. The new type of civil servant was emerged at the end of the 1980s, in a varying political context, which contained greater demands for public sector effectiveness, institutional capability, and broader democratization. Therefore, with an outlook to understand inclusive `state transformation` and ` total system overhaul` followed by the recommendations given by the World Bank, it is forwarded for all of African countries. Based on this, Ethiopian government embarked by the early 1990s many public administration reforms (Getachew & common, 2006).

Ethiopian government announced the Public Sector Capacity Building programs in 2003, with the intention to provide effective, efficient, and responsive public service delivery by improving the capacity of government institution. In addition, civil service reform program is one of the fifteen national capacity-building programs, which contained five sub-programs, including the service delivery reform sub-programs. Hence, the motives of the civil service reform are to enhance the quality of services provided to citizens via public institutions (Yosef, 2011).

2.5 Customer satisfaction

Satisfaction is a term, which is defined as the customers’ fulfillment reaction. It is a decision in which whether manufactured goods or services; otherwise a product or a service by its own is delivered in a satisfying level. Customer satisfaction is utilization-interrelated fulfillment, consisting levels of below- or above-fulfillment (Home, 2000).

Different scholars defined customer satisfaction in different ways. However, customer satisfaction is defined as the customer’s completion reply. It is a decision that a product or service quality, or else the manufactured goods or service by itself, delivered at a satisfying level of consumption with interrelated fulfillment, together with levels of below or above fulfillment (Giese &Cote, 2000).

“Customer satisfaction is the degree to which a customer perceives that an individual, firm or organization has effectively provided a product or service that meets the customer’s needs in the context in which the customer is aware of and / or using the product or service. Satisfaction is not inherent in the individual or the product but is a socially constructed response to the relationship between a customer, the product and the product provider/maker. To the extent that a provider/ maker can influence the various dimensions of the relationship, the provider can influence customer satisfaction” (Cengiz, 2010:79).

Customer satisfaction is a term which is defined as a status of mind wherein the customer’s wants and desires as well as expectations all through both goods and services life safe place would meet otherwise exceeded, follow-on in the future repurchase plus loyalty (Abdallat &El – Emam, n.d. p.1).

The word loyalty is defined as a more inclusive or else re-patronizes favorite products of services constantly in expectations. Thus, causes cyclical use of similar brand or identical brand sets purchase regardless of situational pressures as well as market effort has a potential to cause switching conducts. Based on this, loyalty has two essential elements these are attitude and behavior (Abdallat & El - Emam, n.d. p.4). Therefore, Customer loyalty is defined as the faithfulness of customers to an organization. Even though businesses make faults, loyal customers cannot go away (Ganiyu, Uche & Elizabeth, 2012).

2.5.1 Theories of Customer Satisfaction

There are numerous theories about customer satisfaction such as the Comparison Level Theory, the Expectancy-Disconfirmation Paradigm (EDP), the Dissonance Theory, the Value-Precept Theory, the Attribution Theory, the Equity Theory, the Contrast Theory, and the Evaluation Congruity Theory, the Person-Situation-Fit model, and the Performance-Importance model. Some of the theories are discussed below.

1. The Dissonance Theory

This theory implies that an individual who expected a high-quality product and gained a low-quality product will distinguish the difference, and their knowledge leads to a cognitive conflict. These means the disconfirmed hopes make a state of disagreement or a psychological distress. Depending on the theory, the presence of conflict creates stress in favor of its decline; it might be attained by regulating the supposed difference. Moreover, the theory embraces that post exposure classifications are mainly purposes of the expectation level, for the reason that, the job of acknowledging disconfirmations are supposed designates psychologically painful (Yüksel & Yüksel, n.d. p.2).

2. The Contrast Theory

This theory was introduced for the first time by Hovland, Harvey and Sherif. The theory is stated in contrast to the assimilation theory by Cardozo, as a “post-usage evaluation process”, which leads to products in opposite forecasts to the final effects customer expectations for satisfaction. On the other hand, the Contrast Theory is contrary to that of the Dissonance Theory. The theory suggests that while actual product performance falls small of consumer’s expectations regarding the product, the difference between both the expectation and outcome gives rise to the consumer to amplify the inequality. The theory remains that consumers who take delivery of a product with less quality than the expected one; it will amplify the disparity between the product gained and the product predicted. In addition to this, the theory forecasts the product performance under expectations and desires rated not as good as that in reality (Aigbavboa & Thwala, 2013; Yüksel & Yüksel, n.d. p.4).

3. The Expectancy Disconfirmation Paradigm

Numerous scholars approved that this theory is the most capable theoretical framework in favor of evaluation of customer satisfactions. This model suggests so as to consumers obtain whether goods or services through pre-purchase expectations regarding the expected performances. Namely, once both the products and services have been used, final results will be compared with anticipations. On the other hand, if the result matches the anticipation, verification occurs. Whereas disconfirmation happens when there is disparity between the expectations and results. Based on this, customers are whether satisfied or dissatisfied depending on the positive or negative disparity among the expectations and perceptions (Yüksel & Yüksel, n.d. p.5)

In general, the theories imply that customer satisfaction is an idea managed in relation to standards among the customer expectation of goods and services and their outcomes. Finally, the customers’ will be satisfied or dissatisfied based on the quality of goods and services they received.

2.5.2 Customer Expectations

Various theories and researches have suggested that whether expectations or perceived performances might be the main factors that affect satisfaction. Due to the assimilation-contrast theory the comparative advantage of performance against expectations bases on their inconsistency. The expectations might control perception of satisfaction while the purpose of performance is inside a number of suitable levels of expectations (Johnson & Fornell, 1990).



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Title: Assessing the effectiveness of service delivery reform. The quest for customer satisfaction in public institutions of Arba Minch town