Faculty of Business and Economics

Department of Accounting and Finance

The Effect Of Service Quality On Student Satisfaction

(The Case Of Ayer Tena Health Science& Business College)

A Thesis proposal submitted to Mr. Belay Zeab

MAY, 2024

Addis Ababa, Ethiopia

Investigated By:
 NAME ID NO
1. Yared Eshetu 022/14

2. Alemayehu Deneke 003/14

3. Letifa Seifu 015/14

4. Tamirat Alemu 021/14

5. Yeshimebet Fiseha 029/14

6. Eyerus Fikre 028/14

7. Nardos Tesema 017/14

8. Abrham Fentahun 002/14

Table of contents
Contents page no.
Table of Contents ………………………………………………………. I

Acronym................................................................................................................
.............IV

Abstract..................................................................................................................
.............V

CHAPTER
ONE...........................................................................................................1

INTRODUCTION................................................................................................
........1

1.1 Background of the

Study......................................................................................1 1.2
Statement of the Problem................................................................ ....................3
1.3
Hypothesis.............................................................................................................
.....4
1.4 Research
Objectives...............................................................................................4

1.4.1 General
Objective......................................................................................... 4

1.4.2 Specific
Objectives...................................................................................... .4
1.5 Definition of Key
Terms.......................................................................................5 1.6
Significance of the Study.................................................................... 5 1.7
Scope of the Study............................................................................... 6
1.8 Limitation of the Study........................................................................ 6
1.9 Organization of the Study………………………………………….... 6

CHAPTER TWO ……………………………………….………………7

LITERATURE REVIEW ………………………………………………7

2.1. Theoretical Literature Review……………………………………….7

2.1.1 Concepts of Service Quality……………………………………..7

2.1.1.1 Service...................................................................................7

2.1.1.2 Characteristics of Services.....................................................7

2.1.1.3 Quality……………………………………………………. .8

2.1.1.4 Service Quality..................................................................... .8

2.1.1.5 SERVQUAL Model...............................................................9

2.1.1.6 Service Quality Dimensions..................................................12

2.1.2 Concepts of Customer Satisfaction................................................13

2.1.2.1 Customer................................................................................13

2.1.2.2 Customers Expectation and Perception.................................13

2.1.2.3 Customer Satisfaction............................................................14

 2.1.2.4 Service Quality versus Student Satisfaction………………..14

2.2 Empirical Literature Review………………………………………….15

2.3 Conceptual Framework.........................................................................16

CHAPTER THREE……………………………………………………..18

RESEARCH METHODOLOGY……………………………………….18

3.1 Research Design……………………………………………………….18

II

3.2 Description of the Study Area………………………………………….18

3.3 Methods of Data Collection…………………………………………….18

3.4 Sampling Techniques…………………………………………………..19

3.5 Method of Data Analysis……………………………………………….19

3.6 Definition of Variables and Working Hypothesis……………………...19

3.6.1 Definition of Variables…………………….....................................19

3.6.1.1 Dependent Variable…………………………………………. 19

3.6.1.2 Independent Variable………………………………………….20

3.6.2 Working Hypothesis………………………………………………. 20

CHAPTER FOUR…………………………………………………………21

BUDGET AND WORK PLAN……………………………………………21

4.1 Budget Plan…………………………………………………………….. 21

4.2 Work Plan……………………………………………………………….21

Reference……………………………………………………………………23

III

ACRONYMS/ABREVATIONS

ATHSBC - Ayer Tena Health Science and Business College

SERVQUAL – service quality

SPSS - Statistics Package for Social Science

CH - Chapter

Br - Birr
 IV

ABSTRACT

This study is concentrated on the role of service quality on Ayer Tena Health Science and
Business College students satisfaction found in Addis Ababa Kolfe Keranyo sub city. The
general objective of the study is to investigate the satisfaction level of students enrolled in
regular program of ATHSBC and there by understand level of service quality perceived by
the students. To encompass various aspects of service quality SERVQUAL model has been
adopted in this study.The five service quality dimensions namely, Tangibles, Reliability,
Responsiveness, Assurance and Empathy are assessed to measure the general expectation of
students concerning service and perception regarding the level of service actually provided by
the college.They identify the level of student satisfaction by measuring the gap between
student expectation and actual performance on the quality of service delivered by the college.
The study used mainly quantitative approach. Data were collected through SERVQUAL
model questionnaires and the study used only primary sources to collect the data. The study
has two variables dependent and independent. In dependent variable there is the customer
satisfaction while in independent variable there are service quality dimensions. The study use
descriptive methods of data Analysis. SPSS version is used to analyze the information
gathered. The findings of this study expected that students are not satisfied in all service
quality dimensions which shows expectation exceeds the actual performance of the college.
According to the results of the correlation analysis it was found that all service quality
dimensions are strongly and positively correlated with students satisfaction. Based on this it
is recommended that the college should give greater attention to improve its service quality
and satisfy its students by assessing and improving the gaps in all service quality dimensions.
Key words – Service Quality, Customer Satisfaction, SERVQUAL,

CHAPTER ONE

INTRODUCTION

This chapter deals with background of the study, statement of the problem, definition of key
words objectives of the study(general and specific objectives), significance of the study,
scope of the study and limitations of the study.
1.1. Background of the study

“Education is the most powerful weapon which we can use to change the world” Nelson
Mandela’s famous quotes on education (Brainy Quote.com) a change that is potentially
undergone on social, political and economic sector. For the economic shift from agricultural
sector to industrial sector and the recent shift from industrial sector to service sector
education plays an important role; as by itself education is one of a service sector (Hanusbek
and Wobmann, (2007).

Service quality is commonly noted as a critical prerequisite for establishing and sustaining
satisfying relationship with valued customers. Many organizations emphasize on service
quality due to their strategic role in enhancing competitiveness especially in the context of
attracting new customers and enhancing relationship with existing client. In today's
competitive academic environment where students have many options available to them,
factors that enable educational institutions to attract and retain students should be seriously
studied (Ugboma, et al, 2007).
The perception of quality is multilateral; quality means different things to different people
and from the perspective of quality’s dimensions (input, process and output) and from the
perspective of the stakeholders, there are many views of quality.

Despite the lack of consensus over the concept of quality, service quality has now become
one of the central components of reform and policy instruments to adapt in higher education
institutions to the increasing expectation from both internal and external stakeholders all over
the world (Mulu, 2012). Now days, the concept of service quality and level of satisfaction

had got considerable attentions in public as well as in private sector. According to Malik, et
al,(2010), the quality service in service educational institutions is an important factor that is
considered for attracting and retaining the students in particular and other customer in
general.

In order to make the institutions progressive and effective its clients’ expectations, their
preferences and quality perception about the overall environment of the institution should be
kept by the higher authorities of the institute. An institution can achieve success only by
understanding and fulfilling the needs of customers. From a total quality perspective, all
strategic decisions an institution makes are “customer-driven” (Malik, et al, 2010). In other
words, the institutions must show constant sensitivity to emerging customer and market
requirement [Parasuraman et al. 1985, 1988].

According to the study by Collart, one of the determinants of success of a firm is how the
customers perceive the resulting service quality, as this is the key driver of perceived value. It
is the perceived value which determines customer satisfaction. Many firms including
universities begin to track their customers’ satisfaction through measuring their level of
service quality perceived by their customers. The most widely used model to measure
perceived service quality was developed by Parasuraman et al. (1985, 1988) known as
SERVQUAL. Therefore this Study on student satisfaction and the influence of service quality
in Ayer Tena Health Science and Business College’s part of the continuing effort to improve
its services, the College is seeking information about the quality of its service through the
current student satisfaction study.
In the past two and half decades, education systems all over the world have expanded rapidly,
as reflected in large increase in enrollments and public educational expenditures. But these
quantitative developments of education systems give rise to low educational quality.

According to the 1994 Education and Training Policy, Ethiopia has given emphasis to the
expansion of education to enhance the socio-economic transformation of its population.
Because of the limitation to finance the sector, the government has introduced privatization as
a means to shift costs to users. Since then, private business schools have been expanded from

time to time starting from kindergarten to higher education. They have played a great role in
reducing illiteracy and enhance socio-economic development of the country.

These notions become the essence in this research in order to examine the extent to which
performance of services and the provision of facilities available at Ayer Tena Health Science
and Business College that can ensure the quality of services to attract more students to study
in the college.

1.2 Statement of the Problem

It has become increasingly necessary for the private sector to get involved in the provision of
educational services in the country. Based on this, the 1994 Education and Training Policy
and the subsequent Education Strategy and Sector Development plans have acknowledged
and realized the need for public-private partnership and collaborative effort to enhance the
delivery of quality services managed under a decentralized system of administration. As
stated in the policy, the government will create the necessary conditions to encourage and
give support to private investors to open schools and establish various educational and
training institutions. Following the policy several privately owned schools have begun to
operate in urban centers, the biggest which is observed in Addis Ababa.

The higher education sector in Ethiopia has undergone enormous growth in recent years.
According to Ministry of Education (MOE, 2009 E.C), the number of higher education
institutions and the intake capacity of both the undergraduate and graduate programmes are
increasing rapidly. However, the rapid increase in the gross enrolment rate has challenged the
overall quality of education, particularly in the context of severely limited resources
(UNICEF, 2014). Having recognized these problems, the Ministry of Education (MOE) is
currently engaged in a highly motivated effort to reform the country’s higher education
system including quality improvement program. In spite of this, reform in Ethiopian higher
education includes establishing supporting agencies such as the Higher Education Relevance
and Quality Agency (HERQA), and the Educational Quality Improvement Programme
(EQUIP) which are responsible for assuring quality of the education system in Ethiopian
higher learning institutions.

ATHSBC, as a private organization, is engaged in the teaching-learning process and it is

striving towards knowledge transfer and community service in accordance to the demand of
the ccustomers. But, limited studies have been done to document how students satisfy with
the delivery of service quality in this college. Therefore, this study investigates the extent the
service quality provided by the college and the level of their customer satisfactions. As the
problem was not yet well addressed in the ccollege the gap identified by this study is very
essential, and the research will be the base for those who want to study the situation further.

1.3 Hypothesis

H1: There is a positive relationship between tangible services students satisfaction.

H2: There is a positive relationship between assured services students satisfaction.

H3: There is a positive relationship between reliable services students satisfaction.

H4: There is a positive relationship between responsive services students satisfaction.

H5: There is a positive relationship between empathy services and students satisfaction.

1.4 Objective of the Study

1.4.1 General Objective

The general objective of the study is to examine the satisfaction level of level(diploma) and
undergraduate(degree) students enrolled in regular program of Ayer Tena Health Science and
Business College.

1.4.2 Specific Objectives

This study has the following specific objectives:

 To measure the effect of tangibility on ATHSBC student satisfaction.

 To identify the effect of reliability on ATHSBC student satisfaction.

 To determine the effect of responsiveness on ATHSBC student satisfaction.

 To identify the effect of assurance on ATHSBC student satisfaction and

 To identify the effect of empathy on ATHSBC student satisfaction.

1.5 Definition of key Terms

Service:service is any activity or benefit that one party can offer to another which is
essentially intangible and does not result in the ownership of anything (Kotler, 2012).

Service quality:Customer's judgment of overall excellence of the service provided in relation

to the quality that is expected (Sturman, 2016).

Customer Satisfaction:is a personal feeling of pleasure resulting from the evaluation of

service provided by an organization to an individual in relation to expectation (Armstrong,
2012).

SERVQUAL: Is a multi-dimensional instrument (i.e. questionnaire or measurement scale)

designed to measure service quality by capturing respondents' expectations and perceptions
along with the five dimensions of service quality. The questionnaires consists of matched
pairs of items;22 expectation items and 22 perception items, organized into five dimensions
which are believed to align with the customer's mental map of service quality
dimensions(Parasuraman et al 1985,1988).

1.6 Significance of the Study

This study examine the service provided by the college and its impact on student satisfaction.
The study is significant in many ways some are:
 It adds knowledge to the available literature on private colleges in Ethiopia.

The study could be useful to other institutions and researchers working on service

Quality of private colleges.

The study would also enable the college to make regular assessments to enhance the

improvements of the service quality.

Staff managers can use the this study to maintain quality aspects that students are

satisfied with and improve the quality of services that students are not satisfied.

1.7 Scope of the Study

It is important to study the practices of action research in the whole private colleges in Addis
Ababa city. However, a large scale study requires much resources, time, and human power.
Therefore, the scope of this study is limited in Ayer Tena Health and Business College in
order to make the study manageable and complete it with in a given time.

1.8 Limitation of the Study

The size of sample is small. We think the research would have been more reliable if a greater
size of sample will be used.Due to time and financial constraints, the study is limited to our
college which is located at Kolfe Keranyo Sub City. We are unable to incorporate more
private colleges and not try to cover wide areas and depth information. Therefore, the
information obtained from this study might not be sufficient to generalize about service
quality of the college.

There is a shortage of relevant literature, therefore, the study was limited by lack of sufficient
literature.

1.9 Organization of the Study

The thesis is organized into four chapters. In chapter one, introduction of the study which
includes background of the study, statement of the problem, objective of the study, research
questions, definition of key terms, significance, scope, limitation as well as organization of
the study are presented. In chapter two, review of theoretical and empirical works related to
the study, gap identification and conceptual framework will be presented. Chapter three
discusses the research methodology used in the study. In the fourth section, time and budget
plan for the proposal are included. In the last part, the key findings of the study, conclusions,
and recommendations are presented.