Innovative profiles of TQM in banking management. The relationship between employee training and risk mitigation

Abstract

PurposeThis paper aims to investigate the relationship between employee training and bank risk to verify whether and to what extent an increase in employee training, as a soft component of total quality management (TQM), affects bank risk.Design/methodology/approachThe research adopts a panel regression, based on a unique dataset of a sample of Italian banks over the period 2011–2018, to test whether employee training affects bank risk, measured alternatively in terms of Z-score, a proxy of bank stability and non-performing loans (NPLs)/gross loans ratio as a proxy of credit risk.FindingsResearch findings reveal that increasing employee training leads to growing bank stability. In contrast, credit risk is not affected by employee training. However, by investigating training heterogeneity, this study found that the increase in the number of managerial training hours, as a proxy for soft skills training, negatively impacts credit risk. Therefore, an increase in soft skills leads to a reduction in bank credit risk.Research limitations/implicationsThis study provides empirical evidence in support of the relationship between employee training and bank risk, which seems novel in the literature. From a managerial point of view, this study highlights the need for banks to pay attention to the skills, particularly soft skills, that banks' employees must possess to effectively manage bank risk and, more specifically, the core bank risk.Originality/valueEmpirical evidence on the relationship between employee training, soft/hard skills and bank risk appears limited if not absent. Therefore, the findings provide insights for a more nuanced interpretation of variables that affect bank risk.

Investigating the quality of the relationship, supply risk mitigation on medium and large-sized manufacturing firms' supply chain performance in the developing countries: the moderating effect of supplier involvement

“…Mwesiumo et al (2021) defined supply risk as supply insufficiency, technology expedition, alternative elements, entrance restrictions, logistics expense and complex situations. Different approaches refer to all circumstances preventing a new product insertion or interrupting production (Rajagopal et al, 2017;Testa et al, 2022). Sreedevi and Saranga (2017) divided risk into two categories, demand and supply risk.…”

“…The mediating effect of supply risk mitigation on the relationship between SC quality of relationship and supply chain performance In SC literature, some studies report mixed results regarding efficient, effective, risk-avoiding, risk mitigation flexible, integration, responsive and/or agile SCs in connection with supply and demand uncertainty of markets (Chang et al, 2019(Chang et al, , 2019(Chang et al, , 2019Raghuram et al, 2021). Although the concept of SRM has become increasingly significant and is being applied in most firms, in, order to achieve a competitive advantage and sustainability in SC efficacy performance in a fast-paced business environment (Al-Shboul, 2017;Rajagopal et al, 2017;Testa et al, 2022). SRM can affect positively on firm's performance, mitigating wastes in time and cost, better use of current sources and improvement in several operations.…”

“…Different approaches refer to all circumstances preventing a new product insertion or interrupting production (Rajagopal et al. , 2017; Testa et al. , 2022).…”

“…Therefore, some firms resorted to establishing cooperative business relationships with suppliers to achieve more integration, reduce supply risks mitigations and achieve common goals. In SCM literature, it is found that there are few and limited number of studies that investigated the role of the quality of the relationship (QoR) in creating a competitive advantage by assessing the extent of its impact on firms' behavior with suppliers and trading partners and their ability to integrate, improve performance and mitigate supply risks (Chiarini, 2017;Raghuram et al, 2020;Testa et al, 2022). The QoR has a vital and effective role in building business relationships between businesses.…”

“…In SCM literature, it is found that there are few and limited number of studies that investigated the role of the quality of the relationship (QoR) in creating a competitive advantage by assessing the extent of its impact on firms' behavior with suppliers and trading partners and their ability to integrate, improve performance and mitigate supply risks (Chiarini, 2017; Raghuram et al. , 2020; Testa et al. , 2022).…”