Corporate Security Management Strategies and Profitability of the Telecommunications Firms in Kenya
Kairemia, Denis Kimathi
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Corporate security has evolved immensely over the past few decades, from a simple egress control task to a corporate management function with a sizable budget and sometimes a seat in the board with the task of ensuring business continuity. The broadened role of corporate security has meant more stakes on its success and therefore more scrutiny and funding. This study sought to examine how the employment of the various security management strategies affects a given organization’s profitability by considering both direct and indirect costs. This study explored four theories that define the relationship between corporate security management strategies and profitability. The theories are; mitigation value theory, internal function of corporate security theory, external function of corporate security and the revenue potential theory. Firms in the Kenya Telecommunications industry cannot ignore the value of corporate security, but in this regime of cut-throat competition and the corporations desire to keep their bottom-line healthy, three different corporate security management strategies have emerged namely; proprietary corporate security management strategy whose relationship with profitability was 0.195 at .0239 confidence level, outsourced corporate security management strategy whose relationship with profitability was 0.308 at .0224 confidence level and the hybrid corporate security management strategy whose relationship with profitability was 0.335 at .0217 confidence level. The study targeted Corporate security practitioners in the Kenyan telecommunications industry as the target population. Census sampling was used and the sample size was 67. This study used a questionnaire and the data collected analyzed by the use of SPSS and the ANOVA test. The study found that proprietary security strategy is reliable, the security workers are loyal and trustworthy. However, the emoluments, training costs and recruitment costs are high. The study established savings on training, equipment and efficiency is enhanced but trust and reliability are sub-optimal. The study established that security providers under all the security management strategies are sourced from the same labor market. The study finally established that with hybrid security system; efficiency is enhanced, emoluments are low, contract costs are low but trust is not optimal. The study also found out that there are more security related incidences reported under both outsourced and hybrid management strategies and outsourced security providers do not underwrite any security incidences that lead to lose in premises they are contracted to secure. The study recommended for the top management of the telecommunication companies to evaluate their business well based on the different benefits as well as drawbacks with the different options for strategic security. They should proprietary for reliability and trust and choose to suffer higher emoluments costs that has effects on profitability or go for the other forms and have low contract costs but loose trust and reliability. The study also recommends that contracted security providers should underwrite a proportion of loses suffered under their care to increase reliability.