Balance Scorecard Model and Competitiveness of Selected Private Security Services Firms in Nairobi City County, Kenya

Abstract

Competitiveness is an important factor in the survival, growth and achievement of businesses especially in today's financial and business environment. With security concerns and a drastic increase in competitors in many industries, security companies are operating in a very competitive business environment. A balanced scorecard is a system to making an interpretation of vital targets into execution measures. This action estimates the adequacy of the executed methodology and gives input on the exhibition of vital drives. This survey aimed at exploring the influence of balance scorecard on competitiveness of chosen private security services companies situated in Nairobi City County, Kenya. The study’s objectives were to determine the influence of financial perspective, customer perspective, internal business process perspective, and learning and growth perception on competitiveness. The theories guiding this study included; resource-based view, expectation-disconfirmation, human and capital theories as well as the theory of the firm. A descriptive design which was cross-sectional in nature was used in this study. In this study, private security companies in Nairobi city county formed the target population. The survey conducted a comprehensive study of all 36 private security companies in Nairobi City County. This research purposefully preferred to include the general, operational, human resource, finance and customer relations managers based on the structure of individual firms. The study therefore recruited 5 managers from the 36 private security firms in Nairobi City County to come up with a sample of 180 respondents. A structured self-administered questionnaire was utilized to gather data from the participants. A pilot study was done amongst private security companies in Nairobi City County that were not registered under Kenya Security Industry Association and PSIA. Descriptive analysis presented data on individual variables such as the financial perspective practices of participating firms or their competitiveness. Multiple regression analysis was conducted between individual independent variables and firm competitiveness. Tables and pie-charts were utilized to illustrate the results of this survey. Regression analysis showed that there is a strong positive correlation between balance scorecard and competitiveness of selected private security services firms in Nairobi City County. Financial perspective, customer perspective and learning and growth perspective were significant. Financial perspective had the largest beta value indicating that it was the most important of the four variables while business process perspective is the least important. The study therefore concluded that balance scored a significant and positive relationship with firm competitiveness. Financial perspective was the most affecting of the four BSC perspectives in this study. The study recommended that there is a need to conduct research to gauge customer satisfaction with services among Private security services firms. In addition, the study recommended that Private security services firms in Nairobi county ought to implement product improvement programs.