The Value of Private Security

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The Value of Private Security Management to Businesses

James P. Hogg

University of Phoenix (Online Campus)

Introduction to Organizational Security and Management


David D. Cornely, DM

November 5, 2006


The value private security management brings to businesses is not limited to the

intangible feeling of safety and security in the workplace. While this is certainly an

important aspect that may lead to increased employee performance by reducing

unsafe conditions, the value of private security management can also be measured in

dollar signs. Through the use of the return on security investment formula (Barr, 2004),

business managers can understand the implications an effective security program has on

profits. This paper will explore both the tangible and intangible value of private security

management to businesses.

The events of September 11, 2001 (9/11) brought attention to the seriousness of the

threat Americans face and the consequences of inadequate security measures. As the

human toll was being calculated, one can imagine that affected businesses were also

calculating the loss of personnel, revenue and other assets. Then followed the bio-

terrorism scares with anthrax or in some cases, suspected anthrax being sent in postal

packages to various businesses and political offices. The ensuing hysteria created, once

again, a loss of personnel (some through illness, but most from fear of exposure) and a

loss of revenue. While these events had a significant impact on bringing security into the

spotlight and increased the importance of security management in the eyes of private

citizens, many businesses recognized the terrorist attacks as a "perceived risk" (Barr,

2003). This was, in large part, a result of the risk management guidance provided by

private security professionals. By avoiding excessive expenditures as a "knee-jerk"

reaction to an exaggerated or perceived risk, businesses saved money.

According to James G. Barr, author of Managing Real Risks, a perceived risk is

"something which, while possible, is extremely rare.". Private security management

provides businesses with a source of security related expertise that can assist in

distinguishing between risks that have a likely potential of occurrence and risks that are

possible, but unlikely. This knowledge is essential for the development of the security

infrastructure framework of any business and allows security practitioners the

opportunity to focus resources on real threats, thereby maximizing the return on security

investment by providing the benefit of applicable, relevant security measures and

reducing the security related costs associated with unneeded security measures.

To further understand the value of private security management, one should

consider the "consequential costs of poor security" (Barr, 2004). The article, Seven

Strategies for Becoming a Security Leader, written by James G. Barr, identifies nine

significant costs associated with poor security. It is my opinion the first six costs are self

explanatory (loss of revenue, loss of customers, loss of business partners, loss of investor

confidence, loss of market value and loss of reputation), but the significance of the last

three may not be as easily recognized. Businesses operate with the continual threat of

potential individual or class action lawsuits, regulatory sanctions and civil (criminal in

the event of negligence) penalties. Security management, due to the inherent nature of

security's function, can have a major impact on determining whether or not these threats

will become costs. By establishing effective security procedures that incorporate

compliance monitoring, providing relevant training to security personnel and properly

supervising the daily performance of the...
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