Assessment of Cost Management Practices for Small Scale Building Contractors in the Ghanaian Construction Industry
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Date
2021-06-23
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Abstract
The construction industry is an important element in our socio-economic growth as a country. It is said to require huge capital investment by virtue of its nature. One key player in the industry is the contractor who operates as a firm or company. The contractor is responsible for the execution and production of the required project. In Ghana the construction industry is made up of about 95% Small Scale Building Contractors (SSBC) who by their nature operate in an informal manner. One major challenge of them has to do with the management of their cost which determines whether or not the stay in business. They are required to put in place cost management practices that will help their survival, level of profitability and growth. The purpose of this research was to assess the cost management practices adopted by these contractors and suggest measures to improve upon them. As part of it, critical factors inhibiting the use of their chosen cost management technique was determined. The contractors targeted in this research are the D3K3 contractors registered on the Association of Building and Civil Engineering Contractor of Ghana (ABCECG) database within the Greater Accra Region. Quantitative design was adopted with the use of structured questionnaires which was responded by Quantity Surveyors, Site Engineers, Site Supervisors, Managing Director and other professionals who play cost management roles within the firms. Consensus approach was utilised to gather information from all or almost the entire population of contractors within the stated category. In all 45 contractors were targeted and questionnaires distributed to. Out of which 40 responded to the questionnaires representing 88.89% response rate. The data gathered were analysed using descriptive statistics by employing SPSS (version 23) and Excel worksheet. In the discussion of the results, mean score ranking, one sample t-test and Relative Importance Index (RII) were used in analysing the data. All the contractors admitted to using some of a cost management technique. The frequently used ones are as follows: budgeting, resource management, variance analysis, estimation etc. The research also indicated that the following factors: technology issues, quality of data, use of traditional techniques, lack of collaboration of participants, poor resource management, lack of communication etc were inhibiting the use of the cost management technique. Recommendations such as communication among the various sections of the company, the use of qualified personnel, and the use of tried and tested practises etc should be adopted to attain effective cost management system.
Description
A thesis submitted to the Department of Construction Technology and Management, College of Art and Built Environment in partial fulfilment of the requirements for the degree of Master of Science.
Keywords
cost management, small scale building contractors, professionals, business