Abstract
Cost management is key to project implementation and an important tool for maximizing profit nonetheless it has been a major challenge for most indigenous construction firms in Ghana. The study seeks to investigate the important factors influencing cost management practices among indigenous construction firms in Ghana and to ascertain whether there is a significant difference between the responses of the categories of the firm (construction and consultancy firms) in Ghana. A total of 82 questionnaires were retrieved from 100 administered questionnaires to professionals with indigenous construction firms representing 82% response rate. Data gathered were analyzed descriptively using Mean Item Score (MIS) via SPSS version 24 to identify the most important factors. The Kaiser-Meyer-Olkin Measure of Sampling Adequacy and Bartlett’s test of sphericity conducted showed a KMO score of 0.894. Bartlett’s test of sphericity also revealed a significance level of 0.000 (p˂0.05). The ANOVA suggest that there is no significant difference between the responses between the categories of firms. Indigenous firms are encouraged therefore to consider managing disagreement between project team members by ensuring constant project implementation meetings and to understand ground conditions of projects by visiting proposed sites prior to estimation and tendering. Finally, communication and expenditure control measures should be enhanced and introduced respectively. The implication of this study while contributing to the discourse on cost management practices of indigenous constructions firms in Ghana, also outlines the major (highly ranked) factors influencing indigenous firms in the management of project cost, before, during and after project implementation.
Highlights
Cost is an essential component in the life cycle of projects which is used to define the success or failure of a project (Ali and Min 2017)
Mean Item Score (MIS) test was used in the first phase to establish the most important factors influencing cost management practices of indigenous firms in Ghana
Significant scores of 0.495, 0.669, 0.148, 0.609 and 1.00 were recorded for factors unexpected ground conditions, Poor communication between project team, Lack of expenditure control, Project variations/Design changes, and Poor project management respectively. This presents a significant p-value greater 0.05 (p0.05). These findings indicate that for all important factors influencing cost management practice of indigenous firms, the responses of respondents are the same; the study failed to reject the null hypothesis
Summary
Cost is an essential component in the life cycle of projects which is used to define the success or failure of a project (Ali and Min 2017). Cost management (CM) is a major component of project management and an important indicator to keep firms in the business. CM is necessary to ensure that the anticipated project is designed and developed within the projected cost to ensure value for money (Keith, 2008). Siebers et al, (2008) inform that a major inefficiency among entities in the construction industry is due to its poor cost management practices. The menace of poor cost performance has been of concern globally (Zarina et al 2014; Chen et al 2016; Suk et al 2016)
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