Investigating the Cost Management Practices of Indigenous Firms in the Ghanaian Construction Industry

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.