An investigation of cost management practices case Macro construction (Pvt) Ltd

Abstract

This research was carried out at Macro Construction a member of MCD Group of companies. The aim of the research was to investigate the cost management practices of the organization. The objectives of the study were to understand the organizational costing policy, Investigating the organizational policy implementation guidelines, to find out the capacity of personnel in policy implementation, to examine the challenges experienced in policy implementation, to find out which controls can be put over the costing processes and to come up with the best practices in costing policy implementation. To fulfill these objectives the existing literature was reviewed. Descriptive research method was used to carry out this research. 32 questionnaires with both structured and unstructured questions were administered to Macro Construction staff giving a response rate of 78%. Interviews were held with 3 of the organizational staff the accountant, the commercial director and IT director and the response rate was 100%. The researcher found out that the organization was using the traditional costing system. The controls over the costing process were used and project budgets were mainly used throughout. The main challenge of implementing costing policy was that the managerial staff was failing to communicate necessity and benefits of costing practices to non-managerial staff. The major recommendation was for the organization to adopt the modern cost accounting practices.