Difficulties Of Cost Control During Construction Stage - Free Essay Example

Sample details Pages: 20 Words: 5996 Downloads: 2 Date added: 2017/06/26 Category Statistics Essay Did you like this example? CHAPTER 1: INTRODUCTION 1.1 Problem Statement: In every industry, cost control is a must in order to make sure that a project or production can make maximum profit or to make sure that the budget of a project does not burst. Locally, the actual costs of development of a project will normally being higher than necessary. In order to have an effective cost control in construction industry, it is necessary for us to determine the difficulties of cost control and to identify the factors contribute to the cost control difficulties in a project in order to overcome the difficulties or to avoid those factors that may cause difficulties to cost control of a construction project during construction stage, thus to have an effective cost control for the construction project and complete the project within the budget or under budget. Don’t waste time! Our writers will create an original "Difficulties Of Cost Control During Construction Stage" essay for you Create order 1.2 Aim and Objective: The aim of this paper is to study the difficulties of cost control in construction industry during the construction stage. In order to achieve the study of aim, some objectives have been established as below: To ascertain the importance of applying cost control in local construction industry. To highlight the cost control difficulties in local construction firm during the construction stage. To investigate the factors contributing to cost control difficulties in local construction firm during construction stage. 1.3 Background: Cost control is a process that should be continued throughout the project life cycle of a project. In construction industry, cost control should be continued from the inception of the project until the completion of the project to ensure that the cost of the construction project is kept within the agreed cost limits. For cost control of construction industry, it can be divided into two major stages; the control of cost during design stages and the control of cost by construction firm right after the commencement of the construction work of the construction project. According to Ashworth (2004), cost and schedule control is one of the most important functions of management once a project is identified. Cost control is paramount during the feasibility and design phases because a projectà ¢Ã¢â€š ¬Ã¢â€ž ¢s feasibility is normally tied to the cost of a project. Besides that, cost control during the construction phase can be paramount for large projects due to their potentially high construction cost and profiles. As mentioned by Nunnally (1998), the measuring and collecting the cost record of a project and the work progress are included in the cost control of a project. Besides that, the comparison of actual progress with the planning is also involved. The main purpose of cost control of a project is to gain maximum profit within the designated period and satisfactory quality of work. According to Pilcher (1994), he defined cost control as the regulation, by executive action, of the cost of carrying out the various activities which go to make up a project or a contract. The regulation (for cost control) designed for a specific industry will need a major modification if it is used in other industry because of the different nature or the business. He also said that for all construction projects, costs must be controlled and monitored from all the parties involved including client, consultants and contractor. This study will mainly focus on the difficulties of applying cost control during construction stage. That is because of in my opinion, what is needed in a cost control methodology is to proactively seeks out potential difficulties and factors contributed to those difficulties and provides project managers with as much warning as possible before their occurrence. This study provides a milestone for construction firm in the factors that likely to causes the difficulty in cost control. 1.4 Scope of Study: Cost Control is commonly used in every industry and almost in every project, the study will only focused on cost control difficulties of construction industry or a construction project during the construction stage. This study will ascertain the importance and the use of applying cost control in local construction industry. Besides that, the difficulties in applying cost control during construction stage also falls within the scope of this study. After highlighting the difficulties theoretically, an interview will be conducted with experienced Contract Executive or Contact Manager or Project Manager to determine the difficulties of cost control during construction stage practically. Finally, after understanding the difficulties of cost control during construction stage, the factors contributing to cost control difficulties during construction stage will also be highlighted. 1.5 Research Methodology The study is conducting in three stages. First stage is literature review. The literature review will started with the introduction to cost control. In the introduction to cost control, the definition of cost control will be reviewed and the literature will also review the importance of cost control in construction industry. Moreover, the literature also will review the difficulties of applying cost control during construction stage. Furthermore, articles and notes about the cost control difficulties will be searched. All literature will be review deeply by referring the previous research paper, article, journal and etc. These sources can all be found in Google, Emerald, Yahoo and from the library of College Tunku Abdul Rahman. At second stage, an interview will be conducted with experienced Contract Executive or Contracts Manager or Project Manager face-to-face to obtain the information about their current practices in cost control system of their company, the practical difficulties and factors contributing to the difficulties in cost control will be identified by the Contract Executive or Contract Manager or Project Manager. The chosen Contract Executive or Contract Manager or Project Manager must be experienced enough in cost management of construction industry and willing to provide valuable information regarding the research topic. Last stage is writing up the content of the dissertation and the information obtained during the interview will be analyse and compare with the theoretical information. Conclusion of this study should be the result of the comparison between the practical and theoretical difficulties during cost control of construction stage faced by the contractor. 1.6 Benefits of Study By conducting this study, it allows me to have a rough idea on the Cost Control system. Completing this study also gives me a better understanding regarding the purposes and importance of Cost Control. Besides that, it also provides me with better perception regarding the difficulties during the application of Cost Control during construction stage. Furthermore, the interview conducted with the experienced Personnel will definitely allow me to review the current practices of Cost Control in the construction industry. 1.7 Dissertation Organisation Chapter 1: Introduction Chapter 2: Cost Control Chapter 3: Research Design and Methodology Chapter 4: Analysis of the Result and Discussion Chapter 5: Conclusion CHAPTER 2: COST CONTROL 2.1 Introduction to Cost Control 2.1.1 Definition The term à ¢Ã¢â€š ¬Ã…“Costà ¢Ã¢â€š ¬? is defined by Dictionary.com (an application of iPod Touchà ¢Ã¢â‚¬Å¾Ã‚ ¢) as the price paid to acquire, produce, accomplish, or maintain anything. Whereas the term à ¢Ã¢â€š ¬Ã…“Controlà ¢Ã¢â€š ¬? in Dictionary.com, it defines à ¢Ã¢â€š ¬Ã…“Controlà ¢Ã¢â€š ¬? as the act or power of controlling; regulation; domination or command. For construction industry, the term à ¢Ã¢â€š ¬Ã…“Costà ¢Ã¢â€š ¬? should be referred to the amount paid by a party; either a person or a corporation, to another party; normally a contractor, either to construct a complete building or a particular section of a building. And for the term à ¢Ã¢â€š ¬Ã…“Controlà ¢Ã¢â€š ¬? in construction industry, it should be referred to an official mean of regulation or restraint in the management of the project. According to Marchesan and Formoso (n. d.), the combination of the term à ¢Ã¢â€š ¬Ã…“Costà ¢Ã¢â€š ¬? and à ¢Ã¢â€š ¬Ã…“Controlà ¢Ã¢â€š ¬? should be defined as the application of procedures that result in early illumination of potential changes in resource requirements and in the timely surveillance of the usage of funds to permit action that will keep cost within a predetermined range. While for the other definition of Cost Control, we can refer to Ashworth (2004), he defined Cost Control as a process of planning, checking and verifying project expenditure based on established standards and taking the necessary corrective action to ensure that the total project expenditure is approximately to the estimated budget. While according to Ritz (1994), he stated that Cost Control gives a different meaning to a different people. Some people engage it with engineering costs; some states that it is a cost report, value engineering, cost management etc. Cost Control involves all the activities above in different time by different parties and all the parties involved in a project will have their own responsibilities and roles in cost minimization and Cost Control. Other than that, Royal Institute of Chartered Surveyor Committee defined Cost Control as the total proves which ensures that the contract sum is within the clientà ¢Ã¢â€š ¬Ã¢â€ž ¢s approved budget or cost limit. Further definition can refer to Mueller (1986), he stated that the cost control is the ability to influence the final cost of project positively with modifying negative performance trends. In addition, Kwayke (1997) defined Cost Control as a process where construction cost of a project is manage with the best method and systematic approach in order that the contractor would not suffer losses during the execution of the activities of the project and the cost of construction of a project would not be over-estimated by the developer. By concluding all the definition mentioned above, Cost Control in construction industry should be the application of procedures or regulation during the construction project life cycle to plan, check and verify the construction project expenditure based on the established procedures or regulations to ensure that the construction project expenditure is within the project budget, within given timeframe with quality specified and also to ensure that resources are used to best advantages or maximization of the profit for the construction project. 2.1.2 Statement of Facts in Cost Control As stated by Roger (2000), he said that Cost Control is a broad set of cost accounting methods and management techniques with the common goal of improving business cost-efficiency by reducing costs, or at least restricting their rate of growth. Cost Control is used in business to monitor, evaluate and the most important to increase the efficiency of specific areas within their operations. As for Nunnally (1998), he stated that cost control of a project involves measuring and collecting cost record and work progress of a project. Besides that, comparison of actual progress with the planning is also involved. He also mentioned that the main objective of Cost Control of a project is to maximize profit within the given timeframe and to achieve satisfactory quality of work. If the application of cost control is by a systematic procedure, it will result in ease of collection of important cost data in estimating and controlling of the cost of the coming projects in future. Kwakye (1997) states the main purpose in cost controlling for a construction project should be active controlling of final costs for owner, and not just to record and registering the payment. Cost Control Reports must be prepared for efficient Cost Control. The Cost Control Report is based on the cost data collected, it is important to project the costs in to future and to estimate or re-estimate the cost of the work yet to be completed. Amount of detail and the time interval between Cost Control Reports must be considered and the time interval is varied depends on the level of management for which they prepared the Reports for. For example, Cost Report should be received by site manager on weekly basis. Since the commencement of the contract, any new information must be taken into account and makes a suitable reporting system is important for a cost control system. According to Koh (2005), if an adequate reporting system is used, the estimator would become more reluctant in the future to use cost data that have been fed back from the site and granting the estimator some time to determine sufficient detail about the data and conditions they acquired. In addition, Koh (2005) also suggested two areas to check whether the Cost Control reporting system is efficient or not. First is to check on the profitability of the work and second would be check on efficiency carried out against the standard of the output rates that were used by the estimator in compiling the estimate. 2.1.3 The Purposes and Importance of Cost Control One of the principal objectives of Cost Control for most project or organisation is the achievement of minimum cost for a particular project. Achievement of minimum cost is to maximize the profit and profit in simple terms is what is left after all the income accruing to the enterprise has been received and all of the costs or outgoings have been paid. For all construction projects, cost must be monitored and controlled, whether from the point of view of owner, designer or a contractor. It helps to distinguish the problems arise and understanding of the problems which occur in each phase of industry enables better co-ordination of the activities of the many participants in a single project (Pilcher, 1994). Besides that, according to Pilcher (1994), the importance of Cost Control is due largely to the following: To provide the relevant feedback, carefully qualified in detail by all the conditions under which the work has been carried out, to the estimator who is responsible for establishing the standards both historical and future; To provide the client with a value-for-money project. Example: To give the building client a building which is soundly constructed, of satisfactory appearance and well suited to perform the functions for which it is required, combined with economical construction layout. To provide data to assist in the valuation of those variations that will arise during the course of the work; To provide immediate warning of uneconomic operations, both in the long and the short term; To limit the clientà ¢Ã¢â€š ¬Ã¢â€ž ¢s expenditure to within the amount agreed. In simple terms this means that the tender sum and final account should approximately equate with the budget estimate. To achieve balanced design expenditure between the various elements of the buildings. Thus, the sums allocated to cladding, insulation, finishing, services and other elements of the building will be properly related to the class of building and to each other. To summarize progress. To promote cost consciousness; The contractor may ascertain the maximum income that they may receive according to the contract sum, then ascertain the initial cost expenditure, or provide detailed brief to his own construction team who will then determine the actual cost that may involved. But most schemes are a combination of these two extremes. There has in recent years been a great need for an understanding of construction economics and Cost Control, particularly during the construction stage of projects. As stated by Ashworth (2004), Cost Control also should serve the following purposes: The clientà ¢Ã¢â€š ¬Ã¢â€ž ¢s requirements today are more complex, a more effective system of control is therefore desirable during the construction stage up to the completion of final account and thereafter during costs-in-use. There has been a trend towards modern designs and new techniques, materials and methods of construction. The designer is able to choose from a far wider range of products and this has produced variety in construction. The traditional methods of estimating are unable to cope in these circumstances to achieve value for money and more balanced designs resulting that in the end the contractor may need to bear for extra cost due to the faulty design. Contractorsà ¢Ã¢â€š ¬Ã¢â€ž ¢ profit margins have in real terms been reduced considerably during the past decade. This has resulted in their greater cost-consciousness in an attempt to redress possible losses. There is a general trend towards greater cost-effectiveness, and thus a need to examine construction costs not solely in the context of initial costs but in terms of whole-life costs, or total-cost appraisal. World recession has generally produced a shortage of funds for capital purposes and construction in general. This has been coupled with high inflation and interest charges, resulting in the costs of construction soaring to high levels. Although the relative costs compared with other commodities may be similar, the apparent high costs have resulted in greater caution, particularly on the part of contractor. 2.2 Difficulties of Applying Cost Control Procedures At present, serious problems exist in the cost control and management of construction project. For example, for some construction project, the design is earlier than the study of feasibility, which makes the later turn into useless. In bidding, some construction companies perform illegally, which makes the bidding fail to control project cost well. The popularization of assigned subcontracts and various subcontracts serve as potential threats for project quality. The delay for project payment, especially for workersà ¢Ã¢â€š ¬Ã¢â€ž ¢ wages, is serious. Some projects can not manage the changes of designs, construction companies fail to follow the designs completely, which may lead to larger costs for construction. Some construction companies emphasize on the control of quality and period but fail to control the cost. All these activities make the cost of construction project out of control in our country, which is harmful for the sustainable and healthy development of construction ind ustry. Gao (2009) has stated that the following is the difficulties in Cost Control of construction stage. 2.2.1 Fail to Estimate the Project Exactly The project estimation is performed at the very beginning, namely in the study of feasibility. Present compilation of study of feasibility is lack of details. No effective items to control the number of project. The estimation has a lower preciseness. Besides, the study of feasibility has no necessary investigation. Some potential geological disasters can not be identified effectively, which leads to the rise of costs. Although some companies make à ¢Ã¢â€š ¬Ã…“details for implementà ¢Ã¢â€š ¬?, the effect is poor. In order to establish the project, some companies may reduce the number of project and decrease costs. 2.2.2 The Compilation of Project Budget Has Poor Reliability At the stage of design, the investigation is far from sufficient. Some fundamental materials for design are inexact. As a result, the design may be irrational and will be changed significantly in construction, which causes the poor reliability of budget. 2.2.3 Working Drawing Budget is Unpractical At the working drawing design stage, compile the project budget according to the design. The working drawing budget is to calculate the cost of design. The rationality of working drawing budget is about how to organize the construction and how to reach the design requirements by what kinds of methods, plus how to arrange the construction period, and how to manage workers and machines under different seasons, according to scientific designs. All these tasks are supposed to be arranged by construction companies. For design companies, to compile the budget is unpractical. 2.2.4 Do not Follow Basic Construction Procedures and Can not Control Costs For some projects, time is urgent. Therefore, the design is maybe imperfect. And the construction does not follow the basic procedures strictly. Sometimes, the study of feasibility turns into useless papers. As a result, the estimation and the budget can not control the project cost effectively. 2.2.5 Contract is not Managed Well Some developers neglect to manage contracts. They do not follow the terms written in contracts strictly. Besides, some developers can not calculate the cost of project quantities correctly. They are incapable of managing external workers effectively. 2.2.6 Irregular Management and Many Changes for Project Developers can not design properly and have to change the management methods. Or, the execution is weak. They can change the design as will. Then, the scale of project is increasing and the cost is rising. 2.2.7 Rise of Cost Due to Unreasonable Financing Structure At present, the funds for construction project in Malaysia are mainly from domestic loans, foreign funds, self-collected by construction companies, and other sources. Although financing ways are few and some are immature, limits are more. Sometimes, funds can not arrive in time. In order to insure the process of project, the construction companies have to apply loans from banks. Therefore, a large proportion of construction funds are from banks as loans. And the credit period is long and can not match with investment return. The characteristics of construction industry determine the lagged-behind investment return. One financing channel increases risks and costs, which leads to the accumulation of loan balance in banks, increasing construction costs and pressures for later in operation. 2.2.8 System is imperfect One of the factors that cause overspending is the management. Main items that cause overspending include management fees, compensation fees for removing, and supervision. Main reasons include: Lack of a perfect cost control system and can not manage and control the cost systematically, which makes it hard to identify the out-of-control of cost in time. Lack the idea of cost control and the constraint mechanism. Project managers are always focusing on quality and construction period, but not cost control. The absence of system makes the expenditure more irregular. No integrated standards for management fee are effective. Workers are more than necessary in construction companies. 2.3 Factors Contributing to the Difficulties of Cost Control 2.3.1 Control of labour cost The control of labour cost frequently causing much troubles to Cost Control because of the productivity of labour is variable and causing the difficulty to the estimating stage. Although experienced estimators have their own database of historic cost data, but these data can only ever be regarded as an average for a given trade and does not make allowance for particular circumstances. A prediction of how labour will perform in the future on a particular project must be incorporated into an estimate of cost. Site management is greatly affecting the labour efficiency and their productivity. It is important that all labour resources, either self-employed or employed as labour and materials sub-contractors, are fully supervised and co-ordinated, to ensure that the labour resources are efficiently organized and making best used of them. If the labour resources are not well organized, it may reduce the productivity of the labour and making cost of labour to be higher hence causing difficulties to Cost Control because the labour cost is different with the estimated cost. 2.3.2 Site Condition After the design of engineer, quantity surveyor will normally estimate the amount of the designed work, but due to the site condition is unpredictable, it cause the cost estimation is rather difficult. In many of the construction project, there are majority of unforeseen and differing site condition are found in subsurface work such as tunneling and foundation work, such situation can also arise in rehabilitation and restoration work, retrofitting to meet revised seismic codes and projects that improve energy efficiency. Where ground water level is close to the surface of the site, closely pumping operation may be needed throughout the substructure work. This unforeseen situation will increase the construction cost. A wet site may also involve raising temporary sheds and offices on brick bases and more costly temporary work. The cost of excavation in rock is much more expensive than working in normal ground. This type of strata will need to be examined and to determine what type of support is needed to the sides of excavation. All this will contribute to the difficulty in cost control when the construction method is carried out wrongly. 2.3.3 Location of site The cost of building on a site in a city could be much expensive than construct a similar building on a provincial site. This is due to higher wages, materials and other costs. For instance, a project on a remote location site may involve long lengths of temporary access road and of temporary power cable for electricity suppliers and increased costs of transporting operatives and materials to the site. A site in a congested central area of a city will give rise to major problem in delivery and storage of materials and equipment, protection of adjoining building, construction method to carry out substructure work, restriction on the use of mechanical plant and to the protection of the public. Overcoming these problem involve considerable additional cost and all these will considerably contribute to the difficulty in cost control. 2.3.4 Materials In some of the guides the cost of materials can be easily identified, and adjustment to the measured rate is therefore a simple process. Material prices often depend on contractor, location, quantity and discount and hence making the estimation process to be rather difficult. The materials wastage of site will also contribute to this because there will be difference between the actual amount used and the estimated amount used. 2.3.5 Overheads and profit In most case, during the estimation process, the amount of overheads and profit will normally just referred back to previous projects. But the amounts included in the published rates vary considerably. In some guides nothing has been allowed, and these expect the user to add an appropriate amount. In other information, up to 25% has been included on margins of 3%. In addition, overhead costs have generally been reduced in order to keep costs to an absolute minimum, while seeking to maintain the required workload. Builders will therefore need to access their own percentage and adjust this according to that quoted. Surveyors, in attempting to predict tender values, will also need to take this into account in their approximate estimate. 2.4 Chapter Summary Cost Control in construction industry should be the application of procedures or regulation during the construction project life cycle to plan, check and verify the construction project expenditure based on the established procedures or regulations to ensure that the construction project expenditure is within the project budget, within given timeframe with quality specified and also to ensure that resources are used to best advantages or maximization of the profit for the construction project. Cost Control need to serves the purposes like to provide the relevant feedback, to provide the client with a value-for-money project, to provide data to assist in the valuation, to provide immediate warning of uneconomic operations, to limit the clientà ¢Ã¢â€š ¬Ã¢â€ž ¢s expenditure, to achieve balanced design expenditure, to summarize progress and to promote cost consciousness. Difficulties of Cost Control during construction stage are failed to estimate the project exactly, the compilation of project budget has poor reliability, working drawing budget is unpractical, do not follow basic construction procedures and can not control costs, contract is not managed well, irregular management and many changes for project, rise of cost due to unreasonable financing structure and system is imperfect. Factors that contribute to those difficulties are control of labour cost, site Condition, location of site, materials and overheads and profit. It is necessary for management to study the difficulties involved and the factors contributing to these difficulties so that they will design a cost control system that more efficient for a particular project. chapter 3: Research design and methodology 3.1 Introduction In this chapter, the research methodology used in this research will be discussed. The method of conducting research to achieve the aim and objectives will be reviewed to ensure that all the information obtained is reliable. Among two research strategies that suggested by Naoum (2007), which is Quantitative Research and Qualitative Research, Qualitative Research will be used as the research strategy for this dissertation. The reason to use Qualitative Research is because of it allows the topic being studied to give much valuable answers to questions put to them. Structured interview will be conducted with at least five (5) contractors so that sufficient information can be obtained to proceed with the field work. The interview will be carried out face to face with the interviewee, however, it also may be carried out over the telephone or any other methods like email or webcam. The targeted personnel to be interviewed are contract executive, contract manager or the project manager of the company. Since it is a structured interview, the questions to be asked are presented in the same order and with the same wording to all interviewees. The main objectives of this interview section are to clearly understand the ability of the contractor in cost control and the difficulties that they are dealing with during cost control of project they undertake. While the other objectives are to ascertain the importance of cost control during construction stage with the contractor and last but not least to investigate the factors that contribute to difficulties that they are dealing with during cost control. The interviewing session has the advantage of providing experience or opinion based information for the dissertation. Questions prepared are open- ended questions for the interview so that in-depth information can be collected. The questions are set by referring to the aim and objectives, data obtained will be of the opinions and perception as individual interviewee knowledge and experience of research area. 3.2 Questionnaire Construction The principles that are followed in constructing the questionnaire for the research are as shown in Figures 3.1 below: Research objectives + Literature review Questions Lead to Lead to Issues, topics and ideas Principles on how research objectives are translated into specific questions. (Naoum, 2007) Before constructing the questionnaire, the potential ideas which can be developed into a questionnaire at a later stage are listed out. In order to have the ideas to develop into questionnaire, the research proposal and the literature review is reviewed and all possible questions which are related to the research is written down to obtained the first thought questions. Those listed out question are all based on the aim and objectives of the research. After the first thought questions have been identified, the final questionnaire is constructed by introducing a number of section or categories for the questionnaire and the first thought questions are fitted into these sections. The research questionnaire was divided into two sections in which the first section is to obtain the back ground and information of the interviewees as well as their organization. This is to ensure that the contractor and the personnel is experienced enough and is highly knowledgeable to provide sufficient information required by the research. While for another section, the contractor will be asked to highlight the difficulties that they are dealing with in cost control. The factors contributing to the difficulties will also be investigated and the importance of cost control will be ascertained. 3.3 Basis of Interview Questions The interview questions are designed in format and wording that can be easily understood by interviewees. These questions were set to achieve the aim and objectives of dissertation. Information obtained should be able to support or make comparison with the theoretically as presented in the previous chapter. Through the interviews, the information regarding difficulties and factors contribute to those difficulties of cost control during construction stage will be obtained. Besides that, the importance of cost control will also be obtained. Each question is designed to achieve certain aims and purposes. For questions set in the first section, it is to make sure that the interviewee has sufficient knowledge and experience in cost control of construction project during construction stage. The interviewees will first being asked how many years has he been in the construction industry and how many years had he been involved in the post that related with cost control during construction stage. The interview will then proceed by asking the interviewee how many projects that the intervieweeà ¢Ã¢â€š ¬Ã¢â€ž ¢s firm has completed within budget or under budget to determine the ability of the firm in Cost Control. For the subsequent section, questions are designed to obtained information to meet the aim and objectives. The interviewees will first being asked to give his opinions regarding the importance of cost control during construction stage. 3.4 Potential Problems and Contingency Plan Primary data of this research will be obtained by structured interview, but as we know, interview often causes bulks of problem no matter during the interview or after the interview which is to analyze the data. Potential problems that may arise will be discussed and contingency plan to solve those problems will be suggested in this sub-chapter. Interview can help the interviewer to obtain in depth information regarding the research. However, the ability to ask open questions and to create an open environment in which the interviewees feel comfortable to answer is a difficult and complex set of achievements. This is the most challenging part in conducting an interview. So, a well preparation for the question is needed and the designed question should be checked and rechecked to ensure that the question is leading the interviewee to provide necessary information. Besides that, the interviewer shall train himself to ask question correctly before the interview session to ensure a success and good interview can be done. Since only left a short period of time which is before the final submission of thesis is available for conducting the interview and analyze the data obtained, there might be insufficient of time to collect enough data for the fieldwork. For example: only able to obtain two or three face to face interview out of five (which is the minimum). If this problem occurs, interview may be carried out via telephone, email or webcam. Conducting an interview via all these communication devices require shorter time and they are more convenient for interviewees as they do not need to purposely arrange a time for the face to face interview in which the arrangement of time might take a long time. But interview via these communication devices will be harder for the interviewer to obtain in depth information, hence, a set of well prepared and structured questions is needed to obtain as much information as possible. Different languages may be used by different interviewee, since the dissertation is written by using English, some terms or words just cannot be translated directly. If those terms or words are translated directly, it may have a very different meaning. Besides that, the data collected are all in words, in which it may be tricky enough for the interviewer to understand what those interviewees mean although they are all using the common language because words may take on a different meaning in different cultures or different usage. When facing this kind of problem, try to seek clarification of the meaning of the special terms. It could make the data analysis become a difficult and hard job if the data collected are not clear enough of the specific meaning or rationale. The interviewer can ask for clarification by repeating and double confirm the answer with the interviewee. The notion of interviewer bias does not simply refer to the way in which questions might be asked and how answers are responded to. Interviewer bias refers to the whole character of the interviewer and the impact this may have on the responses of the interviewee. Therefore, while doing the data collection and data analysis, must always bear in mind that not to insert interviewer bias into the work. 3.5 Method of Analysis The research strategy that being use in this dissertation is qualitative research. Since it is a qualitative research, it is necessary to analyze the content. It involves essentially analyzing the interview contents to identify and isolate the main themes that permeate right through the responses from the interviewees. The data collected will be analysed manually because the sample size is small (minimum of 5) and the number of variables are not many. Several steps are required to analyse the qualitative data: Step 1: Set the objectives for the interview Since the interview session is to obtain information to achieve the objectives of this research dissertation, the objectives of this research dissertation will as well be used as the objectives of the interview session and the following are the 3 objectives for this research dissertation: To ascertain the importance of applying cost control in local construction industry. To highlight the cost control difficulties in local construction firm during the construction stage. To investigate the factors contributing to cost control difficulties in local construction firm during construction stage. Step 2: Identify and isolate main themes Step 3: Classify responses under the main themes A careful perusal of the descriptive responses from the interviewees for each question can uncover the meaning underlying the responses. Examine the responses in all the interviews and classify each response under the different themes which have developed. Use appropriate wording to accurately represent the meaning of the responses. Step 4: Integrate themes and responses into the text of research write up. While discussing the main themes that run through the research study, one can bring in verbatim responses to substantiate the discussion of the research.

Summary of People and Empires - 844 Words

Summary of People and Empires. This book is a Short History, of western empires which explain how European civilization and includes chronology of key events are influenced by the empires that was formed in it, like the Roman empire. It starts with Alexander and his Greek army and ends with the EU. Major events between these two events are empires like the Roman Empire, Byzantine Empire, the Catholic Church as an Empire, the Spanish Empire, British Empire, and the European Colonial influence into the 20th Century. The book begins with Alexander, an ancient Greece king. Alexander life became a tale of the elision of knowledge and understanding with power. In the middle ages, Alexander became a legendary figure whose desire to subjugate the entire world. He did not even came close but did manage to conquere the Persian Empire, Anatolia, Syria, Phoenicia, Judea, Gaza, Egypt, Bactrian and Mesopotamia. However, Alexanders empire grew to fast. He could not manage both Europe and Asia. As a result, other empires took ov er, starting with the romans. By the late sixth century Rome had a republic government, but through a series of civil wars, the roman republic turned into the Roman Empire under a military control. Republics have been able to create empires, they have all, fallen prey to the ambitions of the strongest and most influencial among them. This is what became of the Greek city-states, and it is what finally became of roman when the empire had grown too big.Show MoreRelatedAnalysis of Jeffersons Theories1086 Words   |  4 PagesAccording to Thomas Jefferson, kings are the servants, not the proprietors of the people. In his bold document, Summary View of the Rights of British America, Jefferson pompously but intelligently lays down his argument against British rule over the colonies. Jefferson takes it upon himself to offer advice to King George III, who he addresses personally in this treatise. The author didactically cites historical examples of the changing role of the monarchy through out British history. With regardsRead MoreBlack Stereotypes Of Modern Media1481 Words   |  6 Pagesand later, the subjugation of African American people. Stating that stereotypes are just a joke is an understatement of the consequential after – math racial images and stereotypes have on the African American population. Even stereotypes that are considered positive are often concealed with negative implications and reasons as to why they exist. Most people may think they only hold stereotypes in the back of their head, but studies show that people are more likely to fall back on them in makingRead MoreCompare And Contrast Aztec And Aztecs702 Words   |  3 PagesProfessor: Wilson Kaiser October 16, 2017 THE AZTEC AND INCA EMPIRES 1300-1550 THE AZTEC AND INCA EMPIRES 1300-1550 During that time as previous, pre-European civilizations in the Americas, the Aztec and Inca empires were separate and distinct civilizations. Both civilizations were without question very advanced and had their own complex but very well-organized society. Polytheism (who beliefs in multiple gods) dominated both empires. They worshiped idols extensively and interestingly, the SunRead MoreHow Did the Mongols Accomplish the Conquest of Such a Large Territory Within Such a Short Period of Time?899 Words   |  4 Pagesa powerful alliance that built the largest empire the world has ever seen. The Mongolian empire reached great in size in such a short period of time. This was basically because of the sturdy Mongol army and many efficient policies the Khan family established. The Mongols were very knowledgeable in military tactics. There empire had a strong sense of unity, helping the empire get so great so rapidly. There allies also contributed to the Mongolian empire. By the time of Chinggis Khans death in 1227Read MoreNotes On The World And The Arabian Peninsula1186 Words   |  5 Pagesthe 7th century -followers of Islam spread from Arabian Peninsula -began sequence of conquest Spreading †¢ Spreading -merchants -warriors -wanderers (nomads) -empire extended to Africa, Europe and Asia Deserts and Towns: Desert and Towns: The Arabian World and Birth of Islam The Arabian World and †¢ The Arabian Peninsula -was covered mostly by deserts -wide variety of Bedouin (nomadicRead MoreWhat Does Sequoyah s Life Story Tell You About Him And The Cherokee People? Essay995 Words   |  4 Pages1. What does Sequoyah’s life story tell you about him and the Cherokee people? The story of Sequoyah’s life demonstrates how the Cherokee people weren’t barbaric but they were fascinated in the white people’s technology. Some of the traits of the Cherokee people: Determination Proudness Open mindedness 2. Where were the Cherokee homelands and why did immigrants and others want those lands for themselves? Across the Appalachian Mountains from Kentucky to Alabama was the homelands of the CherokeeRead MoreThe Mongolian Empire1112 Words   |  5 PagesThe Mongolian Empire was one of the most influential in history; it controlled more land than any other civilization and caused the black plague which started the renaissance in Europe. 1.â€Å"age-set† Who: For the people of East Africa What: A warrior moved through age-grades or ranks starting from a warrior through elder When: Until after 1500 Where: East Africa Why: Showed the warrior emphasis in East Africa How: Political: Allowed mobilizing of young men for military use Social: Was a sort of SocialRead MoreImportance Of The Declaration Of Independence707 Words   |  3 Pagescolonists to rebel against British Empire in the name of liberty. However, after Revolutionary War broke out, Britain attempted to crush the rebels. On October 1775 King George III ordered enlargement of English army, this made American rebels to strengthen their cause. Because of conflicted between English and Americans in March 1776 past first vote in favor of independence. This is what colonists thought had to be done, without it, the separation colonies from British Empire could have not gained enoughRead MoreSiddhartha Gautama, Or The Buddha1045 Words   |  5 Pagespowers of AÅ›oka and the Tang Dynasty. AÅ›oka, the Mauryan Dynasty’s third king ruled the empire at its peak. The Mauryan Dynasty Empire swept the majority of South Asia. Accepting of other religions, AÅ›oka had access to a variety of people and religions residing in his reign. However, the king remained in his traditional Buddhist ways and it showed throughout his rule. AÅ›oka wanted to spread dharma to his people, so he had the Pillar Edicts made, the first tangible evidence of Buddhism scripture carvedRead MoreThe Differences Between The Assyrians And The Middle East1509 Words   |  7 Pagesdeclared to have been an empire, but many would disagree. Looking at the three different articles, we will see if they fit the criteria for what would have been known as an Empire, or if they fit into what would be known as a kingdom. First a little back story on the Assyrians, they existed between 911 and 609 BC. Its expansion and coverage over most of the Middle East is astounding. It eclipsed a large chunk of Babylonia and Egypt. Making it appear to have been an Empire just by looking at the way

Macroeconomic Effects of High Oil Prices on The Swiss Economy

Question: Describe about the Macroeconomic effects of high oil prices on the Swiss economy? Answer: Introduction With the effect of globalisation, the overall demand of oil and gas has been increased in a significant manner within the globe. In this regard, Lukoil (2013) argued that effect of globalisation and internationalisation has influenced the demand of oil and gas approximately at a rate of 1.2% annually. On the other hand, consumption of energy has been increasing approximately around 50% in every year. As an impact, the petroleum business has turn into one of the developing commercial ventures among the globe (Atukeren, 2011). In this assignment, the objective is to identify and analyse the potential factors, which have influenced the costs of petroleum commodity in the world over the last few years. At the same time, the study will try to highlight the significant causes, which have lead massive revenue shortfalls on the balance of oil and gas exporting nations. In this regard, this particular study will emphasise towards US, as a petroleum exporting nation for identifying and understanding the effects on economy in terms of aggregate demand and supply due to the shortfall of oil prices (Blanchard and Riggi, 2013). Discussion Overview of Petroleum Industry In Chen et al., (2012) order to highlight, overview of petroleum industry it can be stated that overall performance of oil and gas industry has remained volatile since after the year 2009. In this regard, in order to identify the potential causes, it is revealed that poor global financial operation and the effect of recession have highly influenced the overall performances of oil and gas industry within the globe in a diversified manner. In this regard, based on the report of EYGM Limited (2014), it is identified that Organization of the Petroleum Exporting Countries (OPEC) has provided its utmost attention towards the oil and gas industry with an aim of reinforcing the situation of energy resources within the globe by reducing the price of these commodities. As an effect, the overall prices of oil commodity have remained stabilized since after the year 2010. On the contrary, the prices natural gas has kept going upward direction and it has influenced challenges for the emerging as w ell as developing nations (Organization of the Petroleum Exporting Countries, 2013). A picture is depicted below for improved perceptive the prices of petroleum industry in the world (Drakos and Konstantinou, 2012). Figure 1: Prices of Oil and Gas Industry/ Per Barrel (Source: Organization of the Petroleum Exporting Countries, 2013) The Causes for inflation in the Prices of Oil in US So as to highlight the causes of inflation in the prices of oil in the world, it can be stated that exhausted spare capacity of US has affected the prices of petroleum commodity in an extensive manner. At the same time, embargo on the Arabian oil companies have reduced overall supply of the petroleum commodity within the globe. As an effect, it is witnessed that the costs of petroleum has been increased in a significant manner amid the oil and gas market. Apart from this, the war between Iran and Iraq has also influenced the prices of petroleum commodity in a diversified manner. Simultaneously, Saudi Arabian swing producer role have also affected the performance of oil and gas industry. As an effect, it is witnessed that the overall prices of oil have been also remain volatile in between the year 2009 to 2013 (Hamilton, 2011). In this relation, it can be also claimed that due to the effect of Asian financial crisis, the prices of oil and gas has been increased in a significant manner . Similarly, global financial crisis has also affected the global trading prospect of petroleum industry. As an effect, the costs of unrefined petroleum and common gas have been increased in an extensive manner. Thus, in order to highlight the potential causes of volatility of unrefined petroleum and common gas price, it can be stated that these are the above stated factors have influenced the costs of petroleum commodity (Energy Information Administration, 2015). Impact of Volatile Prices on Aggregate Supply and Demand of US In order to highlight the impact of supply and demand on US, it can be stated that the overall demand of oil was 89.17 million barrels/ day during the year 2012, which has been increased 1.07 million barrels/ day in terms of year 2011 (Huang and Chao, 2012). Effects of Oil Prices Volatility in Aggregate Demand and Supply on the US Economy The aggregate demand can be defined as the total demand for output of an economy like production of goods and services over a given period of time. The demand may come from a sector of the society like households for consumption, firms for investment or governments for exports. There is an inverse relationship between price and demand as aggregate demand rises with fall in price. The aggregate supply can be divided into two categories as long-term and short-term aggregate supply. In the long run, the money is neutral as any change in the money supply will be proportional to the change in prices and the boost in money availability would not affect output of the economy. In terms of short run, the money is not neutral, as the increase in money supply may not immediately trigger raise in price. With increase in output prices there is an alteration in higher cost of living and neglecting the increased profits (Khan, n.d.). The effects of oil prices volatility in aggregate demand and supp ly on the US economy are discussed below for better understanding. Effects on Real Income and Wealth In this context a number of case studies can be taken into account but the most important incident is of the 1990 oil shock which shook the three nations namely United States, Japan and Germany with an adverse effect on the economy. This scenario has affected the economy of exporting countries as at that time the importing nations were not ready for intake of any petroleum products due to high oil prices (Ozdemir and Akgul, 2015). Effects on the World Demand The decreases in the trading terms for importing nations depict the increase in wealth of oil exporters. The oil exporting nations would not extent to offset the overall aggregate demand in respect to importing countries. The rise in oil prices would profit the exporting countries but at the same time it would decrease the demand for oil from the importing nations of the world. And vice versa, the decline in oil prices proves worthy for importing countries but affects the exporting nations (Shirai, 2014). Effects on the Domestic Market of US During the period of high oil prices the demand for oil in the exporting nations also decrease as it becomes unbearable by the consumers. In this context, an example of Iran and Iraq the two most leading countries as producers cannot suffice the internal demand if there is decrease in the oil prices. As with the decrease in the oil prices there is decrease in the revenues of that nation thus affecting the economic condition of the country (Valadkhani, 2014). Effects on Wealth and Expectations This effect can be well explained by taking into account the US economy where the noteworthy fall in oil costs since mid 2014 ought to increment general US financial movement. As the expense of generation abatement's for organizations, particularly for those that are vigorously subject to oil inputs. This will support both business and employment. Hence it depicts that the oil prices directly affects the economy of the nation (Wang and Chueh, 2013). Adjustment in the Aspects of Private Sector While wistful changes frequently affect the share trading system instantly, genuine changes will produce results over the more drawn out term. In the event that oil costs stay low, this at last influences financial arrangement system, private part action and corporate productivity, as per the Jadwa Investment report. Taking a gander at the general population division transmission, change in oil costs will influence government income. High oil costs maintained for more than year will bring about a fabricate up in financial offsets bringing about higher government use, which pushes up GDP development rates and corporate gain fullness and eventually interprets into a constructive outcome on the share trading system. Maintained low oil costs have the inverse impact. At each phase of the transmission prepare in the general population part there are immediate linkages and thump on impacts to the private segment. Effects on Monetary Factors and Demand Policy The fall in oil costs, and their anticipated constancy, has essential ramifications for both the reasonable way of swelling and the fitting reaction of money related approach. The fall in the oil cost could produce inflationary weight by boosting interest and with little impact on potential supply in the economy. As dependably in financial approach, the answer relies on upon the wellspring of the shock. As it is supply as opposed to request that has been the predominant component behind the late fall in the oil value (Wu and Ni, 2011). Conclusion The fall in the oil value ought to have a noteworthy positive effect on the economy of the exporting nations by expanding general financial action as the expense of creation diminishes for organizations, particularly for those that are reliant on oil inputs. Despite the fact that the oil and gas extraction area is adversely influenced by the lessening in the oil value, parts such as horticulture, air transport, coke and defined petroleum producing and oil-escalated assembling parts will advantage as the cost of a key info falls. In rundown, lower oil costs ought to be certain for most parts of the exporting nations economy, families and the government. In any case, the size of these advantages remains exceedingly questionable contingent upon how oil costs develop in the upcoming days. Reference List Atukeren, E. (2011). Macroeconomic effects of high oil prices on the Swiss economy: 2003 2008.IJSE, 3(1), p.1. Blanchard, O. and Riggi, M. (2013). Why are the 2000s so Different from the 1970s? A structural Interpretation of Changes in the Macroeconomic Effects of Oil Prices.Journal of the European Economic Association, 11(5), pp.1032-1052. Chen, P., Chang, C., Chen, C. and McAleer, M. (2012). Modelling the Effects of Oil Prices on Global Fertilizer Prices and Volatility.Journal of Risk and Financial Management, 5(1), pp.78-114. Drakos, K. and Konstantinou, P. (2012). Investment decisions in manufacturing: assessing the effects of real oil prices and their uncertainty.J. Appl. Econ., 28(1), pp.151-165. Energy Information Administration, 2015. What Drives Crude Oil Prices?. Spot Prices. [Online] Available at: https://www.eia.gov/finance/markets/spot_prices.cfm [Accessed July 26, 2015]. Hamilton, J. (2011). Nonlinearities and the Macroeconomic Effects of Oil Prices.Macroecon. Dynam., 15(S3), pp.364-378. Huang, W. and Chao, M. (2012). The effects of oil prices on the price indices in Taiwan: International or domestic oil prices matter?.Energy Policy, 45, pp.730-738. Khan, A. (n.d.). Oil and Economy: Factors Influencing Crude Oil Prices and the Significance of these on the Global Economy.SSRN Electronic Journal. Lukoil, 2013. Global Trends in Oil Gas Markets To 2025. Global Trends, pp. 1-64. Organization of the Petroleum Exporting Countries, 2015. An Introduction to the Oil Industry OPEC. Public Relations Information Department, pp. 1-68. Ozdemir, S. and Akgul, I. (2015). Inflationary effects of oil prices and domestic gasoline prices: Markov-switching-VAR analysis.Petroleum Science, 12(2), pp.355-365. Shirai, M. (2014). Effects of Quality and Price Appeals on Consumers Internal Reference Prices and Quality Perceptions.ME, 05(08), pp.831-840. Valadkhani, A. (2014). Dynamic effects of rising oil prices on consumer energy prices in Canada and the United States: Evidence from the last half a century.Energy Economics, 45, pp.33-44. Wang, Y. and Chueh, Y. (2013). Dynamic transmission effects between the interest rate, the US dollar, and gold and crude oil prices.Economic Modelling, 30, pp.792-798. Wu, M. and Ni, Y. (2011). The effects of oil prices on inflation, interest rates and money.Energy, 36(7), pp.4158-4164.