An Exploration of Activity Based Costing in the Chinese Construction Industry (2013)

In modern day China, with the introduction of ‘open-door’ policy and continuous economic reform, the Chinese construction industry has significantly developed and evolved. Now, it plays a very important part in Chinese National economy, which has become the main supporting industry of the whole nation. According to national statistics, currently the annual output of the construction industry is approximately US$1,188 billion in 2012. It employs around 26 million people, more than 5% of the total labour force in the country. It accounts for more than 6% of the GDP and has been growing at an average annual rate of about 11% since 1978. The reform of relevant regulations and laws, government’s encouragement policies as well as the immense market opportunities all facilitate the development of construction industry and provide a good external environment for the participants of concern. However, despite the prosperous perspective of the industry, the competition within the Chinese construction industry is still fierce and cruel. There are several reasons contributing to this. Firstly, more and more big or small new participants enter this market for the potential market share. Secondly, after China entered WTO (World Trade Organization), Chinese government started to open the construction market to the international investors, which not only bring the opportunities but also the challenges to Chinese enterprises. They encounter the competition from both foreign companies and local rivals. However, in China, Activity Based Costing is a new concept and has been adopted more over the past 5 years; this method has been more widely used from 2010 onwards in larger organisations. There is still a perception that Activity Based Costing has not been widely adopted in China. This study plans to identify the current status of cost management within the China’s construction industry, explore the concept of Activity Based Costing method and how it has been used in Chinese construction enterprises. The main aims of this disseration are:

  • Explore the concept of Activity Based costing and
  • Investigate the current application of Activity Based Costing in Chinese construction enterprises
  • 19,000 words – 74 pages in length
  • Excellent use of literature
  • Good analysis of subject area
  • Well written throughout
  • Includes questionnaire
  • Ideal for construction management students

1 – Introduction
Aims of the Research and Research Questions
Research Hypotheses
Research Method
Structure of the Dissertation

2 – Literature Review
Framework of Project Cost Management
Theory/Framework of Activity Based Costing
Cost Management
Activity Based Costing Theory
Definitions and Terms
Activity Based Costing Implementation
Activity Based Costing Benefits
Problems for Activity Based Costing Implementation
Difference between Traditional Costing Method and Activity Based Costing
Chinese Construction Industry and Activity Based Costing Adoption
General Adoption of Activity Based Costing in China
Application of Activity Based Costing in Chinese Construction Industry

3 – Methodology
Investigation Objectives
Data Collection Methods
Questionnaire Construction
Selecting Sample
Questionnaire Design
Pre-testing of Questionnaire (Pilot Test)
Relationship of Questions to the Research Questions and Hypothesis
Telephone Interview
Data Analysis Techniques
Problems of Data Collection

4 – Results and Findings
General Description of Activity Based Costing Application in China
The Emergence of Activity Based Costing
Application of Activity Based Costing in China
Application Status of Activity Based Costing in Chinese Construction Industry

5 – Conclusions, Limitations and Further Research
Overview of the Research Questions
Summary of the Research
Main Research Findings
An Overview of Activity Based Costing Application in Chinese Construction Industry
Reasons for Adopting Activity Based Costing
The Problems to Implement Activity Based Costing Method
The Positive Environment and Conditions
Hypothesis Testing
Research Limitations and Further Recommendations



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