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International Accounting
 

Applying the tools of strategic management accounting in construction

Vol. 18, Iss. 7, FEBRUARY 2015

Available online: 18 April 2015

Subject Heading: REGULATION AND STANDARDIZATION OF REPORTING

JEL Classification: 

Pages: 30-43

Zhul'kova Yu.N. Nizhny Novgorod State University of Architecture and Civil Engineering, Nizhny Novgorod, Russian Federation
zhulkova@mail.ru

Importance Currently strategic management accounting gains special importance for taking managerial decisions in construction and related industries. The article illustrates the most common accounting methods applied in Russia and abroad, though special attention is given to combined application of the target costing concept and conjoint analysis. I scrutinize the logic, possibility and significance of applying the said tools in construction, sale of economy class residential property. The research introduces a theoretical model suggesting the use of the conjoint analysis. This method focuses on the importance of studying a set of parameters of designed construction products, and analyzing the importance to price ratio per each parameter. When offering a marketable product with the optimal set of characteristics required by customers, and when determining the 'usefulness' of a certain factor for customers and searching for further ways to decrease the cost of one square meter, I reveal certain types of works, which allow decreasing the construction cost down to the required level. Respective changes in cost items (in construction documents), which I obtain as a result of the calculations, will enable the management of construction companies to perform a targeted adjustment of expenses and, therefore, to achieve the required level of cost.
     Objectives The objective is to substantiate the use of strategic management accounting tools by enterprises involved in development and sale of construction products. The main tasks of the study are to determine the importance and place of strategic management accounting for construction companies, evaluate the need of strategic management accounting, show financial feasibility of using the said methods of strategic management accounting at different stages of construction products' life cycle.
     Methods I applied the methods of comparative analysis, systematization, and content analysis to conduct the study.
     Results The presented calculations prove the possibility and efficiency of the practical use of strategic management accounting tools at different stages of construction products' life cycle. The results of the study may be useful for a wide range of readers interested in practical implementation of strategic management accounting tools in the construction industry
     Conclusions and Relevance The management based on the methods of strategic management accounting plays a special role in efficient operations of construction enterprises; therefore, it is a primary source of their competitive advantages.

Keywords: management, accounting, efficiency, cost management, target costing, profit, construction, real estate, property

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