The paper "Can Target Costing and Whole Life Costing Be Applied In the Construction Industry by Nicolini" is a good example of a finance and accounting article. The article is focused on identifying ways of employing target as well as the whole life cycle costing to the UK construction industry. The authors argue that the success of this model costing in other industries like the commodity manufacturing should be replicated in the aforementioned sector to prompt quality of service generated and, also ensure an imminent reduction in the level of costs incurred in the entire construction process (Nicolini et al 304).
The authors suggest that the adoption of this model of cost within the UK construction sector will result in a significant level of benefits and such competitive advantage implication as sustaining a cost leadership strategy. The article further argues that even though the applicability of the model within the sector is somehow certain, still, there lie enough challenges that fairly results from the principles and considerations of target costing model itself (Nicolini et al 304-305). Summary The article indicates that the UK construction industry plays a significant role in the growth of the economy’ s overall GDP as it contributes to at least 10 per cent of the GDP and employs at least 1.4 million personnel across the country, which prompts an imminent effort to reduce the constructions costs (Nicolini et al 304).
Research comparison with other large economies like the USA and Japan suggests that the UK construction model; although operates under a low-labour mechanism, is marred with low output per each number of inputs implemented. It is also indicated that the relatively higher construction costs relate to the fact that UK-based buildings are mostly highly specified in comparison to competitive countries while at the same time fail to utilise advanced construction techniques like the use of standardised components.
As a result of poor design and construction techniques, it is postulated that many resources are commonly wasted to rectify these designs in the course of repairing defective structures immediately after the completion of the initial construction process. The article further notes that the existing tight product-market situations have also resulted in a lag in making efforts needed for improving the process and construction techniques within the UK industry as a whole.
A poor model of communication in the construction industry is argued to have resulted to poor service quality, low-level efficiency and incurrence of widened adversarial attitudes amongst construction personnel that prompted a need for changing the way management of construction process should be conducted in order to ensure substantial cost and price reductions (Nicolini et al 304). The authors suggest that for a high-performing UK construction industry both in terms of profitability levels as well as cost-to-quality ratio aspect, there needs to be the introduction of distinctive innovation in relation to the perception, setting and management of the entire relationships that exist within entire parties of a single construction supply-chain. Assessment The authors have made lots of significant contributions to the development of a workable and innovative work culture within the construction industry as a way of reducing costs while at the same time ensure profitability and quality service.
Works CitedNicolini, Davide, et al. “Can Target Costing and Whole Life Costing Be Applied In the Construction Industry?” Evidence from Two Case Studies, British Journal of Management, 11 (2000):303-324.