Z The Company Projects The Cost Of Dynamic Control And Management

Due to the ongoing reform of the nation's economy system and the establishment as well as the development of the market economy, the building industry has become a profitable one filled with competition. As a result, construction companies are facing enormous pressure to survive and develop. In order to meet challenges, construction companies have to focus on key issues such as effective management of projects, cost efficiency and improvement of innovation. According to our research, however, construction companies are lacking such a mechanism that is mature and can be commonly applied regarding cost efficiency.As a big state-owned construction company, Z Company has made little profit and even faced losses on some projects. The main reasons for these losses are ineffective management of project costs and weak dynamic control (over projects). Additionally, the company's mechanism has led to such weaknesses as extensive and poor management, unclear responsibility and lack of process control and so on. In the absence of dynamic control (over the project), the project result can be predicted. By then, even well-developed accounting will not solve the problem .However, we can fix the problem by designing a dynamic mechanism in accordance with cost management theories and dynamic control standards to control cost efficiency that meets Z Company's requirements.The dynamic control mechanism consists of three systems: Responsibility, Data and Enforcement. The Responsibility system clarifies responsibilities and work distribution; The Data part includes three components: planning, which requires a project manager to make practical plans as for project construction and development as well as resource distribution before a project starts; budgeting, which requires budget staff to make cost and revenue budgets that are consistent with the progress of the project and used as evidence for the dynamic control; and finance, which needs responsible staff to report actual costs that will be compared with target costs. The Enforcement system details project framework and offers timely analysis on any possible mistakes and necessary correction measures to ensure the dynamic control.The dynamic control mechanism has proven to work well according to a trial practice on a project of Z Company. The company has not only lowed project costs and timely managed the project, but also has significantly increased its profitability.