Portfolio Europeo para las Lenguas en formato

Ontology is about the researcher’s view of the nature of reality (Saunders et al., 2009). The researcher can inquire and analyse the nature of the world and everything within the universe. There are two extreme views, i.e., objectivism and constructivism (refer to the top level of Figure 4-2). The objective stance considers the nature of realities in the world, external to the researcher’s own mind. The constructive stance argues that reality is socially constructed and reality is only understood by examining the perception of human actors (Collis and Hussey, 2003; and Saunders et al., 2007 and 2009). The research onion presented by Saunders et al (2007 and 2009) has not explicitly shown the position of ontological

96 stances. The ontological stance considers ‘what knowledge is and assumptions about reality’ (Pathirage et al., 2008).

The area of this research is about Cost Management and Controlling Practice (CMCPs), where the Activity-Based Costing (ABC) system is applied to develop the Activity-Based Cost Controlling (ABCC) model for improving the management of project overheads during the construction stage of projects. This model will be implemented and focused on substructure elements of construction activities of commercial building projects.

On one ontological extreme side, the traditional costing system and current cost accounting management approaches would seem to be considered through the objectivism assumption. The traditional costing system utilises the standard Bill of Quantities (BoQ) to estimate project costs with a percentage addition of project overheads on construction building costs (RICS, 2009; and CIOB, 2009). The standard financial statements (e.g., balance sheet, profit and loss statement) are regularly reported, and cost accounting managers must apply the same standard forms of cost accounting and management reporting system, e.g., General Accepted Accounting Principles (GAAP). It is used by several organisations in a similar way. This reality exists independently of human factors, where the standard cost accounting system is normally followed to fulfil the requirements of external standards and regulations on a regular basis (e.g., quarterly, by semester, or yearly). This system is commonly implemented to satisfy senior management and external parties such as investors, creditors, auditors, regulators, and taxation authorities (Horngren et al., 1997; Glynn et al., 2003; and Drury, 2008). The current cost accounting and management standard may still be applicable to financial reporting (Kaplan and Cooper, 1998).

The other ontological extreme is considered for the view that objectivist aspects of the traditional costing and standard cost accounting and management systems are less important. The cost accounting standard system (e.g., the GAAP) may be

97 quite different to contemporary cost management strategies in which social entities attach their thoughts and beliefs consistently for successful management environments of organisations. Management strategy is very important in business and management that may have ‘neither a fixed start nor certain end’ (Nordberg, 2010). It is very difficult to limit the strategy and may only be understood through constructive perception of human creators. The research relating to developing contemporary cost management strategies can be considered through socially constructed reality, i.e., the constructivism assumption.

However, this research consider cost management and controlling practices – CMCPs of project overheads during the construction stage which cannot be positioned to both ontological extreme sides, i.e., objectivism or constructivism. This research falls between the two ontological extremes. The research relating to development of the ABCC model and implementation of the CMCPs’ tools and techniques for improving ‘the management of project overheads during the construction stage’ could be considered as an independent reality of the researcher’s own mind. This phenomenon exists independently because the researcher is not involved or contributing directly to the failure or success of projects in practice. The researcher’s thoughts and knowledge are only used for understanding and interpreting the meaning of project documents and the perception of human actors during the research period. The researcher’s view about this phenomenon is clearly considered as the outsider who has no control on the reality. The ways in which social entities, such as management lines and project team managers involve their knowledge, beliefs, skills, expertise, and experiences are considered as critical aspects for the best way they think and act to achieve successful project progress and cost performance through cost management and effective control of practices.

Project documents such as drawings, costs, schedules, physical progress, invoices, etc., are documented from the real project reports during the construction stage. These project documents (representing existence of reality) are created based on

98 actual project progress independently of the researcher’s involvement (realist assumption). The existence of realities is also interpreted by human factors as the respondents of questionnaire survey and participants of interviews focused on explaining the context of the research area (critical realist).

Therefore, this research is connected with both categories of continuum of realities, and leans towards a critical realist stance (refer to Figure 4-2).

4.2.2.

Epistemology

The second branch of philosophy is epistemology: the researcher’s view about an original creation and dissemination of what constitutes acceptable knowledge in a particular area of research (Saunders et al., 2009). It involves examination of relationships between the researcher and that being researched (Collis and Hussey, 2003). Saunders et al (2009) categorised epistemological research philosophies into four perspectives: positivism, realism, pragmatism, and interpretivism (refer to Figure 4-1 and Figure 4-2).

Positivism argues that credible data or facts can only be provided by observable phenomena, it focuses on causality and law like generalisations. Realism considers two perspectives: (1) direct realism considers whether observable phenomena provides insufficient data then represents inaccuracies in sensations, and alternatively, (2) critical realism considers that phenomena create sensations which are open to misinterpretation. These two realism perspectives focus on explaining phenomena within contextual areas. Pragmatism believes either or both observable phenomena and subjective meanings which can provide acceptable knowledge dependent upon the research questions. This focuses on practical applied research and integrating different perspectives to help interpret the data. Interpretivism believes that social phenomena and subjective meanings focus upon the details of a situation, a reality behind these details (Saunders et al., 2009). It seems that there are philosophical overlaps between those areas.

99 After considering the epistemological philosophy, this research deals with the observable phenomena of cost management and controlling practices - CMCPs of construction project overheads which are acceptable to knowledge and create sensations that are biased and interpreted through several research activities, such as identification of project overheads during the construction stage; analysis of important CSFs for management of project overheads; investigation of the underpinning philosophy of the ABC system in construction projects; development of the ABCC model to improve the management of project overheads; and validation of the ABC system to maintain the ABCC model through expert interview outcomes.

The ABCC model is investigated, designed, developed, and implemented on substructure activities of construction building projects. These observable phenomena enable a focus on explaining the specific area of the cost management and controlling practices – the CMCPs for improving the management of project overheads during the construction stage of construction projects. Therefore, the epistemological philosophy indicates that this research can be considered through a critical realism stance (refer to Figure 4-2).