Communication and knowledge barriers when applying incremental target costing in the construction industry

Communication permeates all organizations and effective communication is a prerequisite for organizations to realize their goals. Identifying and overcoming barriers to communication is therefore essential. The construction industry is characterized by complexity where large construction projects, which require collaboration between several actors, are common. This creates challenging forms of cooperation, which gives rise to problems in the application of target cost calculation. The calculation is based on information that is communicated between the calculation and design groups and therefore their collaboration is central in the application of successive target cost calculation. The study aims to study and identify prominent barriers regarding communication and knowledge and investigate how these affect the implementation of target costing in a large construction company in the Swedish market. To achieve the purpose, data from internal documents, regarding the working method in project planning, has been collected and interviews with employees from the respective functions, regarding their experiences of their working method and collaboration, have been carried out. The results show that the case company has a working method that should promote collaboration and communication, but that this is not completed in practice. There are several clear barriers in communication, one of the main ones being the lack of forums for communication, which creates an organizational distance. Another striking barrier is the lack of follow-up and evaluation of the projects, which prevents tacit knowledge from being externalized. One of the conclusions is that an important prerequisite for target costing to be implemented is that the two functions come closer together both organizationally and in terms of time. This can then result in other barriers being broken down