Date of Award

Summer 1999

Document Type

Dissertation

Degree Name

Doctor of Business Administration (DBA)

Department

Management

First Advisor

Gene Johnson

Abstract

The objectives of the study were to empirically examine the relationships among the three elements of the Theory of Constraints (TOC), a number of observable outcomes expected to be associated with application of TOC, and business unit performance. Measures were developed for each of the elements of TOC and a number of observable outcomes (OUTCOMES) expected to be associated with practice of TOC. TOC is defined as consisting of scheduling logistics (LOGISTICS), the Thinking Process (THINKING), and non-traditional performance measures (MEASURES). A previously developed and widely used measure of business unit performance (PERFORMANCE) was employed.

The sampling frame for this research consisted of business unit employees who had some knowledge of TOC. Discussion groups and web sites devoted to TOC were monitored to identify these individuals. The questionnaire was sent via email and posted on a web site. A total of 180 usable responses were received. A response rate could not be accurately calculated because it could not be determined how many individuals had access to the survey. Responses collected from the different sources were compared and no significant differences were found.

The statistical analysis revealed that adoption of the individual elements of TOC independently had varying relationships to business unit performance. When used alone, LOGISTICS was negatively related to PERFORMANCE. THINKING did not have a significant relationship to PERFORMANCE. Use of MEASURES was positively related to PERFORMANCE, and the presence of OUTCOMES had a positive relationship with PERFORMANCE. The complete model of all four factors (LOGISTICS, THINKING, MEASURES, and OUTCOMES) was positively related to PERFORMANCE. Interacting effects of these four factors were found to be complex. OUTCOMES were found to have a moderating effect on the relationship between two of the elements of TOC and PERFORMANCE.

From these results, the data suggests use of TOC is effective as an aid to improving business unit performance. However, the negative relationship between some individual elements of TOC and the complex interaction relationships suggest managers should be cautious in adopting TOC in a piecemeal fashion. Failure to adopt all three elements of TOC could result in unwanted consequences.

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