Rexford H. Draman, Archie Lockamy and James F. Cox
Since its inception, cost accounting has provided data to managers for the development of internal organizational performance measures. In the mid 1980s, Dr Eli Goldratt…
Abstract
Since its inception, cost accounting has provided data to managers for the development of internal organizational performance measures. In the mid 1980s, Dr Eli Goldratt introduced a new management philosophy called the theory of constraints (TOC). This philosophy contained a new set of performance measures which linked together the strategic objectives and operational capabilities of the organization. This linkage allows for the maximization of profits. Since its introduction, there has been a growing amount of evidence documenting TOC’s ability to more tightly link local decisions to organizational performance than those of traditional cost accounting. This research used a simple Gedunken experiment to evaluate the difference between strategy driven product‐mix decisions based on TOC accounting and traditional cost accounting. In all cases, the constraint‐based approach to costing outperformed the traditional approach based on cost accounting.
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Edward D. Walker and James F. Cox
Problem‐solving techniques for poorly structured problems have been the subject of recent academic research and popular press texts. The purpose of this paper is to explain the…
Abstract
Purpose
Problem‐solving techniques for poorly structured problems have been the subject of recent academic research and popular press texts. The purpose of this paper is to explain the use of one of the Theory of Constraints thinking process (TP) tools — the Current Reality Tree (CRT). The purpose of the tool is to clearly identify the root problem or problems that cause the surface problems or undesirable effects occurring in an organization.
Design/methodology/approach
One must fully understand the core problems in the environment before proposing a system solution to these core problems. Without this systems perspective, a proposed solution may create more problems than it solves. Through the use of an actual white‐collar service case, the paper explains how the CRT is created.
Findings
The overall objective of this research is not to propose solutions to the case but to demonstrate how the CRT might provide structure by identifying and logically linking the surface problems encountered in each area to the core problems. In this manner, the reader is introduced to the power of the CRT to address poorly structured problems.
Research limitations/implications
The paper uses only one case as an example of the power of the TP tools. However, numerous testimonials from industry (many are cited in the text) provide evidence of the effectiveness of the TP tools.
Practical implications
The paper provides evidence that the TP tools might be an effective method to provide structure to ill‐structured problems which in many case have been addressed by management as if the problem were unstructured or, worse, unstructurable.
Originality/value
The paper is the first (to the authors' knowledge) to specifically address the issue of ill‐structured problems from the perspective that structure might be provided by the TP tools.
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While large corporations have metrics experts, most managers do not need skills of that order. What they need is a clear understanding of how measurements affect the activities…
Abstract
While large corporations have metrics experts, most managers do not need skills of that order. What they need is a clear understanding of how measurements affect the activities and behavior of their own organizations.
Computers were first used in manufacturing firms around 1958. Since then, their impact on manufacturing has been of mixed results. In some instances, they have greatly improved…
Abstract
Computers were first used in manufacturing firms around 1958. Since then, their impact on manufacturing has been of mixed results. In some instances, they have greatly improved the work done in the factories, especially in the area of computer controlled robots; while in other aspects of manufacturing, the results have been far below the desired standards. Inventory control and production scheduling are two examples of where computers have not lived up to management's expectations (Wright, 1974).
This study first replicates, then perturbs, the centipede game as implemented by McKelvey and Palfrey (1992). It is thus both a replication study and an original research study…
Abstract
This study first replicates, then perturbs, the centipede game as implemented by McKelvey and Palfrey (1992). It is thus both a replication study and an original research study. We use controlled laboratory experiments, with computer interfaces for each treatment, anonymous round-robin matching among the subjects across rounds, multiple (10) rounds within each treatment, and incremental changes between adjacent treatments allowing for an assessment of effects at the margin of different game configurations. We find unraveling to the subgame perfect equilibrium somewhat faster than did McKelvey and Palfrey (1992), when using their exact design. Perturbations to that design show that setting non-taker payoffs to zero induces earlier unraveling, as does the use of higher stakes (as in Murphy, Rapoport, and Parco (2006), and Rapoport, Stein, Parco, and Nicholas (2003), respectively). Other, subsequent perturbations show: that there is at most a subtle effect associated with using a 10-second timer with a default move, relative to untimed active moves; and that clock format versus tree format has a minimal effect in common information, unchanging payoff-parameterization environments. We verify the robustness of some key past findings in real-time games. We also explore in a common information environment, the effect of design features previously used in independent private values settings; here we find new evidence that features which might modulate information acquisition and/or processing in an independent private values setting may not restrict behavior in a common information setting.
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The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and…
Abstract
The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.
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Aarhus Kommunes Biblioteker (Teknisk Bibliotek), Ingerslevs Plads 7, Aarhus, Denmark. Representative: V. NEDERGAARD PEDERSEN (Librarian).
James C. Cox and Vjollca Sadiraj
Much of the literature on theories of decision making under risk has emphasized differences between theories. One enduring theme has been the attempt to develop a distinction…
Abstract
Much of the literature on theories of decision making under risk has emphasized differences between theories. One enduring theme has been the attempt to develop a distinction between “normative” and “descriptive” theories of choice. Bernoulli (1738) introduced log utility because expected value theory was alleged to have descriptively incorrect predictions for behavior in St. Petersburg games. Much later, Kahneman and Tversky (1979) introduced prospect theory because of the alleged descriptive failure of expected utility (EU) theory (von Neumann & Morgenstern, 1947).
Gerald R. Ferris, Shanna R. Daniels and Jennifer C. Sexton
Although employee race has been an actively investigated area of scientific inquiry for decades, a thorough and informed understanding of the role of race in the organizational…
Abstract
Although employee race has been an actively investigated area of scientific inquiry for decades, a thorough and informed understanding of the role of race in the organizational sciences has eluded us for a number of reasons. The relationship of race and stress in organizations is a prime example of this neglect and deficiency in our knowledge base, as little work has been done in this area. We attempt to address this limitation in the literature by proposing an inductively derived, review-centric framework that attempts to articulate the multiple intermediate linkages that explain the process dynamics taking place in the relationship between employee race and health and well-being in organizations. We argue that socialization processes, social networks, information and resource access, and mentoring contribute to distance and differences between racial minorities and nonminorities concerning control, reputation, performance, and political understanding and skill, which in turn, creates barriers to success, and increased stress and strain for racial minorities. The implications of this framework along with directions for future theory and research are discussed in this chapter.
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A pæan of joy and triumph which speaks for itself, and which is a very true indication of how the question of poisonous adulteration is viewed by certain sections of “the trade,”…
Abstract
A pæan of joy and triumph which speaks for itself, and which is a very true indication of how the question of poisonous adulteration is viewed by certain sections of “the trade,” and by certain of the smaller and irresponsible trade organs, has appeared in print. It would seem that the thanks of “the trade” are due to the defendants in the case heard at the Liverpool Police Court for having obtained an official acknowledgment that the use of salicylic acid and of other preservatives, even in large amounts, in wines and suchlike articles, is not only allowable, but is really necessary for the proper keeping of the product. It must have been a charming change in the general proceedings at the Liverpool Court to listen to a “preservatives” case conducted before a magistrate who evidently realises that manufacturers, in these days, in order to make a “decent” profit, have to use the cheapest materials they can buy, and cannot afford to pick and choose; and that they have therefore “been compelled” to put preservatives into their articles so as to prevent their going bad. He was evidently not to be misled by the usual statement that such substances should not be used because they are injurious to health— as though that could be thought to have anything to do with the much more important fact that the public “really want” to have an article supplied to them which is cheap, and yet keeps well. Besides, many doctors and professors were brought forward to prove that they had never known a case of fatal poisoning due to the use of salicylic acid as a preservative. Unfortunately, it is only the big firms that can manage to bring forward such admirable and learned witnesses, and the smaller firms have to suffer persecution by faddists and others who attempt to obtain the public notice by pretending to be solicitous about the public health. Altogether the prosecution did not have a pleasant time, for the magistrate showed his appreciation of the evidence of one of the witnesses by humorously rallying him about his experiments with kittens, as though any‐one could presume to judge from experiments on brute beasts what would be the effect on human beings—the “lords of creation.” Everyone reading the evidence will be struck by the fact that the defendant stated that he had once tried to brew without preservatives, but with the only result that the entire lot “went bad.” All manufacturers of his own type will sympathise with him, since, of course, there is no practicable way of getting over this trouble except by the use of preservatives; although the above‐mentioned faddists are so unkind as to state that if everything is clean the article will keep. But this must surely be sheer theory, for it cannot be supposed that there can be any manufacturer of this class of article who would be foolish enough to think he could run his business at a profit, and yet go to all the expense of having the returned empties washed out before refilling, and of paying the heavy price asked for the best crude materials, when he has to compete with rival firms, who can use practically anything, and yet turn out an article equal in every way from a selling point of view, and one that will keep sufficiently, by the simple (and cheap) expedient of throwing theory on one side, and by pinning their faith to a preservative which has now received the approval of a magistrate. Manufacturers who use preservatives, whether they are makers of wines or are dairymen, and all similar tradesmen, should join together to protect their interests, for, as they must all admit, “the welfare of the trade” is the chief thing they have to consider, and any other interest must come second, if it is to come in at all. Now is the time for action, for the Commission appointed to inquire into the use of preservatives in foods has not yet given its decision, and there is still time for a properly‐conducted campaign, backed up by those “influential members of the trade” of whom we hear so much, and aided by such far‐reaching and brilliant magisterial decisions, to force these opinions prominently forward, in spite of the prejudice of the public; and to insure to the trades interested the unfettered use of preservatives,—which save “the trade” hundreds of thousands of pounds every year, by enabling the manufacturers to dispense with heavily‐priced apparatus, with extra workmen and with the use of expensive materials,—and which are urgently asked for by the public,—since we all prefer to have our foods drugged than to have them pure.