Theory of Constraints Handbook - James Cox Iii [257]
Second, there is no incentive for accounting and finance professors to spend time becoming proficient in TOC concepts because they are primarily evaluated and promoted based on their research publications in the recognized top quality (mostly theoretical) journals where, at least in the United States, “applied” articles generally are not welcomed.46 Bill Ferrar, recipient of the Lifetime Contribution to Management Accounting Award, has called for the teaching of TOC, but he suggests it could only occur by team teaching with a manufacturing engineering professor (Ferrara, 2007, 172).
Third, there is little or no demand from business school constituencies that TOC concepts be taught to students. Auditing firms frequently make accounting departments aware of their desire to hire students schooled in certain topics, such as XBRL (eXtensible Business Reporting Language) and IFRS (International Financial Reporting Standards), but as yet there is little or no push from industry for accountants who have been trained in either TA or TOC. This should not be surprising since even firms that have adopted TOC typically do not include accounting and finance people in their training classes until improvement initiatives become accounting and finance targets for cost reduction.
Future TOC Accounting/Finance Research Needs
There have been relatively few publications by accounting or finance writers relating their research and conclusions on the subject of TOC. The field is entirely open.
Case Studies and Simulations
There is a desperate need for practitioners of TOC to partner with accounting or finance academics and publish case studies of their experiences, both good and bad, from a finance or accounting perspective, along with analysis of major factors that contributed to the success or failure of the initiative. It also would be most interesting to read a case of an accounting or finance area applying TOC concepts to their own operations. The quality and efficiency of accounting reporting systems could also be examined.
Information and Decision Making
Accountants have a broad perspective of an organization. To provide increased value to an organization, accountants need to establish internal information systems that aid decision makers. There is a need for research on the decision-making process, the behavioral aspects of decisions, single versus multiple decision makers and the quality of decisions, and supply chain information and accounting.
Decision-Making Processes
While accounting and finance personnel usually do not make operating decisions, they do guard the treasury and must approve acquisitions. Therefore, they must understand legitimate investment needs.
It would be enlightening to see a rigorous study of short-term decisions, generally defined as decisions where the impact is experienced in one year or less and decisions must be made quickly, and long-term decisions where the decision time frame is longer and the impact is felt perhaps years later. What about the assumption that short-term decisions can affect (or become) the long-term? Who typically receives credit for long-term decisions where the cost is incurred much earlier?
What really is needed is a TOC conceptual framework for management accounting similar to Concepts Statements47 provided by the Financial Accounting Standards Board (FASB) for financial accounting. That is, a TOC conceptual framework establishing desired information concepts would encourage an entire, internally consistent, reporting system including information objectives, decision support criteria, and periodic income statement reporting in a format that facilitates quick decisions by line managers as well