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Originally developed by Dr. Eli Goldratt, TOC’s Strategy and Tactic (S&T) trees3 (see Chapters 18 and 25, this volume) offer the sort of detailed implementation instructions necessary to keep a strategy focused and ensure that everyone involved in the implementation is following a coordinated implementation plan. The S&T trees are also helpful in sequencing necessary events in a strategic implementation. The S&T trees at an appropriate level of detail stipulate which application implementations are critical (e.g., Drum-Buffer-Rope [DBR], Critical Chain, etc.), in the order they should be applied, and with details of the operational means of putting them into action.
Conflicts within the System
Although the management literature recognizes several types of intra-organizational conflicts, one of the most disruptive types of conflict, the cross-functional conflict, is very common in organizations. For example, marketing managers perceive great dependence on manufacturing, but manufacturing managers perceive significantly less dependence on marketing (Kahn and Mentzer, 1994). Kahn and Mentzer point out that lack of reciprocity thereby inhibits a collective orientation toward an effort to serve the customer (1994, 117). Further, manufacturing managers perceive themselves as more like marketing managers than vice versa on dimensions of work, customer interaction goals, employees, and reward structures, suggesting additional opportunities for misunderstanding and conflict to erupt.
Resolving conflict means that problems that arise during cross-functional integration, which involves different work units interacting and marshalling work, resources, and mutual assistance (Ruekert and Walker, 1987), are minimized (see Chapter 33, this volume). Yet cross-functional relationships must flourish if companies are to compete successfully in today’s very competitive marketplace. In the context of strategic management, cross-functional relationships have been found to be integral to Porter’s (1985) value chain, to internal marketing (Ballantyne, 1977), to maintaining a true market orientation (Kohli and Jaworski, 1990), to achieving seamless customer relationship management (Ryals and Payne, 2001), and to aligning marketing and manufacturing strategies with market conditions (Berry et al., 1999).
The challenges entailed in achieving alignment between marketing and manufacturing (viz. Shapiro, 1977; Crittenden, 1992; Crittenden et al., 1993; Hill et al., 1998; Cooper, 2002), marketing and sales (Massey and Dawes, 2007a; 2007b), marketing and engineering (Shaw et al., 2003), marketing and information systems (Cooper et al., 2008), and marketing and project management (Cooper and Budd, 2007) have been explored throughout the business literature (see also Chapter 33, this volume). TOC’s TP help identify the core conflicts that exist as generic conflicts between these functional areas and assist in selecting solutions from the TOC array of applications that address these conflicts. The TP can also assist in identifying and resolving idiosyncratic conflicts for which generic solutions are inappropriate.
Conflicting Standards of Performance
A number of academic articles point out the difficulties that arise from conflicting standards of performance. For example, manufacturing may prefer large production runs to lower their cost of production. Marketing, on the other hand, calls for smaller quantities of a variety of products to satisfy the heterogeneity found in differing consumer preferences (Ghose and Mukhopadhyay, 1993). Conflicting standards of performance are a direct contributor to cross-functional conflict, since, inevitably at one or many functional interfaces, these standards clash with the overriding objectives of the company’s strategic focus4 (see also Chapters 13, 14, and 33, this volume).
Dysfunctional Compensation and Reward Policies
In the introduction