Management Dynamics: Merging Constraints Accounting to Drive Improvement

John A. Caspari and Pamela Caspari



Level of TOC knowledge acquired:



327 pages

Designed for:

Business owners and Consultants


Finance and Measurements


Throughput Accounting




Hardcover and Download



This book is a comprehensive introduction to the Theory of Constraints (TOC) in profit-oriented organizations. Focusing on practical dynamic solutions for weak links in the organizational tangle of chains, Constraint Management reveals how problems arise from the lack of global goal congruence and how a fair incentive compensation plan can align the goals of individuals in all functional areas and at all organizational levels with the shareholder goal of greater profitability.

  • Provides the missing piece of the constraint theory -- the dynamic motivator to drive the process of ongoing improvement in the bottom-line.
  • Contains materials on budgetary control, pricing, simplified critical chain project management, and sales funnels that are new contributions to the management tool kit.
  • Builds on existing constraint management materials to facilitate the transition for internal and external consultants in integrating the material with their existing practice.
  • Provides a comprehensive introduction to the Theory of Constraints. Complete with hundreds of informative illustrations and tables, Management Dynamics is an enlightening and useful guide for controllers, cost managers, and an organization’s executive management and owners.

Key points:

  • Budgetary control
  • Pricing
  • Simplified critical chain
  • New ways to use sales funnels in the management tool kit
  • Incentive compensation

Chapter 1.
Thinking Bridges

Evaluating Decision Alternatives

Thinking Bridges Example

Chapter 2.

Two Paradigms

Constrained Environments

TOC Focusing Process

Identifying Ongoing Improvement

Chapter 3.
Internal Financial reporting

Early Throughput Accounting

Cost Control in a Throughput World

Constraints Accounting versus Throughput Accounting

Complexity Divide

Chapter 4.
Motivation and the Budget

Motivation for a Process of Ongoing Improvement

Role of Financial Manager

Establishing a Budgetary Revision and Reporting Process

Chapter 5.
Constraints Accounting Terminology and Technique

Basic Financial Control Metrics

Capital Write-Off Methods

Exploitation Decisions

Chapter 6.

Cost-Based Pricing

Constraint-Based Pricing

Decoupling Throughput from Operational Expense

Constraints Accounting Approach to Pricing

Chapter 7.
Tactical Subordination in Manufacturing

Tactical Subordination

Drum-Buffer-Rope Scheduling

Buffer Management Reporting

Chapter 8.
Tactical Subordination in Project Management

Common-Sense Scheduling

Critical Path versus Critical Chain

Project Management Constraints

Subordination Reporting in Projects

Critical Chain Buffer Reports

Current Status of Critical Chain

Simplified Critical Chain

Chapter 9.
Tactical Subordination in Sales

Sales Funnels

Sales Commissions

Leveraging Constraints to Create Compelling Offers

Chapter 10.
People: A Valuable Asset

Empowerment and Respect: Aligning Authority, Responsibility, and Long-term Commitment

Personnel Employment Decisions

Mixed Messages

Chapter 11.
Strategy and Conclusions


Successful Constraint Management

Appendix: Accounting System Structure

Brief History of Cost Accounting

Cost and Revenue Flows

Constraints Accounting Similarities and Departures