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Goldratt’s
Addressing ill-structured thinking
problems using Goldratt’s processes
thinking processes
137
A white collar example
Received April 2005
Edward D. Walker II Revised June 2005
College of Business Administration, Valdosta State University, Valdosta, Accepted June 2005
Georgia, USA, and
James F. Cox III
Department of Management, Terry College of Business, University of Georgia,
Athens, Georgia, USA

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.
Keywords Decision making, Service operations, Problem solving, Thinking, White collar workers
Paper type Research paper

Why is decision making so touch?

Billions of dollars have been expended on new technologies to improve white-collar
productivity. In most cases little to no improvement has been realized. In some cases, Management Decision
Vol. 44 No. 1, 2006
the organization actually lost money with the “improvements”. Manufacturing went pp. 137-154
through two decades of improvements – MRP, MRPII, JIT, and TQM. Service q Emerald Group Publishing Limited
0025-1747
organizations have recently joined manufacturers in the newest improvement tools – DOI 10.1108/00251740610641517
MD six sigma, lean, BPR, and ERP. Can it be that most of these tools and technologies do
44,1 not address the core (underlying) problems of the organization? In many cases,
organization policies and procedures are what block effective organizational
improvement.
In this paper, we present one of the Theory of Constraints (TOC) thinking processes
(TP), the Current Reality Tree (CRT), which has been used effectively by many
138 organizations (e.g. Israni, 1995; Kwolek and Cox, 1996; Moon, 1996; Mordoch, 1996;
Murphy, 1996; Roadman, 1996; Gattiker and Boyd, 1999) to identify the core problems
of the organization. We discuss the CRT, and provide an application of the CRT to a
white-collar environment. We conclude with a discussion of the use of the CRT in
ill-structured problem identification.

Structured, structurable, and unstructured problems

Many managerial decisions are ill-structured and thus do not lend themselves to
quantitative methods – managerial decision making seems to be as much an art as a
science, particularly with respect to ill-structured problems. Problems are rarely
defined in a way that leads the decision-maker to appropriate data, the right tool, and
the correct answer. Our traditional academic texts provide little preparation for
understanding the complexities of real world problems.
Smith (1988) argues that problems are structured, structurable, or unstructured for a
particular problem solver at a given time. With a structured problem, the problem
solver can readily identify a solution strategy – the six-line problem in academic texts.
For a structurable problem, a solution strategy becomes apparent if additional
information becomes available or the problem solver can divide the problem into more
manageable sub-problems. An unstructured problem has no solution strategy because
of limitations of the problem-solving tools.
Both researchers (e.g. Anderson, 1985; Bransford et al., 1987; Nickerson, 1994; and
Sacerdoti, 1977) and the popular press (e.g. Altier, 1999; Palady and Snabb, 2000; Rasiel
and Friga, 2001; Sproull, 2001) have addressed the nature of complex problem-solving.
Tacit knowledge of the environment (Balconi, 2002) and a clear definition of the
problem (Campbell, 1960; Getzels and Csikszentmihalyi, 1976) are required. An
accurate identification of the core problem provides a platform “to analyze the roots,
rather than the symptoms, of success and failure” (Lamont and Friedman, 1997).
Investigations into solving ill-structured problems (e.g. Chen, 1999; and Fazlollahi and
Vahidov, 2001) reveal that a structured analysis is helpful.
Spence and Brucks (1997) defined an expert as one “who has acquired domain
specific knowledge through experience and training” (p. 234) and concluded that
experts perform much better than novices on structurable problems. Eli Goldratt (1994)
developed a simple logic method based on causality, called the Theory of Constraints
Thinking Processes (TP), to impress structure on most structurable problems and on
many unstructured problems. The Thinking Processes are based on the premise of
systems thinking. Dettmer (1995) states that systems thinking is comprised of four
principles:
(1) The performance of the system is affected by each of its components.
(2) The parts of the system are interdependent.
 (3) If the parts of the system are grouped in any way, they form subgroups that are Goldratt’s
subject to the first two principles.
thinking
(4) If the performance of each part of the system is individually maximized, the
system, as a whole, will not behave as well as it could.
processes

Novices, those without specific domain knowledge, can in our view make decisions
comparable to experts through the careful application of the thinking process tools. 139
Using only the data we gained through interviews with company employees (managers
and workers in various functional areas), we will attempt to support this assertion.

Theory of constraints thinking processes

Goldratt’s TP are logic-based tools to provide the user the ability to:
(1) Identify the core problem of a system.
(2) Identify and test a win-win solution (before implementation).
(3) Create an implementation plan (that is almost fool-proof).
(4) Communicate the above without creating resistance.
Goldratt (1994) describes six basic tools (referred to as thinking processes) that allow
managers to answer the three most important questions when confronted with an
apparently intractable problem, whether it may be structurable or unstructured:
(1) What to change?
(2) To what to change?
(3) How to implement change?
We will focus on the use of the Current Reality Tree in this research. The TP have a set
of rules, called categories of legitimate reservation (CLR), for constructing and testing
the logical arguments.
The CRT is a logic-based tool for using cause-and-effect relationships to
determine core problems that cause the undesirable effects of the system (Cox et al.,
2003) It answers the first managerial question – what to change? Of all the
organizational problems, what problem is blocking the organization from real
improvement?
A CRT begins with the identification of several surface problems or undesirable
effects (UDEs) through interviews with the parties involved in the situation. A single
statement summarizes each UDE. Two approaches are used to build a CRT. The
traditional approach is to build the causal logic between two UDEs by using if-then
logic or by selecting an UDE and asking, “Why does this UDE exist?” The second
approach, the three cloud approach, is to build an evaporating cloud for each of three of
the UDEs. From these three clouds, a generic cloud is constructed; next, all of the UDEs
are connected to this generic cloud base using causal logic as described above in the
traditional approach. For a detailed discussion of the traditional approach, see
Scheinkopf (1996) or Dettmer (1997); for a detailed discussion of the traditional and the
three cloud approaches, see Cox et al. (2003). We use the traditional approach to
demonstrate the creation of a CRT; the ten-step procedure is presented in Table I.
(Though only four of the CLR are explained here, Dettmer (1997, pp. 30-61) explains
each of the seven CLR.)
MD
Step 1 List between five and ten problems (called undesirable effects – UDE’s) related to the
44,1 situation
Step 2 Test each UDE for clarity – is the UDE a clear and concise statement. This test is called
the clarity reservation
Step 3 Search for a causal relationship between two of the UDEs
Step 4 Determine which UDE is the cause and which is the effect. Read as “IF cause THEN effect.”
140 This test is called the causality reservation
Step 5 Continue the process of connecting the UDEs using the If-Then logic
Step 6 Many times the causality is strong to the person feeling the problem but doesn’t seem to
exist to others. In these instances, “clarity” is the problem. Use the clarity reservation.
Generally, entities between the cause and the effect are missing
Step 7 Sometimes the cause by itself is not enough to create the effect. These cases are tested with
the cause insufficiency reservation and are improved by reading “if cause and __________
then effect”
Step 8 Sometimes the effect is caused by many independent causes. The causal relationships are
strengthened by the additional cause reservation. These cause-effect relationships are
called a “magnitudinal and” for each cause increases the magnitude of the effect. Each of
the causes must be addressed individually to eliminate most of the effect
Step 9 Sometimes an if-then relationship seems logical but the causality is not appropriate in its
Table I. wording. In these instances words like “some”, “few”, “many”, “frequently”, “sometimes”
Traditional method to and other adjectives can make the causality stronger
construct a current reality Step 10 Numbering of UDEs on the CRT is for ease of locating entities only. An asterisk by a UDE
tree indicates that UDE was provided in the original list of UDEs

An application of the CRT

This application is constructed from data obtained in interviews with a large service
company. Acme (not the actual company name) employs a pool of sixteen secretaries to
service its corporate offices. A secretarial staff supervisor administers the pool. Two
years before our interviews, a centralized secretarial pool had been reorganized. Each
of the 16 secretaries is assigned to a department and supports up to six individuals.
The secretaries earn two weeks annual leave taken at the discretion of the secretary
upon approval by the secretarial staff supervisor. Additionally, secretaries
occasionally have jury duty or take unscheduled sick leave.
Currently, the secretaries are frustrated by their job assignments and work loads –
feeling that they are requested to complete more work than can be handled and that
they are asked to complete assignments for which they have not been trained or are not
responsible. Conversely, the managers are frustrated by the slowness with which
assignments are completed and by the errors contained in the resulting reports. This
example will be used to illustrate the procedure for constructing a CRT.

Step 1. List the undesirable effects

In our interviews with Acme managers, secretaries, and the staff supervisor, we
identified the following UDEs:
(1) Secretaries are frustrated.
(2) Secretaries make mistakes.
(3) The manager/department appears inept.
(4) Work is completed slowly.
 (5) Secretaries constantly ask managers for clarification. Goldratt’s
(6) Managers do not trust the system. thinking
(7) Secretaries often change departments. processes
(8) The secretary is not trained.

Step 2. Test each UDE for clarity using the clarity reservation
Is the UDE a clear and concise statement? The original UDEs were edited to improve
141
clarity.
(1) Secretaries become frustrated with their work assignment/load.
(2) Secretaries make mistakes.
(3) The manager/department appears inept.
(4) Work gets postponed/completed more slowly than expected.
(5) Work must iterate between the manager and secretary several times.
(6) Management loses trust in the secretarial support system.
(7) Secretaries are rotated among the managers frequently.
(8) Assignments are made for which the secretary is not trained.

Step 3. Search for a causal relationship between two of the UDEs

Both entities 2 and 3 and entities 8 and 2 seem to be related. (“Entity” describes any
statement in the CRT. Many entities are added during the CRT construction; however,
only a few, those on our original list, are UDEs.) We check 2 and 3 first. Numbering is
used to quickly locate the entity on the diagram, nothing more (see step 10, Table I). An
asterisk identifies each of the original eight UDEs.

Step 4. Determine which UDE is the cause and which is the effect
Read “if cause then effect”. This test is called the Causality Reservation. Occasionally
the cause and effect might be reversed (Tautology Reservation); check for this error
using the following statement: “Effect because cause.” If “secretaries make mistakes”
then “the manager/department appears inept”; or, “the manager/department appears
inept” because “secretaries make mistakes.” This relationship seems logical and causal
except for the modifiers (see step 9, Table I). The relationship is better expressed as: if
“secretaries make mistakes” then “sometimes the manager/department appears inept.”
As we build the tree we adjust the modifiers based on further causality relationships.
Other UDEs are causally related to UDE 3. This part of the CRT is provided in Figure 1.

Step 5. Continue the process of connecting the UDEs until all are connected
Entity 4 causes entity 3; entity 8 causes entity 2; entity 1 causes entity 2; entity 6 causes
entity 3; and entity 4 causes entity 5. These relationships are given in Figure 2.

Step 6. Apply the clarity reservation

The remaining steps are not necessarily applied in the number sequence presented.
They clarify the causality by modifying the entity wording or structure. There appears
to be a relationship between entity 7 and cause 1 (see Figure 3a). If “secretaries become
frustrated with their work assignment/load,” then “secretaries are rotated among
managers frequently.” The clarity reservation again requires the insertion an
MD intervening entity (see Figure 3b). If “secretaries become frustrated with their work
assignment/load,” then “secretarial staff supervisor reassigns work/secretary to satisfy
44,1 the secretary.” If “secretarial staff supervisor reassigns work/secretary to satisfy the
secretary,” then “secretaries are rotated among managers frequently.”
The insertion of additional entities into the CRT is based on the creator’s knowledge
of the situation (interviews with Acme employees in this case) or from the creator’s
142 general knowledge. The creator should verify the existence of the entity. Validation is
required whenever entities are added to the CRT as required by steps 6, 7, and 8.

Figure 1.
The search for causal
relationships

Figure 2.
The search for more
causal relationships
 Goldratt’s
thinking
processes

143

Figure 3.
Another example of the
clarity reservation

Step 7. Apply the cause insufficiency reservation

Entity 7 causes entity 8 (Figure 4a), but 7 alone is insufficient. If “secretaries are rotated
among managers frequently,” then “assignments are made for which the secretary is
not trained.” Another cause must be added to cement the relationship (see Figure 4b.) If
“secretaries are rotated among managers frequently,” and “different
departments/managers require different skill sets of their secretaries,” then
“assignments are made for which the secretary is not trained.” The ellipse

Figure 4.
An example of cause
insufficiency
MD (representing and) across both arrows indicates that either cause alone is insufficient to
44,1 result in the proposed effect – all causes must exist for the effect to occur.
The original UDEs are now connected (see Figure 5). It is apparent that a loop exists
within the CRT: the secretaries are rotated because they make mistakes, and they make
mistakes because they are rotated. This vicious cycle must be broken to restore the
effectiveness of the organization.
144

Figure 5.
The initial current reality
tree
Step 8. Apply the additional cause reservation Goldratt’s
Although the original UDEs are now connected, the tree is still incomplete. Entity 7 has thinking
an additional cause reservation. Reassignment by the secretarial staff supervisor due
to frustration is not the only cause. Each secretary takes two weeks annual leave at any processes
time approved by the staff supervisor or may unexpectedly stay home sick. Since the
company continues business when a secretary is absent, the secretaries are shifted
among managers/departments to cover for absent employees. When a secretary 145
supporting a higher-level manager is absent for a period, four or five secretaries might
be reassigned to support higher-level managers. The absence of one secretary creates a
domino effect down several levels of management, shown in Figure 6.
There must be some reason that entity 39 exists. When questioned, the managers
and staff supervisor responded that it is company policy that the highest skilled
secretary available is always assigned to the highest level of management. This
relationship is shown in Figure 7.
One need not identify all possible causes of an effect; only enough causes to account
for 80 percent or more of the occurrences of an effect. A simple test for whether to
include an additional cause would be to ask the question, “Does this additional cause
alone account for many occurrences of the effect?”

Completing the CRT

Using the clarity, cause insufficiency, and additional cause reservations as above and
restating several entities led to the more complete CRT shown in Figure 8. Some
readers may feel the CRT is simply the creator’s perception of reality; or as Greenleaf
states: “As I look through my window on the world I realize that I do not see all. Rather,
I see only what the filter of my biases and attitudes of the moment permits me to see
(quoted in Cutting and Kouzmin, 2002).” The creator’s biases and perceptions are
present in the CRT, as in any mental model. In this application, various managers
using the secretarial support system and secretaries within the secretarial support

Figure 6.
MD
44,1

146

Figure 7.
Another example of the
additional cause
reservation

system identified the UDEs of the system. The TP tools are a relatively simple
application of Boolean logic to establish causality. Yes, errors in logic can occur.
However, the careful application of the CLR by the CRT developers and the subsequent
review of the CRT by an outside reviewer – in this case, several Acme managers and
secretaries – reduce systematic bias.
Although 42 entities appear on the final CRT, two trees were constructed originally
– one representing the views of the managers and the other representing the views of
the secretaries. By approaching the problem space from the points of view of both the
managers and the secretaries, we were able to get an overview of the entire system
rather than the view from only one perspective. Consider the famous poem of John
Godfrey Saxe about the six blind men and the elephant. Each man was absolute in his
conviction. Each of them was correct from his perspective, but none understood the
true nature of the elephant – hence, all were wrong. The CRT conveys a system level
understanding of the situation.

What needs to be changed?

An entity that does not have an arrow entering it – the entity is not caused by some
other entity – is referred to as a root cause. A root cause can be classified into either of
two categories. A core driver is a condition that is beyond the control of the problem
solver. Examples of a core driver might include government regulation, environmental
conditions, or human nature. The second category of root cause, the core problem is the
concern of the problem solver. A core problem is a condition over which the problem
solver can exert some control or influence. Upon initial examination of the final CRT,
all ten of the root causes, listed below, might appear to be core drivers rather than core
problems.
. 9. There are no formal initial training requirements.
.
21. Different departments/managers require different skill sets of their
secretaries.
.
31. The work scheduling system is informal and ineffective.
.
37. The secretary’s workload is not considered.
.
41. Managers know which secretary possesses the skills required.
 Goldratt’s
thinking
processes

147

Figure 8.
The final current reality
tree
MD .
44. Managers aren’t notified of the shift.
44,1 .
82. Secretaries try hard to please the manager(s).
.
101. Secretaries take time off for annual/sick leave.
.
102. The highest-skilled secretary available is always assigned to the highest
level of management.
148 .
109. The manager does not have time to do things that cannot/have not been
delegated.

This phenomenon occurs because the core problem has existed for such a long time
that all concerned parties have accepted the core problem as fact, or as a given,
unchangeable condition. Notice that none of these root causes appeared in the initial
list of UDEs.
The problem solver identifies those core problems that if reversed or eliminated
destroy the UDEs. What are the core problems of this CRT? Entity 102, “the highest
skilled secretary available is always assigned to the highest level of management,”
entity 31 “the work scheduling system is informal and ineffective,” and entity 19 “there
are no formal initial training requirements” are connected to most of the UDEs. A core
problem should be connected to at least 70 percent of the UDEs. In fact, every entity on
the diagram except for the other seven root causes can be traced to one of these three
core problems. If these problems can be addressed then almost all of the UDEs
disappear.
The initial CRT (Figure 5) revealed a loop that in essence states that as secretaries
are rotated among managers, problems arise that cause the secretaries to be rotated
among the managers yet again. Approximately, 40 distinct loops can be found upon
examination of the final CRT (Figure 8). These loops can be traced to three of the core
drivers: 102 “the highest-skilled secretary available is always assigned to the highest
level of management”; 31 “the work scheduling system is informal and ineffective”;
and, 19 “there are no formal initial training requirements”.
“The highest-skilled secretary available is always assigned to the highest level of
management” is an Acme policy and as such can be changed; therefore, this core driver
is a core problem. Reserving the highest-skilled secretary or a highly skilled secretary
for use as a replacement for any secretary who is absent might replace policy. In this
way, no department would be required to work with a secretary of lesser skill than is
normally present. Additionally, the work of a single department is disrupted by an
absence, rather than disrupting the work of many departments by re-assigning several
secretaries.
However, elimination of the core problem 102 is not, by itself, sufficient to eliminate
the looping. The rotation of secretaries can also be traced to core driver 31 “the work
scheduling system is informal and ineffective.” The lack of a formal, effective work
scheduling system can also be changed. A formal, effective work scheduling system
might be as simple as a job sign-up board located at the secretary’s workstation. All
jobs in queue would be visible and could be processed on a first-in, first-out basis or
due-date basis established by the secretarial staff supervisor. If a manager needed to
have a job expedited or placed in queue ahead of other jobs, then it would be his
responsibility to clear such a request with the secretarial staff supervisor and the
managers whose jobs would be delayed.
 Core driver 19 “there are no formal initial training requirements” also Goldratt’s
contributes to the UDEs. Requiring initial skills training and requiring the various thinking
departments/managers to standardize on one set of applications software is
reasonably easy to implement. Core driver 21 “different departments/managers processes
require different skill sets of their secretaries” actually encompasses two thoughts:
first, the different departments required different software proficiencies such as
word processing or spreadsheet or presentation graphics skills; and second, the 149
different departments used different software suites. As a move to standardize on
a single software suite was already underway, we chose to not address this as a
core problem.
Prior to the creation of the CRT, the secretarial pool supervisor was fighting fires on
a daily basis. She was only addressing the symptoms of the underlying problems, and
without addressing the core problems the system was failing and would have
continued to fail.
Acme realized that the system was in disarray and had intended to re-centralize its
secretarial pool before examining the CRT. Such a move would have cost a
considerable sum of money as the mini-pools are on various floors of three different
buildings. Acme’s solution would also have diminished the one-to-one contact of
secretary and manager/department and increased the makespan of each job. The three
possible solutions suggested by the CRT are less intrusive, require lower initial and
ongoing investment, and, most importantly, eliminate the UDEs in the CRT.

What happened and where do we go from here?

The secretarial pool CRT
Spence and Brucks (1997) found that experts perform much better than novices on
structurable problems though the experts’ confidence decreases as the problem
structure decreases and that decision makers resort to simplifying heuristics when
solving less structured problems. They concluded that “experts outperform novices
because they can impose meaningful structure onto judgment-intensive, nontrivial
problems . . . this effect is most apparent when solving problems without access to a
decision aid” (Spence and Brucks, 1997, p. 244).
The Acme employees – the experts in this case – had decided to re-centralize the
secretarial staff. A move that they acknowledged would be expensive and would likely
cause other problems. We – the novices – had access to a decision aid, the CRT. The
secretarial staff supervisor, selected secretaries and managers, and the vice-president,
felt that the CRT was correct in identifying policies that were creating serious
problems in secretarial and managerial productivity and morale. Without the use of the
CRT, the VP would have centralized the secretarial staff into a single pool, again. The
novices outperformed the experts.

The CRT and the system view

The CRT graphically represents the inter-related conditions existing in the system.
The CRT logically links the UDEs to the core drivers. Too often in business,
managerial problem-solving attacks the symptoms of some underlying problem rather
than treating the problem directly. These actions are analogous to treating the
symptoms of a biological infection – fevers, chills, etc. – instead of attacking the cause
of the infection. Long ago, the medical profession recognized the futility of such efforts
MD and routinely performs diagnostic tests to identify the cause of the ailment so as to
44,1 properly treat it. The CRT allows businesses to perform a diagnostic test similar to
what is practiced in the medical profession.
Our task in this research is not to solve the secretarial pool problem but rather it is
to teach the procedure for constructing a CRT. We feel the CRT provides a mechanism
for identifying the impact of policies, procedures, and actions in one functional area on
150 other organization areas. Both the traditional and three cloud approaches are useful.
These same rules apply to constructing the most complex CRTs using either approach
– no more rules are required. Validation of the causality and existence of entities and
their relationship is always necessary. Triangulation is often used when the biggest
problems in the system are identified from different perspectives – in this example, the
managers, secretaries, and secretarial staff supervisor provided three different
perspectives of the problem environment. In this manner we ensure that we are
objectively viewing the system. To this end, the three-cloud approach to CRT
construction offers the advantage of looking at an environment from three different
perspectives.

Addressing structurable and unstructured problems

Smith’s (1988) definitions of structured, structurable and unstructured problems imply
that structurable problems are a superset of structured problems and that there is no
intersection between these sets of problems and the set of unstructured problems. Our
view of Smith’s problem classification overlaid on a business and its environment is
provided in Figure 9. This view combines Smith’s definitions with Deming (1994)
concern for the business as a system. We believe that the TP are the advances in the
state-of-the-art problem solving for which Smith (1988) calls to convert unstructured

Figure 9.
Problem and solution
domains
problems into structurable problems and structurable problems into structured Goldratt’s
problems. thinking
The structured problem with its simplistic solution seldom provides the correct
solution to a business situation. It ignores the true goal of the larger system – instead processes
attempting to optimize a local or functional objective. It seldom recognizes the
interaction of decisions and policies in this and other areas on the overall business, and,
therefore, seldom recognizes the core problem. A similar argument can be made with 151
respect to structurable problems when considering Smith’s contention that a
structurable problem becomes structured with additional information or by breaking
the problem into more manageable sub-problems. Managers and secretaries created
their own solutions – bypassing the work scheduling system and taking annual or sick
leave, respectively – to the problems they saw in the secretarial support system, but
these solutions caused other problems and created a vicious cycle.
The CRT provides a realistic examination of a surface problem, its relationships to
other surface problems within and across functions, and its relationships to the core
drivers and core problems. The scope of the problem and solution can be extended
depending on the distinction between core drivers and core problems. The objective of
the CRT is to identify the core problems driving many of the seemingly unrelated and
independent problems.

Summary
Goldratt’s TP offer an alternate approach to studying ill-defined problems. Structured
problems are commonly solved with simple but independent solutions. These solutions
fail to consider the appropriate system and its goal. Structurable problems are
addressed by using a CRT to better understand the causal relationships within and
across functions and from core problems to UDEs and to the system goal. Many
unstructured problems can now be reclassified as structurable problems with proper
identification of the system, its goals and its constraints. Significant data need not be
collected to study every aspect of the system. Only eight to ten UDEs – drawn from
different functions and different levels to gain a systems perspective – are required to
develop a good understanding of an organization when viewed as the system and of its
core problems and drivers.
In this manner, the TP provides structure for many structurable problems and some
unstructured problems. If, as Smith (1988, p. 1497) comments, “. . . it is the behavior of
problem solvers that we advert to in making ascriptions of structure to problems”, then
the TP significantly increase the number of structured and structurable problems;
serve as the decision aid to decrease the expert-novice performance differential; and
increase the confidence the problem solver has in his recommendation.
Many problems are not well defined because we have not identified the reference
system to identify the core problems and core drivers. We should study the whole
system to identify the core problem and how to solve it. We need to identify the
causality to assure we are addressing the core problems and not just symptoms.

Directions for the future

While the CRT in Figure 8 appears complex (it takes several hours to construct a
logically sound CRT using the CLR), it is an effective problem identification and
communication tool (recall this secretarial pool problem existed several years without
MD identifying the correct problem). Goldratt (1992) identified physical constraints and
44,1 traditional measurements as major constraints to improving organizational
performance. However, in many cases, the constraint blocking organizational
improvement is a policy or procedure that has been in place for several years. In most
cases, organizations address only the symptoms of the core problem. This is where the
endless list of new buzzwords comes into play. In some cases these tools may have
152 been effective, but in many they were not (Dumond, 1995; Tatikonda and Tatikonda,
1996). The TP help identify the core problem, identify and construct win-win solutions,
construct effective implementation plans, and communicate effectively in an
organization. Before a company spends money on big improvement projects,
managers should logically think through their UDEs to ensure they are attacking a
core problem that will result in true organizational improvement. While we have
focused only on the CRT, the six TOC TP taken together provide managers and
business students skills to lead the organization in the new century.

References
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Corresponding author
Edward D. Walker II can be contacted at: eddwalker@ valdosta.edu

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