After there is a positive aggregate wave across the economy, organizations tend to be increasing investments, depicting that there is less increase in dividends when compared in terms of units with flows of cash. As a result, the increase of investments tends to be partially absorbing the effect of positive acts and shock buffered for the streams of dividend, thereby, there is a decreased level of risk. This mechanism of inflexibility has been utilized before for understanding the value premium and the equity premium. By the prevention of organization from financing each and every desired investment, collateral constraints tend to be working in accordance with the mechanism of smoothing dividend. The shadowed price related to the new debt can be considered as an exact measure related to the limit to which there is binding of constraints. The higher the value of shadow price, the more distressed firms are in adjustment of investment for smoothening the dividends, there will be more covary of dividends with cycles of the business, and hence, there will be higher expected returns and risk.
Considering the dimension of performance measurements, the approach of TOC mentions that traditional measures of accounting are inappropriate in context with the literal goals of organization, and they tend to cause more harm as there is a distraction for plant managers diverting them from the actual goal. Finally, considering the dimension of methodology and decision making, there has been an evolution of TOC within a continuous process, where key emphasis is laid upon embracing change. This is significant as constraints hold the tendency of being shifted in the organization with the passage of time. The key fundamental base of TOC lies within the idea that majority of the businesses operating in manufacturing were performing a number of things in a wrong way in the United States of America in the years of 1970s and 1980s when an effort is made for competing with the organizations of Japan. There was a utilization of techniques like Just- In- Time in Japan for the production of goods with quality in a lean chain of supply.