Conference Proceedings
This paper describes the use of System Dynamics (SD) for making a claim for Disruption and Delay. The case concerns design management of a large development project. Extensive group workshops (GDSS) with the managers, based on the cognitive mapping technique and association software tope COPE, showed that the client-contractor interaction process had set up dynamic feedback loops creating Disruption and Delay to the project. In order to qualify the extent of the Disruption and Delay, the cognitive map was transformed into an "influence diagram" and thence through the acquisition of numeric data into a large SD model. The development of the two continued in parallel, informing and checking one another. As well as simply providing explanations of trends and behavior, the SD model had to reproduce the planned and actual out-turns explicitly for it to be a creditable explanatory tool. The paper will draw lessons from the case study on the process of moving from cognitive map to a SD model, and the mutual benefits of joint development, as well as more general lessons about combining soft and hard methods.
This paper describes the evaluations results from an unsuccessful case study. In this case study, system dynamics modeling was used to support the development of an implementation plan for a corporate strategy. Three modeling sessions were conducted with senior management, which were unsuccessful. A detailed analysis of the evaluations interviews with several of the participants had identified the main cause for this failure. These causes turn out to be threefold: Firstly, most of the participants were unwilling to discuss openly this politically sensitive issue, secondly several errors were made in project design and thirdly the scope of the strategic issue is at stake was too broad to tackle effectively within the time frame allotted to the project.
Several important lessons are drawn from this project. These lessons are formulated as designs guidelines for future system dynamics modeling as such, but rather to underlying management consulting skills required to conduct any strategy support project with senior managers.
An optimal control-based decisions support model is developed which allows managers and future managers to gain hand-on experience with product portfolio management in a dynamic micro-world. In this micro-world, they study one of the several scenarios, set objects and importance hierarchies, create action plans and control the system over time en route to their objectives. The system is demonstrated with data from an actual product portfolio management case.
Using the system, a manager or player can gain sophistication with decision-making as well as assess the capabilities of dynamic models for decisions support. Working with the models gives players a feel for such important insights, as the lag effects of response, the differential impact of various marketing tools, cross-elasticities, and the potential for cannibalization. A manager can devise promotional strategies to achieve specific sales results for a particular brand or product line, test those strategies, and learn as the system evolves. Backing up the micro-environment is a discrete-time optimal control model which allows the system to be optimized from the perspective of a decision-maker. Players can test their own strategies against those of the optimal control "Shadow Player".
Used as an optimization-based simulations tool, the model allows flexibility in the testing of alternative strategies and scenarios which affect achievement of product portfolio objects. The model focuses on the overall objectives of the portfolio while recognizing the objectives and dynamics of the products within it.
A social system is unlike a natural system, because its behavior is determined by ethics, values and purposes. Yet it can be compared to a natural system in terms of self-maintenance. To maintain itself, a social system reproduces roles, functions and authorities, not it's basic components, individuals. This is because, social system are purposely designed by human begins for human purposes. The ethics which guides management of social system is a kind of rule ethics relying on rules of behavior, laws, and taboos. The rule ethics and its basic value, rational calculation, disables the possibility of social system to cope with rapid or serve environmental changes. It also creates managerial conflicts which are difficult to solve within the frame of reference of the rule ethics and its association values. These conflicts are results of the tension between: control and semiotic freedom, shared culture and diversity, and command hierarchy and self-organization. To diminish these tensions, we need another kind of ethics, an increased development of human consciousness.
For the past seven years, the modeling group at the
University at
Our purpose is to initiate a larger discussion of shared scripts and techniques for group model building. The discussions is divided into planning for a group model building conference, scheduling the day, particular scripts and techniques for various group model building tasks, and closing a group modeling conference.
This paper is the second in a pair presented in this volume. The first paper presents a theoretical view of mental models appropriate for carrying out empirically-based research on system dynamics modeling interventions. Mental models consist of three types of measurable sub-models – end models, means models, and means-ends models. The means-ends models may be thought as containing either detailed “design” logic or much more simple “operator” logic. This paper presents an empirical test of the impact of interventions intended to improve design versus operator logic for 53 participants in a dynamic learning laboratory with a task centering on implementing welfare reform over a simulated twenty year period. Results suggest that providing managers with high level heuristic results from modeling interventions is necessary condition for achieving improvement in system performance. Focusing on operator logic is key to improving managerial performance of dynamic tasks.
The problem to be addressed is the dynamics of the chain growth polymerizations process via free radicals. The process consists in a series of chemical reactions by which a macromolecule is formed by the addition of many structural unites called mers. The reactions taking place are initiation, propagation and terminations of the growing macromolecule or molecular chain.
The problem was focused under the General Theory of Systems and the methodology of System Dynamics. This work is an example of interdisciplinary interaction between Chemical Engineering and Systems Engineering through System Dynamics methodology.
The modeling of polimerization processes is an up to date topic of both scientific and industrial practice importance. The developed model is based on the especies balance equations and also on an isomorphism with population models.
The model is composed of a set of only sixteen, but very complex non-liner differential equations, whose solution is very restrictive with respect to the simulation time interval used, due to the great differences in order of magnitude of the characteristics time of occurrence of the various events taking place in the process. In this particular, the authors consider to have made a contribution to establish criteria to quantity what is called in the literature as the appropriate simulation time interval.
The proposed model is ahead of the traditional models of polimerization, in as much as the second ones predict only the behavior of the stable species and the chain lengths average, whereas the proposed model includes besides the dynamics of the unstable species. On the other hand, the proposed model excludes the seudo-stationary assumption, on which, according to our results, is not a completely valid. As a general conclusion, the Dynamics System methodology appears to be an effective problem-solving tool in interdisciplinary environments.
Environmental management is a complex dynamic process, which involves taking decisions regarding different environmental components and socio-economic agents. Within in the contexts, simulations games are extremely powerful learning tool, allowing the decision maker (player) to formulate and test the results obtained with the implementation of alternative environmental managements strategies, which is often impossible to perform in real situations.
ECOMAN is a simulation game, where the players are
environmental managers who are responsible for a region, trying to cope with
the different agents, media and uses in order to achieve environmental quality,
and social welfare objectives.
The player has a limited budget to allocate to several environmental management
tasks, which is dependent on the health of the economy of the region. Each year
a score is computed taking into account environmental quality, service levels
and economic activity.
The game is based on a system dynamics model developed in STELLA II, simulating
the major interactions between the socio-economic and the environmental
system. The model was implemented with a
multimedia interface integrating numerical, graphical and qualitative
information using Supercard and Quicktime for the display of video images.
The Importance of quality cost benefits is sometimes not
fully recognised by industrial managers.
Quality cost money. Industrial
managers recognize this and tend to be afraid of spending on quality. But quality also earns money. Industrial managers do not seem to be fully
convinced of this fact. Unfortunately,
even existing literature on the subject does not encourage investing for higher
quality. Most of the cost models about
quality deal with the quality improvement and the costs associated in achieving
the desired level of quality, but fail to incorporate the benefits of improved
quality.
In this work, an attempt has been made to develop a quality costs model which
incorporates the benefits. The quality
cost elements have been drawn from various standards sources such as British
Standards and American Society for Quality Control publications on quality
cost. The benefits from investing for
quality are taken from recently published case studies and reports as well as
from our own experiences. The elements
of quality related activities of design department, such as design standards,
training design staff and test equipment are identified. The contribution of
each individual element, starting from estimation of looses due to poor design
to preventions of poor design is isolated and linked dynamically so that costs
and benefits are demonstrated through time.
The quality costs and benefits model was developed using the System Dynamics
Modelling approach and simulated using the computer software package
“Professional DYNAMO Plus”. The simulated results demonstrate the extent to
which prevention investment is justified by future earning.
It is felt that the model can be a significant addition to course material for training programmes of industrial managers. It allows the user to explore the consequences of different quality management policies such as the amount of investment and the nature of investment on the profit performance and delay before profits are increased in and organization. It is hoped that the model will serve as a useful tool in the hand of decisions-makers, encouraging them to invest more in prevention activates.
This is the second paper in a series that aims to start a debate on issues involved in university-level system dynamics education. The first paper argues that the field has not experienced growth that one would expect from its potential and identifies several issues that need to be addressed by the system dynamic community, before the field can proliferate in universities. The second paper tackles some of those problems. More specifically, the paper discusses the academic definition of system dynamics: What is the academic core of system dynamics? What other objects are immediate relevance and importance with respect to this core. The paper offers answers to those questions. The second issue that the paper deals with is the problem of terminology. I discuss different types of terminology problems, the most significant being system dynamic, the very name of the field. System dynamics having an established meaning in mathematical and engineering sciences, does not convey the specific meaning that we wish to attach it. I discuss various potential problems caused by this situation. I then offer a short list of alternative, more specific names for the field. I conclude that, once the academic issues are rigorously tackled, the university-level system dynamics education should experience growth, which would be a major step toward activation an exponential growth process in the field in general.
Model validation constitutes an important step in system
dynamics methodology. Validation is a prolonged and complicated process,
involving both formal/quantitative tools and informal/qualitative ones. This paper first provides a summary of the
philosophical issues involved in model validation. We then focus on the formal model validation.
We offer a flowchart that describes the logical sequence in which various
validations activities must be carried out.
We give examples of specific validity tests used in the three major
categories of model validations:
Structural tests, structure-oriented behavior tests and behavior pattern
tests. Finally, we focus specifically on
the logic of the behavior pattern validation and illustrate it on a mutli-step
validation procedure. Currently, we are in the process of implementing this multi-step
procedure on micro-computers, embedded in a friendly user-interface.
Despite the importance of computerized information system,
many MISs are left idle or used only partially, having exceeded their budgets
or time allocations. The basic problem
is that critical interactions between software engineers, users, and the
organization have been neglected. The
reason for this neglect is the inter-disciplinary nature of the problem. There is a basic conflict of interest between
managers’ need for efficiency, users’ desire for quality of working life, and
software engineers' quest for sophisticated technical solutions.
We have developed an integrated theory of the detailed processes and
transformed it into System Dynamics model.
Running the model against three time series of data from one
organization that has introduced an MIS, we reproduced an average of 84% of the
variances in the data. Our tentative
conclusion is that introducing MIS is a special case of directed organizational
change that requires cooperation between software engineers and
It is widely believed that the world is entering the
Information Age, and telecommunication companies must make critical investments
decisions based on how much information customers will want to move in the
future, Understanding and preparing for the range of possible customers demand
scenarios is vital for long-term success in an increasingly competitive
market. However, detailed forecasts are
impossible to make since the market is as yet undefined. Scenario modelling is useful in developing
the understanding telcos need to achieve success.
We have developed a system dynamics model to investigate the effects of
different business and technological drivers on the demand for future
telecommunications services, using the software tool iThink. Drivers include the number of people
teleworking and increasing computing powers.
These interact to produce usage dynamics for generic services covering
conversation, messaging and data transfer, which are then used to calculate
resulting network traffic.
Our results suggest that the key uncertainties are the rate of improvement in
general IT sophistications, and the extent of teleworking. High growth in both of these produces rapid
growth in peak traffic, whilst low teleworking delays that growth. Slower improvement in IT sophistication
severely limits growth, since increasing computing power could stimulate large
volumes of traffic. Small increases in
the use of video applications also produce significant traffic growth, and
these factors combine to give large uncertainties. The behavior of this system is discussed with
reference to individual business sectors, demonstrating system dynamics as a
useful approach for investigating telecoms supply-demand systems.
We describe the development of a meta-level framework to be
used as a structuring and controlling mechanism during management development
workshops.
The framework is constructed around the use of system metaphors and methodologies
within a microworld workshop environment.
Relevant elements from system methodologies are employed as transitional
objects within these microworld environments, in order to provide a creative
stimulus and reduce participant anxiety.
The paper uses systems thinking to interpret the dynamic interplay between social, political, and institutional forces that have influenced the management of a large urban water authority. This interpretation is used as a framework for assessing recent government initiatives to introduce competition into the water industry. The study is based on 100 years of history of the operation of Melbourne Water and current proposal to vertically disaggregate the business and to use a combination of industry regulation and yardstick competition to manage the industry. The paper attempts to demonstrate the importance of adopting a systemic approach to understanding the complex array of issues involved and to record some of the practical difficulties encountered in using this approach within a highly turbulent environment.
This paper examines the introduction of information system into the new environment of the National Health Service since restructuring in 1989. Taking its approach from Soft Systems Methodology, it looks at cultural analysis in the context of the development of decision support systems for hospital managers and medical staff. Drawing on the deeper cultural analysis developed by Schein, it examined the problems which face systems developers when attempting to seek an accommodation of views between groups which not only have different requirements but significantly different outlooks predicated by their roles in the hospital environment. Particular attention is focused on the survival instincts of these two groups when faced with an environment which is changing rapidly. The medical profession is seen as one which sees its former pre-eminence within the hospital threatened. This may have adverse effects on the development of system for doctors and managers alike but, unless the cultural dimension is addressed, solutions to hospital information problems will, at best, be partial.
The use of system dynamics (SD) is proposed to assist
project managers in examining the consequences of their resources distribution
plans. Justification of the selection of
this technique is given, in particular why it is purposed as an alternative to
statistical forecasting techniques. The
focus of the research is to provide insights into how to reduce schedule
slippages, which is thought to be a common dynamic behavioral problem. One objective in reaching this goal is to
identify common SD structures.
An overview of the original SD research contribution to the software
engineering discipline is given. A brief
description of the problem tackled and the model findings are outlined. Criticisms of the research process are developed
to justify parts of our approach. To
ensure that this practical research investigations is both relevant to managers
and scientifically rigorous, a selection of both qualitative and quantitative
methods are suggested to assist with the first objective. These are briefly justified and discussed in
this paper.
This paper reviews a recent period of change in traditional manufacturing environment of a large oil refinery, and the role of systems thinking techniques in this development process. The focus in on how the gradual adoption of these methods as part of normal working practices has contributed to changes in attitudes, behavior and performance. Attention is directed to the way the methods are themselves proving to be a vehicle for cultural development, as well as being of the toolkit used to analyse specific issues.
The paper describes the way several techniques have been
introduced, applied and combined. There
is a commentary on how these approaches have helped to induce a shift from a rather
intimidating fire-fighting mentality to a widespread embrace of the quest for
structural improvements. This shift and
the adoptions of the techniques are, of course, mutually reinforcing. What is of particular significance is the way
the virtuous circle was initiated. It is
concluded that the approach was successful largely because it was consistent
with the broader requirement of change-management and compatible with
fundamental aspects of the predominant organizational culture.
While this is an ongoing process of transformation, the paper introduces a
framework to conceptualize the insights which have emerged so far. It is intended that this will facilitate
their further application and hence support the broader learning process.
For policy makers in
The importance of this topic lies in the resistance of the criminal justice
system to change and the high total cost of the system. Recent policy goals of
The global climate is a large complicated system with many
feedback loops connecting the different sub-systems. In recent years there has been an increase in
the public's awareness of global warming and the greenhouse effect. The public understands that there is some
connection between the human emission of greenhouse gases and global climate
change. Experts in this field have been
analyzing these connections for years and are still unable to give definitive
answers to questions concerning the direct link between emissions and
temperature change. Policy makers have a
desire to intervene in order to limit the amount of emissions. At this point in time available answers are under
debate and are unclear, or the model used by the scientific community are too
complicated for policy makers to understand.
The purpose of this global warming model is to be small, conceptually clear,
and accessible to nonscientists. The
model contains all of the feedback loops hypothesized in the scientific
literature. However, due to its small
size it is aggregated to a global level.
This level of aggregation will help to make the model more
understandable for policy makers. The
global aggregation will allow policy makers to focus upon the global effects
rather than the details of the climate system.
An effort has been made to develop a system dynamics simulation
model for soybean production in
Privatization of most enterprises in
This paper explores the dynamics of management development to meet the needs as
markets are freed and companies are privatized. Particular attention is directed at the fact
that many needed skills essential to success may not be taught in the normal
management school programs. From this
observation emerges the need for a program of management development uniquely
designed for recently privatized companies and for those soon to go through the
process. In addition the conclusions
contribute insights to the current debate whether to privatize all corporations
within a very short period or whether to proceed more gradually.
This paper contemplates the prospect of the complementary use of hard, soft, and critical systems methodologies, becoming a more established practice among the diverse company of operational researchers and management scientists in academic, commerce and government, who have been trained in systems thinking and apply its language and concepts in dealing with organizational problems.
The paper takes the line that because matters concerning methodology always embody deeper structures of meaning, and meanings are largely culturally determined, it is worthwhile drawing upon ideas from the literature on organizational culture to illustrate some of the key factors that are likely to obstruct this and other similar initiatives. From a culture prospective, transitioning from the existing specializations of systems science towards methodological complementarism is conceptualised as requiring a form of organizational learning. Learning is contingent upon the existence of a broad set of propitious circumstances; a scenario, it is argued, that is not met in this particular case. Although the idea of complementarism is the principal focus of the paper, much of the argument applies equally to other attempts to deliberately intervene in the culture of systems science.
We investigate parts supply from one supplier to a
manufacturer who operates a very variable final assembly schedule with kanbans
for parts supply to the production line from suppliers.
The information flow includes kanbans for resupplying the line from the factory
store and restocking the factory store from the supplier, one week ahead
forecasts of parts requirements, 8-week ahead requirements and updates orders
supplied weekly, and a six month MRP schedule supplied fortnightly. The supplier uses these to schedule raw
material preparation, initial assembly on a bottleneck machine, and
finishing. This is challenging given the
conflicts between the pieces of information.
We investigate ways to improve total system performance, particularly inventory
levels and easier production scheduling of critical machines, given the delays
and structure of the system, using system dynamics models built in ithink!
Kanban numbers can be reduced without risking production interruptions. The one week ahead forecasts offer little
useful information to the supplier.
Shifting to a simpler scheduling mechanism for the initial assembly is
helpful.
We have investigated two processes in the manufacturing logistics system, parts
flow internal to the manufacturer and to the supplier, and the linkage between
parts usage by the manufacturer and parts production by supplier. They can be simplified and improved, reducing
inventory holding and hence cost, without compromising the overall
responsiveness of the manufacturer which is a distinctive competitive
characteristic. Simplified information
flow processes allow for easier, better operation of total system.
The study analyzes the impact information network within the waste recycling market on the performance of public policies designed to develop the recycling market. Two typical policies are reviewed with an experimental procedure of partial and whole model tests. A system Dynamics model of waste recycling market is used as a laboratory setting for this study. The research findings suggests that well-intentioned policies can inadvertently lead to dysfunctional performance within a localized information environment. Delayed and distorted information feedback in the multi-stage structure of the recycling market further complicates problematic policy outcome, or market instability. This study proposes an information policy of integrating vertically the information network in the recycling market in order to improve the performance of market development policies
This paper discusses the dynamic simulation model of the
Model conceptualisation is the most difficult system
dynamics skill to acquire, practice and teach.
The advent of user friendly simulation tools; STELLA and ithink, have
made the task of model constructions and use much easier. Model conceptualizations by contrast remains
as difficult server as ever.
Experiences in training managers in system dynamics show that it is a
relatively simple task to turn complete beginners into competent and confident
simulators. The capability to recreate a
model from ithink map and in a written description of operating policies is
quickly acquired, as is the ability of modifying that model set to test out
possible solution to problematic behavior.
The problem arises when these proficient simulators are asked to conceptualize
a simple two loop model from a problem descriptions, presented in the form of a
newspaper article. This task is found
very difficult by most course members.
The paper describes the development of a new technique to assist with the model
conceptualisation process. The method
integrates archetypes and their corresponding generic Models into a framework
that helps modellers move from a problem descriptions to a first past ithink
model and/or casual map.
An application of the method, to aid conceptualisation of a model of Government
funding of housing association is described.
A Continuous Improvement Process
Maintenance management has become a field of important
development according to the operating needs of production planning systems and
the impact of new technologies in the industry.
The processes of production flow creation and inventory control in the
modern factories lead to a more sophisticated maintenance system to ensure low
failure rates and reduce accordingly failures consequences, which is a must in
these kinds of environments to meet the production schedules.
In this paper a maintenance system is modelled to study the effects of
different policies that can be applied to reach above mentioned targets. Moreover the conditions required to create a continuous
improvement mechanism for the system are analyzed. Model validation and simulation results are
obtained and presented for a real problem in the Spanish industry.
Projecting Model Behavior in the Absence of a Model: Results of a survey
One of the advantages commonly put forward in support of the system dynamics methods is that managers find it difficult to trace dynamic consequences of cause and effect relationships even in simple systems. While this may be intuitively appealing as one of the justifications for existence of system dynamics, there is a need to accumulate a body of evidence which results from putting this assertion to the test. The paper reports the findings from a questionnaire which has been administered to over one hundred undergraduates and postgraduates covering a range of business management specialisms. Respondent were asked to decide between two manufacturing technologies, exhibiting quite dissimilar cost structures, with a view as to their future profitability under four different demand scenarios. The questionnaires were administered twice with a three month gap between during which the answers to the first one were revealed, and on the second occasion the rubric was altered to incorporate feedback into the situation described. The competing technologies and their associated cost structures reflect very real policy choices and so the outcome of the exercise has a message for manufacturing industry as well as the system dynamics community.
In system dynamics we seek to understand the relationship
between the structure and the behavior of dynamic systems. In problem solving, for instance, we must
identify the structure underlying problem behavior and find how the structure
can be modified to create a more desirable systems behaviour. To enhance such an understanding, we utilize
the graphical techniques. Whether in
print or in software, however, there has been a significant gap between our
representation of structure and behaviour.
In this paper, we first present a series of ways to link structure and
behaviour such that behaviour can be more easily understood on the basis of the
underlying structure. These techniques
are computerized using PowerSimTM.
Within the framework of an EEC research project on distance education for
professionals, JITOL (Just In Time Open Learning), we have investigated how to
facilitate System Dynamics distance education on electronic networks. One of the main challenges consists of
finding an effective way to present the results of a simulation. Such an
interpretation of simulation results is normally partitioned in accordance with
the various phases of the system development, portrayed by the simulation, and
requires that references be made to the assumptions embodied in the underlying
simulation model.
Consequently, the author or any other user of a model must be allowed to
comment on the various phases of a specific dynamics development. Moreover, these comments must be made
available to any reader of the model, ie anyone who runs the model under the
conditions specified by the author or user.
And these readers must be allowed to respond by adding their own
comments to the same fragments of the model development.
This paper outlines a technique developed to, at runtime (ie as the model is
running), link such annotations to graphs that represent simulation results,
and to make such annotations available to readers at runtime when they inspect
that specific simulations.
A new management institute, Der Rutli Fuhrungskrafteseminar,
was established in
The properties of the simulator originate from the characteristics of the
underlying software. Consequently they
can be applied generally to any system dynamics based management
simulator. In particular, the simulator;
(1) the simulator is a multi-group simulator utilizing any personal computer
network that supports MS windows;
(2) The simulator allows the user not only to submit decisions to the server
that calculates and returns a new state, but also to formulate and try out, on
their local computer, their own strategies over any strategic horizon;
(3) the simulator gives the user access to;
-the underlying simulation model (to an extent determined by the
administrator);
-The tool by which the simulation model was built, allowing the users to
formulate and test their own dynamic hypotheses.
In this paper, we describe these characteristics of a new generation of
simulators for management training, illustrated by Der Rutli Management
Simulator, and we discuss the potential implications of taking advantage of
these characteristic.
In October 1993, a group of 7 academic institutions
submitted to the ERASMUS Office of the European Union (EU) in
When the ICP is established, it will receive a grant to support a number of students visiting host institutions abroad in order to receive a formal training in the theory and practice of system dynamics. The program will also support the exchange of faculty and system dynamics curriculum development.
The system dynamics method has proven particularly useful in
social sciences and in public and private management. A large number of
enterprises currently apply system dynamics in their design of policies and in
management training. The system dynamics method is taught and applied in
prominent management schools, schools of social science and technological
institutes in Europe,
This paper describes some possibilities and challenges that
arise from this program. It also indicates how we could initiate a research
program in
This paper demonstrates the use of system dynamics in the
examination, evaluation and reformulation of business policy. It describes the consultancy and modeling
process used to examine the recruitment and promotion system of a large
company.
The management felt that the short-term decisions they were making,
particularly about how many graduates to recruit, were endangering their
ability to manage the system in the longer term. They were finding the there were too many
staff at middle management grades, whilst they were doubtful that they were
developing the senior management of the future. They further believed that the system, as
currently operated, gave them little ability to control the long-term
availability of staff. It was decided to
initiate a study, using system dynamics, to understand the dynamics of the
manpower system and study the policy options available for controlling the
system. The model enabled management to
increase their understanding of the system and evaluate their current method of
decision making.
The model demonstrated that the problems were indeed caused by the system, and
that managers had adapted their decision making process close to the optimal,
given the constraints in which they were operating. A new system of recruitment and promotions
was defined, tested and implemented, which overcomes many of the problems
identified in this study,
This paper describes the results to date of an investigation
into the role of a system dynamics “microworld” model in helping a
not-for-profit organization (charity) become more “business-like” in its strategic
management, and more able to evaluate impacts and opportunities in its ever
more competitive environment. The
organization- the local division of a relationship advisory service in the U.K.
- in common with most other charities is facing a more turbulent environment
with major uncertainties in government grants, greater competition for
voluntary donations, and changes in its perceived role. This requires the organization to put much
greater emphasis on effective management, but this may be regarded as
diverting, and even in conflict with deeply held beliefs, by Board members,
paid managers, and counselors and volunteers.
This experience to date suggests that the development and utilization of a
microworld model of the organization and its environment help its member to
envision the full implications of possible strategic developments. These developments include the impact and
timing of direct advertising and the offering of contract advisory services to
firms concerned that redundancies and other situations may put their employees
under the sort of stress that could seriously effect their domestic
relationships. This approach clarifies
and aids the reconciliation of "business" performance measures like
client contributions, cash flow management and training investment with such
core concerns as counselor moral and the service provided to it's
"clients".
This paper presents a critique of the atomistic ontology and empiricist epistemology which inform most current definitions of the concepts information, systems and, hence, information systems in the Information System (IS) literature. The notion of information as an objectively given quantifiable 'force' emanating from the real world and endowed with the essential property of dissolving uncertainty; or as possessing the same essential property but as consisting of structured or processed data, i.e. atomistic ‘facts’, about the real world are argued to be unsustainable, on both philosophical and practical grounds. It is argued, furthermore, that the notion of systems as an ontology in respect of goal seeking cybernetic machines unproblematically specifiable in terms of their boundaries, of their input and output, and of their objectives is not inappropriate to the socially-based systems in terms of which an IS must be defined, but also fails to consider the ontological, and consequently epistemological, depth implied by this concept. In view of these arguments, an alternative conceptual practice is explored by suggesting that the concept system be taken as an epistemological tool to be deployed in respect of complex coherent 'whole-entities' characterized by their emergent properties and, in the case of socially-based systems, by the essential autopoietic nature of their modes of regulation and self-representation including, above all, language. It is also suggested that information should be considered as a set of fundamentally, arbitrary signs whose 'emergent' properties i.e. syntactic, semantic and pragmatic, are intersubjectively negotiated between international organizational agents and, as such, inseparable from the forms of social life which they sustain and in which they are generated. This alternative conceptualization, proceeds from an ontology which acknowledges the essential 'depth' of its key thought objects, by virtue of the emergent properties attributions to these objects, in contrast to the flat atomistic ontology currently dominant in the IS field. Such an alternative conceptual practice, we argue, provides an initial theoretical framework in which to ground the currently ill-defined, “emergent perspective”, on the relationship between ICT and organizational change, identifiable in the IS literature. While as regarded IS practice, this re-conceptualization is found to be congruent with the object oriented approach to IS development which is currently attracting increasing practical attention and which appears to provide the basis for a common and intuitively meaningful language with which to bridge the gap between IS end-users and developers.
Management practitioners have always felt the need to understand organizational contexts and processes. Consequently many different theoretical bases have been used to facilitate the evaluation. However the focus on existing approaches has primarily been on the ‘formal’ aspects of the organization. This has often resulted in inadequate and poor analysis of various complex managerial situations. In viewing organizations as communications systems, this paper introduces the responsibility analysis approach which helps in presenting a comprehensive picture of an organization environment. At a very generic level, organizations are viewed in terms of three sub-systems; technical, formal and informal. When conducting a responsibility analysis, the endeavor is to identify the responsible agents and capture the norms associated with each action. In doing so, we seek to understand the underlying repertories of behavior. This produces a high level specification of the organization and its attendant responsibilities, thus allowing a comparison to be made with the implicit and explicit structures of responsibility. The paper demonstrates these concepts with examples drawn from a National Health Service case study.
This paper shows that viewing dyadic communication from the
perspective of servomechanisms and system dynamics rather than the cybernetics
perspective (see
This paper reports the finding of an internal McKinsey
research and development project designed to test the value of applying System
Dynamics thinking to the life insurance industry. The aim was to understand better how
management decisions and actions can affect the success or failure of a typical
direct sales life company. The study
compared the evaluation over 20 yeas of two companies, Equitable Life and
London Life. Starting out in 1975 from
virtually identical competitive positions, Equitable has become the
We found System Dynamics a powerful means of identifying which managerial
actions had accounted for the extraordinary divergence of the two
companies. The lessons learned include
many counter-intuitive insights that have relevance for any life company
manager. Through simulation we were able
to isolate which management actions made the difference to long term
performance. In particular, we show how
attempts exceed the maximum sustainable growth rate specific to any individual
company can lock it into a slow but relentless spiral of decline, from which
there is little hope of escape. This
growth ceiling can be quantified and we also identify a number of a long range
early warnings signs. Consequently, we
believe that our conclusions are likely to change the way life companies are
managed in the future.
This paper wants to report about an approach to make German
pupils familiar with the problem of system dynamics, to promote the
comprehension of complex system, to teach them something like "thinking in
networks".
To reach this aim we employed a tool for modeling and simulating, comparable
with well-known systems as Ithink or POWERSIM, but able to run on simple PCs
under MS-DOS.
Using this tool we have developed the following four units (the subject in
parentheses):
-Ecosystem forest (ecological balance, biology)
-Flows of carbon dioxide (chemistry)
-Growth (mathematics)
-"Tycoon" (economy)
Two of these units, "forest" and "economy" are the basis of
our research. In 11 groups with 238
pupils we made pre-tests, video recording and final tests,
The results in the field "model thinking" were remarkably better then
in a polite study, initiated two years ago, the semantic and the syntactic
correctness of the models have increased as well.
This will be evaluation of several items, regarding the aspects
-prediction of behavior
-forms of presentation, and
-level of net structure.
Infrastructure induced development is a process dominated by feedback in that it features the synthesis of demand and supply functions. For the demand function, we are seeking the infrastructure improvement requirement to accommodate a certain socioeconomic need; for the supply function we want to know the level of service obtained for a certain infrastructure improvement. The objectives of the project from which the paper is derived is to develop a methodology for generating models that can be used to by planners and decision makers as instrumentalities for making reliable estimates of the economic health and productivity benefits and of potential infrastructure investment, and for linking infrastructure investment, users benefits, and succeeding economics development to provide a basis for rational policy formation. The results is a methodology that permits one to answer the question: What would be the economic impact A, the social impact B, the demographic impact C, and the land-use impact D, the environmental impact E, and the users benefits F over geographic scale G for an infrastructure investment H at time T? The approach is illustrated at both the regional and national levels.
The new Colombian construction makes heavy emphasis on
issues related to decentralization and community participations. It intends to incorporate in Government the
appropriate social actors to accomplish more effective administration.
In this sense, definitions have to be made in relation to regional
responsibilities in the area of Health, Education, Housing, Public Services,
and Employment, in order to obtain the appropriate transferences of resources
from the central Government to the communities.
Laws on these issues are now being discussed in Congress.
Preliminary results show how System Dynamics proves to be an appropriate
methodology to evaluate resources needed, community participation and
institutional performance.
The model developed may be used as a training tool to help community leaders to
understand the complexities involved in the decentralization process. The model incorporates behavioral patterns
and at the same time provides system performance and effectiveness indications
(Community participation and accomplishments).
The analysis of capacity levels and there location is of
vital importance in the design and management of supply chains as it is
commonly believed that capacity constraints exacerbate poor customer service
levels. The inventory and order Based
Production Control System (IOBPCS), often associated with "real life"
production control system, is used as "company" building blocks for
the dynamic simulation of a supply chain.
Various combinations of capacity levels through the supply chain are
implemented at each echelon in the form of a maximum order rate that can be
placed on the production facilities.
A strategy of maintaining a record of unfilled orders (backlog) at the
production facility highlights a number of notable dynamic characteristics over
and above normal dynamics of an unconstrained IOBPCS. There is an excess inventory build up even as
production order backlog is being depleted.
This is simply dealt with by effectively re-engineering the total
business via integrating the company's overall inventory control policy with
production. The new system is used to
analyze the effect of capacity constraints within a three echelon one player
supply chain. The inclusion of a
non-linearity into the system leads to improved dynamic performance in some
designs for the step change in sales and capacity constraint levels tested, but
this does not mean improved consumer levels.
The strategy examined to improve dynamic performance is the holistic setting of
system parameters to improve the non-linear systems. The future direction for research and ideas
for further improvement are also presented, where the simulation results
indicate the need to closely monitor appropriate system variables such as
inventory levels, and to incorporate them within more robust decision rules.
System Dynamics at the pre-college level, its time has
come. English teachers have sufficient
comfort with technology. Tools such as
STELLA II and PowerSim have provided the broad-based language for communication
and understanding.
A recently awarded 3 year National Science Foundation grant, CC-STADUS
(Cross-Curricular System Thinking and Dynamics Using STELL), is training 165
high school math, science, and social studies teachers in system modeling using
STELLA II. Teachers develop some models
within their curricular areas. Then
Cross-curricular teacher teams are formed to design at least one large model
and develop curricular materials around the model so it can be used immediately
in their classes. The training is done
by high school teachers and by speakers from industry who use modeling in their
work. The teacher participants are
responsible for sharing their knowledge and expertise with other faculty and
with students in their classes.
High school students are using systems concepts at various levels. At lower levels (especially with
"at-risk" students) the teacher demonstrates how a model is designed
and students manipulate the model and predict new behavior. At the middle level, students develop a model
as a class activity under the direct guidance of the teacher. At the highest level, students select a topic
of interest, formulate boundaries, work with an information resource person,
and work with a modeling resource person to develop a model and present it to a
class.
System Dynamics wee used for the first time to improve
planning and budgeting in American higher education with a pioneering project
launched in 1990 by staff of the Arizona Board of Regents to help the state of
Arizona anticipate and prepare to meet rapidly growing enrollment demand over a
twenty-years planning horizon. Then, the
Though system dynamics was developed close to forty years ago at MIT and has
widely used industry, it is new to the higher education. This paper first briefly describes the actual
experiences of
This paper discusses the nature of generalized problems
solving and its algorithmic-like properties.
In the systems literature problem solving is usually discussed in
relation to its methodological setting - for example, SSM may legitimately be
regarded as a problem solving scheme.
This paper explores what we believe to be the five basic cognitive
elements or strategies involved in problem solving. An examination of these five strategies then
suggests a way of understanding why particular methodologies have powerful
problem solving power, and why explicit use of these five strategies within a
methodology will result in an increased problem solving potential.
Some of the ideas discussed here arose from studies into how knowledge
engineers solved the problem of knowledge elicitation and representation. These studies were illuminating since the
most common situation seemed to be that no real underlying strategy was
employed and that the activity in essence was based on the chance plus
experience. In other words when
practitioners were asked what strategy they were using the most common answer
was that they did not know but they could do it anyway. This form of knowledge is often called Tacit
Knowledge - that is the sort of knowledge where we know what to do, but
have no clear idea as to explaining how we do it.
This article presents a model in System Dynamics, for the control of the Leishmaniasis. This proposal presents the interactions among the five subsystems that intervene in the transmission dynamics of the Leishmaniasis: insect population, human population, animal population, the environment and the control strategies. The parasite, the transmission personage, is defined as the element that determines the relationship among the subsystems that determines the epidemiological cycle. The indicated subsystems are separated at different levels and its dynamics is modeled through a set of 120 different equations involving the different reported parameters in the scientific literature. The resulting model permits to simulate the transmission with and without controls and to observe the efficiency by applying of those control policies. The simulation is performed using a home made software called EVOLUTION, in two different conditions: natural conditions or without controls and with controls, obtaining quantitative and qualitative results which were considered plausible by the experts. The set conformed by the software and then model could be considered a valuable tool for epidemiology research.
This paper describes the work and experience gained by a
team of senior managers using a systems thinking approach, to develop their own
set of future scenarios, to support a realignment of strategy and the redesign
of a worldwide exploration group of a major integrated oil company. The opportunity for this experience arose
from a need to assess the diminishing returns produced during several years of
overseas exploration activity. According
to a recent article in the Wall Street Journal, the entire petroleum industry
has increased its search for reserves overseas.
“...between 1988 and 1992, the world’s 234 largest publicly traded oil
companies spent $157 billion on exploration and development overseas, 49% more
than in the U.S.”, but diminishing results.
In 1990, the industry discovered 148 barrels of oil outside the
Against this backdrop, the senior manager used a systems thinking approach to
brainstorm the factors influencing the dynamics of the world oil and gas
industry. From this process the group
was able to develop a set of five distinctly different plausible futures that
might develop. To test their group
mental model for consistency, they develop a causal model of the industry and
discovered that their five different futures all could be explained by a common
model.
To maintain the standards set forth by the American Association of Collegiate Schools of Business (AACSB), one thing a business school (B-school) must do is to maintain a certain proportion of tenured faculty members to students. The AACSB standards also affect the process of reviewing tenure track faculty members for promotion and tenure (P&T). Typically, tenure faculty members are considered more committed to enhancing the reputation of a B-school and of the AACSB through research and publications.
This paper presents a system dynamics simulation model of
the interrelationships among variables pertinent to hiring adjunct and tenure
track B-school faculty. An ad-hoc
committee of administrators, faculty and students of a relatively small
prestigious B-school met to evaluate the implication of AACSB standards and to
consider the possible implications the school’s recent expansion history might
have on these standards five years into the future.
An important concern underlying the modelling process is that having less than
fifteen students in classes is preferable to students. Smaller classes allow for more instructor-student
interaction, so the student better understands what the instructor require and
the instructor knows the student interaction, so the needs and skills. Estimates of the growth and attrition rates
of both students and faculty members affect administrative decisions on the
number of adjunct and tenure track faculty to hire. Although the time a student
spends in the B-school program varies depending on whether enrolled full-time
or part-time, the student growth history, the student growth fraction and the
student growth forecast are the variables that determine future student
enrolment.
The model confirms that the inexorable nature of P&T evaluation process
makes the often desired balanced growth in B-school faculty a physical
impossibility. Yet, the model’s computed
scenarios, which corresponding to alternative future student enrollment and
faculty growth rates, show how the proportion of tenured faculty to students
may respond differentially to alternative growth strategies. An important implication of the simulation
results would require the B-school administration to consider both ratios in
making hiring and firing decisions for the B-school to maintain the current
AACSB accreditation status.
This paper describes a system dynamics simulation model of
the interrelationship among firms competing in the entertainment industry. The model integrates ideas from strategy
design, organization design and new technology adoption to describe exactly how
the diffusion process of new hardware and software technologies into the
entertainment industry is changing the power and stability of syndication
firms, the dynamic changes in the extant production capacity of TV networks,
and the investment opportunity in basic cable network system operators.
The economic organization and regulation of TV networks broadcasting vary
substantially from country to country, but having a mixture of public private
enterprise placed under the supervision of a government agency is a common
arrangement. TV networks and affiliates
in the
A team of managers and planners from a group of syndicators met to discuss
current events and the changing structure of the entertainment industry. Changes stem from the moves of major pay
cable channels, TV networks, basic cable networks and system operators, each
responding differentially to the diffusion of new signal-transmission technologies
into their industry. A broad discussion
culminated into a system dynamics simulation model of the interrelationships
among firms competing in the entertainment market. The model produced new insights into the
power and stability of syndication firms, the dynamic changes in the extant
production capacity of TV networks, and the investment opportunities in basic
cable and networks and cable system operators.
This successful, large-scale introduction of system dynamics
into education requires many supporting elements. One important element is an institutional
structure that supports school change. A
major part of such a structure needs to be the availability of expert system dynamics
mentors to provide on-going training and support for teachers.
This support occurs on three tracks. One
track is relatively formal workshops and meetings spent cooperatively
developing projects. Another track is
classroom observation and documentation.
The third track consists of encounters by the coffee machine, and
consists of informal, brief conversations where the mentor and teachers can
brainstorm ideas or confer on a current project. These methods of on-going support are
preferable to the more conventional format of short-term intense workshops,
which research shows has little long-term effectiveness.
In this paper, the author discusses his experience a part of the System
Dynamics Project in the Catalina Foothills School District (CFSD), located in
There has recently been a revival of interest in the dynamics of the oil market, not least because its key determinants are still a matter of intense debate even though the turbulence experienced in the 1970s and the early 1980s has largely dissipated. One aspect of the discussion is how to appropriately model the market given that dominant paradigm of the 1970s - that of exhaustion of a finite resource - is no longer seen to be valid for the short time scales involved. Models that are based on the behavioral simulation approach typically use the target-capacity utilization (TCU) supply-side model in their description of events, but doubts remain as to the validity of the TCU hypothesis. In this paper we adopt a bottom up approach by modelling as closely as possible, from first principles, the strategies adopted by OPEC in their attempt to manage the world oil market. We also look afresh at the demand side of the oil market to capture the completed lag structures that characterized the response to price volatility. The complete model, constructed in Stella, is shown to reproduce accurately the hysteresis effect exhibited by the oil market in the period of interest.
Scholarly research has long identified innovations as one
important reason for internationalizing corporate business. This statement is represented analytically by
cause and effect relations at the beginning of the project. Innovations, i.e.
the underlying technologies have a crucial impact on industries and their
development over time. The dynamic
relationship between technologies and their industries will be explained on the
basis of technology and industry life cycles.
Subsequently, it is pointed out that one important precondition for generating
innovations successfully is the organizational structure by which research and
development (R&D) units are linked together. Basically, three organizational models which
are examined can be distinguished: an international network models, the process
of organizational learning on knowledge, relevant for innovations, takes place
in different ways. To generate
successful innovations, R&D personnel has to learn diligently and quickly
from both: the new technological developments and from new or diligently and
quickly from both: the new technological developments and from new or changing
market needs. Proposals could be made to
facilitate organizational learning in the field of R&D. Then, the organizational models are allocated
to the quadrants of a technology portfolio.
One axis symbolizes the attractiveness of the technology which basically
illustrates the technology life cycle.
This may offer a theoretical explanation of the need for adjusting
organizational R&D models and the organizational learning process according
to the dynamics of technologies.
Functional economic analysis is a modeling approach that provides a uniform basis for analysis and comparison of alternative investment and management practices. The approach takes into account the costs, benefits, and risks associated with new ways of doing business and managing organizations. The entire purchasing process from initial request to final delivery, payment and accounting is being re engineered at MITRE. A complete resourced process flow chart was developed for both the present and proposed systems. An "i think" system dynamics model of both the present and proposed process was developed. The model projects the seasonal workload over the proposed system lifetime. Dynamic normal, overtime, and temporary staffing requirements were calculated. The new system reduced total requisition delay by a factor of ten. This will greatly reduced expediting actions and costs. Multiple data bases and computer systems along the process were combined into a single system. This greatly reduces data entry and reconciliation effort. The new process groups purchase requisitions by type that provides the opportunity for bulk discounts. All these will result in 37 million dollars of saving over a ten year system life.
The counterintuitive associations, known as Bowman's Paradox, found between measures of financial risk and return for a large sample of companies across many industries have previously been explained in terms of the attitudes of managers to risk using prospect Theory. Similar results were obtained by the author from teams playing a system Dynamics based business game to stimulate a magazine publishing industry. Experimental results of the dynamics movements of the team companies within the financial measures of risk and return space are presented. Explanations based on organizational learning and adapting group decision making behavior provide an alternative account of the archetypal team transitions observed.
This paper deals with System Dynamics as an alternative to
methods of problem-solving that are traditionally taught in colleges. It is based on my experience of teaching the
use of the methodology for analyzing small system of finance, hydrography,
demography etc.
Testing out any hypothesis where System Dynamics is compared to another
methodology is complicated, and I do not present any conclusions. I argue further that this has to be done by a
qualitative approach.
In the field of finance quite a lot can be gained by using System
Dynamics. The given example of
calculating the net present value of a cash flow illuminates my point. In traditional textbooks this value is given
by a formula based on the assumptions that interest remains constant over a
long period of time, and that there is no or constant depletion of money value
due to inflation. In view of economic
reality this description is very native.
On the other hand, it is rather cumbersome to develop and use a formula
that takes in account variation of annual earnings, varying interest and
varying inflation. Similar observations
have been my incentive for applying System Dynamics to various sciences. Quite a lot of traditional calculations can
be greatly simplified by resorting to the methodology of system dynamics;
especially when it comes to integrating complex, realistic assumptions into the
models.
My preliminary conclusion is that System Dynamics enhance the understanding and
enables the students to go well beyond the oversimplifications of traditional
textbooks, and that the use of the methodology in various disciplines should be
advocated. It is further my belief that
teaching the subjects in undergraduate classes creates an underwood of users; a
basis from which further system analysts can be recruited.
System Dynamicists usually view simulation as a means to help them understand the counter-intuitive behaviors commonly exhibited by complex systems and to facilitate others’ learning about these behaviors. However, a second and closely-related application is typically overlooked: the elicitation of barriers to organizational learning in a non-threatening environment. In our experience, when clients are placed on teams and presented with a simulated future, the organizational defensive routines which prevent effective decision-making in the real world soon arise in the simulation setting. A skilled facilitator can then begin to address these behavior patterns in the (relatively) safe context of the simulation.
Thus, we see tremendous power in the integration of the applications of simulation technology. First, the dynamic model used to build a simulation helps both the modeler and the client understand systemic behavior – which leads to better strategic choices. Second, the addressing of organizational defensive routines promotes learning and the conversion of such choices into timely action.
DIAGNOST is a policy exercise based on a gaming/simulation
in which managers and directors of institutions for the care of the elderly in
a region of the
It is increasingly common for companies to undertake a system dynamics study with the aid of outside consultants. However, it is still uncommon for even large companies to successfully bring system dynamics into the organization as an internal competency. This paper reports on the efforts at Eastman Chemical Company to create an internal capacity in system dynamics. At this point, Eastman has successfully launched system dynamics as an organizational approach to decisions making, and the effort continues to develop rapidly. Eastman managers must yet address issues of sustainability, however the process that resulted in a successful organizational start is of interest in itself and may help other companies seeking competency in system dynamics. This paper describes the launch of system dynamics at Eastman.
Advances in all fields of medical technology have driven rapidly growing expectations of medical care over the last half century. The rate of growth of this demand for health-care had consistently exceeded GDP growth and, in many countries, the health-care bill had been absorbing an ever greater proportion of government spending. Governments throughout the world are increasing concerned that this growth is unsustainable. The pharmaceutical industry, whose products account for about 5 to 10% of the health-care spend, has based on a cycle of growing sales from ever more effective new products, fuelling a substantial re-investment in high-risk, long-term research and development, leading to further advances and new product introductions. Historically the overall sales growth has been founded on both price-related factors.
The purpose of this study was to explore the relevance of a
System Dynamics modeling approach to understanding the potentially complex
interactions between the pharmaceutical industry, the medical and related
professions, and the regulator and paymasters who fund health-care. A prototype model has been constructed and
used to create a variety of scenarios describing alternative futures, in which
the regulators impose constraints on either price or volume increases. Not surprisingly, the developing dynamics
vary, depending on the type and severity of the constraints and the industry
responses to them. For example, under
price control, increased investment in marketing by the industry to promote
volume growth might accelerate the reduction in the industry's profit margins,
leading to a fall in the proportion of sales income devoted to R&D and a
fall in the number of new products being developed. This scenario suggests a transformation of
the industry towards a high volume, low margin, non-innovative
"commodity" industry.
Experiments with the prototype suggest that the System Dynamics modeling
approach can help to explore in an insightful way the potentially complex
interactions of the various groups involved in health care delivery. There is extremely broad scope for further
development of the approach, which should ideally be targeted at specific issues
within the system.
This paper describes a consultancy project where the main
aim was for the client to learn about systems thinking (ST) through an
application in the area of business process re-design (BPR). Over a two week period, systems thinking was
applied in variety of contexts: exploring the interfaces between business
processes; re-designing a single process; and structuring a chronic problem
relating to the client’s budgeting process.
It was found that systems thinking performed differently depending on
the problem context within which it was being applied. Systems thinking performed well when applied
to specific and chronic problems, but less so when used to explore business
processes where no particular problem had been identified. Blending systems thinking with other
problem-structuring techniques, however, created an integrated and powerful
method for re-designing a business process.
Four ways are describes in which systems thinking was applied during the
project and pays particular attention to the way a range of techniques was used
to re-design a business process.
The organizational learning orientation to systems thinking requires managers to think together and share mental models using a variety of related techniques. It is generally recognized that this is no easy matter since the demand for new ways of thinking puts stress on old habits of mind. The purpose of this paper is to show how treating this difficulty as purely a technical problem falls short by overlooking the cognitive dimension of what new events have to happen in the brains of the managers. Cognitive biology gives a starting point to consider the decision behavior relates to implicit mental models. The consequences of mental models without feedback and systemic coherence are illustrated by an analysis of faulty thinking in privatization. A classification of system and feedback types emphasizes that, in managing organizations, uni-dimensional systems thinking is not adequate. The requisite multi-dimensional systems thinking requires holistic multi-factor thinking, multi-future thinking combined with causal feedback thinking. A crucial link between practical consulting, applied cognitive science and applied system science is the use of visual facilitation which increasingly makes use of the power of interactive visual representations of mental models behind decisions.
This paper is concerned with the use of a set of influence Diagrams representing the major processes in retail branch operations. (i.e., stock flow, sales activities, and human resources management), to identify I.T. applications that can help improve control over these processes. These applications can then be mapped onto the type of retail branch to give a portfolio for development and implementation. Prioritisation may be based on cost/benefit/risk analyses.
The Business Flight Simulator is a major action research project involving academic and industrial collaborators. Its central purpose is to support the creation and development of learning organizations through the application of wide variety of IT and software tools. The particular influence of evolving system dynamics thinking on the project is identified. The project also draws in finding from a recent international study of the application of information technology to support group working. The preoccupation of the Business Flight stimulators is with creating a physical and networking environment for group decisions and their implementation. Groups are supported by a variety of software tools. Much of the emphasis during the last decade has been on the application of single tool to support group working. These range from the highly quantitative to those which focus on more qualitative and inter-personal issues. The research project involves applying combinations of tools to business processes across a variety of industrial sectors, and preliminary conclusions in this area will be discussed.
Total Quality Management (TQM) has been experiencing great deal of attention. It has become the competitive strategy of choice. However, a seeming lack of a unifying framework, TQM appears to be fragmented into isolated approaches. For an organization to achieve business success, various quality initiatives should be mutually reinforcing. Implication is that managing relationship among several TQM component programs is at least as important as the implementation of the individual programs. In contrast to many other tools, system dynamics tools facilitate management of relationships in a proactive way. The focus of this paper is to advance this role of system dynamics. Several relevant processes and critical initiatives generally confronted by an organization engaged in phasing in quality management are captured in distinct casual frameworks. The paper also explores how and when system dynamics tool can be leveraged with commonly known quality management tools by quality professionals.
This paper shows the connection between the softer tools of system dynamics and the foundation of personal quality. This accomplished by portraying the problems and issues students experienced while engaging in individual personal quality improvement projects using system archetypes or casual loop diagramming. A major objective of the improvement project was to provide a critical and fuller glimpse of organizational quality by building on personal experience. Because the feedback from own actions is rapid and unambiguous while working within the framework of personal quality improvement project, it becomes possible to learn about the important systemic issues in a relatively short duration. Furthermore the visual representation of the issues using system dynamic tools preserved the learned lessons.
This paper is concerned with urban strategy planning on macro SocioEconomyEnvironmentR&D. Based on Grey System Theory, a urban grey simulated model (UGSM) has been established. The base run shows that it is high efficient in system action fitting. Taking a city as an example, some strategy policy tests are illustrated and main conclusion are presented.
Many System Dynamics researchers have found that
decision-makers have difficulties in controlling System Dynamics model which
represent complex social reality. This
means that heuristics employed by decision-markers are not appropriate for
controlling dynamic social problems. As
alternative ways for understanding and controlling System Dynamics models,
various mathematical methods have been suggested.
Some simulation-based experiment demonstrated the possibility of
decision-makers’ learning ability. For
instance, the experiment performed by Sterman showed that game players'
performance was improved slowly as their experiences are accumulated. The slow learning process is often regarded
as indicating the limitation of human intelligence. On the contrary, it may be interpreted as
indicating a potential power of human intelligence or heuristics.
In previous studies, decision-makers’ heuristics are formulated in simple
decision rule. Such decisions rules
failed to incorporate the learning ability of decision-makers. To experiment the learning ability of
decision-makers, this study replace decision-makers with neural network
model. The neural networks are
recognized as a representative of human intelligence by many students in
artificial intelligence. In this study,
neural network heuristic are applied to two System Dynamics models; Meadow's
commodity cycle (1969) and Sterman’s model of the Kondratiev cycle, or long
wave (1985). Neural networks model have
demonstrated a surprising performance in learning and pattern recognition.
In addition to neural networks applications, this study demonstrated technical
feasibilities in IBM environments using Smalltalk.
At RIVM environmental models are not only used for exploration but also for production, whereby environment reports are provided on a yearly base. Using models in a production situation raises the demand on quality to which model must comply. A robust "multiuser, multipurpose information system" is needed rather than a set of separate models. The demands on quality include:
- full reproducibility of results
- high performance (speed, reliability, uniform user interface)
- complete documentation to assure ease in maintenance
- explicit regulation of responsibility for and access data.
These demands have called for a method of software development that can assure
the quality resulting information system.
This paper describes the method which RIVM's Laboratory for waste
Materials and Emissions has developed.
Important elements are:
- Development of information in a cyclic "evolutionary" process,
consisting of a number of stage, as opposed to a linear succession of
steps. The end-users (environmental
specialists) participate in all stages.
The development cycles can also be considered as feedback loops. The quality of specification appears to be a
key factor in the behavior of the system.
- Management and modeling of data preceding the modeling of functional
relations.
- Facilitating the testing of the resulting, complex information system by
creating a description in the form of adapted casual loop diagrams.
The laboratory is now in the process of obtaining ISO 9001 certification for
its information management based on this method of software development.
The paper describes an attempt to tackle the problem of
energy management and conversation of the hotel industry of the
The paper describes all steps of all the methodology applied that is: the
development of the rich picture, the identification of issues for
investigation, the development of conceptual models and the derivation of
useful, feasible and culturally acceptable recommendations.
The paper concludes that Soft Systems Methodology is an excellent means for
tackling complex problems involving human activity systems and that is certainly suitable for improving problematic
situations in energy management and conversation.
Engaging managers in facilitated team model building and using all the principles of system dynamics to obtain high quality models are useful prerequisites to creating a good management flight simulator. No amount of interface improvement should substitute for or mask a poorly designed or understood model. However, there is a great deal of learning going on in the field of Human Computer Interaction that we in the system dynamics community can learn from in order to improve the effectiveness of our management flight simulators and model based learning workshop. This paper will explain how we can apply the principles of Human Computer Interaction to building management flight simulators.
Conventional Business-Process-Engineering (BPE)
consists of cautious small step improvement in succession to optimize target
figures such as financial outcomes, delivery time and leadtimes.
To support BPE for fast and focused change, a simulation model on top
and outside of MRP-system in place is proposed.
Useful business models for this task include the whole process from
clients billing to supplier paying. A
continuous flow simulation allows to cover the long time horizons of several
weeks to years to include the bottom-line-effects relevant for decisions.
Outside of existing MRP-systems means that alternatives of structuring the
business-process can be assessed without the heavy reprogramming and database
support needed, if you do this with the MRP-systems in place. We use process-chain-models with the
appropriate flow calculations instead of the discrete-event type calculations
of MRP-systems. This simplification pays
out in better focus on essentials such as dynamic control of the process-chains
for the price of not going into the details of single piecewise operations.
A generic template as a starting model is used to cover the many-facetted
problems of business-process-engineering in order to prepare the follow-up with
a professional custom-model and simulation-tool for the real company's
problems. Any final customized model is of course highly company specific.
The debate on the causes of present high and apparently
staying unemployment is just starting to get the grand picture together.
A preliminary investigation of a two-sector economic model is presented. Its focus is the interactions between wages
in the productive sector and rents and subsides in the non-productive sector.
Aging populations, late entry into the labor market, a growing administration
headcount and widespread subsidizing add up to taxes and other fiscal
measures. Their driving force is
modelled to be the recompensation
expected relative to the wages before tax of the productive sector.
There are three different behavioral-modes identified:
- full employment policy will result in a stable employment inverse to the
expected recompensation of the Non-Producing sector.
- hire and fire policy will get a stable mean taxation level, but with
oscillations of some twenty years duration at least.
- preventative hire and fire will induce catastrophical changes of employment
and tax-income.
A weak interaction composite model of this two-sector model into an available
longwave model further reinforces, that a high rent-and-subsidizing expectation
kills employment and reduces the so called self-ordering of capital production
in the longwave model context, except for businesses with high profits. Also, the longwave periods is influenced
strongly in this composite experiment.
The context for interpretations of the results is proposed to be the national
economies with their taxation in global competition.
This paper explores the social theories implicit in past,
present, and future (envisaged) SD practice.
Previous work on the theory of SD is first reviewed. A framework for studying social theories is
then introduced; the assumptions underlying its axes discussed and the four
paradigms of social theory which these yield described. Various grouping of SD practice are then
defined and these are placed in the framework, primarily within functionalist
sociology. Motivated by alternative
paradigms, two new and potentially productive forms of practice are
envisaged. The term “
A number of conclusions arise from this analysis. Firstly, that Forrester’s basic conception of the field was spread across the schools of Social System Theory and Integrative Theory and resulted in a period of interpretive division regarding validation. Secondly, that the resulting move by some practitioners towards more subjective forms of practice should be seen not as revolutionary, as some external observers assert, but as an evolutionary extension of the basic conception. Thirdly, that some current SD practice may, and the envisaged forms certainly do, indicate that the field is not wedded to a particular theory but rather that the method of SD can be used in different paradigms. This conclusion implies a greater need to be aware of, and consistent with, the social theoretic axioms implicit in SD activities if practitioners are to sustain a Kuhnian ‘normal science’ - hence reinforcing the paper's consideration of social theory.
This paper concerns two system-based approached for
organizational intervention - soft system methodology (SSM) and system dynamics
(SD). After a brief description of the
theoretical and methodological assumptions of the two a partial critique is
presented.
SSM is strong on the generation and representation of diverse perspectives, or Weltanschauugen
and attempts to deal with the socio-political elements of an intervention. But
SSM is weak in ensuring what is termed here ‘dynamics coherence’: consistency
between the instinctive behavior resulting form proposed changes and behaviour
deduced from ideas on causal structure. Hence, in situations where causal
structure and instinctive behaviour are meaningful, the intervention is blind
to the dynamic complexity of the proposed changes.
SD examines the causal structures capable of explaining and exploring the
dynamics interactions of different policies.
However, whilst SD emphasises the need for a clear issue focus for a
study, the approach has little theory regarding the generation and explicit
representation of diverse issues. A
proposal is made regarding the dove-tailing of the two to form a
synthesis. After an SSM intervention a
second stage is described. This
continues the socio-political analysis and draws on the previous Weltanschauuugen. It operates within a new Weltanschauuug
which values dynamic consistency of the
This paper closes with reflections on the proposed synthesis, particular
emphasis being attached to the need for theoretical consistency when mixing
tools.
What other activities and techniques exist that are interest to system dynamicists? Are there possibilities for system dynamics itself to contribute to them? These questions have been of interest to the authors for some time and now the 1994 System Dynamics Conference is helping to advance the debate. This paper tries to help things along.
We consider two areas of interest: the problem structuring techniques of ‘soft’ operational research and the wide range of system thinking concepts employed in the systems movement. Both involve valuable ideas and experiences. Both have a more European-orientated perspective, in contrast to the mainly-US viewpoint of system dynamics. In this two-part paper we therefore offer a selection from the literature of the two as well as brief annotations.
In this first part we consider the emergence of a range of practical problem structuring methods, their grounding in respective theories of organizational interventions and group processes, their creators' concern with participation and the political and power consequences of their work and, finally, the current debates in the area. In the second part (q.v.) we turn to systems thinking.
Of course, this is only our own selection but our aim is to encourage connection between these areas of activity. We have no doubt that they will be mutually beneficial.
What other activities and techniques exist that are interest
to system dynamicists? Are there
possibilities for system dynamics itself to contribute to them? These questions have been of interest to the
authors for some time and now the 1994 System Dynamics conference is helping to
advance the debate. This paper tries to
help things along.
We consider two areas of interest: the problem structuring techniques of ‘soft’
operational research and the wide range of system thinking concepts employed in
the systems movement. Both involve
valuable ideas and experiences. Both
have a more European-orientated perspective, in contrast to the mainly-US
viewpoint of system dynamics. In this
two-part paper we therefore offer a selection from the literature of the two as
well as brief annotations.
The first (q.v.) deals with ‘soft’ OR. In the second part we consider ‘systems
thinking’. Although this terms seems to
have been appropriated by the system dynamics community it can be interpreted
very differently. We therefore try to
convey the breadth and scope of the intellectual and practical endeavours that
define the systems movement and explore the range of holistic ideas that people
have found useful thinking about and acting in the world.
Of course, this is only our own selection but our aim is to encourage
connection between these areas of activity.
We have no doubt that they will be mutually beneficial.
This paper trace the evolution of the 'generic structure' concept in system dynamics, and discusses the different practical uses to which they have been put. By reviewing previous work on the concept we have identical three different views of what a generic structure is and, hence, what transferability means. These different views are distinguishable in practice as well as in concept. Examination of these interpretations shows that the assumptions behind them are quite dissimilar. From this analysis we argue that it is no longer useful to treat 'generic structures' since a single concept as the unity it implies is only superficial. We conclude that the concept needs unbundling so that different assumptions about transferability of structure can be made explicit, and the role of 'generic structures' as generalisable theories of dynamic behavior in system dynamic behavior in system dynamics theory and practice can be debated and clarified.
This system dynamics community has been active in developing
model-supported cases studies, gaming simulations and management flight
simulator for use in learning laboratories and student workshops. As multimedia environments are being
introduced, system dynamics based learning tools are beginning to look
increasingly like many commercially developed games.
Developments within the commercial video game markets, including new mass
storage media (CD-I, CD-ROM) and multimedia technologies have resulted in a
host of new business and policy related games and simulations becoming
available. In this paper, we examine the
possibilities for using commercially available games in a system dynamics
context. We demonstrate those
opportunities through an example, SimCity, a well-known commercial strategy
game.
How can the system dynamics community contribute to these new exciting
developments in the area of commercial edutainment products? How can we make
use of the current interest in strategy games to get more people introduced to
system dynamics?
There seem to be several advantages in using System Dynamics
modeling to understand the behavior of newly privatized industries. System dynamics models can develop insights
on the possible evolution of the industry from public to private ownership and
from protected to competitive markets.
The implications for business strategy and for the regulatory framework
can be examined under various scenarios.
As part of the privatization of the
Our model focuses on how long term development of capacity utilization is
likely to evolve, how much influence the regulator will have under the current
regulatory framework, and how this framework should be modified to give the
regulator more influence on the market to prevent cycles of over and under
capacity.
In the perspective of formulizing abstractions as a
fundamental facet of cognition, we study knowledge in its relationship to the
biological substratum from which its outcomes.
Our research is mainly founded on the works of F.J. Varela concerning
the autonomy of living systems (autopoiesis) and of S. Lupasco on antagonism.
We show how autopoiesis brings a new enlightment upon knowledge, by turning
representation problems to organization problems and how the autopoietic
dynamics of living systems leads to a new formulation of machine learning. By developing new internal dynamics, a system
does not learn to know its environment, but to adapt himself to it.
It follows that modeling an autopoietic system requires to focus, no more on
sharing of semantic universes between a system and its environment, but on
structural models producing behavioral regularities of the system in answer to
environmental perturbations. Autopoiesis
seems therefore more suited for developing adaptive and complex systems,
especially when an exhaustive specification of the operating factors is
prohibitive, as well as for providing a unified framework for modeling
cognition. Moreover it provides a
paradigmatic foundation to the design of massively parallel system.
Over the past decade, the Australian labor Government has
cut the size of the Australian federal budget sector from some 32% to around 24
% of Gross Domestic Product. This cut in
public sector intervention in the market-place has been achieved while the
Government has continued to focus on achievement of its social justice
objectives.
Central to those changes has been the Financial Management Improvement (FMIP), initiated in 1984 with the
establishment of a small management reform team drawn from the department of
Finance and the public service board.
Fundamentally, the FMIP sought to effect a change in bureaucratic and
government culture, shifting the prevailing paradigm from input accounting to
output and outcomes management. In
responding to this challenge, the FMIP unit in the Department of finance
adopted a 'systems thinking' approach, initially using qualitative casual loops
analyses and subsequently dynamic simulation modeling, to identify high value
leverage points in bureaucratic government. processes. Qualitative and quantitative system dynamics
modeling is now starting to be used in the broader policy advising areas of
government.
This paper presents an overview of key elements of the Australian federal
public sector reforms from the perspective of systems thinking and summarizes
significant recent uses of system dynamics modeling in public sector management
and policy analysis.
This paper describes the scenario generator (SaGa) tool that
prepares "plausible" futures for use in developing - or testing -
managerial plans. SaGa generated
adaptive, written scenarios based upon some of the power systems thinking.
SaGa produces scenarios from the combination of textual and numeric values that
are linked into cascades of formulae or decision tables. It provides a written description of the
implications of using different sets of input values in a model of complex
systems behavior. Managers with
preferences for verbal material can use these scenarios to consider what
preparations should be made to achieve their preferred future.
Since 1990,
The affordable housing market has an aura of destiny and paradox about it. On the one hand, the housing backlog of some
1,14-million units appears to be an unsurmountable problem and on the other, it
provides an amazing and historically important opportunity. Through the provision of affordable housing
at scale for the under-privileged, many of the objectives of a new
In the search for leverage, a systems model, using the ithink soft-ware package
was developed of the building industry in
In the model, it was possible to link hard data such as building activity,
gross domestic product, housing backlog and need, home-ownership, employment
and subsides. with 'soft issues' such as the need for leadership and vision and
for establishing a Housing Accord. The
Systems Model enabled the participants to see the impact of alternative
strategies over a 20 year planning horizon.
Sensitivity analysis was applied to varying levels of subsides
demonstrating the impact on the housing backlog and building industry activity.
The “ithink” strategic modeling package provides an extremely useful tool in
scenario building and in challenging the mental models of leading influences
and decision-makers in the building industry.
In particular, it highlighted the need for a gradually phased increase
(and timeous decrease) in affordable housing delivery, in order to avoid
"over shoot" and "over correction", with the potential of
putting the system into dangerous fluctuation.
In the scenario planning process, the use of the model information
enabled some 60 participants in a Think Tank process, to obtain a much clearer
view of the future of the building industry and to use the process in 'creating
a memory of the future' and thus, to have some influence on housing policy
and strategy in South Africa.
In the framework of designing programming environments based on the paradigm of autonomous agent systems, we conceived an interaction model based on the notions of charge and force.
In a multi-agent system, an agent is defined as autonomous entity composed of an agent's kernel and charges forming an envelope around this kernel. An agent perceives the other agents exclusively through sensors attached to his charges. Therefore all the dynamics of the system is governed by charges.
The introduced interaction model supports two kinds of dynamics: an internal dynamics obtained by changing inside an agent, and an external dynamics obtained by the agents movement through the environment. These dynamics enable the agents to vary jointly the forces acting on them and the forces they generate.
Because the high level semantics of the charges is not fixed by the model, the model may be used as well for modelling high level interactions, like psychological relations, as for modelling low level interactions, like elementary interactions used in artificial life.
One of the largest growth areas in telecommunications is
global business communications. In today's global economy, companies want to
communicate across the globe through a single service provider, in a seamless
manner between all their locations. For
this to happen the service provider must operate in markets which have
differing cultures, regulatory frameworks and levels of competition.
We present here a system dynamics model developed using the IThink software
package, which investigate some of the major issues of global service
provision. The world is segmented into
four regions within which there can be distinctly different conditions. The model captures the complexity of
obtaining a customer in a region and providing a global service in time scale
which will satisfy the requirement for connectivity between world-wide locations. The degree to which customer's requirement
can be met will be dependent on the presence the provider has throughout the
world.
Initial results indicate that the perception of a provider’s service has a
strong influence on market share within its home region and also the other
region of the world. However, this can
lead to scenarios where a strategy to improve service offering without due
regard to provisioning constraints can lead to a loss of market share.
The modeling activity delivered three major benefits: it has provided valuable
insight into a key telecommunications markets; it has demonstrated the
applicability of system dynamics to telecommunications strategy, and; it has
highlighted areas for development which will provide future value.
Many firms take actions which affect their competitive position without considering the longer-term strategic consequences of those decisions. This is particularly true of many recent downsizing initiatives, which have tended to be tactical in the sense of being reactive, focusing on pieces of the business, and with short time horizons. This paper uses examples from a dynamic simulation model of a telecommunication company to illustrate the dangers of such a "tactical" approach which is anticipatory, holistic, and long-term in its viewpoint.
Evaluating optimization model based decision support system is a complex task. Once an optimization model is built, one is not sure how to compare the effectiveness of two competing optimization models. One is also not sure how the model results will fare when they are actually implemented in practice. This paper lays out a procedure for evaluating optimization models in the framework of a system dynamics based game. Using the suggested procedure, a number of optimization model based system are evaluated. Investigations are then carried out on the effect of such decisions support system on the performance of the game participants. The proposed procedure opens up the possibilities of developing realistic and credible optimizations models by testing them for their effectiveness in the context of a specific problem situation.
Traditional models of innovations diffusion ignore the
complexity and dynamics underlying the process of diffusion. Usually these models consider only a single
management decisions variable, e.g., price of advertising, but they assume
these variables to be exogenous elements.
The models seek for strategies to optimize the cumulative profits
without consideration of the highly independent influencing elements. Their aim is normative decision support, but
they use models, which do not appropriately represent the structural
fundamentals of the problem.
The use of the system dynamics methodology allows the development of more
complex and detailed models to investigate the process of innovations
diffusion. These models can enhance the
insight in the problem structure and increase understanding of the complexity,
the dynamics and the impact of management decisions. But the development of adequate system dynamics
models requires expert knowledge and plenty of time.
The paper presents a knowledge-based approach to System Dynamics Modeling to
shorten the process model building and to make the knowledge about innovation
management available for many users. It
consists of two parts: A knowledge based system with the traditional components
for dialog, explanation, knowledge representation and inference is used to
configure System Dynamics Models, and a modelbase of different modules that
represent the generic structures of typical innovation management
problems. The knowledge about the
innovation problems is included in the different modules and in the knowledge
base of the knowledge-based system. In
dialog with the user the knowledge based system analyses the problem structure,
chooses the relevant modules and finally configures the model that then can be
used for further analysis through the problem owner.
Optimal Control Modeling
with Vensim: Applications to Public Finance
The purpose of this paper is to improve the results obtained
by Fernandez and Mantel (1989), referred to the price control inconvenience in
the application of a stabilization plan for
Norman L Marshall, Stephan J
C Lawe
We have developed several models linking land use changes
and transportation for different regions with populations ranging from 100,000
to 2,000,000. The models are uses to
long-term planning for land use, transportation, and air quality. The level of
detail desired by clients requires that the models have a high degree of
spatial disaggregation, typically several hundred zones.
The spatial detail is a strength of the models, but it is achieved at
cost. Model development is
time-consuming and expensive. Even on
the fastest microcomputers, model run time is measured in hours. Testing new
models structures and making structural enhancement is slow and difficult. The complexity of the models inhibits experimentation
and learning by clients. Simpler models are
needed to aid in prototype development and in communication and training.
We compared results of policy simulations from regional models with three
levels of spatial disaggregation. The
most detailed models are as described above.
For a highly-aggregated example, we developed a system dynamics model
with two concentric rings using STELLA software. Finally we evaluate two simplified grid
models with intermediate levels of spatial disaggregation models.
The STELLA model is able to demonstrate some of the policy results, and is an
excellent tool for model development. In
some ways the grid model combine the worst of both worlds. They are neither simple nor fully detailed. The detailed models exhibit the most rich
behaviors. We are developing techniques
to move from STELLA structures directly to the more disaggregated model
Ali N Mashayekhi
In the conventional view, planning is a process in which various goals for the future are set and action programs are formulated to achieve those goals. Future goals and appropriate plans are formulated based on analysis of environment forces and audits of internal conditions or strengthens and weaknesses. Then, plans are implemented to achieve the goals. But, in the System Dynamics view planning is a decisive formulation of policies or decision making riles which will enable the system to evolve from its present state to the desired one. The design of decision making rules is within a framework of feedback and based on consideration of the fact that new conditions will lead to new decisions and actions as the based on consideration of the fact that new condition will lead to new decisions and actions as the system moves towards it's desired states. The implication of these two views in planning is discussed with respect to management of a company within a growing market.
Management Games for Group Decision
Making in a Dynamic Environment
Peter M Milling, Frank Lehmann
Management games are very powerful teaching and training
devices which however, sometimes suffer from a direct and usually one-to-one
interaction between player and the model.
The paper presents a management simulator for decisions occurring during the
innovation process. Several groups of
players represent the boards of directors of virtual enterprises that compete
with each other. The computer model serves
only as a clearing device to coordinate the decision consequences on the supply
side and on customer demand.
Technically, the game is based on a simulation model written in Professional Dynamo. It has an interface for the preparation of
the simulation results and the communication with the players, that was
realizes using Microsoft Excel.
A simulation model for generating data for management gaming must comprise a
realistic structure and stable policy rules.
The players should be able to use their professional knowledge and their
business experience. The computer-model
in the paper represents a microworld for testing different strategies, to
experience different forms of behavior, and for improving the understanding og
the consequences of decision making in a dynamic environment.
Extending System Dynamics for
Environmental Research and Management
Ian Moffatt
System dynamics modeling is used in many disciplines to
examine the various ways in which dynamic system function. At the
The main thrust of this paper is to argue that system dynamics needs to be
extended into a more general framework so that detailed investigations of major
environmental problems can be undertaken.
In particular it is suggested that system dynamics needs to develop dynamic
models to interact with several areas of information technology, especially
database, quantitative methods, geographical information system (GIS) and
experts systems in order to contribute further to the understanding and management
of environmental problems. This argument
is illustrated with a description of a prototype, integrated and general environmental research and management system
(GERMS) developed explicitly to address the problem of modeling and management
water quality in the forth estuary, Scotland.
Some of the results of this research and its implications for environmental
management are discussed. It is
suggested that further development along these lines could be made to ensure
that system dynamics make an even greater contribution to try to resolve many
of the environmental problems which surrounds us.
Safety Hazard Control in the Workplace:
A Dynamic Model
Jonathan D Moizer
The work described in this paper was carried out as part of a study into occupational health and safety information systems, and the simulation package used was Powersim. Systems thinking and practice are tools which can contribute greatly to better safety management (Waring 1990). The paper presents a generic model to illustrate the life cycle of a workplace hazard, from its conception to its final control. The greater the number of uncontrolled hazards in a working environment at any one time, the greater the likelihood of accidents being generated. The rate at which hazards can be identified and controlled will have a great bearing on the overall safety of the workplace. The exclusive use of a reactive approach to hazard control in the following system models proves not to be sufficient in substantially controlling hazards.
Management of Fiscal and Monetary Policy
(The Case of Developing Countries)
Mohammad T Mojtahedzadeh
A system dynamics model is presented to analyze fiscal and monetary policies. The model describes an economy which suffers from infrastructure shortage. Further, government is responsible for the development of infrastructure. The model demonstrates the contradiction between fiscal policy and monetary policy in offsetting the rise of inflation. The contradiction can be addressed in terms of time horizon—from a short-run and a long-run perspective. In order to control inflation, a monetary policy may suggest a reduction in the rate of increase in money supply. This can be done by restricting dudget deficit based on inflation. In contrast, a fiscal policy may suggest that in order to control inflation, aggregate supply (of goods) must be increased. An increase in aggregate supply requires infrastructure; thus, budget deficit expansions is unavoidable. The model also shows that a policy which restricts new project initiation based on government budget availability causes a lower inflation rate, particularly in the long run, without decreasing the production growth rate.
To Shower or Not to Shower: A
Behavioural Model of Competition of Shared Resources
John D W Morecroft, Erik R Larsen, Alessandro
Lomi, Ari Ginsberg
Most system dynamicists have used a simple shower model to
explain feedback and to introduce cyclical dynamics behavior characteristic of
a balancing loop. The damped system's temperature is relatively easy to
manage. But what if we assume the
existing of the two showers sharing the same limited supply of hot water? It turns out- as one might expect - that it
is much harder to control the water temperature because a person managing one
shower is unaware of the other shower or it's occupant, yet must react to the
aggregate temperature outcome resulting from a joint 'management' effort.
We discuss how a single two-shower model can provide a useful metaphor for a
wide range of real managerial problems.
The model is used to illustrate the causes and consequences of
interdependence in processes of resources allocation, competition within and
among organization.
Qualitative Analysis of Financial Models
Thomas F Morgan, William M Ammentorp
Financial modeling is generally founded on the premise that
financial managers and fiscal policy makers operate 'by the numbers'. Indeed the assumption is so deeply ingrained
as to shape much of spreadsheet software to conform with accounting
practices. It is the thesis of this
paper that there is a qualitative side to financial decision making which
translate the mathematical expressions of accounting into the commonsense
language of mangers.
The research reported in this paper examines the relationship between
conventional financial models and the linguistic representations given them by
financial managers. The research takes
form of a STELLA model of corporate finance with a HYPERCARD interface. In the interface, the authors employ the
propositions of fuzzy set theory to incorporate such linguistic hedges as
"too high", "way out of line", and others found in common
management speech. The resulting model
assists financial managers in linking their qualitative judgments to the
numerical parameters of a typical corporate financial model. As the model runs, it allows managers to
adjust their financial policies on a quarterly time scale - while recording
each person's decisions as related to model performance.
The authors report the decision making practices of a sample of corporate executives
as a set of qualitative propositions.
There take the form of statements like, "If market share is falling
rapidly, and leverage is fairly high, product line expansion is
required." Such propositions take
on a dual role; they can be translated into average numerical values to control
a Stella simulation - or they can be simulated as a purely qualitative model.
The significance of the qualitative thesis lies in the new perspectives it
offers to those who study and practice financial management. The thesis offers a clear connection between
the arcane world of the analyst or accountant and the complex environment of
the working manager. It fosters a dialog
across professional boundaries that may well result in more accurate models and
more effective practitioners.
In Search Of Learning Organization
Within the Australian Hotel Industry
Michael Morrison, Fern Marriott
The concept of "organizational learning" offers a
rich opportunity for not only rethinking theories of organizational behavior
(OB) but also reexamining the relationship between
Short Term Manpower Planning: Time Basic
Simulations vs Systems Dynamics Approach
G I Mould
The bulk of the literature on manpower planning models deals with long term planning and strategy evaluation. The most common approach is to use a Markov type model. This can readily model wastage and promotion rates, together with training policies and can be used to evaluate the longer term impact of personal policies. However many manpower planning problems span a much shorter time period and precise modeling of training and promotion strategies is inappropriate. This paper presents such problem. Staff planning procedures were required to reduce a large but temporary backlog of work. Two modeling approaches are contrasted: a time base simulation (a decision support system approach) and a system dynamics approach. The simulation model was encoded in a spreadsheet this enabled management to easily make alternatives, to the model data. The systems dynamics model presented a graphical representation of the problem which made all the modeling assumptions explicit. Both models could assess management alternatives, the spreadsheet model was able to provide very detailed information, whilst the main strength of the system dynamics model was its ability to provide more general results for the longer term. With both approaches the cooperation of management was essential for suggesting practical solutions.
Investigating the Dynamics of Employee
Participation
Jose Edgar S Mutuc
There has been an increased interest in teams and
empowerment of working groups in management literature yet some researchers
note that little has been done to define and analyse the critical factors that
explain the variations of their performances as well as the participation
progamme itself.
This paper presents an initial investigation of the interfacing factors in
participation, and its construct, motivation.
The system archetypes in the participation system are first developed
using recognized relationships in social science literature. Their corresponding balancing loops are later
inferred largely from conflicting accounts and observations of the
participating process. Some of the basic
loops that are presented include the Organizational Improvement Loop, the
Worker Environment Loop, the Tug-o-War Control Loop and the contribution
sharing
Powerful Modeling Using Array Variables
Mangne Myrtveit
As the field of system dynamics modeling is expanding, there
is a continuos need for improvements of the available tools for developing
simulation model. Lack of features like
array variables often lead to modelers to choose third generation languages
like C when developing large, realistic models.
This paper describes the array variables of the POWERSIM language. Comparisons are made to other notation,
including mathematics and DYNAMO. Index
variables, array dimensions, subscripts, and functions operating arrays are
described. An important feature of
POWERSIM is that the array notation goes well together with standard
accumulator-flow diagram (AFD) and casual loop diagram used by system
dynamicists. This makes the use of array
variables almost as easy and intuitive as using scalars.
The transition from single scalar values to multi-element array variables is
visualized through examples. Examples
include capital stock with machines and building, work force with inexperienced
and experienced workers, delay structures programmed as arrays, etc.
The array features of POWERSIM has been used with success in several
large-scale projects. Many modeling
problems are not practically solvable without using arrays. Even models that can be developed using only
scalars, sometimes become much easier to develop, explain and maintain when
using array's. In conclusion, the family
of simulation problems that are best solved using a system dynamics tool, has
been extended significantly through POWERSIM's array mechanism.
System Dynamics and Learning Curves
N M Naim, D R Towill
Learning curves are met in a wide variety of industrial
situations. They have become
particularly important in modern business strategy because product life cycles
are constantly reducing as companies seek to gain competitive advantage via a
rapid response to customer demands. The
paper describes a family of System Dynamics models that have been found
particularly appropriate in modeling and forecasting the performance of
business organisations including the performance of manufacturing systems and
the penetration of new product into the market place.
The system dynamics learning curve model have a servomechanism analogue that
yields valuable insights into the parameter estimation problem. The models are required under two quite
different circumstances. The first is
based on historical information where the model is to be added to a company or
consultancy data base. The second is for
on-line forecasting and control of a business activity. An enhanced stability least squared error
predictor is described which covers both requirements. The paper concludes with industrial
applications of the system dynamics models.
A System Based Methodology for
Industry-Level Analysis
Allen Nash
Both strategic planning by senior management in the private
sector and industry policy analysis by analysist in the public sector have the
need for a systematic approach to develop an understanding the dynamics of their
industry. Currently a systematic attempt
at industry-level analysis requires the simultaneous use of a plethora of
techniques such as Porter's five forces for competitive analysis, network
approaches to examine inter-organizational transactions, as well as competitive
population ecology to examine population dynamics. Building scenarios of possible consequences
of significant strategic moves involves modeling the industry or strategic
analysis. The underlying theory is
developed from general system theory, strategic policy analysis. The aim of the approach is to allow a
comprehensive qualitative model of the industry or strategic group to be
developed based on graphically representing three subsystems: The social
Subsystem, Information Subsystem, and the Physical Subsystem. The approach has been applied to an
examination of the rapidly developing textile industry in
Henry Neimeier
A new simulation is proposed to overcome several of the limitation of discrete event simulation. It is based on the combination of analytic queuing networks and analytic uncertainty modeling. The analytic queue techniques gives an approximate transient solution to the general inter arrival time and general service time single server queue. Analytic uncertainty analysis is based on the beta distribution. It provides the entire uncertainty probability distribution can be fit based on the minimum, mean, maximum, and estimate of the mean and standard deviation statistics. In a complex results calculation, all that is required is to keep track of these statistics as the calculation proceeds. At any point in a calculation, the probability distribution of the result can be derived by fitting a beta distribution based on the four statistics. When analytic queuing is combined with analytic uncertainty, modelling dynamics uncertainty analysis becomes feasible. The time varying uncertainty distribution in resulting measures of effectiveness can be calculated at any specified time or over nay user specified time interval. The new capability is not available in discrete event simulation.
Henry Neimeier
The analytic uncertainty modeling techniques is useful
whenever sensitivity analysis is important.
It provides the entire resulting probability distribution instead of a
single uncertain point estimate of the mean. Both analytic development costs, and computer
execution cost are far less than in discrete event simulation. The price paid is some lack in modeling flexibility.
Discrete simulation requires multiple long simulation runs to obtain a
statistically significant point estimate.
The different result values from multiple runs with identical parameter
values but different random number seeds, are average to obtain the point
estimate of the mean results value.
Conversely, the analytic solution gives the entire resulting probability
distribution with minimal calculation.
The analytic solution also considerably simplifies sensitivity
analysis. A single analytic run is done
for each input parameter setting.
Discrete event simulation requires multiple runs for each input
parameter, to obtain a statistically significant mean result.
In functional economic analysis we are interested in the relative future cost
of alternative systems. There are
uncertainties in process performance, resource requirements, cost estimate,
investments required, workload, interest and inflation rates. There is also uncertainty in the future
projection of these elements. Analytic
uncertainty modeling provides a simple way of calculating output measure
uncertainty from model input parameter uncertainties.
Dynamics Software Life cycle Model
Henry Neimeier
This software life cycle model encompasses initial development, software upgrades, and error maintenance. The dynamic S**4 model is used to calculate several different development and maintenance strategies. The impact of Intergrated Computer Assisted Software Engineering (ICASE) tools on development and maintenance cost, schedule, and error rate is quantitatively evaluated. Alternative techniques for grouping error rate is quantitatively evaluated. Alternative techniques for grouping errors and functions into releases are evaluated.
Performance Evaluations Gradient
Henry Neimeier
The performance Evaluation Gradient (PEG) model quantitatively compares the relative merits of government operation versus outsourcing to provide government needed goods and services. DOD outsourcing is the contracting out of business-related activities to save money. PEG provides a means to minimize procurement operations and maintenance, and investment costs for a broad range of products and services. Products are categorized by their associated input parameter values. The model evaluates the effect of fourteen key economic parameters on per-unit costs. This section describes the current budgetary environment and the relation of PEG to Functional Economic Analysis (FEA). PEG is applied to a Local Area Network (LAN) services example and summary results are presented.
Performance Evaluation Surface
Henry Neimeier
The performance evaluation surface relates total cost over a system lifetime to eleven key performance factors. A system dynamic model is developed to project initial cost and trends over the system lifetime. A quadric surface (equation with all linear, quadratic, and two factor interaction term) is fit to a complete factorial design of model runs. These runs span the practical range of factor values. The equation is a generalized cost model that gives a first-cut cost projection for any product or service.
System Dynamics Model of the Standards
Development Process
Henry Neimeier
An overall dynamics model of the standards development process was developed to document savings potentially obtainable from standards improvements in the defense information system. The model will aid in allocating standards development resources. Different funding and personnel strategies are quantitatively compared.
Using System Dynamics Simulations Model
to forecast Long-Term Urban Water Demand
Huien Niu, Allan A Gillard
Forecasting long-term water demand is essential in water resources planning and management. A common problem existing in long-term forecasting is that many uncertainties are involved due to the various assumptions which can be used. Thus, it is highly desirable to give the assumptions explicitly in a long-term forecasting. By using system dynamics simulations, scenarios can be easily produced based on different assumptions, or by issuing different valued to the parameter and initial variables. And the assumptions can be stated explicitly and organized systematically by presenting the alternatives in tables. The frequency distribution of the forecast results, which are obtained from different scenarios, can be derived. A range of forecasts, rather than a single forecast, can be produced. This can possibly supply an overall picture of a forecast.
The Public School System: A Dynamic
Model of Community Standards, Students, Teachers, and Resources
Conrad F Nuthmann
-Declining performances
-Diminished Standards
-Relativistic performance assistance
-Student motivation
-Confused objectives and curicula
-Teaching fads
-Cultural heterogeneity
-non-educational responsibilities of schools
-Social pathology
-Administrative confusion
-Disenchantment with public school
Purpose/Objective
The objective of the effort was to reduce the public education system to its
basic elements: standards, students, teachers and resources; and then to
analyze the dynamics of such a system as it responded to three fundamental
kinds of disruption: resources waste, teacher diversion, and student
distraction.
Method/Approach
A system dynamics model of a public education system was constructed using
STELLA II. It was exercised according to
a 5X4 factorial experimental design that examined the behavior of 12 dependent
variables under the 20 conditions specified by the factorial design.
Findings
Results were summarized as a series of parametric plots. For example, plotting Performance X Cost per
Performance point gained across all conditions of degradation revealed a
significant interaction effect. That is,
performance cost at high standards are much less per unit of performance
gained, (and much less sensitive to disruption) than those at low
standards. Eight major findings are
discussed, and a discussion of each of the major identified problems is
offered.
Patrick J O'Brian
The combination of global competition and automation has had a major impact on how contemporary businesses serve their customers. Product development, operations, and sales have all been reshaped by the desire to provide high value products and services to the changing needs of customers. A corporation's ability to compete is intimately tied to its ability to continually develop its workforce. The number of traditional manufacturing jobs in the future will decline; the competency demands will increase. The paper outlines how one company developed six strategies to ensure that the skills of its workforce kept pace with the innovations of its production technology.
System Dynamics as a Tool to Advance
Organizational Learning
Martin R Ochs
Today it can be seen that management of change has become a management of 'surprise', in which an enterprise can only survive by recognizing future events in the environment and by acting on that information with appropriate business moves. The ability to learn about these changes requires a kind of organization that never stands still; moreover, enterprises have to develop their own strengths according to their environmental conditions.
Managerial Learning Laboratories: An
Action Research Project for Group Learning
Rogelio Oliva
The purpose of this paper is two fold. The first is to structure the thinking and
theories about managerial learning laboratories as held by the
The paper can be viewed as iteration of action-research, where active
participation of the researcher in the problem situation is followed by
reflection and learning from the process.
The lessons are then used to update the theories that gave origin to the
action.
A Model for the Polis, the Ancient City-State
Mauro Piattelli, Nicola Bianchi, Marta Cuneo
Polises are the
ancient city-states that began to appear in the
The aim of the proposed model is to simulate these different paths by
introducing cultural factors such as the 'trade aptitude and 'conservative tendency'
of the dominant classes and also by considering geographical constraints.
The model uses nine main state-variables, four concerning population and five
economy. Macro events such as emigration and/or expansion, which may generate
new polis, are explained in terms of social conflict between the two dominate
classes. The economic unit measure is
yearly per capita consumption and the sampling interval is set to one year.
The model description also includes a comparison with Forrester's well-known
Urban Dynamics. The reasons for the
choice of the System Dynamics methodology are expounded in the paper.
Two-running examples are discussed and shown as output plots. They deal with a case of high social
stability due to sea trade activity of the Emerging class, and also with a case
of low stability with generation of new polises.
In the authors' opinion, the model offers a general heuristic tool in
historical analysis, but may also be useful for approaching present-day
problems about the identification of a new development hypothesis for western
civilization, in that it recognizes the fundamental role of cultural factors in
addition to the economic ones.
The purpose of this paper is to present a model developed
for detecting strategic change in efficiency and effectiveness of an industrial
company that is structured along with mechanistic concept, produces consumer
products, and profit center.
Main aim of the research is to develop a model for detecting strategic changes
that is a step of strategic issue diagnosis.
Which strategic changes are monitored is on dependent on which analysis
unit is. In this study it is
organizations that are structured with mechanistic concept, vested in a multi
product company and profit centre. It
can be found in literature that for these companies changes in effectiveness
and efficiency are likely strategic changes.
Our approach to constructing the model is based on problem detecting approach
due to relevant literature. The model
consists of two sub model; namely simulation sub model that is a system dynamic
model and control chart sub model. The
simulation model provides us with distribution of profit values that can be
obtained under the normal changes in effectiveness and efficiency. The control chart model receives profit
values produced by simulations model and calculates limits to show a manager
whether there is a strategic changes in efficiency and effectiveness or not.
The model was run by input values of a Turkish company that produces
paints. In the test of the simulations model
we did not found any statistical difference between profit values obtained from
the simulation sub model and one obtained from profit formula, which may be a
confidence indicator for validation.
As a conclusion it can be said that the detecting strategic changes offers a
lot to system dynamic researcher and using management science tools with system
dynamic will likely increase strength of it.
A number of writers have argues that Soft Systems Methodology embodies a distinctly "subjective" philosophical approach and (or) yield a system methodology based on a "subjectivist" epistemology, and as such it is distinct from "objective" methodologies. It has also been argued that Soft System Methodology avoids, or attempts to avoid, the "reductionism" inherent in traditional approaches to study of natural phenomenon. In this paper it is argued that such argument contain a number of conceptual and historical confusions, and that whilst the advocates of the developed form of Soft Systems Methodology in fact subscribes to a subjective mode of enquiry, such a mode has its history firmly grounded in the natural sciences. It is also argued that the Soft System Methodology advocates (in fact) subscribe to the thesis of epistemological reductionism, and this thesis will be contrasted with that of epistemological holism.
In this paper we describe the process of building a
conceptual model of a guided missile base of the Royal Netherlands Air Force, a
complex organization in the middle of transformation. Based on this conceptual model, we developed
a policy exercise that is used by the Air Force to explore their future
organization, focusing especially on the communication structure.
We will describe the steps made in developing the model and explain the choices
that lead to some methodological innovations in communicating complexity
through a conceptual model. We will also describe this model, which consist of
28 actors and actor groups, and between them more than 350 relationships of
nine different types, including five specified types of communication.
Furthermore we will look shortly into the possibilities of transforming our
qualitative model of actors and relations between actors into a system dynamic
model, thus broadening the scope of system dynamics by giving an input from the
system analytical approach we use in developing policy exercises.
Delay function is one of the most important functions in
dynamo Language in system dynamics.
This article discusses intersection characteristic of output curves in the case
of delayi (i=1,2,3,…), and proves that in step-input, output curves in the case
of delayi (i=1,2,3,…) doesn't intersect
at the common inflection point and that when DEL1=DEL2/2=DEL3/3, the output
curves in the case of delayi (i=1,2,3,…)
doesn't intersect with each other except common initial point.
Above-mentioned result is very important in the application of delay function.
This paper describes a simple model of a manufacturing firm in which a successful productivity improvement program is implemented. This model is an attempt to generalize an earlier theory developed to explain one company's paradoxical experience with Total Quality Management (Kofman, Repenning and Sterman, 1994). The model describes a dynamic hypothesis concerning the firm's financial performance. In this model the Half-life Equation suggested by Schneiderman (Schneiderman 1988) is used to determine the maximum rate of improvement. The spread of skills and commitment is modeled as a diffusion process, and the allocation of resources to support that commitment is represented as a dynamic adjustment process with a multi-dimensional utility function and fixed resources constraint. This formulation, with the assumption of locally rational decision rules, results in differential rates of improvement in the capacity and demand generating areas of the firm. This differential, when coupled with traditional accounting, pricing, and human resource policies, can create unanticipated side effects that result in sub-standard performance or failure of the program.
Business Simulations and the Role of the
Manager
Martin Rich
This paper examines some of
the experience of using business simulations, for management teaching, in an
academic environment. It is particularly
concerned with simulations which promote groups and collaborative working, and
which encourage students to review their interaction within the group. Using this experience, and examining the
nature of managers’ work in business, it discusses the extension of these
principles to in-service management training.
In the business context, the emphasis on group work translates to an
emphasis on enabling managers to recognize and use their individual skills, and
personalities, to the best effect.
Management training,
especially in the
Ongoing research at the
From that theory we derive classes of testable research hypotheses about
decisions making in dynamic environment in particular, design logic and
operator logic hypotheses that have serious implications for system dynamics
research and practice. The operator
logic hypothesis suggests that system intervention focused on understanding
detailed system structure will have little impact if they are not captured in
easy-to-digest chunks of strategic insights that managers can integrate into
relatively simple means-ends associations.
Compounding the difficulties of mental research is the likelihood that
individuals’ mental models can not be directly elicited without distortion.
This paper addresses the dynamics of energy development
projects. Nationalization has repeatedly
squandered the economic, physical and mental resources of large joint-ventures
between multinational oil companies, and developing countries. A deteriorating relationship between
multinational oil (MNOC) management and regional hosts consistently leads to
nationalization. This cultural gulf between corporation and regional host,
while existent in many regions is most significant in high conflict areas,
which is why petroleum managers, with most of their experience in low conflict
areas, have mostly ignored and cultural gulf.
To form strong relationships that bridge the cultural gulf requires
cultural sensitivity. Neighbor conflict
studies show this problem to be most prevalent in developing countries, but
also existent in emerging areas such as offshore
The proposed microworld trains first world petroleum managers, through
cause-effect analysis, that while cultural-sensitivity to the developing
country's need increases marginal costs, it's lower the probability of
nationalization, generating positive project economics and raising expected
payouts from extended project life.
The increasing rate of change to which organizations are exposed, along with the growing complexity of projects and of the environment, has highlighted some weaknesses of traditional approaches in coping with the strategic issues of project management. System Dynamics models provide a useful tool for a more systematic management of these strategic issues. There have been a number of applications of System Dynamics in project management; this experience permits a tentative comparison with the more traditional approaches and to examine the particular benefits of system dynamics. The conflicts of options between their supporters stress the different perspective underlying the two approaches. The comparison of the two approaches is focused on the "view" of the project management process. Although they both assume a system perspective, identifying a cycle of planning, implementation and control, the level of detail in which they consider the project system is different. Traditional models support the project manager in the operational problems within the process, while System Dynamics models provide more strategic insights and understanding about the effectiveness of different managerial policies. For effective project management both operational and strategic issues have to be handled properly. This paper suggests an approach to combining the lessons of system dynamics and traditional models within a single, integrated project management methodology.
Research regarding the examination and evaluation of work
climate in understanding organizational functioning has enabled us to formulate
strategies that not only improve the behavioral aspects in institutional
functioning, but also result in more effective organizational performance. While sufficient studies exist on examination
of work climate for industrial, service and allied sectors, relatively few
researchers have considered government-funded Research and Development (R&D)
institutions as their unit of study. Further,
most of the studies reported have been conducted for scientists working in
R&D units in developed countries.
System Dynamics methodology as applicable to studying organizational behavior
have found limited acknowledgement in literature. Moreover, most of these studies are based
upon theoretical understanding of the subject with little empirical
support. The present study is an
offshoot of a serious of studies which were undertaken in the National
Institute of Science Technology and Development Studies on different aspects of
R&D Management with primary emphasis on organizational behavior. An attempt is made here to model the work
climate of an R&D laboratory using the System Dynamics methodology with support
from the studies carried out earlier as mentioned above. The motivational conditions prevailing in an
R&D laboratory was studied in order to understand the factors and forces
which are necessary to provide a climate which will motivate the scientists.
Likewise, factors and forces that contribute significantly to the overall
satisfaction with the work group were also studied. The question whether operating within an
environment as is prevailing with the R&D laboratory stimulating or a
debilitating effect on the work enthusiasm of the scientists were addressed to
them. The aspect of R&D
effectiveness of the research group was also probed into and the factors and
forces contributing to the same identified.
A detailed flow diagram was then developed relating to above factors to
the project flow dynamics. Trail runs of
the model using the DYMOSIM package have been carried out and project-related
data collection are currently in progress to evaluate the constants and
multiplier factors and for validation of the model structure.
This paper describes a way of using systems thinking
concepts and a system dynamic model to help clients design strategic
approach. The client, a large
information services corporation, knows the market it is serving now and the
market it wants to serve in the future.
It also knows the core competencies necessary to meet the benefits
needed in each market. A can-do attitude
and limited time for reflection limit the client's ability to design the policies
necessary to achieve this strategic transition.
Systems thinking concepts help the client understand the urgency of the
situation and the difficulties faced in achieving a strategic transition.
The model is designed around the client’s perception of the corporation's
present and desired market, and around Gary Hamel's strategy concepts. It is not designed to answer a specific
question, but rather to allow the client to address strategic issues. The model incorporates every implied casual
link that the developer could collect from diverse constituencies within the
company to increase the chances that users will find topics from which to build
a discussion. Reports are made to look
like corporate reports to ground the model in the client’s mind. The model runs on MicroWorlds. It is used like other existing management
flight simulators.
In the study presented here we have modeled a firm with various production sections managed along traditional lines. We also include in the model the structural changes necessary for the company to be managed according to OPT. It is possible to work with the two philosophies alternately. We have thus created a tool which allows us to check the validity of the various basic rules from which professor Goldratt works in developing his theory, and also to establish its strengths and/or possible weaknesses for different business situations.
This paper reflects on a successful problem solving exercise that was carried out in a textile factory using a systems approach together with a Japanese management technique. The systems approach used was System Dynamics modeling and the Japanese management technique was CEDA (see appendix). The paper concludes that successful problem solving can be viewed as a group of learning process and that this approach offers a useful framework for initiating and managing performance improvement. The degree of success is largely determined by the degree of learning that takes place.
A desirable movement towards a high skill and high wages economy may imply a broader employee participation in shaping investment/innovation strategies. This could extend collective bargaining over automating, timing of innovations in addition to issues involving employment, wages and other working conditions. This paper makes us of nonlinear differential equations and of a qualitative state space analysis to describe dynamic feedback system, based upon a Goodwin-like model of economic cyclical growth and income distribution. The patterns of behavior are traced to the system's feedback structure (in particular, to delays and polarity of it's feedback link and loops). It is shown that typically growth of labor productivity promotes a steady state labor bill share and employment ratio, although irrationality or myopic rationality in bargaining, disregarding regularities of the whole system, may be detrimental.
A system Dynamics model of a dual economic system incorporating also the behavioral responses to competition and the ability to innovate on the part of the formal and self-employed sectors is developed and used as an experimental apparatus to search for technology-related entry points for achieving economic growth and changing income distribution. Policies to promote competition among the monopolistic formal fi9rms while simultaneously providing positive assistance to the competitive informal firms appear to offer promising alternatives to the traditional fiscal policy levers mainly affecting prices and factor costs.
System dynamics has strong didactic potential of physics
education. The use of modeling systems
like Stella in the physics classroom creates new opportunities to
- accentuate the basic structure of physical theories,
- investigate more complex and realistic phenomena,
- improve the possibilities for students to bring in their own ideas.
Conventional physics instruction is often dominated by a bulk of special
equations (gimmicks) for special cases, like s=v.t for linear motions on an air
track. System dynamics models help
students to realize that the core of physics can be expressed by a limited
number of power tools like Newton's laws _p=F._t, which are applicable to a
wide range of topics, including process and the graphical modeling language,
they can use system dynamics as a tool to solve problems from nearly all domains
of physics, starting from the motion of bodies to the decay nuclei.
Empirical research carried out by the
The lack of commonly held rules or standards for system
dynamics, the eclecticism of its application, and the wide variety of modeling
and non-modeling methodologies developed over the past thirty years present
formidable challenges for establishing an effectively functioning system
dynamics community. It is reasonable to suggest that the current structure of
the community may hold back the growth of the field more than obvious obstacles
such as the inherent difficulty of developing insightful moods or the
counterintuitive nature of nonlinear feedback lessons. In this light, the structure of the community
deserves closer scrutiny.
Benchmarking the System Dynamics Community, a survey sent by the author to
System Dynamics Society members in February of 1993, is the first survey of the
system dynamics community and a first step towards developing a more
comprehensive understanding of the structure of the field. The survey instrument consisted of five
sections: background, Practice, Software, and Hardware,
This paper presents the results of survey response, structured parallel to the
five sections of the survey instrument.
It concludes with a series of questions for further investigations.
With the advent of concepts such as punctuated equilibrium,
chaos, and systems thinking from the hard sciences, and their respective
implications for the social science, we must consider change to be more
performance; it requires us to examine both the organization's ability to
perform and their collective ability to learn.
This perspective necessitates the use of a sociological paradigm which
allows for a better understanding of the dynamic and complex nature of
organizational learning. The
organizational systems model discussed in this essay contains four subsystems
each responsive for carrying out vital functions for the organizational
learning system to adapt to its environment.
Relationships among the subsystems is established through the use of
input/output variables labeled as interchange media: new information, goal
referenced knowledge, structuring, and sense making. These interchange media are products of the
functional subsystems of the organizational learning system and are manifested
and measurable dynamics variables.
Qualitative data is used to provide illustrative case examples. The paper concludes with implications for the
system modeling of organizational change as a function of both performance and
learning.
Top management, through strategic plan, designs the guide of
actions that are necessary to achieve company goals.
Methodologies and tools are essential for comparing the results reached through
operative actions with those programmed; so that the management can analyze the
differences and decide operations to better manage the future. In this area the principle aim is to support,
who has the decision, with instruments that increase management knowledge. As a whole, the control system, is
"simply" an overall feedback model, the results of which, if given in
time to top management, allows him/her corrective actions that can be
"vital" for company conduction.
Above knowing how things are going compared to what has been planned, top
management needs to know which are the so called "master variables"
that have particularly influenced the results.
What will describe in this paper will be the following: how, through System
Dynamics approach, a simple "feedback control" management model can
be integrated with a "feed-forward System" so to support top
management in the process of budget planning and management control.
Two problems will be particularly discuss that could be of interest.
- An application of dynamic problem definition as a prerequisite to a good
System Dynamics modeling. This
theoretical approach will be integrated also with an approach that imposes to
define an aggregate model which contains, particularly, "master
variables".
- The model will be discussed and developed together with an academic expert in
Italian public accounting and this will be a way to spread out the knowledge in
System Dynamics approach in Italian university environment.
The result model will support public managers in the process of budget plan and
the management control.
We have done research fore these 20 years on the model for
dental diseases in
The demographic sector covered populations of 5 three year
age groups under 14 years of age and 13 five year age groups above 15 years of
age. From the total number of defective teeth, total dental costs in
We reported each stage of this model at the 1987, 1992 and 1993 International System Dynamics Conference.
We will make a general explanation of this research progress
and show how changes of metamorphic rates among dental diseases affect number
of surviving teeth for Japanese age groups and total dental costs in
Abstract: This paper explores the use of genetic algorithms (GAs) for optimizing system dynamics models. System dynamics offers a unique and powerful approach to identifying the most successful policies for managing complex problems. Unfortunately, policy makers too often avoid the use of models because of high level of experience required to operate the models and the time and expense which results from trail and error testing of a multitude of policy options in order to discover the best policies. The role of system dynamics models as decision-makers tools would be greatly strengthened if model users could simply identify the goals for the system being modeled and have the system dynamics model identify the best management actions. Current analysis and optimization techniques used with system dynamics models are not capable of automatically determining which policies most nearly produce the desired system behavior. One emerging optimization technique, (GAs), offers great promise in automating the identification of the best policies for selected system goals.
The paper is divided into three sections. The first explains how genetic algorithms work. The second section demonstrates how GAs can be used to optimize system performance for a more complex model. The paper concludes with a discussion of the advantages and limitations of Gas as they relate to the needs of the system dynamics community.
Dynamics of Organizational Learning, An Axiomatic and Model Approach
Abstract: With computer tools that have recently become available, we can model, understand, and re-interpret many important concepts that habitually have had descriptive form. One of these concepts is organizational learning as presented by D. Schon and C. Argyris. Instead of searching for empirical evidences and applications of a single (simple learning) - and double learning (meta-learning) mechanism, the paper attempts to develop an axiomatic view of learning process exploring the model of Autonomous System - AS (by M. Mazur) as an organizational arquetype. Used as teaching instrument, the model linked with the system modeling and simulations has proved to be very stimulating effect and effective tool in the classroom.
Abstract: This paper presented a preliminary attempt
of bridging a gap existing traditional approach to solving public
administration problems and the System Dynamics perspective. The problem of
solid waste in
Abstract: A System Dynamics model specially built to
analyze energy policies in the Colombian industrial sector is presented. The
model allows to simulate two main aspects of industrial energy consumption:
line production and boilers. The
decision processes takes into account all energy alternatives and select the
most economic one. Decision are made based on economic terms where variables
such as investment, tariffs, energy consumption and maintenance are taken into
account. The model allows to examine several aspects such as: alternative on
technology diffusion, energy consumption growth and effects of pricing policies
on diverse energetic demands. The model was applied to the energy consumption
of the industrial sector in the Medellin Metropolitan Area,
Ricardo Sotaquira G, Jorge H
Panqueva, Hugo H Andrade S
Abstract: This paper presents a model in System Dynamics to estimate the economic incidence of the correction in the economy of a nation, in particular the Colombian case is studied. For the construction of the model, the Input-Output Analysis methodology is also used. The model disaggregates the national economy in economic sectors and allow for each one, to get their corrosion cost, and to estimate the economic benefit of control policies.
The simulation results, obtained through EVOLUTION for
windows software, indicate that corrosion cost in
P . Stoyanova, R Woodward,
M. Elliott. A O Moscardini
Abstract: In today’s highly competitive market, many organizations are uncertain of how to structure themselves. For maximum flexibility and effectiveness there is, for most organizations a need to accommodate change and to introduce innovative methods that will improve efficiency and quality. Managers are required to exhibits much more imagination than ever before. This paper uses the system approach to help managers consider corporate performance improvement through developing their imagination model.
A system Dynamics model of an existing non-traditional organization has been developed. The company considered had completely innovated its organizational structure into what is commonly termed a spaghetti organization as opposed to the traditional hierarchical organization.
The authors believe that there is a vast potential in using System Dynamics Approach for developing managers’ imagination model in the attempt to make a breakthrough for speed, quality and productivity; encouraging thinking the “unthinkable”.
Juergen Strohhecker
Abstract: Innovations are the drive for a company’s growth and contribute substantially to its competitiveness in a world of falling economical barriers. New products are to be invented, developed and introduced into the market if the success and existence of a company are to be preserved. Therefore it is not astonishing, that the explanation and forecast of the diffusion of innovations in a special market are a subject the management is vitally interested in.
Most of the model that are to support the difficult forecast of new product sales - among them the widely spread Bass model - are based on describing view of life-cycle of a product and generate s-shaped sales curves using only one single mathematical formula or maybe just a few. In these models the diffusion of new products seems to be predetermine by nature. The management only has to estimate the parameters had coefficients to forecast the cycle correctly.
This paper wants to present a different, a more individualistic and microanalytic point of view. Not the entire market, not the homogenous potential of the market is in the center of this model, but the single, individual protagonists of the market. Using the methods of object-oriented analysis (OOA), the relevant objects and there classes will identified, the characteristics and conduct will be examined and their relationship among each other will be laid open.
This way, an object-oriented model of the market is created, a model of which one of the most remarkable features is the very natural copying of reality. Therefore it contains a much higher grade of explanation, and it can be more easily implemented to an object-oriented programming language, which makes it usable for simulation. The first results will be introduced in the final chapter.
Johan Strumpfer, Tom Ryan
Abstract: The paper describes a programme in teaching
system thinking at the Graduate School of Business at the
The course itself is based on an action learning model, with self application a major mode of learning. Less emphasis is placed on the theoretical input, but students are required to invest significant effort in acquiring this through self study. The course makes extensive and explicit use of group work to structure and support the learning experience.
The course uses systems thinking to deal with general problem solving. The underlying methodology for problem solving used is one based on group inquiry, aimed at building up an appropriately rich and shared model of reality. The process of group learning is structured using Soft Systems Methodology and Systems Dynamics Modeling.
In the end the course is more about changing the way people think than about techniques. Some of the experiences relevant to this type of teaching is reflected on.
Stephan A Stumpf, Mary Anne
Watson, Hemant Rustogi
Abstract: For a practice field to be of greatest value in developing global leadership capability, it needs to be constructed so as to combine meaningful cultural and national issues with realistic interpersonal dynamics. This paper examines how two practice fields designed to facilitate systems thinking and organizational learning Foodcorp, International and Globalcorp accomplish this task. Both are management development tools called behavioral simulations (not computer simulations) each creates a realistic context, a micro world, for people to interact on business and global issues. Both can be used to: (1) surface cultural assumptions in a social business context where they can be observed, tracked, and discussed relative to various effectiveness criteria; (2) create a team capable of performing with a shared vision and common mental models; and (3) develop leaders who can create as well accommodate micro cultural norms.
Preliminary results using this practice field approach are
supportive of these objectives. A growing number of organizations (e.g., Apple
Computer, Citicorp, Dow Jones & Company, American Express, AT&T,
Northern Telecom, Glaxo) and educational institutions (e.g.,
Lees
Abstract: In the
The Creative Learning Exchange is a non-profit organization set up to encourage networking and curriculum sharing among teachers and schools who are using system dynamics in the classroom as well as those interested in initiating the process. Over the three years of our existence, this network has grown across forty states and into almost a dozen other countries.
Ann Taket, Leroy White
Abstract: Many commentators have pointed to changes in organizational practices and structures, with moves from hierarchy and centralization to decentralization and more democracy. There is an increased emphasis on local action and self-organization, rather than steep vertical structures. This paper responds to the challenge of looking at the relevance of the theory and practice of problem solving methodologies in this changing context. Within the framework provided by postmodernist and poststructuralist ideas, we draw on our work in the domain of community operational research (COR), working with a variety of groups in the voluntary sector. The voluntary sector is particularly relevant as it exemplifies the characteristics of the “new times”, with democratic and self-organizing groups, many of which operate at very local level.
In the paper we will approach the subject in the following three ways:
1. By scrutinizing the notion of problem ‘solving’ and suggesting that it might open a larger space for action and choice to recast this issue-structuring. This involves a move away from the notion of a singular optimum or best solution to exploring a range of possibilities.
2. By examining the nature of representation implicit in the notion of modeling, (as in systems dynamics and issue structuring methodologies), drawing on a reading of the ideas of Baudrillard.
3. By subverting the notions of the experts and expertise in practice. Here we demonstrate how the relationship between expert and client has shifted to encompass the idea that the client can be seen as the expert in context.
Daniel Thiel
Abstract: We have tackled the problem of teaching business logistics. Over vision and knowledge of the industrial world and particularly its logistics are obviously not the same as that of out graduate and post-graduate students without professional experiences. Therefore, our teaching difficulty consists in adopting the means of transferring knowledge to this specific public. How can system dynamics contribute to this knowledge transmission?
The originality of this paper consists in placing our training based on system dynamics concepts and tools, in relation to different traditional pedagogical doctrines and methods (attractive, interrogative, intuitive and active methods).
We present also a particularly analysis of different methods of formalizing knowledge in production-distribution system learning.
This study has led us to use management games even very limited ones, built by students themselves. This is the solution that we advocate in out approach to logistics using system dynamics.
R K Thurlby, J O Chang
Abstract: Value Processes are those high level processes which are critical to achieving an organization objectives. This paper describes the authors’ work in re-engineering a value process which was not working efficiently and causing serious problems to an important new business operation. Conventional process engineering tools were initially used and after these had failed to deliver significant improvement. The authors readdressed the problem using System Dynamics and the I-THINK modeling tool.
The authors’ experience of using System Dynamics are reported in detail, together with the results achieved. The models produced are described as is how system dynamics forced the authors to explore the processes beyond the boundaries identified by the conventional approach. It was in these new areas that the key to the problem lay and its solution lay. The problem was case of process invasion by the customer into the suppliers value process and the solution identified by simulating the i-THINK model lay in obliteration of element of the process. Finally, the authors comment on the relative merits of System Dynamics with conventional process engineering and describe their plans to continue investigation into other areas of value process.
Tomoyuki Todoroki, Yoshio
Hanzawa, Atsushi Fukuda
Abstract:
This has, however, made users pay additional travel time and cost, because Narita airport located in outlying area of TMA.
In this paper, the simulation model for multi-airports system is developed so as to know the answer for the question whether both airports can survive or one lose a demand after competition or cooperation. The model mainly consists of three bodies, namely air passengers, airlines and airports. Under the competition between two airports to get both domestic and international flights, share of air demand between two airports is calculated. Finally, key factors on the service, demand and management of a milt-airports system which are decided depending on the behavior of users, airlines and airports authorities, is defined by using this model.
Denis R Towill
Abstract: Modern manufacturing systems are expected to respond rapidly, effectively and efficiently to changes in the marketplace. Simultaneously there is the drive to achieve world class customer service levels coupled with minimum reasonable inventory (MRI). We thus have the classic conflict of interests between marketing off-the-shelf; production is still all-too-often looking to manufacture in economic batch quantities so as to achieve economies of scale; and the materials management is trying to minimize storage and distribution costs which in turn requires that a total systems MRI policy be adopted.
As reviewed in the paper the ground rules for effective manufacturing system design were co-incidentally established in 1961. Jay Forrester showed that medium period demand amplification was a system dynamics phenomenon which could be tackled by reducing and eliminating delays and the proper design of feedback loops. In parallel, via his “rules to avoid bankruptcy” and “laws of manufacturing systems”, John Burbidge showed that short period demand amplification was due to multi-phased, multi-period ordering policies.
Some thirty years later the work of both pioneers (which is conveniently summarized in the frequency domain) is still ignored at their peril by manufacturing industry. As an aid to fruitful exploitation of these ideas we describe their application to the analysis and design of a real world automotive spares supply chain and to a multi-product “to-make” ordering models which drives an MRP system to ensure that customers service level targets are met. Input-Output block diagrams were found to be particularly useful diagnostic tools for these projects.
Ann Van Ackere
Abstract: The aim of the national health Service (NHS) is to provide access to medical care to all. One of the challenges is to balance demand and resources while avoiding unduly waiting lists, either for treatment (the traditional waiting list phenomenon), or to see a practitioner. This note illustrated how Systems Thinking can contribute to the understanding of the complex of this issue, and to assess the impact of various policies. Systems thinking differs from traditional approaches in that it looks at the problem as a whole, as a system, and focuses on identifying key inter-relationships and feedback loops between different components of the system. We present three simple examples which illustrate the concepts of systems thinking, and indicate how this approach could be useful to analyze various policies.
Jac A M Vennix
Abstract: System dynamics is increasingly employed as a method to foster team learning in strategic decision making groups. Although only a full brown computer simulation model can reveal the dynamics of the system, in group model building the client organization is frequently satisfied with the construction of a conceptual (qualitative) model. In this paper a case is described in a Dutch government agency. Since people from different departments held strongly opposite viewpoints on the strategy, the agency had discussed its strategic problem for more than a year, but had obviously not been able to reach consensus. The group model-building process was successful in integrating opposite points of view, as well as in fostering consensus and creating commitment. Careful evaluation of the case shows that three factors might have been responsible for this: the role of systemic thinking, improvement of the quality of communication and finally the role of the facilitator.
D Vriens, E Philips
Abstract: In this paper we will develop a systemic framework for the description of organization by which we will define ‘organizational learning’ and ‘learning organization’. The framework will follow modern insights on system-theory and will be used to define and operate these concepts. In order to do this, first, a general framework for observing/defining systems will be introduced. This will follow the distinction between organization and structure of systems. Secondly, the general framework for defining systems will be used to define organizations. To this aim, the ‘organization/structure’ dichotomy will be further conceptualized according to social system-theory. Here, antipoetic, communication-oriented notion organization (Luhmann, 1988) will be used. A communication definition of organizations, however, does not suffice: a rationale for defining a ‘communicative whole’ as an organization should be given. These rationales are to be found in the perceived network of outputs and transformation of the organization to-be-defined. Finally, to an organization, defined as a communicative system, a number of properties might be attributed. Among these are learning (organizational learning and the learning organization), flexibility and anticipation. These concepts can be defined adequately within the developed framework. To conclude, it will be argued that the defined concepts of flexibility and anticipation contribute to the understanding of the learning capabilities of organizations. Therefore, these concepts may offer an increased understanding of learning and of how learning can be influenced. Consequently, this leads to an increased understanding of how organizations may gain viability.
Qifan Wang, Wang Huihua, Jin Yin, Wang Xianyong
Abstract: Chinese state-owned enterprises, which have
decades of expertise under planning economic system, have been inured to the
simple production function far from the market-oriented economy, the challenge
and influence they met are serve. Some experiences have been accumulated in the
past years reform, but how to make state-owned enterprises more vigorous is
still a critical problem that should be solved immediately. This article tries
to discuss how to apply the learning organization, a successful management
theory and method used in the Western Countries universally, to the
organization-constructing of Chinese state-owned enterprise so as to find out a
commonly effective means to envigor the enterprise. The characters and problems
of Chinese state-owned enterprises as well as the features of learning
organization applied in
Qifan Wang
Abstract: This paper revealed the main problems which
thwarted
Henry Birdsye Weil, Leon S White
Abstract: Internal and external forces beyond the control of management strongly influence the life-cycle characteristics of organizations. As a business moves, from infancy through adolescences to maturity and decline, the precepts for profit growth can change dramatically. Many corporations have become quite large and successful, only to ride and curve downward at the end a cycle. In the process, enormous amount of shareholder value are destroyed. Companies such as Wang and IBM are recent examples. Businesses that survive and succeed over the long-term must redefine or even reinvent themselves, not just once, but repeatedly. Imagining the next step is a big challenge. Implementing the transformation without permanently damaging the business is an even more complex strategic undertaking.
Drawing on a real and timely case, the authors explore a set of critical, interrelated issues pertaining to the process of business transformation. What are the key strategic considerations for managing the “end game” of your current core business? What are the major interdependencies between your current business and the one into which toy are transitioning? How can you maximize the transfer of business “assets” (including such intangibles as corporate reputation, customer loyalty and brand franchises) from the business of the past to the one of the future? What management policies might limit your growth in the new business area? How can you control the downside risks associated with corrections? The authors illustrate the use of computer simulation modeling to analyze these issues, provide a framework for debate among the senior executives of the company and facilitate strategic decisions.
Kim Warren
Abstract: A 1989 Monopolies Commission Inquiry into the supply of beer claimed that Tied retail distribution by brewers’ ownership of retail outlets (pubs) restricted consumer choice, excluding would-be competitors from brewing and retailing, and forcing up the retail price of beer. The inquiry recommended reducing large brewers’ ownership of pubs. This was intended enable new entry into retailing and production, reduce wholesale and retail beer prices, and extended consumer choice. However, a 1993 Government review found that the outcome had been largely the opposite of these aims, and a further serious consequence was the closure of large numbers of pubs and a sharp fall in their values.
These unintended consequences need to be understood if such outcomes are to be avoided in other cases, and firms need good models to help anticipate the effect of regulatory change and discover appropriate strategic responses. Since in this case there are complex interactions and feedback effects between three distant markets - (beer supply, pub retailing, and property) - models are needed that capture the dynamics of competition in each market as well as the interactions between them. This paper reports on the structure and results for a system dynamics model built to capture the growth of pub-owning firms, given different characteristics, incentives and behavior. This forms the basis of a further model for the licensed property market as a whole. Data was derived from the Inquiry report and discussions with industry executives, but all such data was available at the time of the original inquiry.
Preliminary results demonstrate the mechanisms by which firms grow chains of pubs and show how the impact on property values and numbers might be assessed. The model also demonstrates the broader value of applying a system dynamic methodology to researching issues of industry structure, strategic management and business policy.
Frederick P Wheeler
Abstract: The article aims to identify actions that will lead to an increased likelihood of managers adopting system dynamics. The specific purposes are:
-To explain how to implement successful information technology that supports managers.
-To identify the implications of adopting system dynamics as regular support software;
-To see if there is a need for system dynamics by examining how managers use information for decision-making.
Executive information systems are an example of information technology that is being used by managers. Lessons from the successful implementation of executive information systems are shown to be relevant and research on decision-making is used to show why managers need system dynamics. The main message is that system dynamics modeling needs to be done by internal support staff who actively adapt the support system to managers’ needs.
Leroy White, Tony Ackroyd, Michelle Blackeborough
Abstract: It is widely recognised that modelling organisational systems can be used to provide insights into the problems of an organization, and to induce learning about the context. The objectives are to increase the effectiveness of thinking about the situation, to enable a wide participation in the constructions of the models, and to allow an analysis that minimizes the need for opaque technical reasoning. It is important, therefore, in the training of future modelers on undergraduate and postgraduate courses, to appreciate the need to identify a system structure and behavior, without necessarily placing a strong emphasis on the underlying mathematics.
This paper describes how system dynamics was used to re-design a course on system modeling, with an emphasis on system dynamics. In the approach adopted, cognitive mapping in conjunction with drawing influence diagram helped to conceptualise and to think about the situation, and a workshop environment was adopted to design and analyze the model of the course.
In addition, the paper will discuss the nature of the modeling process, and the problems of the distinction between qualitative and quantitative forms of representation. Finally, conclusions will be given on the potential of system dynamics modeling in the education of System Analysis, modelers or Operational Researchers.
Phillip Wing, Mark Maloney
Abstract: Understanding, quantifying and realising the net benefits derived from Information Technology investments is becoming a complex and difficult management process.
A theoretical
framework for managing Information Technology investments has been developed by
the authors and applied to a process innovation initiative in the health sector
in
This paper details the background to the process innovation project, how a dynamic system approach was applied and the results of the case study.
The preliminary results confirm the conceptual robustness of the IT investment management framework and validated the practical use and application of a dynamic system approach within this framework.
Rolf Wolff, Olof Zaring
Abstract: This contribution draws from several research sources in order to develop on an organizational learning frame of reference towards ecological implementation in business companies. 1. It will demonstrate the necessity for companies to protect their production systems from over demands through the establishment of various legitimating functions in the company. 2. The paper will also show that rational decision making instruments (like capital investment planning) per se not adapt to ecological demands, but to the contrary hide the ecological decisions taken in the decision making process 3. Based on these empirical case studies we therefore can develop the organizational-learning-structure for ecological learning. The learning-issue is completed with the different modes of decision making in businesses (strategic choice, optimization, competition driven). Thus, this paper aims at overcoming the many myths regarding pressures posed on companies, both from the consultant community and different green pressure groups, by demonstrating that companies reactions (even defensive) are rational from the learning perspective.
Eric Wolstenholme
Abstract: Many approaches to change management have tended to focus on specific dimensions or functions of organisations at the expense of others. For example, there has been organisational analysis, strategic analysis and more recently business process analysis. Strategy, organisational structure and process are inextricably linked via information and delays and form a management ‘ecology’, where changes to any one of the elements have repercussion for all. This paper suggest that a balanced understanding of the organisational ecology is required to generate effective and appropriate planning and change which the author is currently using system dynamics modeling to assist change management. The paper is written to assist System Dynamics in bringing the role of System Dynamics as a change management tool to the attention of managers, at a time when there is much confusion about alternative approaches to analyzing organisational change.
Qingrui Xu, Jin Chen,
Shaoxia Chan, Jie Han
Abstract: The underpinning factor for one nation’s
sustainable development is the proper investment on environment conversation,
advanced countries spend 24% GNP on national environment conversation, but
China spends’ is only around 0.06.7% of GNP. Increasing the input on
environment conversation emphasize by Chinese Government and many scholars. In
this paper, based on the situation of environment conversation input in some
countries, the mechanism analysis on the relationship between environment,
economy, science & technology, education, population, we introduce a system
dynamics model to forecasting
Mike Young, Robert Bailey
Abstract: CORDA has developed SD models for the UK Ministry of Defense over several years. This paper survey a number of defense applications where Stella and iThink have been used, either directly to predict results for a study, to examine a concept, or to create a prototype which can be used to determine a functional specification.
Two of the models are described in more detail to illustrate how we overcame limitations either in the SD paradigm or in the current programs. This paper summarizes a number of “lessons learnt” which it is hoped will prove of relevance to other practitioners and which may influence future program developments.
Showing H Young, Sy-Feng Wang, Jenshou Yang
Abstract: Recent experimental studies in management flight simulators showed a dissociation between task performance and learning: subjects’ performance was significantly improved through practice, but very little deeper learning was detected. A theoretical framework is developed to explain the dissociation. That is, the cognitive strategies really used by subjects, e.g. Situations matching, feedback control and feed forward control are different from the normative cognitive strategy of mental model simulation expected by researchers. Methods to overcome the dissociation are suggested and demonstrated by two experimental studies. Based on the discussion and the experimental results, we found that considerations of cognitive strategies and task salience are very important dimensions for designing effective learning environment of management flight simulators.
William E Youngdahl, Russell W Wright, Lillian C Wright
Abstract: Most, if not all, descriptions of process reengineering reply on the notion of translating the voice or satisfaction is criteria of the customer into a redesigned chain of value-adding business processes. While customer satisfaction is critical to business success, the tactical process of designing process to satisfy current customers may still overlook long-term strategic considerations. If managers are unable to see beyond current customer requirement, they will miss the opportunities that require new combinations of knowledge and skill.
We suggest that quality function deployment provides a
framework for considering a variety of strategic criteria and translating these
criteria into well integrated business processes. The “House of Quality” used
in the QFD process maps customer quality criteria to design and functional
activities and includes benchmarking of competitors’ customers satisfaction and
technical performance. We will demonstrate that the house of quality can be
used to match competitor best practices with a firm’s desired competencies and
business process purposes. This model successfully integrates QFD and Business
Process Reengineering with a knowledge-based view of the firm.
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