Abstract for: Complexity Handling with System Dynamics and effect of human factors on value creation- Case study of a diversified company
In this article we provide an overview of the how “Value” in business can be captured by handling complexity. We will focus on variables governed by market based assets and how these are critical to sustainable business for creating value. Value has many interpretations like Character, Work, Personal, or Economic value. It signifies both quantitative and qualitative dimensions. We will refer “value” as shareholder value and how this can be managed. System Dynamics was introduced by JW Forester in the1950’s at MIT Sloan. The power of this methodology can only be understood when applied to the value chain of human aspects and correlate these to enable business decisions. The paper presents a case study debt ridden company decides which business areas to focus on based on human factors. It elaborates the external environment like industry, market, competitors and the internal variables like business portfolio and margins with their fulcrum at human factors like comfort zone, leadership qualities, employee satisfaction and brand loyalty. The objective is to place a schema to further develop a model of system dynamics to study this complex organization.