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Strategic Modelling and Business Dynamics: A Feedback Systems Approach

Book Description

John Morecroft's book is an ideal text for students interested in system modelling and its application to a range of real world problems. The book covers all that is necessary to develop expertise in system dynamics modelling and through the range of applications makes a persuasive case for the power and scope of the approach. As such it will appeal to practitioners as well as students.

Robert Dyson, Professor of Operational Research, Associate Dean, Warwick Business School.

Much more than an introduction, John Morecroft's Strategic Modelling and Business Dynamics uses interactive "management flight simulators" to create an engaging and effective learning environment in which readers, whatever their background, can develop their intuition about complex dynamic systems. The numerous examples provide a rich test-bed for the development of systems thinking and modelling skills

John Sterman, Jay W. Forrester Professor of Management, MIT Sloan School of Management

This book, with its vivid examples and simulators, will help to bring modelling, system dynamics and simulation into the mainstream of management education where they now belong.

John A. Quelch, Professor of Marketing, Harvard Business School, Former Dean of London Business School

This text fills the gap between texts focusing on the purely descriptive systems approach and the more technical system dynamics ones.

Ann van Ackere, Professor of Decision Sciences, HEC Lausanne, Universit? de Lausanne

Strategic modelling based on system dynamics is a powerful tool for understanding how firms adapt to a changing environment. The author demonstrates the appeal and power of business modelling to make sense of strategic initiatives and to anticipate their impacts through simulation. The book offers various simulators that allow readers to conduct their own policy experiments.

Dr. Erich Zahn, Professor of Strategic Management, Betriebswirtschaftliches Institut, University of Stuttgart

A website to accompany the book can be found at housing supplementary material for both students and lecturers.

Table of Contents

  1. Copyright
  2. Dedication
  3. About the Author
  4. Foreword
  5. Preface and Acknowledgments1
  6. How to Use This Book
  7. The Appeal and Power of Strategic Modelling
    1. Introduction1
    2. A New Approach to Modelling
    3. The Puzzling Dynamics of International Fisheries
    4. Model of a Natural Fishery
    5. Operating a Simple Harvested Fishery
    6. Preview of the Book and Topics Covered
    7. Appendix - Archive Materials from World Dynamics
    8. References
  8. Introduction to Feedback Systems Thinking
    1. Ways of Interpreting Situations in Business and Society
    2. A Start on Causal Loop Diagrams
    3. Structure and Behaviour Through Time - Feedback Loops and the Dynamics of a Slow-to-respond Shower
    4. From Events to Dynamics and Feedback – Drug-related Crime
    5. Purpose of Causal Loop Diagrams – A Summary
    6. Feedback Structure and Dynamics of a Technology-based Growth Business
    7. Causal Loop Diagrams – Basic Tips
    8. References
  9. Modelling Dynamic Systems
    1. Asset Stock Accumulation
    2. The Coordinating Network
    3. Modelling Symbols in Use: A Closer Look at Drug-related Crime
    4. Equation Formulations
    5. Experiments with the Model of Drug-related Crime
    6. Benefits of Model Building and Simulation
    7. References
  10. World of Showers
    1. Getting Started
    2. Redesigning Your World of Showers
    3. Inside World of Showers
    4. Simulations of World of Showers B
    5. References
  11. Cyclical Dynamics and the Process of Model Building
    1. An Overview of the Modelling Process
    2. Employment and Production Instability – Puzzling Performance Over Time
    3. Equation Formulations and Computations in Production Control
    4. Modelling Workforce Management and Factory Production Dynamics
    5. Equation Formulations in Workforce Management
    6. Chronic Cyclicality in Employment and Production and How to Cure It
    7. Modelling for Learning and Soft Systems
    8. Appendix 1: Model Communication and Policy Structure Diagrams
    9. Appendix 2: The Dynamics of Information Smoothing
    10. References
  12. The Dynamics of Growth from Diffusion
    1. Stocks and Flows in New Product Adoption– A Conceptual Diffusion Model
    2. The Bass Model – An Elegant Special Case of a Diffusion Model
    3. A Variation on the Diffusion Model: The Rise of Low-cost Air Travel in Europe
    4. Strategy and Simulation of Growth Scenarios
    5. Conclusion
    6. Appendix: More About the Fliers Model
    7. References
  13. Managing Business Growth
    1. A Conceptual Model of Market Growth and Capital Investment
    2. Formulation Guidelines for Portraying Feedback Structure
    3. An Information Feedback View of Management and Policy
    4. Policy Structure and Formulations for Sales Growth
    5. Policy Structure and Formulations for Limits to Sales Growth
    6. Policy Structure and Formulations for Capital Investment
    7. Simulation Experiments
    8. Redesign of the Investment Policy
    9. Policy Design, Growth and Dynamic Complexity
    10. Conclusion
    11. Appendix – Gain of a Reinforcing Loop
    12. References
  14. Industry Dynamics – Oil Price and the Global Oil Producers
    1. Problem Articulation – Puzzling Dynamics of Oil Price
    2. Model Development Process
    3. A Closer Look at the Stakeholders and Their Investment Decision Making
    4. Connecting the Pieces – A Feedback Systems View
    5. A Simple Thought Experiment: Green Mindset and Global Recession
    6. Using the Model to Generate Scenarios
    7. Devising New Scenarios
    8. The Oil Producers' Microworld
    9. References
  15. Public Sector Applications of Strategic Modelling
    1. Urban Dynamics – Growth and Stagnation in Cities
    2. Medical Workforce Dynamics and Patient Care
    3. Fishery Dynamics and Regulatory Policy
    4. Conclusion
    5. Appendix – Alternative Simulation Approaches
    6. References
  16. Model Validity, Mental Models and Learning
    1. Mental Models, Transitional Objects and Formal Models
    2. Models of Business and Social Systems
    3. Tests for Building Confidence in Models
    4. Model Confidence Building Tests in Action: A Case Study in Fast-moving Consumer Goods
    5. Model Structure Tests and the Soap Industry Model
    6. Equation Formulation Tests and the Soap Industry Model
    7. Tests of Learning from Simulation
    8. Summary of Confidence Building Tests
    9. Conclusion – Model Fidelity and Usefulness
    10. References
  17. Index