Strategic Modelling and Business Dynamics: A Feedback Systems Approach

7.3. An Information Feedback View of Management and Policy

The market growth model embodies the essence of the information feedback view of the firm. There is more to this view than feedback loops, stocks and flows – important though they are. There is also an underlying philosophy about management and policy (in all areas of business and society), which I want to reflect on now before developing the model any further. A good place to start is with Forrester's original comments about the craft of management. In his seminal book Industrial Dynamics (Forrester, 1961, p 93) he describes management as the process of converting information into action.

If management is the process of converting information into action, then management success depends primarily on what information is chosen and how the conversion is executed. Moreover the difference between a good manager and a poor manager lies right at this point between information and action.

The viewpoint is cognitive but also action oriented. As Forrester (1994, p 51) goes on to explain:

A manager sets the stage for action by choosing which information sources to take seriously and which to ignore. A manager's success depends on both selecting the most relevant information and on using that information effectively. How quickly or slowly is information converted into action? What is the relative weight given to different information sources in light of desired objectives? How are these desired objectives created from available ...