Strategic Modelling and Business Dynamics: A feedback systems approach, + Website, 2nd Edition

Foreword by Peter Checkland

When I was a manager in the synthetic fibre industry in the 1950s and 60s, there was a recognised but problematical pattern of activity in the textile industry. A small increase in demand for textile products would induce big ups and downs back in yarn and fabric production. This arose as a result of the structure of the production-to-retail chain, a sequence from fibre to yarn to fabric to products, these being stages in the hands of different companies between which were time delays. This recurring pattern of response to demand change was one which no one stakeholder could command and control.

Many areas of human activity reveal dynamics of this type, with several classic patterns of behaviour: exponential growth or decline; oscillation; S-shaped growth; growth followed by collapse, etc.

John Morecroft's textbook is a brilliantly clear guide to elucidating and modelling such patterns of behaviour. The modelling is normally a team effort based on both real-world experience of the area and the principles of system dynamics. Such modelling seeks to reveal enduring feedback structures (both balancing and reinforcing) which are real characteristics of the situation in question but are normally hidden. Once developed, such models are ‘instruments for investigation, clarification and discovery’, and can be used to feed better evidence into discussion of strategy than does the reliance on experience and gut feel, which is the common mode of managing.