Business Dynamics: Systems Thinking and Modeling for a Complex World with CD-ROM
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Today’s leading authority on the subject of this text is the author, MIT Standish Professor of Management and Director of the System Dynamics Group, John D. Sterman. Sterman’s objective is to explain, in a true textbook format, what system dynamics is, and how it can be successfully applied to solve business and organizational problems. System dynamics is both a currently utilized approach to organizational problem solving at the professional level, and a field of study in business, engineering, and social and physical sciences.
Mental models are widely discussed in psychology and philosophy. Different theorists describe mental models as collections of routines or standard operating procedures, scripts for selecting possible actions, cognitive maps of a domain, typologies for categorizing experience, logical structures for the interpretation of language, or attributions about individuals we encounter in daily life (Axelrod 1976; Bower and Morrow 1990; Cheng and Nisbett 1985; Doyle and Ford 1998; Gentner and Stevens 1983;
cannot put managers up on the lab bench and run experiments to determine their transfer function or frequency response. We believe all electrons follow the same laws of physics, but we cannot assume all people behave in the same way. Besides a solid grounding in the mathematics of dynamic systems, modeling human systems requires us to develop our knowledge of psychology, decision malung, and organizational behavior. Finally, mathematical analysis, while necessary, is far from sufficient for
the client make decisions? Use the model to set priorities and determine the sequence of policy implementation. Use the model to answer the question, How do we get there from here? Carefully consider the real world issues involved in pulling various policy levers. Quantify the full range of costs and benefits of policies, not only those already reported by existing accounting systems. 6. Modeling works best as an iterative process of joint inquiry between client and consultant. Modeling is a
(1991), Morecroft and Sterman (1994), Vennix (1996), and Vennix et al. (1997) provide good overviews of tools and techniques to elicit and capture the mental models of teams and client groups. 96 Part I Perspective and Process there are in fact any important feedbacks from the endogenous elements to the candidate. If so, the boundary of the model must be expanded and the variable must be modeled endogenously. The consequences of narrow model boundaries and reliance on exogenous variables are
above what it would have been, and a decrease in the fractional birth rate means the birth rate will fall below what it would have been. That is, if average fertility rises, the birth rate, given the population, will rise; if fertility falls, the number of births will fall. When the cause is a rate of flow that accumulates into a stock then it is also true that the cause adds to the stock. In the example, births add to the population (see chapter 6 for more on stocks and flows). A negative link