System Dynamics and Corporate Strategy


******** Every organization is a system * It has a life just like a human being * Some have complex lives while others have simple lives Some have very developed life paths while others take a lot of time to develop their life paths * A group of interacting, interrelated, and interdependent elements forming a complex whole * A configuration of parts connected and joined together by a web of relationships * The whole is different from, and greater than, the sum of its parts * Just like a human being firms have various operational parts * In some cases these may be called departments while in others they come in various other names * All parts must have capacity to function with each other seamlessly and efficiently * All parts of an organization are interconnected * When we look at the components of a firm in whole we see a system * The system must operate within a functioning structure * The interface between organizational components for the purpose of task performance and goal achievement determines the level of system efficiency * The structure may be seen as the hardware while the system is seen as the soft ware The following questions are important * Does the firm understand its vision, mission and strategic objectives? * Does the firm the right resource items? * Are the resource items of a competent nature? Are they adequate? Does the firm have a mechanism to optimize the interface of various resource items? * Is the structure right? * Does the firm have an understanding of its external environment? * A way of understanding reality that emphasizes the relationships among a system’s parts, rather than the parts themselves. * Concerned about interrelationships among parts and their relationship to a functioning whole * Sees underlying patterns and structures * Complexity theory: complex adaptive systems; semi-independent, interacting agents; self-organization; emergence; nonlinearity; co-evolution; past is irreversible; future is unpredictable * Learning systems: the way that people learn and the systems in which they learn

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