This course introduces you to system dynamics modeling for the analysis of business policy and strategy. Modeling helps you understand the ways in which an organization's performance relates to its internal structure, its operating policies, and external influences. In this course you will learn to:
- Visualize a business organization in terms of the structures and policies that create dynamics and regulate performance;
- Recognize and deal with situations where policy interventions are likely to be delayed, diluted, or defeated by unanticipated reactions and side effects.
- Use state of the art software for computer simulation and gaming.
No prior computer modeling experience is needed.
Why do so many business strategies fail? Why do so many others fail to produce lasting results? Why do many businesses suffer from periodic crises, fluctuating sales, earnings, and morale? Why do some firms grow while others stagnate? How do once-dominant firms lose their competitive edge? How can a firm identify and design high-leverage policies, policies that are not thwarted by unanticipated side effects? Accelerating economic, technological, social, and environmental change challenge managers to learn at increasing rates.
We must increasingly learn how to design and manage complex systems with multiple feedback effects, long time delays, and nonlinear responses to our decisions. Yet learning in such environments is difficult precisely because we never confront many of the consequences of our most important decisions. Effective learning in such environments requires methods to develop systems thinking, to represent and assess such dynamic complexity – and tools managers can use to accelerate learning throughout an organization.
Class sessions combine lectures, interactive exercises, group presentations and discussions. The diversity of approaches seek to enhance students’ technical, decision-making, problem-solving, and practical skills. To achieve these goals in an effective way, it is important to engage in and prepare for discussion; participate actively during class discussions; and review readings and assignments for their applicability of concepts covered in class
We recommend class attendance to be at least 75% of in-presence classes.
Assignments: 50% (5 highest grades out of 6 assignments – 10% each)
Final exam: 50%
Sterman, J. (2000). Business Dynamics: Systems Thinking and Modeling for a Complex World (Text and CD-ROM). Irwin/McGraw Hill. ISBN 0-07-238915X.
We will use the Vensim Personal Learning Edition (VensimPLE) software by Ventana Systems. VensimPLE is free for academic use. You can download VensimPLE from www.vensim.com/download/