Strategic Modelling and Business Dynamics: A Feedback Systems Approach

8.4. Connecting the Pieces – A Feedback Systems View

As we have seen, the project team supplied their knowledge and opinions on the pieces of the global oil industry. Now let's see how the pieces fit together. Figure 8.15 shows the main concepts necessary to describe the industry. Take a few minutes to inspect this scatter list of words and phrases. Altogether, there are 37 phrases on the page which record shared vocabulary developed from team dialogue. Some phrases are specialised industry jargon such as intended marker price, call on OPEC, agreed quota, negotiated quota, and cartel quota bias. As a list for describing a large and complex industry it is short, but as nodes of a web it is quite daunting. Potentially, there is an enormous number of ways to connect 37 concepts. In fact, the team's knowledge of industry structure greatly reduced the raw combinatorial problem. The modelling process pinned down, with some confidence, eight feedback loops that capture (at least for team members) the essence of the industry's enduring feedback structure and the basis of its dynamic complexity.

Figure 8.15. Scatter list of phrases describing the global oil industry

8.4.1. Two Invisible Hands and More

Figure 8.16 shows six feedback loops within and between the independents' and market sectors. (By the way, you can create your own industry web by photocopying Figure 8.15 and then drawing ...