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

Book Description

Insightful modelling of dynamic systems for better business strategy

The business environment is constantly changing and organisations need the ability to rehearse alternative futures. By mimicking the interlocking operations of firms and industries, modelling serves as a 'dry run' for testing ideas, anticipating consequences, avoiding strategic pitfalls and improving future performance.

Strategic Modelling and Business Dynamics is an essential guide to credible models; helping you to understand modelling as a creative process for distilling and communicating those factors that drive business success and sustainability. Written by an internationally regarded authority, the book covers all stages of model building, from conceptual to analytical. The book demonstrates a range of in-depth practical examples that vividly illustrate important or puzzling dynamics in firm operations, strategy, public policy, and everyday life.

This updated new edition also offers a rich Learners' website with models, articles and videos, as well as a separate Instructors' website resource, with lecture slides and other course materials (see Related Websites/Extra section below). Together the book and websites deliver a powerful package of blended learning materials that:

  • Introduce the system dynamics approach of modelling strategic problems in business and society

  • Include industry examples and public sector applications with interactive simulators and contemporary visual modelling software

  • Provide the latest state-of-the-art thinking, concepts and techniques for systems modelling

  • The comprehensive Learners' website features models, microworlds, journal articles and videos. Easy-to-use simulators enable readers to experience dynamic complexity in business and society. Like would-be CEOs, readers can re-design operations and then re-simulate in the quest for well-coordinated strategy and better performance. The simulators include a baffling hotel shower, a start-up low-cost airline, an international radio broadcaster, a diversifying tyre maker, commercial fisheries and the global oil industry.

    "Much more than an introduction, John Morecroft's Strategic Modelling and Business Dynamics uses interactive 'mini-simulators and microworlds' to create an engaging and effective learning environment in which readers, whatever their background, can develop their intuition about complex dynamic systems."

    John Sterman, Jay W. Forrester Professor of Management, MIT Sloan School of Management

    "Illustrated by examples from everyday life, business and policy, John Morecroft expertly demonstrates how systems thinking aided by system dynamics can improve our understanding of the world around us."

    Stewart Robinson, Associate Dean Research, President of the Operational Research Society, Professor of Management Science, School of Business and Economics, Loughborough University

    Table of Contents

    1. About the Author
    2. Foreword by Peter Checkland
    3. Preface to the Second Edition
      1. Notes
    4. Preface from the First Edition
      1. Manufacturing Dynamics and Information Networks
      2. Bounded Rationality and Behavioural Decision Making
      3. Modelling for Learning
      4. The Dynamics of Strategy
      5. Soft Systems and Complementary Modelling Methods
      6. Notes
    5. How to Use This Book
      1. MBA and Modular/Executive MBA
      2. Non-Degree Executive Education
      3. Undergraduate and Specialist
      4. Notes
    6. Chapter 1 The Appeal and Power of Strategic Modelling
      1. Introduction
      2. A New Approach to Modelling
      3. The Puzzling Dynamics of International Fisheries
      4. Model of a Natural Fishery
      5. Operating a Simple Harvested Fishery
      6. Preview of the Book and Topics Covered
      7. Appendix – Archive Materials from World Dynamics
      8. Notes
      9. References
    7. Chapter 2 Introduction to Feedback Systems Thinking
      1. Ways of Interpreting Situations in Business and Society
      2. A Start on Causal Loop Diagrams
      3. Structure and Behaviour Through Time – Feedback Loops and the Dynamics of a Slow-to-Respond Shower
      4. From Events to Dynamics and Feedback – Drug-related Crime
      5. Purpose of Causal Loop Diagrams – A Summary
      6. Feedback Structure and Dynamics of a Technology-based Growth Business
      7. Causal Loop Diagrams – Basic Tips
      8. Causal Loop Diagram of Psychological Pressures and Unintended Haste in a Troubled Internet Start-Up
      9. Notes
      10. References
    8. Chapter 3 Modelling Dynamic Systems
      1. Asset Stock Accumulation
      2. The Coordinating Network
      3. Modelling Symbols in Use: A Closer Look at Drug-related Crime
      4. Equation Formulations
      5. Experiments with the Model of Drug-related Crime
      6. Benefits of Model Building and Simulation
      7. Notes
      8. References
    9. Chapter 4 World of Showers
      1. Getting Started
      2. Redesigning Your World of Showers
      3. Inside World of Showers
      4. Simulations of World of Showers B
      5. Notes
      6. References
    10. Chapter 5 Cyclical Dynamics and the Process of Model Building
      1. An Overview of the Modelling Process
      2. Employment and Production Instability – Puzzling Performance Over Time
      3. Equation Formulations and Computations in Production Control
      4. Modelling Workforce Management and Factory Production Dynamics
      5. Equation Formulations in Workforce Management
      6. Chronic Cyclicality in Employment and Production and How to Cure It
      7. Modelling for Learning and Soft Systems
      8. Appendix 1: Model Communication and Policy Structure Diagrams
      9. Appendix 2: The Dynamics of Information Smoothing
      10. Notes
      11. References
    11. Chapter 6 The Dynamics of Growth from Diffusion
      1. Stocks and Flows in New Product Adoption – A Conceptual Diffusion Model
      2. The Bass Model – An Elegant Special Case of a Diffusion Model
      3. A Variation on the Diffusion Model: The Rise of Low-cost Air Travel in Europe
      4. Strategy and Simulation of Growth Scenarios
      5. Conclusion
      6. Appendix: More About the Fliers Model
      7. Notes
      8. References
    12. Chapter 7 Managing Business Growth
      1. A Conceptual Model of Market Growth and Capital Investment
      2. Formulation Guidelines for Portraying Feedback Structure
      3. An Information Feedback View of Management and Policy
      4. Policy Structure and Formulations for Sales Growth
      5. Policy Structure and Formulations for Limits to Sales Growth
      6. Policy Structure and Formulations for Capital Investment
      7. Simulation Experiments
      8. Redesign of the Investment Policy
      9. Policy Design, Growth and Dynamic Complexity
      10. Conclusion
      11. Appendix – Gain of a Reinforcing Loop
      12. Notes
      13. References
    13. Chapter 8 Industry Dynamics – Oil Price and the Global Oil Producers
      1. Problem Articulation – Puzzling Dynamics of Oil Price
      2. Model Development Process
      3. A Closer Look at the Stakeholders and Their Investment Decision Making
      4. Connecting the Pieces – A Feedback Systems View
      5. A Simple Thought Experiment: Green Mindset and Global Recession
      6. Using the Model to Generate Scenarios
      7. Devising New Scenarios
      8. Endnote: A Brief History of the Oil Producers' Project
      9. Note
      10. References
    14. Chapter 9 Public Sector Applications of Strategic Modelling
      1. Urban Dynamics – Growth and Stagnation in Cities
      2. Medical Workforce Dynamics and Patient Care
      3. Fishery Dynamics and Regulatory Policy
      4. Conclusion
      5. Appendix – Alternative Simulation Approaches
      6. Notes
      7. References
    15. Chapter 10 Model Validity, Mental Models and Learning
      1. Mental Models, Transitional Objects and Formal Models
      2. Models of Business and Social Systems
      3. Tests for Building Confidence in Models
      4. Model Confidence Building Tests in Action: A Case Study in Fast-moving Consumer Goods
      5. Model Structure Tests and the Soap Industry Model
      6. Equation Formulation Tests and the Soap Industry Model
      7. Tests of Learning from Simulation
      8. Summary of Confidence Building Tests
      9. Conclusion – Model Fidelity and Usefulness
      10. Endnote: The Loops of Feedback
      11. Notes
      12. References
    16. About the Website Resources
    17. Index
    18. EULA