Strategic Modelling and Business Dynamics. Morecroft John D.

about the need to conserve stocks. When the fish population falls to half the maximum (fish density equal to 0.5) the marine biologist argues that stocks are too low. But the fisherman reports (accurately) there is no difficulty catching fish, so what's the problem? In all likelihood, the fisherman thinks the fish stock is actually higher than the marine biologist's estimate. The biologist is exaggerating the problem, or so it seems to someone whose livelihood depends directly on the catch. When the fish population falls to one-quarter of the maximum (fish density equal to 0.25) the marine biologist is frantic and even the fisherman is beginning to notice a reduction in the catch, down by about one-third relative to normal. That outcome, though worrying, is not obviously fatal. Perhaps with a bit more effort and luck the poor catch can be rectified, and why believe the marine biologist now, when he/she was seemingly so wrong and alarmist before? The non-linearity creates confusion in the attribution of causality – what causes what in the system – and such confusion is a typical symptom of dynamic complexity.

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      Please see the About the Website Resources section at the back of the book.

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      The articles are reproduced with permission of MIT's Technology Licensing Office. They come from a special DVD archive collection of all the working papers and PhD theses in the D-memo series of MIT's System Dynamics Group, covering a period of almost 50 years, starting in the early 1960s. In total the collection contains around five thousand articles, originally printed on paper, which have each been scanned to create electronic pdf files. Copyright of the entire collection resides w

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Please see the About the Website Resources section at the back of the book.

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The articles are reproduced with permission of MIT's Technology Licensing Office. They come from a special DVD archive collection of all the working papers and PhD theses in the D-memo series of MIT's System Dynamics Group, covering a period of almost 50 years, starting in the early 1960s. In total the collection contains around five thousand articles, originally printed on paper, which have each been scanned to create electronic pdf files. Copyright of the entire collection resides with MIT and the DVD is available from the System Dynamics Society www.system dynamics.org.

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Full details of articles and books referred to in the Preface can be found in later chapters by cross-referencing with author names in the index.

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See also a guest lecture I delivered at WPI in 2009 entitled ‘Reflections on System Dynamics and Strategy’. It can be found on the Learners' website in a folder entitled ‘A Glimpse of Learning Phases in the Preface’. The same lecture can also be viewed on YouTube by searching under ‘System Dynamics and Strategy’.

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A spinning gyroscope is ‘dynamically complex’ and is therefore a good visual metaphor to signal the simulation of dynamics in business and society. A gyroscope behaves in surprising ways. For example, when prodded on its top-most point it moves at right angles to the direction of the push; a counter-intuitive response. A gyroscope is also self-balancing. It stands on a pointed-end, like an upright pencil. Yet instead of falling over, as might be expected, it appears to defy gravity by remaining upright with its axis horizontal; again a counter-intuitive response.

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Over the years Strategic Modelling has also been taught by Ann van Ackere, Shayne Gary and Scott Rockart, who each brought their own interpretations to the core materials. My thanks to them for the innovations and refinements they introduced.

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The introduction contains edited extracts from my 2000 paper, `Creativity and Convergence in Scenario Modelling'.

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The same idea of limited ability to control situations applies to firms in competitive industries and, to some extent, to business units and functional areas inside corporations and firms. Management teams can devise strategy (the intended strategy), but a whole organisation stands between their ideas and resulting action, so the implemented strategy is often different than intended. The levers of power are only loosely connected to operations.

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Modelling can be controversial. World Dynamics was and still is a thought-provoking model, a potent catalyst for political debate and an instrument for serious policy making. It was also a focus of learned criticism about the nature and use of modelling and simulation in the social sciences. Quotations from the press and academic literature at the time convey the impact, both positive and negative, of the model on opinion leaders: ‘This is likely to be one of the most important documents of our age …’, New York Times; ‘There are too many assumptions that are not founded, and there is too high a level of aggregation in the model’, Science; ‘This year will not see the publication of a more important book than Forrester's World Dynamics, or a book more certain to arouse dislike’, Fortune; ‘This is a piece of irresponsible nonsense, a publicity stunt … extremely simplistic, given the current state of knowledge in the social sciences’, economists from Yale. Notice the sharp division of opinion on the scope, size, adequacy and usefulness of the model. The serious press thinks the work is important for its readers and worthy of policymakers' attention. Academics question the model's apparent simplicity. Not surprisingly judgements vary about the complexity and accuracy required of models (or even ideas and theories) for them to offer useful guidance to business and society. Modellers need to strike a careful balance.

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Clover describes the poignant scene at Lowestoft in recent years: the unrepaired doorways and shabby 1930s office buildings on the seafront, symbols of economic collapse. This town was once among England's greatest fishing ports, famous the world over, with a history spanning 600 years.

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The diagram was created in the popular iThink language (isee systems, 2014). The symbols are pretty much standard for all system dynamics models, though there are differences of detail between the main alternative modelling software packages. Here, in Chapter 1, I briefly explain each symbol when I first refer to it in the text. Later, in Chapter 3, there is a more formal introduction to modelling symbols and equations, with a fully documented example.

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Interestingly, some people dispute the existence of this circularity. They argue that the number of juveniles reaching fishable size each year has nothing to do with the number of parents in the sea because fish such as cod can produce upwards of seven million eggs in a season – most of which perish due to predation and environmental factors. However, the number of fish eggs is certainly related to the population of fish.