Strategic Management via System Dynamics Simulation Models

Authors: G. Papageorgiou, A. Hadjis

Abstract:

This paper examines the problem of strategic management in highly turbulent dynamic business environmental conditions. As shown the high complexity of the problem can be managed with the use of System Dynamics Models and Computer Simulation in obtaining insights, and thorough understanding of the interdependencies between the organizational structure and the business environmental elements, so that effective product –market strategies can be designed. Simulation reveals the underlying forces that hold together the structure of an organizational system in relation to its environment. Such knowledge will contribute to the avoidance of fundamental planning errors and enable appropriate proactive well focused action.

Keywords: Strategic Management, System Dynamics, Modelingand Simulation, Strategic Planning, Organizational Dynamics

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1082159

References:

[1] Stafford Beer, (1972),Brain of the Firm; Allen Lane, The Penguin Press
[2] Donella H. Meadows, Dennis L. Meadows, Jorgen Randers & William W. Behrens, Limits to Growth, Potomac Associates, New York, 1972
[3] Herman E. Daly, Joshua Farley (2011) Ecological Economics: Principles and Applications, Island Press, USA.
[4] Sterman, J., All Models are Wrong: Reflections on Becoming a Systems Scientist: 2002 Jay W. Forrester Award Address, System Dynamics Review, 18(4) 2002, pp. 501-531.
[5] Ker Than, Particles Moved Faster Than Speed of Light?, National Geographic Daily News, September 23, 2011
[6] Barlas, Y. & Carpenter, S. Philosophical roots of model validation: Two paradigms, System Dynamics Review, 6, 1990, pp. 148-166.
[7] Hadjis, A. & Papageorgiou, G., Combining Relativism with Logic and Empirical Knowledge: Integration of PIMS with System Dynamics for Formulating Effective Strategies, Proceedings of the 24th System Dynamics Conference, 2006.
[8] Meadows D.H. and J. Robinson, The Electronic Oracle: Computer Models and Social Decisions, John Wiley & Sons, Chichester, 1985.
[9] Forrester, J., Industrial Dynamics, Cambridge, Massachusetts: M.I.T. Press, 1961.
[10] Gomez, P (1981), Modelle und Methoden des systemorientierten Managements, Haupt, Bern/ Stuttgart
[11] Senge, P., The Fifth Discipline. The Art and Practice of the Learning Organization, New York, Doubleday Currency, 1990.
[12] Warren Kim, Strategic Management Dynamics, 2008, Wiley: New York.
[13] Morecroft John, (2007), Strategic modelling and business dynamics: a feedback systems approach, John Wiley and Sons
[14] Warren Kim, Improving strategic management with the fundamental principles of system dynamics, 2006, System Dynamics Review, 21(4), 329 - 350.
[15] Warren Kim, Why has feedback systems thinking struggled to influence strategy and policy formulation? 2004, Systems Research and Behavioral Science, 21(4), 331 - 347.