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Systems Thinking, System Dynamics

Second edition Chapter 1

Introducing Systems Thinking


Maani and Cavana

Lecturers Guide to Systems Thinking, System Dynamics 2e

Pearson Education New Zealand 2008

Chapter objectives
After studying this chapter, students should have a better understanding of the following topics:
Why we need a new way of thinking A brief history of management thought The need for systems thinking in complex world Origins of systems thinking and system dynamics What is a system What is systems thinking Principles of systems thinking Linear vs systems thinking

Lecturers Guide to Systems Thinking, System Dynamics 2e

Pearson Education New Zealand 2008

Why do we need Systems Thinking ?


Increasing complexity in the world
and in personal lives. Growing interdependence of the world. Critical need for change in management and leadership theories and practice. Mutual interdependence of global and local thinking and actions. Increasing recognition of a common heritage and destiny for mankind.
Lecturers Guide to Systems Thinking, System Dynamics 2e Pearson Education New Zealand 2008

A brief history of management thought


Newton viewed the world as a machine that was created to serve its master God (Ackoff, 1993). This mechanistic view of the world was developed during the Renaissance and based on three fundamental beliefs (Ackoff, 1993):complete understanding of the universe is possible. the world can be understood through analysis (breaking the whole into pieces and examine the parts separately). all relationships can be described through linear cause-andcause-and-effect.
Lecturers Guide to Systems Thinking, System Dynamics 2e Pearson Education New Zealand 2008

Mechanistic view of the world


Correlates strongly with prevailing concepts of:
hierarchy and control stability, certainty and the absolute isolated, separate and interchangeable parts relationships based on conflict and confrontation a single point of view the specialist expertise.

(Zohar and Marshal, 1994: 2528)


Lecturers Guide to Systems Thinking, System Dynamics 2e Pearson Education New Zealand 2008

Developments in management thinking


Renaissance Industrial Revolution Emergence of the corporation Prominence of human relation issues at work Mass production (Henry Ford) Scientific management (Frederick Taylor) Total quality management (W. Edwards Deming) Systems thinking & organisational learning (Peter Senge)
Lecturers Guide to Systems Thinking, System Dynamics 2e Pearson Education New Zealand 2008

Origins of Systems Thinking and System Dynamics


Uncertainty Principle Werner Heisenberg (1923) Cybernetics Norbert Weiner (1947) General System Theory Von Bertalanffy (1954) System dynamics Jay Forrester (1958) The Fifth Discipline Peter Senge (1991)

Lecturers Guide to Systems Thinking, System Dynamics 2e

Pearson Education New Zealand 2008

Other contributions to SD development


Jack Pugh and colleagues (Pugh Roberts, 1986)) developed original computer software (DYNAMO). Limits to Growth by Meadows et al. (1972). Growth Early SD books by Richardson & Pugh (1981) and Roberts et al. (1983). Geoff Coyle received first lifetime achievement award of the International System Dynamics Society (Coyle, 1998). History of SD -Juan Rego (1999).
Lecturers Guide to Systems Thinking, System Dynamics 2e Pearson Education New Zealand 2008

Other contributions to SD development


(contd)
Systems thinking and system dynamics (Wolstenholme, 1990) Feedback thought and theory (Richardson, 1991) Sustainable development (Saeed, 1991) Modelling for learning (Morecroft & Sterman, 1994) Group model building (Vennix, 1996) Environmental modelling (Ford, 1999) Business dynamics an SD methodology (Sterman, 2000) Competitive strategy dynamics (Warren, 2002)

Lecturers Guide to Systems Thinking, System Dynamics 2e

Pearson Education New Zealand 2008

SD computer software
Earlier SD software: DYNAMO (Pugh Roberts) DYSMAP (University of Bradford, UK) Current SD software: ithink/Stella ithink/Stella (Richmond & Petersen, 1997) Powersim (1994) Vensim (Ventana Systems, 2002)

Lecturers Guide to Systems Thinking, System Dynamics 2e

Pearson Education New Zealand 2008

The systems sciences


Soft systems methodology (SSM). (Peter Checkland,1981) Cognitive mapping and strategic options development and analysis (SODA) (Eden, 1989) Interactive planning & problem solving (Ackoff, 1978) Ecology of the mind (Bateson, 2000) Organisational cybernetics (Beer, 1959, 1966 & 1981) Critical systemic thinking (Churchman, 1968 & 1982) Critical systems thinking & heuristics (Ulrich, 1983) Challenging planning assumptions (Mason & Mitroff, 1981) Emotional intelligence (Goleman, 1995)

Lecturers Guide to Systems Thinking, System Dynamics 2e

Pearson Education New Zealand 2008

The systems sciences


Prospect theory and decision analysis (Kahneman & Tversky, 2000), Social systems modelling and bounded rationality (Simon, 1956 & 1982) Systems sciences & systems thinking (Flood and Carson, 1993; Flood, 1999) Total systems intervention (Flood, 1995) Systems thinking tools (Pidd, 1995, 2004) Systemic intervention (Midgley, 2000) Problem structuring methods (Rosenhead & Mingers, 2001) Systems multi methodology (Jackson, 1991 & 2003) Systems intelligence (Hmlinen & Saarinen, 2004). 2004).
Lecturers Guide to Systems Thinking, System Dynamics 2e Pearson Education New Zealand 2008

What is a System ?

A system is a collection of parts that interact with one another to function as a whole. whole. However, a system is not the sum of its parts it is the product of their interactions.
(Russell Ackoff, 1993)

Lecturers Guide to Systems Thinking, System Dynamics 2e

Pearson Education New Zealand 2008

Lecturers Guide to Systems Thinking, System Dynamics 2e

Pearson Education New Zealand 2008

What is systems thinking


Systems thinking is a scientific field of knowledge for understanding change and complexity through the study of dynamic cause and effect over time. Systems thinking offers a new way of thinking based on the primacy of the whole and of relationships. It deals with hidden complexity, ambiguity and mental models. It provides tools and techniques to unravel complexity and to create lasting interventions for chronic problems.
Lecturers Guide to Systems Thinking, System Dynamics 2e Pearson Education New Zealand 2008

Dimension of systems thinking


Paradigm - a way of thinking about the world and relationships. Language - a tool for understanding complexity and dynamic cause and effect. Methodology a set of simulation modelling and learning technologies.

Lecturers Guide to Systems Thinking, System Dynamics 2e

Pearson Education New Zealand 2008

Systems thinking in daily language


What goes around comes around The solution is part of the problem Cyclical pattern Were in this together Fluctuating pattern Vicious/virtuous cycle Domino effect He/she is on a roll

Lecturers Guide to Systems Thinking, System Dynamics 2e

Pearson Education New Zealand 2008

Systems thinking in daily language


Ripple effect Chronic behaviour Downward/upward spiral SelfSelf-fulfilling prophecy Closing the loop Snowballing There is more to it than meets the eye The cure can be worse than the disease

Lecturers Guide to Systems Thinking, System Dynamics 2e

Pearson Education New Zealand 2008

Principles of systems
(Anderson and Johnson, 1997: 1820) 18

1 2 3 4 5 6 7

The big picture Short and long term Soft indicators System as a cause Time and space Cause versus symptom EitherEither-or thinking

Not everything that can be counted counts, and not everything that counts can be counted. -- Albert Einstein

Lecturers Guide to Systems Thinking, System Dynamics 2e

Pearson Education New Zealand 2008

Linear versus systems thinking


What makes organisations successful?

Lecturers Guide to Systems Thinking, System Dynamics 2e

Pearson Education New Zealand 2008

Linear versus systems thinking (contd)


Lists' example of linear thinking:
Factors are independent. Causality runs one way (from cause to effect). Factors are equally important.

By contrast:
ClosedClosed-loop or systems thinking maintains that factors are not independent, and that causality is circular.
Lecturers Guide to Systems Thinking, System Dynamics 2e Pearson Education New Zealand 2008