MGX 9970 Business & Organizational Dynamics Semester 1, 2007

MGX 9970
Business and Organizational Dynamics
MGX 9970 Business & Organizational Dynamics 1

Semester 1, 2007
Subject leader: Tim Haslett
• thaslett@bigpond.net.au
• Tim.Haslett@BusEco.monash.edu.au
• 9903 2998 (w)
• 9429 8616 (h)
Lecturers:
• John Barton (Monday evening)
bartcons@bigpond.net.au
John.Barton@BusEco.monash.edu.au
• Ted Geerling (Wednesday evening)

Semester 1, 2007
Lecture Program:
• Week 1: Overview- Why dynamics?; systems approach
• Week 2: Growth models
• Week 3: Beer Game
• Week 4: Beer Game debrief
• Week 5: Dynamic systems archetypes
• Week 6: Archetypes- applications
• Week 7: Modelling Tools
• Week 8: More Tools
• Week 9: Group presentations on archetypes
• Week 10: Policy dynamics
• Week 11: Simulation workshop
• Week 12: Product launch workshop
• Week 13: Product launch workshop

Semester 1, 2007
Assessment:
• Assignment 1: Beer Game analysis (Group

assignment; 2000 words; 25%)
• Assignment 2: Business application of
archetypes (Group presentation; 25%)
• Assignment 3: Product launch (Individual; 3000
words; 50%)

Semester 1, 2007
Resources
• References:
– Maani and Cavana (2000) Systems Thinking and
Modelling. Pearson Education.
– Senge (1993) The Fifth Discipline. Random House
(Note: new edition available)
– Senge, Roberts, Ross, Smith, & Kleiner.(1994).
Doubleday
• Web ct- Slides plus papers

Semester 1, 2007
Why Study Business & Organisational
Dynamics Dynamics?
• Most approaches in management are based on static thinking and linear
models
• However the world is dynamic and interactive

Semester 1, 2007
Clockspeed: Fast Industries
Industry Product Process Organisation
Technolgies Technologies Technologies
Personal <6 months 2-4 years 2-4 years
Computers
Computer Aided 6 months 2-4 years 2-4 years
S/W Engineering
Toys & Games < 1 year 5-15 years 5-15 years
Athletic Footwear <1 year 5-15 years 5-15 years
Semiconductors 1-2 years 2-3 years 3-10 years
Cosmetics 2-3 years 5-10 years 10-20 years
Source: Charles Fine, Clockspeed

Semester 1, 2007
?
“The difference between Coles Myer and
Woolworths is Woolworths has a virtuous
cycle and Coles has a vicious cycle”
Solomon Lew
(BRW, Feb 27, 2003)
Semester 1, 2007
The Dynamics of Strategy
Ref: Kim Warren. Business Strategy Review, Vol 10. No 3. 1999
Preferred
How?
Why? Where?
Feared
Today Time

Semester 1, 2007
Learning Cycles Next
Diagnosing
Next
Planning Action
Evaluating Action
Diagnosing
Taking Action
Next
Planning Action Cycle 3

Evaluating Action
Diagnosing
Taking Action
After Lewin & Dewey:

Planning Action Cycle 2 Learning as a dialectic
Evaluating Action
process integrating experience
Taking Action
and concepts, observations, and action
Cycle 1

Semester 1, 2007
Management as Learning:
Question Plan
Learning Answers Act Do
Testing Check
Charles Handy’s Circle of Learning Circle of Quality (Deming)

Semester 1, 2007
These dynamic are difficult to
understand
• Read the Ossimutz Challenge for Lecture 1
• The Alpine hotel simulation shows how this

works
• This subject develops the skills to think in this

way

Semester 1, 2007
Booth Sweeney and Sterman (2000) “Bathtub Dynamics”. System
Dynamics Review Vol 16 No 4: 249-286
• Consider a bathtub where Flows (litres per minute)
water flows in at a certain
100
rate, and flows out through
a drain at another rate. Inflow
75
• The graph shows the
pattern of inflow and Outflow
50
outflow rates.
• If the initial quantity in the 25
bathtub is 100 litres, draw
the graph over time 0
representing the volume of 0 2 4 6 8 10 12 14 16
water in the bathtub at any
Time (minutes)
given time.

Semester 1, 2007
Our approach: System Dynamics-
Searches for underlying structural causes
Single events- React
Patterns of events- Adapt
Underlying structure- Pro-active

Uses simulation modelling to explore behaviour

Semester 1, 2007
Achieving Requisite Variety (“Smarts”)
Amplification
Environment/ Situation
Organisation/Manager
Attenuation
• Variety of manager must exceed variety of situation being

managed
• Variety of organisation must exceed variety of environment
• Amplify variety of manager by enhancing experience/building

competencies/sound preparation/clear business models etc..
Semester 1, 2007
Four Laws of Variety
1. Only variety can absorb/destroy variety (Ashby’s Law or Requisite Variety)
2. The behavioural repertory of management must be commensurate to the

residual variety of the unit managed; ie, to the variety left unattended by the
people in the unit relevant to performance (Law of Residual Variety)
3. Every good regulator of a system must be a model of that system; ie, a

management’s effectiveness is a function of the model (explicit or tacit) on which
it is based (Conant-Ashby theorem)
4. The rate of management/organisational learning must be equal or greater than

the rate of change in the manager’s/organisation’s context.
Reference: Espejo, Schuhmann, Schwaninger & Bilello. Organizational Transformation and Learning- A
Cybernetic Approach to Management. Wiley, 1996.

Semester 1, 2007
Where does all this thinking fit?

Semester 1, 2007
Boulding’s Hierarchy of Systems
• Static machine Increasing complexity (variety).
• Dynamic machine Question: In what sense can

• Cell a metaphor based on one level
of complexity be used to explain
• Plant the behaviour of a system at a
higher level of complexity?
• Animal
• Human
• Social systems
• Transcendental

Semester 1, 2007
Subject Material
• The interconnectness of business
• The nature of internal dynamics
• Development of skills for dynamic business
analysis
• The structural view of business behaviour
• Applications of “microworlds” and learning
techniques

Semester 1, 2007
Some General Principles

Semester 1, 2007
Principle One
Exponential Growth

Semester 1, 2007
You are investing 9% of your annual salary in your super fund.
The fund earns 8% per annum. Graph the growth of your fund.
Fund
Time
Semester 1, 2007
The Lily Pad Problem
The first lily pad appears on Day 1.
The number of lily pads doubles every day.
By Day 20 the pond is covered.
When is the pond half covered?

Semester 1, 2007
Principles Two and Three
Feedback and Goal seeking

Semester 1, 2007
Positive Feedback
Age 20 Jan 07
Semester 1, 2007
Example 1
• You will now see someone pouring a glass of

water
• Watch carefully

Semester 1, 2007
Draw the following graphs
Fullness
Rate of pouring
Time

Semester 1, 2007
Now for the second shot
Fullness
Rate of pouring
Time

Semester 1, 2007
Concepts
• The how fast things happen: Rate
• How much there is: Level
• Change in level: Flow

Rate of Pouring
• They are related

Water in Glass
Pouring (Flow)
(Level)

Semester 1, 2007
Graph what happens in Real Estate
sales
Houses on market
Price
Time

Semester 1, 2007
Graph what happens
Houses on market
Price
Time

Semester 1, 2007
Goal Seeking behaviour
Draw some graphs for:
• Marks desired / effort writing assignment

• Effort required to find oil / Remaining oil
• New customers / Recruiting effort
• Price paid / improvement in performance
• Advertising / Sales

Semester 1, 2007
Two Concepts
• Feedback
• Balance (aka Limits to Growth)

Semester 1, 2007
What are the limits to growth here?
• Marks desired / effort writing assignment

• Effort required to find oil / Remaining oil
• New customers / Recruiting effort
• Price paid / improvement in performance
• Advertising / Sales

Semester 1, 2007
Concept:
Systems oscillate

Semester 1, 2007
Another example
Effort
Rewards
Semester 1, 2007
Another Key Idea
• Equilibrium states

Semester 1, 2007
Systems - 1960s Definition:
“Systems are made up of sets of components

that work together for the overall objective of
the whole.
The systems approach is simply a way of
thinking about these total systems and their
components”
C. West Churchman
The Systems Approach, 1968, p11

Semester 1, 2007
Systems - 1990s Definition
“Systems thinking is a discipline for seeing wholes.

It is a framework for seeing relationships rather
than things, for seeing patterns of change rather
than static snapshots”
Peter Senge (The Fifth Discipline, 1990)

Semester 1, 2007
Lecture Two
Workshop on
Growth and
Limits to Growth
Example: eBay Historical Growth
161% $1,214
Revenue ($M) and

Yr/Yr Growth (%) 108%
$749
eBay’s key challenge is to triple 92%

free cash flow every 10 years
(~12% per annum growth) 74%
$431 62%
in perpetuity
– just to keep up with current
growth expectations!
$225
$86
$41
1997 1998 1999 2000 2001 2002

Semester 1, 2007
Sources: Factset data, Compustat, Worldscope, Accenture Analysis
e-Bay’s Growth Strategy:
• Underlying policy was to enter markets with highest number of email

connections- US (100m internet users), Germany, Japan, Canada,
UK.
• The principle means of growth into new markets (countries) has
been through the acquisition of existing auction sites, eg:
– June 1999 acquired Alando.de (Germany); deal took 6 months; cost
$42m in ebay stock (Cohen, 188)
– Early 2001 acquired iBazar with 2.4 regular users (France, Italy, Spain,
Belgium, Portugal, Netherlands)
• Exception was UK- site developed in-house
• By fall 2001, ebay was market leader in 16 of 17 sites it was
competing in; Japan was #17
• Rapid development of auction sites, eg, US car-sales site became
the biggest secondhand car sales avenue in not much more than a
year!

Semester 1, 2007
Can depict e-Bay’s business dynamics as the interaction between two
interacting dynamic processes:
1. A growing action (acquisitions) and,
2. A capability limiting action (eg, IT systems, secure payment system;
management capacity)
Acquisitions Capacity
Growth

Semester 1, 2007
E-Bay’s Most Important “Intangible”..
Meg Whitman, CEO

Semester 1, 2007
Thinking with BOT graphs
• Answer the questions in the Ozzimutz Challenge

II document
The trick is to understand why this is so.

Semester 1, 2007
Growth exercises
• Use the Lilypad simulation to see how best to

control exponential growth
• Use the Retire simulation to plan your

superannuation strategy
Prepare a brief reports for the class

Semester 1, 2007
Limits to Growth
• Growth often runs out of steam
• Particularly if there is a resource constraint.

Semester 1, 2007
Limits to Growth Archetype
Resource Limit
S O
Effort R Growth B Resource

S S

Semester 1, 2007
This is the pattern

Semester 1, 2007
Case study
Your company has launched a new mini computer that is more advanced than any on the
market.
To win customers, the sales force has been told to let cli ents use a machine for six weeks
before deciding to buy. The thinking is that in the six weeks you can integrate the new
mi ni into your cli ents systems to an extent they will not want to disintegrate at the end of
the free period.
The sales force has also been given big financial incentives to get placements of the new
mi ni computer. Their early efforts in the field lead to a high level of performance and
sales in computer placements.
Because they are so new and wonderful, the computers generate huge demand for service
and backup. Your two highly trained support staff are unable to cope with the workload
and companies begin returning t he new computers.
Use the Archetype and a graph to show what has happened

Semester 1, 2007
Case study II
While technology and free markets are certainly helpful in allocating resources,
making adjustments and mitigating shortages, they are not capable of preventing
overshoot.
For example, in Stockholm, Sweden in 2002, scarcity of cod drove the price to $80 a
pound. This price ration paradoxically made cod fishing quite lucrative, motivating
more aggressive fishing. When cod supplies plummet, cod fishing will need to be shut
down, something that free markets are not going to do.
Ecologically concerned governments can do this. Canada shut down all Eastern
seaboard fishing grounds in 1992. They remain closed, awaiting recovery of fish stocks.
Norway is just reopening its waters to herring and cod fishing as those stocks recover.
Use the Archetype and a graph to show what has happened

Semester 1, 2007
Lecture 3: The Beer Game

Semester 1, 2007
The Beer Game
Linking Strategy/Policy/Behaviour
What is the Beer Game
• A simulation of a logistics chain
• A stream of orders and a stream of beer
• Played over 40 weeks
• Four steps per week

Semester 1, 2007
Aim of the Game
• To supply the customer
• Maintain inventory at lowest possible level
• Avoid stock-outs.

Semester 1, 2007
The Rules
Follow Instructions
Fill backlog
Keep records
The Objective
To minimise costs:
Inventory = $1 per unit per week

Backlog = $2 per unit per week

Semester 1, 2007
Flows of Orders and Beer
Flow of Orders
Retailer Wholesaler Distributor Factory
Production
Retailer Wholesaler Distributor Factory
Flow of Beer

Semester 1, 2007
Flows of Orders and Beer
Flow of Orders
Retailer Wholesaler
Retailer Wholesaler
Flow of Beer

Semester 1, 2007
The Step Directions Action Records
1 Fill the Orders Orders goes to Inventory Record Backlog
Beer goes on Truck
2 Move the Beer Beer moves one place
3 Write the Orders Decide and write the order Record orders
4 Move the Orders Orders move one place

Semester 1, 2007
Lecture 4
Debrief of Beer Game

Lessons of the Beer Game
Causal Loop Diagrams

Semester 1, 2007
Lesson 1
Allocate Blame
Lessons of the Beer Game
Events
Patterns
Structures Behaviour

Semester 1, 2007
Events Patterns Structures

Semester 1, 2007
CLD for Beer Game
O O
Customer's Orders My inventory My orders
S

Semester 1, 2007
CLD for Beer Game
O O O
Customer's
Inventory B1 Customer's Orders My inventory My orders
B2
S S

Semester 1, 2007
CLD for Beer Game
O O O O
Customer's
Inventory B1 Customer's Orders My inventory My orders Supplier's
B2 inventory
S S

Semester 1, 2007
CLD for Beer Game
O O O O
Customer's
Inventory B1 Customer's Orders My inventory My orders Supplier's
R1 B2 R2
S inventory
S S S
O
O
Delay in Supply 1 Delay in Supply

Semester 1, 2007
A question
What elements of the system are closely linked
and what are loosely linked ?

Semester 1, 2007
Solutions

Semester 1, 2007
Use the two Beer Game simulations to:
• See the impact of delays
• See the impact of meeting back orders

Semester 1, 2007
Lecture 5 and 6
Archetypes
Fixes that Fail
B S
Problem Symptom
Fix
S
O
S
R S
R
Real Problem Unintended
Consequence

Semester 1, 2007
S
S
Problem Symptom
S
O
Fix
Fixes that Fail
S
Unintended
Real Problem Consequence
Symptoms
Fixes

Semester 1, 2007
Shifting the Burden
B
S
B S
Skills shortfall Technical Problems Use of consultant
O O
S S
Internal R
capacity
S
Dependence on Consultant
S O
B
Shifting the Burden
Skills shortfall
B Us e of consultant
Technical Problems
O
S
S
S
Internal
capacity R
S
Dependence on Consultant
3: Skills shortfall
1: Technical Problem
2: Use of consultant

Semester 1, 2007
Success to the Successful
S O
R R
Allocation of Resources
Success of A to A instead of B Success of B
S O
Success to the Successful
S O
R R
Allocation of Resources
Success of A to A instead of B Success of B
S O
Success of A
Success of B
Escalation
A's results B's results
S S
S
O
B B
Activity by A A's situation Activity by B
relative to B
S S
O S
Threat to A Threat to B
S
S
Escalation
S
B O
Activity by A A's situation B
Activity by B
relative to B
S S
O S
B's Activity
A's Activity
Threat to B
Threat to A
S
S
Escalation
S
B O
Activity by A A's situation B
Activity by B
relative to B
S S
O S
Threat to A
A's activity
Tragedy of the Commons
Gains for A S
S S
R
S R B
A's Activity
S
O
S Gain per
Total Activity Common Resource
individual Activity
B's Activity
R B
S
R
S
S
Gains for B S
Tragedy of the Commons (ii)
Gains for A
S S
S
B
O R B
A's Activity
S
O
S Gain per
Total Activity Common Resource
individual Activity
B's Activity
R B
O
B
S
S
Gains for B S
Tragedy of the Commons (iii)
2: Gains per individual Activity
1: Commons
Drifting Goals
O
B
Goal Pressure to Lower the Goal
S
S
Gap
Drifting Goals
Desired Goal
Gap
Quality Quality
Desired Goal
"Pressure Goal" "Pressure Goal"

Drifting Goals
O
B
Goal Pressure to Lower the Goal
S
S
Gap
O
S
Action B Correction

Semester 1, 2007
Drifting Goals
Desired Goal Desired Goal
Gap "Pressure Goal"

Quality Quality
"Pressure Goal"

Semester 1, 2007
Drifting Goals
1: GAP 2: GOAL 3: PRESSURE TO LOWER GOAL

Semester 1, 2007
Lecture 7
Tools for Analysis
Causal Diagrams

Semester 1, 2007
The story of rabbit control in Australia
Births S Rabbits O Deaths
Rabbits

Semester 1, 2007
Rabbits (ii): A policy decision
Foxes
S
S S
Births S Rabbits O Deaths
Rabbits
Foxes

Semester 1, 2007
Rabbits (ii): Another policy decision
Hunting of foxes
S
B
Attacks on Chooks
S
O
Foxes
S
B
S R S S
Births Rabbits O Deaths

Semester 1, 2007
Rabbits (iii): Another policy decision
Hunting of foxes
S
Attacks on Chooks
S
O
Foxes
S
S S S
S
S
Poisoning
Semester 1, 2007
Rabbits (iv): An insight
Rabbits

Semester 1, 2007
Rabbits (v): Unintended consequences
Rabbits
Hunting of foxes
S
Attacks on Chooks
S
O
Foxes
S
S S S
S S
S
The Super Rabbit R Poisoning
S S
Resistant Strains
Semester 1, 2007
Key Concepts (i)
• Causation
• Feedback
• Behaviour over time
• Balancing and reinforcing loops

Semester 1, 2007
Key Concepts (ii)
• Leverage points
• Lags
• Policy is often counter-intuitive
• Closure of the loops
• Story

Semester 1, 2007
Practice with CLDs (thanks to John Sterman)
S
Chickens Eggs

Semester 1, 2007
S
Chickens Road Crossings
O

Semester 1, 2007
O S
Road Crossings Chickens Eggs
S S

Semester 1, 2007
Practice with CLDs
S
S
S O
Earnings Savings Spending
O
O

Semester 1, 2007
Practice with CLDs
Weight
Exercise Smoking
Food Intake

Semester 1, 2007
Moving from
Causal Loop Diagrams
to
Stock-Flow-Rate Diagrams

Semester 1, 2007
The Petrol Strike Problem
The Story

Semester 1, 2007
Ask the question:
Where are the Accumulations ?

Semester 1, 2007
Petrol at stations
Pressure on comp anies
What is the policy lever ?

Semester 1, 2007
Deliveries
+ Petrol In Stations
- Use
Petrol In Sta tion s
Deli ve ries Use

Semester 1, 2007
Price
Petrol stocks
Deliveries Use

Semester 1, 2007
Ask the question (again):
Where are the Accumulations ?

Semester 1, 2007
Petrol Stocks Question 1
Deliveries Question 2 Use

Semester 1, 2007
Variables for the model
• Perceived Amount • Number of visits

• Queues • Amount per visit
• Panic Buying • Rationing

Semester 1, 2007
The Petrol Problem
Panic Buying Rationing

S
O
Queues S
O
O S Number of Visits Amount per visit
O
Perceived Amount
S
S
S
Petrol at Stations Petrol in Tanks
Deliveries Purchases Us e

Semester 1, 2007
Semester 1, 2007
Lecture 8
Tools for Analysis
Stock Flow Rates

Concept 1: Resources
• The basis for Competitive Advantage.
• Accumulations
• Inflows and outflows

Semester 1, 2007
Graphics
Customers
Gains Losses
• Inflows fill the stock
• Outflows drain the stock
• Stocks accumulate over time

Semester 1, 2007
Ac c umula t io ns
Profit
Staff
Inventory
Outlets
Students
Cars
Backlog
Semester 1, 2007
Your turn
• Identify three accumulations

• Define the inflows and outflows
• Show to a partner

Semester 1, 2007
Metrics
• An accumulation is a difference between:

– The inflow
– The outflow
– And varies over time

Semester 1, 2007
An example
Profit
Revenue Costs
Time Time Time

Semester 1, 2007
An exercise
Profit
Revenue Costs
Time Time Time

Semester 1, 2007
An exercise
Profit
Revenue Costs
Time Time Time

Semester 1, 2007
Your turn
• Use the revenue/profit/costs model

• Design three BOT graphs
• Show two to a partner
• They sketch the third

Semester 1, 2007
Ageing chains

Semester 1, 2007
Ageing chains are progressions
Grad Di p Stu dents Masters Studen ts
Enro lmen ts Prog ressi on Gradu atio n
Li eute nants Captains Majo rs
Gradu atio ns Prom otio n to Capta in Prom otio n to Major Resi gnations

Semester 1, 2007
Your turn
• Make an ageing chain for your customers
• Think of strategic splits
• Show to a partner

Semester 1, 2007
More progressions
Vi sa Vi sa Gol d Vi sa Pl atin um
Upgra de 1 Upgra de 2 Exit

Purchas e
Bas e mobile Extras Plan Vi deo Phone Li nked Vi deo Phones
Upgrade 1 Upgrade 2 Upgrade 3 Exit

Purchas e

Semester 1, 2007
An added complication
Bas e mo bile Extras Plan Vi deo Phone Li nke d Vi deo Phone s
Upgra de 1 Upgra de 2 Upgra de 3

Purchas e
Lo sses 1 Lo sses 4
Lo sses 2 Lo sses 3

Semester 1, 2007
Fundamental Model is an “Ageing Chain”
In Trai ning Waiting for Jobs Age 23 to 54 Age 61 to 65

Age 55 Age 56 to 60
Teacher training starts Graduations Getting Jobs P1 P2 P3 Reti rements

Semester 1, 2007
Step 1: Add losses

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Step 2: Model policy

Semester 1, 2007
Step 3: Model policy feedback

Semester 1, 2007
Introducing Rates

Semester 1, 2007
Rates
• Rates control inflows and outflows
Customers
Gains Losses
Advertising Product failure

Semester 1, 2007
Rates
Word of Mouth
Customers
Gains Losses

Semester 1, 2007
Word of Mouth
Customers
Gains Losses
Engineering Capability
Hires Quits

Semester 1, 2007
The Concept of Directionality
Identifies impact of causal relationships
Establishes causation holding all else steady
Revenue Profit

Semester 1, 2007
And the following is also true
Revenue Profit

Semester 1, 2007
So
Causation
Revenue Profit
S
Directionality
Where S means
“moves in the Same direction”
Semester 1, 2007
Another aspect (i)
Costs Profit

Semester 1, 2007
Another aspect (ii)
Costs Profit

Semester 1, 2007
So
O
Profit Costs
Where O means
“moves in the Opposite direction”

Semester 1, 2007
So the causal relationship is:
S O
Revenue Profit Costs

Semester 1, 2007
Directionality
Word of Mouth
Customers
Gains Losses

Semester 1, 2007
Directionality
Word of Bad Mouth

S
Customers
Gains Losses

Semester 1, 2007
Word of Mouth
S
S
Customers
Gains Losses
Product Failure
O
Engineering
Capability
Hires Quits

Semester 1, 2007
Your turn
• Take your ageing chain for your customers
• Link it to resources in the company
• Make an ageing chain for the resources

Semester 1, 2007

MGX 9970 Business & Organizational Dynamics Semester 1, 2007

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MGX 9970

Business and Organizational Dynamics

MGX 9970 Business & Organizational Dynamics 1

MGX 9970 Business & Organizational Dynamics 2

MGX 9970 Business & Organizational Dynamics 3

• Assignment 1: Beer Game analysis (Group

MGX 9970 Business & Organizational Dynamics 4

MGX 9970 Business & Organizational Dynamics 5

• However the world is dynamic and interactive

MGX 9970 Business & Organizational Dynamics 6

Cosmetics 2-3 years 5-10 years 10-20 years

Source: Charles Fine, Clockspeed

MGX 9970 Business & Organizational Dynamics 7

MGX 9970 Business & Organizational Dynamics 9

Planning Action Cycle 3

After Lewin & Dewey:

MGX 9970 Business & Organizational Dynamics 10

Learning Answers Act Do

Charles Handy’s Circle of Learning Circle of Quality (Deming)

MGX 9970 Business & Organizational Dynamics 11

• The Alpine hotel simulation shows how this

• This subject develops the skills to think in this

MGX 9970 Business & Organizational Dynamics 12

MGX 9970 Business & Organizational Dynamics 13

Single events- React

Patterns of events- Adapt

Underlying structure- Pro-active

MGX 9970 Business & Organizational Dynamics 14

• Variety of manager must exceed variety of situation being

• Variety of organisation must exceed variety of environment

• Amplify variety of manager by enhancing experience/building

2. The behavioural repertory of management must be commensurate to the

3. Every good regulator of a system must be a model of that system; ie, a

4. The rate of management/organisational learning must be equal or greater than

MGX 9970 Business & Organizational Dynamics 16

MGX 9970 Business & Organizational Dynamics 17

• Dynamic machine Question: In what sense can

MGX 9970 Business & Organizational Dynamics 18

MGX 9970 Business & Organizational Dynamics 19

MGX 9970 Business & Organizational Dynamics 20

MGX 9970 Business & Organizational Dynamics 21

The first lily pad appears on Day 1.

The number of lily pads doubles every day.

By Day 20 the pond is covered.

When is the pond half covered?

MGX 9970 Business & Organizational Dynamics 23

Feedback and Goal seeking

MGX 9970 Business & Organizational Dynamics 24

• You will now see someone pouring a glass of

MGX 9970 Business & Organizational Dynamics 26

MGX 9970 Business & Organizational Dynamics 27

MGX 9970 Business & Organizational Dynamics 28

• The how fast things happen: Rate

• How much there is: Level

• Change in level: Flow

• They are related

MGX 9970 Business & Organizational Dynamics 29

MGX 9970 Business & Organizational Dynamics 30

MGX 9970 Business & Organizational Dynamics 31

Draw some graphs for:

• Marks desired / effort writing assignment

MGX 9970 Business & Organizational Dynamics 32

• Balance (aka Limits to Growth)