System Dynamics theory By Jay Wright Forrester
System Dynamics Theory “Applying concepts of simulations at MIT, JW Forrester pioneered the field of System Dynamics, which spawned business dynamics and systems thinking.”
His method introduced experimentation to management, applying it at various levels – organizations, industries, cities, and world (his World Dynamics model facilitated Club of Rome’s study of Limits to Growth).
SD is now widely used as an informed basis for policy planning, strategy review, people development, and social innovation.
System Dynamics Theory PDF (click to get pdf file and right click at image to save)
Forrester introduced fundamental concepts:
- Policy resistance,
- systemic leverage,
- scenario planning etc.
His simulation-based learning has revolutionized how managers develop by externalizing, examining, and enriching their mental models. An electrical engineer, Forrester challenged social scientists on their methods.
He highlighted counter intuitive behavior of social systems, researching the bounds of ‘rational economic’ decisions. He emphasized causal relationships above correlations.
Counter intuitive Behavior of Social Systems:
Social systems are inherently insensitive to most policy changes that people select to alter the system behavior; the trouble symptoms may be part of a larger system. All systems have a few sensitive influence points to cause system behavior change; these are typically not located where we most expect them.
There is usually a fundamental conflict between the short-term and long-term consequences of a policy change; the short run is more visible and compelling, speaking loudly for immediate attention. Many of the problems we face today are the result of short-run (even heroic) actions taken as long as 2 – 3 decades ago. If we follow intuition alone, trends of the past will continue into deepening difficulty. If we set up [system dynamics] research and education, we can expect far sounder basis for action.
JAY WRIGHT FORRESTER
Born on 14th July, 1918, at Anselmo, Nebraska (System Dynamics Theory)