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Business Dynamics

How can we manage effectively in the dynamic and increasingly complex world?

Political, technological, social and environmental transformations generate the need for new tools that would meet the new challenges. Such branches of science as economy, ecology or sociology provide useful simplifications of the issues that companies have to deal with. Simplifications of that sort, however, are often inconsistent, incomplete and they seldom take into account the dynamics of changes both in the organization and in its surroundings. As a result, it is not possible to carry out a reliable analysis of the consequences of one's decisions on the basis of such simplified solutions.

Systems approach offers an innovative way to describe, communicate and test our comprehension of a company and its functioning. Computer simulation models make it possible to examine the dynamics of the operational and strategic actions for different assumptions regarding the possible interactions of particular system components.

Systems Thinking

Systems approach, systems thinking, system solutions are the notions that almost everybody has heard of. Many people feel that these ideas are needed, but only a handful understands them. So what is really the systems approach?

The first step towards systems thinking is to broaden the perspective in space and time - we can then see the functioning of the whole system we are interested in, for example communication system in the city or municipality management system. In such a “look from above", the details become less important. We begin to see emerging patterns that form a certain entity. In that situation, we do not restrict ourselves only to reacting to the often unexpected events, but we see the structure of the system from which these events arise. We have a much better chance to build an appropriate strategy and to take an action that will lead to a positive and sustainable change.

System Dynamics

As the world around us is marked by the increasing complexity and rapid transformation, we often find our knowledge and skills limited or insufficient. Sudden disasters surprise us with growing frequency. Well-meant strategies, plans and technologies, aimed at solving problems, often make the situation even worse or bring about new problems. Effective decision making in complex systems requires a complete transformation of both reasoning and problem analysis, since it demands a holistic, systems approach.

System dynamics is a new field that encompasses an array of conceptual tools and computer modeling methods. Computer simulation models enable us to examine the dynamics of the future and the past, thus giving the opportunity to design more effective strategies and organizations. Within the scope of system dynamics applications there are: business planning, management, social systems modeling, as well as energy and natural environment simulations. It is a rapidly evolving methodology: in the last decade many leading corporations, consulting firms and governmental agencies employed system dynamics methodology for solving key problems.