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System Dynamics conceptsInhoudsopgave
CH.1.............................................................................................................. 2
Lecture 1....................................................................................................... 3
CH.2.............................................................................................................. 5
Lecture 2....................................................................................................... 8
CH. 3............................................................................................................. 9
CH.4............................................................................................................ 10
Lecture 4..................................................................................................... 13
CH.5............................................................................................................ 15
CH.6............................................................................................................ 22
Lecture 5 leverage points.............................................................................25
CH. 7........................................................................................................... 26
,CH.1
Elements of a system: Elements are the individual parts or components that make up the
system (tangible/intangible). (easiest to see).
Interconnections are the relationships and interactions between the elements of the system.
These can be flows of information, material, or energy. (include often loops).
Function: the role/ objective that the system fulfills. (most hard to see). Purpose of a system is
deduced from behavior, not from stated goals. It is often the most crucial determinant of
the systems behavior.
System= elements+ interconnections+ function/purpose.
Flow of information: signals that go to decision points or action points within a system.
Interconnections operate through the flow of information. Interconnections holds systems
together and plays a great role in determining how they operate.
Stock (level): foundation of the system, elements of the system that you can see, fee,
count or measure at any given time. Don’t have to be physic. Stock change over time
through the actions of a flow. Represent the state of the system It is the present memory
of the history of changing flows within the system. Shown in boxes. Do not necessarily need
an inflow and an outflow (can have an inflow or an outflow.) a stock can have multiple
inflows and outflows. Stocks act as delays/buffers/ shock absorbers in systems. Every
stock is a delay.
Flows (rate): sinks and sources, movement of quantities between stocks. Represent
activity. filling and draining, births and deaths, purchases and sales, growth and decay,
deposits and withdrawals, successes and failures. Shown as arrow-headed pipes leading into
or out of the stock. Flows can be turned higher or lower/ on or off.
Clouds in diagrams: wherever the flows come from and go to. The sources are ignored. For
the purpose of the present discussion.
Behavior-over-time graphs: horizontal axes= time ax. To learn wheter the system
approaches a goal/limit. The variable may be a stock or a flow. The y-ax is therefore a
stock or a flow (depends on wheter the variable is a stock or a flow).
Dynamic equilibrium: level does not change. The sum of inflows equals the
sum of outflows.
Feedback loop: the stock that influences itself. The information link that
directs action, which emphasizes action/change always proceeds through
adjusting (aanpassen) flows. Information part, interconnections. Closed
chain of causal connections.
Balancing feedback loop (negative feedback loop): goal seeking/ balancing
seeking. Sources of resistance to change. Loop which has an ability to keep
it’s appointed stock near/ at the goal. equibellum
Reinforcing feedback loop (positive feedback loop): reproduces/reinforces
itself. Exponential growth. Snowball-effect
, Lecture 1
Responsible organization: multiple value creation for stakeholders (instead of profit
maximization/shareholder value). Creating environmental. Social and economic value (3p’s).
System: interconnected set of elements that is coherently analyzed in a way that achieves
something. A set of things, interconnected in such a way that they produce their own
pattern of behavior over time
Conventional perspective: without feedback (AB), short-term, apparent cause-effect,
immediate results.
Connection: easy to trace. Source of problem: others outside. Reaction to change:
short-term success wil lead to long term success. Optimization: optimize the parts
to optimize the whole. Solving: independent initiatives simultaneously.
System perspective: holistic view, interrelations and feedback (closed chains of
causal connections). Delay, non-linearities, unintended effects and counter-intuitive
behavior
Connection: indirect/not obvious. Source of problem: we create our own problems
and have significant control or influence in solving them through changing our own
behavior. Reaction to change: most quick fixes have unintended consequences and
make no matter for the long run. Optimization: improve relationship among the parts
to optimize the whole. Solving: only a few key coordinated changes sustain over time and
produce large system change.
System thinking: connected, contested, chronic/persistent problems. A way to describe the
causality and interrelations between variables within a system
When to use system thinking:
• Connected: Large sphere of influences
• Contested and diverse opinion on the matter among stakeholders
• Chronic and persistent problems
• Short-term effort can undermine long-term solution
• Optimizing parts may come at cost of system performance
System dynamics: quantifies the impact of those interactions.
“Systems thinking is a way to describe and understand the causality and interrelations
between variables within a system. System Dynamics quantifies the impact of those
interactions.”
Integrated reporting: resources/relationships used/affected by an organization. Explains
interactions (stakeholder model/ framework to id value creation).
The Integrated Reporting framework: An integrated report aims to provide insight into
the resources and relationships used and affected by an organization. It also seeks to
explain how the organization interacts with the external environment and the capital to
create value over the short, medium, and long term. The capitals are stocks of value that
are increased, decreased or transformed through the activities and outputs of the
organization. They are categorized in this Framework as financial, manufactured,
intellectual, human, social and relationship, and natural capital. IR’s six capitals: capitals
are stocks of value which transform through business actitivies. (value creation) Financial,
manufactures, intellectual, human, social/relationship, natural (stakeholder model/ framework
to id value creation). “How company’s operations affects these capital and what values
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