introduction to systems thinking

Chapter 1Chapter 1

Systems Thinking, Systems Thinking, System DynamicsSystem Dynamics

Second editionSecond edition

Lecturer’s Guide to Systems Thinking, System Dynamics 2e © Pearson Education New Zealand 2008

Introducing Systems ThinkingIntroducing Systems Thinking

Maani and CavanaMaani and Cavana

Chapter objectivesChapter objectives

�� After studying this chapter, students should have After studying this chapter, students should have

a better understanding of the following topics:a better understanding of the following topics:�� Why we need a new way of thinkingWhy we need a new way of thinking

�� A brief history of management thought A brief history of management thought

�� The need for systems thinking in complex worldThe need for systems thinking in complex world


�� The need for systems thinking in complex worldThe need for systems thinking in complex world

�� Origins of systems thinking and system dynamicsOrigins of systems thinking and system dynamics

�� What is a system What is a system

�� What is systems thinking What is systems thinking

�� Principles of systems thinking Principles of systems thinking

�� Linear vs systems thinkingLinear vs systems thinking

Why do we need Systems Thinking ?Why do we need Systems Thinking ?

�� Increasing complexity in the world Increasing complexity in the world and in personal lives.and in personal lives.

�� Growing interdependence of the world.Growing interdependence of the world.

�� Critical need for change in management Critical need for change in management


�� Critical need for change in management Critical need for change in management

and leadership theories and practice.and leadership theories and practice.

�� Mutual interdependence of global and Mutual interdependence of global and

local thinking and actions.local thinking and actions.

�� Increasing recognition of a common Increasing recognition of a common

heritage and destiny for mankind. heritage and destiny for mankind.

A brief history of management thoughtA brief history of management thought

Newton viewed the world as a machine that was Newton viewed the world as a machine that was

created to serve its master created to serve its master –– God (Ackoff, 1993). God (Ackoff, 1993). This mechanistic view of the world was developed This mechanistic view of the world was developed during the Renaissance and based on three during the Renaissance and based on three fundamental beliefs (Ackoff, 1993):complete fundamental beliefs (Ackoff, 1993):complete


fundamental beliefs (Ackoff, 1993):complete fundamental beliefs (Ackoff, 1993):complete

understanding of the universe is possible.understanding of the universe is possible.

�� the world can be understood through analysis the world can be understood through analysis (breaking the whole into pieces and examine the (breaking the whole into pieces and examine the parts separately).parts separately).

�� all relationships can be described through linear all relationships can be described through linear causecause--andand--effect.effect.

Mechanistic view of the world

Correlates strongly with prevailing concepts of:Correlates strongly with prevailing concepts of:

•• hierarchy and controlhierarchy and control

•• stability, certainty and the absolutestability, certainty and the absolute


•• stability, certainty and the absolutestability, certainty and the absolute

•• iisolated, separate and interchangeable partssolated, separate and interchangeable parts

•• relationships based on conflict and confrontationrelationships based on conflict and confrontation

•• a single point of viewa single point of view

•• the specialist expertise.the specialist expertise.

(Zohar and Marshal, 1994: 25–28)

Developments in management thinkingDevelopments in management thinking

�� RenaissanceRenaissance

�� Industrial RevolutionIndustrial Revolution

�� Emergence of the corporationEmergence of the corporation

�� Prominence of human relation issues at workProminence of human relation issues at work


Prominence of human relation issues at workProminence of human relation issues at work

�� Mass production (Henry Ford)Mass production (Henry Ford)

�� Scientific management (Frederick Taylor)Scientific management (Frederick Taylor)

�� Total quality management (W. Edwards Deming)Total quality management (W. Edwards Deming)

�� Systems thinking & organisational learning Systems thinking & organisational learning (Peter Senge)(Peter Senge)

Origins of Systems Thinking and Origins of Systems Thinking and System DynamicsSystem Dynamics

�� Uncertainty Principle Uncertainty Principle –– Werner Heisenberg (1923)Werner Heisenberg (1923)

�� Cybernetics Cybernetics –– Norbert Weiner (1947)Norbert Weiner (1947)

�� General System Theory General System Theory –– Von Bertalanffy (1954)Von Bertalanffy (1954)


�� General System Theory General System Theory –– Von Bertalanffy (1954)Von Bertalanffy (1954)

�� System dynamics System dynamics –– Jay Forrester (1958)Jay Forrester (1958)

�� The Fifth DisciplineThe Fifth Discipline –– Peter Senge (1991)Peter Senge (1991)

Other contributions to SD developmentOther contributions to SD development

�� Jack Pugh and colleagues (Pugh Roberts, Jack Pugh and colleagues (Pugh Roberts, 1986)) developed original computer software 1986)) developed original computer software (DYNAMO). (DYNAMO).

�� ‘‘Limits to GrowthLimits to Growth’ by Meadows et al. (1972).’ by Meadows et al. (1972).

�� Early SD books by Richardson & Pugh (1981) Early SD books by Richardson & Pugh (1981)


�� Early SD books by Richardson & Pugh (1981) Early SD books by Richardson & Pugh (1981) and Roberts et al. (1983). and Roberts et al. (1983).

�� Geoff Coyle received first lifetime achievement Geoff Coyle received first lifetime achievement award of the International System Dynamics award of the International System Dynamics Society (Coyle, 1998). Society (Coyle, 1998).

�� History of SD History of SD --Juan Rego (1999). Juan Rego (1999).

Other contributions to SD development Other contributions to SD development (cont’d)(cont’d)

�� Systems thinking and system dynamics (Wolstenholme, Systems thinking and system dynamics (Wolstenholme, 1990)1990)

�� Feedback thought and theory (Richardson, 1991) Feedback thought and theory (Richardson, 1991)

�� Sustainable development (Saeed, 1991)Sustainable development (Saeed, 1991)

�� Modelling for learning (Morecroft & Sterman, 1994) Modelling for learning (Morecroft & Sterman, 1994)


�� Modelling for learning (Morecroft & Sterman, 1994) Modelling for learning (Morecroft & Sterman, 1994)

�� Group model building (Vennix, 1996)Group model building (Vennix, 1996)

�� Environmental modelling (Ford, 1999) Environmental modelling (Ford, 1999)

�� Business dynamics an SD methodology (Sterman, 2000)Business dynamics an SD methodology (Sterman, 2000)

�� Competitive strategy dynamics (Warren, 2002) Competitive strategy dynamics (Warren, 2002)

SD computer softwareSD computer software

Earlier SD software:Earlier SD software:

�� DYNAMO (Pugh Roberts)DYNAMO (Pugh Roberts)

�� DYSMAP (University of Bradford, UK)DYSMAP (University of Bradford, UK)


Current SD software:Current SD software:

�� ithinkithink/Stella (Richmond & Petersen, 1997)/Stella (Richmond & Petersen, 1997)

�� Powersim (1994)Powersim (1994)

�� Vensim (Ventana Systems, 2002)Vensim (Ventana Systems, 2002)

The ‘systems sciences’The ‘systems sciences’�� Soft systems methodology (SSM). (Peter Soft systems methodology (SSM). (Peter

Checkland,1981) Checkland,1981)

�� Cognitive mapping and strategic options development Cognitive mapping and strategic options development and analysis (SODA) (Eden, 1989)and analysis (SODA) (Eden, 1989)

�� Interactive planning & problem solving (Ackoff, 1978)Interactive planning & problem solving (Ackoff, 1978)

�� Ecology of the mind (Bateson, 2000)Ecology of the mind (Bateson, 2000)

�� Organisational cybernetics (Beer, 1959, 1966 & 1981)Organisational cybernetics (Beer, 1959, 1966 & 1981)

Critical systemic thinking (Churchman, 1968 & 1982) Critical systemic thinking (Churchman, 1968 & 1982)


�� Critical systemic thinking (Churchman, 1968 & 1982) Critical systemic thinking (Churchman, 1968 & 1982)

�� Critical systems thinking & heuristics (Ulrich, 1983)Critical systems thinking & heuristics (Ulrich, 1983)

�� Challenging planning assumptions (Mason & Mitroff, Challenging planning assumptions (Mason & Mitroff, 1981)1981)

�� Emotional intelligence (Goleman, 1995) Emotional intelligence (Goleman, 1995)

The ‘systems sciences’The ‘systems sciences’

�� Prospect theory and decision analysis (Kahneman & Prospect theory and decision analysis (Kahneman & Tversky, 2000), Tversky, 2000),

�� Social systems modelling and bounded rationality Social systems modelling and bounded rationality (Simon, 1956 & 1982)(Simon, 1956 & 1982)

�� Systems sciences & systems thinking (Flood and Systems sciences & systems thinking (Flood and Carson, 1993; Flood, 1999)Carson, 1993; Flood, 1999)


Carson, 1993; Flood, 1999)Carson, 1993; Flood, 1999)�� Total systems intervention (Flood, 1995)Total systems intervention (Flood, 1995)

�� Systems thinking tools (Pidd, 1995, 2004)Systems thinking tools (Pidd, 1995, 2004)�� Systemic intervention (Midgley, 2000) Systemic intervention (Midgley, 2000) �� Problem structuring methods (Rosenhead & Mingers, Problem structuring methods (Rosenhead & Mingers,

2001)2001)�� Systems multi methodology (Jackson, 1991 & 2003)Systems multi methodology (Jackson, 1991 & 2003)�� Systems intelligence (Hämäläinen & Saarinen, Systems intelligence (Hämäläinen & Saarinen, 2004)2004)..

What is a System ?What is a System ?

A system is a collection of parts that interact A system is a collection of parts that interact

with one another to function as a with one another to function as a wholewhole. .

However, a system is However, a system is notnot the sum of its parts the sum of its parts ––


However, a system is However, a system is notnot the sum of its parts the sum of its parts ––

it is the product of their it is the product of their interactions. interactions.

(Russell Ackoff, 1993)(Russell Ackoff, 1993)

What is systems thinking What is systems thinking

�� Systems thinking is a scientific field of Systems thinking is a scientific field of knowledge for understanding change and knowledge for understanding change and complexity through the study of dynamic cause complexity through the study of dynamic cause and effect over time. and effect over time.


�� Systems thinking offers a new way of thinking Systems thinking offers a new way of thinking based on the primacy of the ‘whole’ and of based on the primacy of the ‘whole’ and of relationships. It deals with hidden complexity, relationships. It deals with hidden complexity, ambiguity and mental models. It provides tools ambiguity and mental models. It provides tools and techniques to unravel complexity and to and techniques to unravel complexity and to create lasting interventions for chronic problems.create lasting interventions for chronic problems.

Dimension of systems thinking Dimension of systems thinking

�� ParadigmParadigm -- a way of thinking about the world a way of thinking about the world

and relationships.and relationships.

�� LanguageLanguage -- a tool for understanding a tool for understanding


�� LanguageLanguage -- a tool for understanding a tool for understanding

complexity and dynamic cause and effect.complexity and dynamic cause and effect.

�� MethodologyMethodology –– a set of simulation modelling a set of simulation modelling

and learning technologies. and learning technologies.

Systems thinking in daily languageSystems thinking in daily language

�� What goes around comes aroundWhat goes around comes around

�� The solution is part of the problemThe solution is part of the problem

�� Cyclical patternCyclical pattern

�� We’re in this togetherWe’re in this together


�� Fluctuating patternFluctuating pattern

�� Vicious/virtuous cycleVicious/virtuous cycle

�� Domino effectDomino effect

�� He/she is on a rollHe/she is on a roll

Systems thinking in daily languageSystems thinking in daily language

�� Ripple effectRipple effect

�� Chronic behaviourChronic behaviour

�� Downward/upward spiralDownward/upward spiral

�� SelfSelf--fulfilling prophecyfulfilling prophecy


�� SelfSelf--fulfilling prophecyfulfilling prophecy

�� Closing the loopClosing the loop

�� SnowballingSnowballing

�� There is more to it than meets the eyeThere is more to it than meets the eye

�� The cure can be worse than the diseaseThe cure can be worse than the disease

Principles of systemsPrinciples of systems(Anderson and Johnson, 1997: 18(Anderson and Johnson, 1997: 18––20)20)

11 The big pictureThe big picture

22 Short and long termShort and long term

33 Soft indicatorsSoft indicators

44 System as a cause System as a cause


55 Time and space Time and space

66 Cause versus symptom Cause versus symptom

77 EitherEither--or thinking or thinking ‘Not everything that can be counted counts, and not everything ‘Not everything that can be counted counts, and not everything

that counts can be counted.’ that counts can be counted.’ ---- Albert EinsteinAlbert Einstein

Linear versus systems thinkingLinear versus systems thinking

�� What makes organisations successful?What makes organisations successful?


Linear versus systems thinking (cont’d)Linear versus systems thinking (cont’d)

‘Lists' ‘Lists' –– example of linear thinking:example of linear thinking:

�� Factors are independent.Factors are independent.

�� Causality runs one way (from cause to effect).Causality runs one way (from cause to effect).

�� Factors are equally important.Factors are equally important.


�� Factors are equally important.Factors are equally important.

By contrast:By contrast:

�� ClosedClosed--loop or systems thinking maintains that loop or systems thinking maintains that

factors are not independent, and factors are not independent, and

�� that causality is ‘circular’. that causality is ‘circular’.

introduction to systems thinking

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