Transforming an agricultural trade organization: A system-dynamics-based intervention

Abstract

The management of agricultural trade organizations in Switzerland is characterized by completely new entrepreneurial challenges due to a progressive opening of agricultural markets and a corresponding reform in the state's agricultural policy. The need for well-suited strategic management tools has suddenly become manifest. Given this background, the intervention described in this article took place in a division of a union of cooperatives in the Swiss agribusiness, which is a typical example of a small medium-sized enterprise (SME). The aim of the project was to search for possible ways to sustain the viability of the division in the future. The intervention started with the development of an overall descriptive network-type model of the strategically relevant issues faced by the division. A system dynamics (SD) model was built as a decision support tool for one of two crucial strategic issues: the organization of the distribution system. Based on the insights derived from model-building and simulation, the management team changed its shared mental model of the issue at hand, achieving a deeper understanding of the situation faced, the options available and their implications. Thereupon, they have started to reorganize the whole distribution system. In sum, the modeling and simulation activities undertaken had a powerful trigger function in the process by inducing organizational learning at a very fast pace. Copyright © 2002 John Wiley & Sons, Ltd.