Business Policy and Strategy, System Dynamics Applications to

Abstract

Definition of the Subject System dynamics has long been applied to problems of business performance. These applications range from operational/functional performance to overall strategic performance. Beginning with its founding at MIT's Sloan School of Management in 1957, an important focus of research, teaching, and application has been on understanding why companies and markets exhibit cycles or underperform competitors in terms of growth or profitability. The original publication in the field was Forrester's Industrial Dynamics (Forrester 1961), which not only laid the theoretical foundations for the field but also provided an understanding of the causes of instability in supply chains. Since that initial work, research and application has been widespread. It has addressed the dynamics underlying instability in manufacturing and service organizations, the processes which encourage or inhibit growth, the dynamics of research organizations, and the causes of cost and schedule overruns ...