System dynamics: Applications in management and policy

Abstract

The methodology of system dynamics emerged as an attempt to offer an endogenous explanation to the dilemma of a manufacturing organization that faced cyclical variations in business which could not be explained based on business cycles alone. The methodology uses insights from servo-mechanism to explain how the feedback loop(s) resulting from management action and the consequent change in the system’s state could produce unanticipated behavioural dynamics not fathomable by the human mind. In the last six decades of its existence, the methodology has found applications in diverse areas of management practice. Wherever there has been a need to understand a complex phenomenon that arises as a consequence of the interaction of multiple independent dynamics, the methodology has proved its utility. In this chapter, I draw upon the twenty epistemological underpinnings of system dynamics discussed by Mohapatra and Mandal, to summarize a select set of such applications. Many of these report outcomes of consulting efforts, while others talk of academic efforts at explaining observed phenomena. It appears that, although in a limited set of instances, the models have been used for forecasting purposes, in the majority of cases system dynamics models have helped in fathoming the operational feasibility of planned intervention or intended strategy. © 2019 selection and editorial matter, Indian Institute of Management Calcutta; individual chapters, the contributors.