Disclaimer:

This literature extract was gathered purely and subjective according the interests of the
author (Manfred Bundschuh). Usually there were complete sentences from the original
transferred. There's no guarantee for correctness.

Literature extract from: Jay W. Forrester: System Dynamics

and the Lessons of 35 Years, Sloan School of Management
Massachusetts Institute of Technology, April 29, 1991

Contents
1. Introduction ………………………………….…………………. 1
2. Designing Managerial and social Systems ……………….…….. 2
3. A new kind of management education …………………….…… 3
4. Modelling for what purpose? …………………………….…….. 4
4.1. Unifying Knowledge …………………………………... 4
4.2. Enhancing Mental Models ………………………….….. 4
4.3. Small Models versus Large Models …………………… 4
5. The System Dynamics paradigm …………………………….… 4
5.1. Endogenous Behaviour ………………………….…….. 5
5.2. Sources of Information ………………………………… 5
6. Learning from models ……………………………………….…. 6
6.1. Surprise Discoveries …………………………………… 6
6.2. General Characteristics of Systems ……………………. 6
7. System Dynamics and public responses ……………………….. 7
8. A new basis for precollege education ……………………….…. 7
9. Links to my Papers about J.W. Forrester in www.academia.edu 8

1. Introduction

The professional field known as system dynamics has been developing for the last
35 years and now has a world-wide and growing membership.

System dynamics provides a common foundation that can be applied wherever we

want to understand and influence how things change through time.

The management and social science have in the past unduly restricted themselves to
measured data and have neglected the far richer and more informative body of
information that exists in the knowledge and experience of those in the active,
working world.

System dynamics uses concepts drawn from the field of feedback control to
organize available information into computer simulation models.

The first articles based on this work appeared in the Harvard Business Review
(Forrester, 1958).

1
The great challenge for the next several decades will be to advance understanding
of social systems in the same way that the past century has advanced understanding
of the physical world.

2. Designing Managerial and social Systems

Everyone speaks of systems: computer systems, air traffic control systems,

economic systems, and social systems. But few realize how pervasive are systems,
how imbedded in systems we are in everything we do, and how influential systems
are in creating most of the puzzling difficulties that confront us.

People deal differently with different kinds of systems.

Consider the contrast between great advances during the last century in
understanding technology, and the relative lack of progress in understanding
economic and managerial systems. Why such a difference?

I believe the answer lies in failing to recognize that countries and corporations are
indeed systems. There is an unwillingness to accept the idea that families,
corporations, and governments belong to the same general class of dynamic
structures as do chemical refineries and autopilots for aircraft.

There is a reluctance to accept the idea that physical systems, natural systems, and
human systems are fundamentally of the same kind, and that they differ primarily in
their degree of complexity.

The idea of a social system implies sources of behaviour beyond that of the
individual people within the system. Something about the structure of a system
determines what happens beyond just the sum of individual objectives and actions.
In other words, the concept of a system implies that people are not entirely free
agents but are substantially responsive to their surroundings.

To put the matter even more bluntly, if human systems are indeed systems, it
implies that people are at least partly cogs in a social and economic machine, that
people play their roles within the totality of the whole system, and that they respond
in a significantly predictable way to forces brought to bear on them by other parts
of the system. Even though this is contrary to our cherished illusion that people
freely make their individual decisions, I suggest that the constraints implied by the
existence of systems are true in real life.

The feedback structure of an organization can dominate decision making far

beyond the realization of people in that system. By a feedback structure, I mean a
setting where existing conditions lead to decisions that cause changes in the
surrounding conditions, that influence later decisions. That is the setting in which
all our actions take place.

We discovered surprising things in our early work with corporations that we now
realize carry over to all social systems.

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- First, most difficulties are internally caused, even though there is an
overwhelming and misleading tendency to blame troubles on outside forces.
- Second, the actions that people know they are taking, usually in the belief that the
actions are a solution to difficulties, are often the cause of the problems being
experienced.
- Third, the very nature of the dynamic feed-back structure of a social system tends
to mislead people into taking ineffective and even counterproductive action.
- Fourth, people are sufficiently clear and correct about the reasons for local
decision making-they know what information is available and how that information
is used in deciding on action.

But, people often do not understand correctly what overall behaviour will result
from the complex interconnections of known local actions.

Sometimes, one need not even go into a company to identify the system creating a
problem. Many readers will remember the People Express airline. During its early
history People Express was spectacularly successful with one of the highest growth
rates in the history of American corporations. In 1983, the Harvard Business School
published a management case on the history, practices, and success of People
Express. (Harvard Business School, 1983).

Professor John D. Sterman at the MIT Sloan School of Management created a

system dynamics simulation model of the People Express corporation. The model
represents the propensity to expand the air fleet, the relatively greater difficulty in
other airlines and on the financial position of People Express. The model generates
a powerful growth mode followed by sudden failure, just as happened with the
actual airline.

3. A new kind of management education

All of this points to a new kind of management education. Beyond that, it suggests
a new kind of manager for the future. One can now see clearly a kind of
management education that we might call "enterprise design." And in the future
there is a role for the output of such an education, the "enterprise designer."

Such management education leads to what I refer to as enterprise design. Such an

education would build on three major innovations that have already occurred in this
century.

- The first innovation was the case-study method of management education as

pioneered by the Harvard Business School beginning around 1910.
- Second was the development of theory and concepts related to dynamic
behaviour of feedback systems as first developed in engineering at the Bell
Telephone Laboratories an MIT in the 1930s and 1940s.
- Third has been digital computers, especially the recent personal desk-top
computers, that permit simulation modelling of systems that are too complex for
mathematical analysis.

Bringing these three innovations together offers the potential for a major
breakthrough in management education.

3
Future training in the enterprise design will include studies of a library of generic
management situations combining descriptive case studies with dynamic computer
models, each of which have wide applicability in business. I estimate that about 20
such general, transferrable, computerized cases would cover perhaps 90 percent of
the situations that managers ordinarily encounter. Several powerful examples
already exist.

4. Modelling for what purpose?

System Dynamics does not impose models at people for the first time.

4.1. Unifying Knowledge

Complex systems defy intuitive solutions.

Attempts to deal with nonlinear dynamic systems, using ordinary processes of

description and debate, lead to internal inconsistencies. Mental models are often
logically incomplete.

System dynamics modelling can be effective because it builds on the reliable part
of our understanding of systems while compensating for the unreliable part.

4.2. Enhancing Mental Models

System dynamics models have little impact unless they change the way people
perceive a situation.

In other words, a system dynamic model, if it is to be effective, must communicate

with and modify the prior mental models. Only people's beliefs, that is, their mental
models, will determine action. Computer models must relate to and improve mental
models if the computer models are to fill an effective role.

4.3. Small Models versus Large Models

What kind of system dynamics model interacts best with mental models? Clearly, a
small model has advantages over a large model. A recent trend in system dynamics
has been toward small models to be used for enhancing insight. Often, such models
have been built directly from mental models

5. The System Dynamics paradigm

System dynamics adheres to viewpoints and practices that set it apart from other
fields dealing with the behaviour of systems. But even so, the unique character of
system dynamics has never been adequately set forth. Each aspect of system
dynamics is accepted by some other professional group at least to a degree. System
dynamics is distinguished not only by the particular cluster of beliefs that guide the
work but also by the degree to which those charavteristics are indeed practiced.

4
5.1. Endogenous Behaviour

I believe the best system dynamics practice puts rather extreme demands on a
model for generating within itself the behaviour modes of interest. That is, the
model boundary is to be established so that the causal mechanisms lie inside the
boundary. This expectation of finding endogenous causes of behaviour is in sharp
contrast to the view often found elsewhere. People are far more comfortable
blaming their troubles on uncontrollable external causes rather than looking to their
own policies as the central cause.

System dynamics models build from the inside to determine and to modify the
processes that cause desirable and undesirable behaviour.

5.2. Sources of Information

Effectiveness of models depends on how it uses the wide range of information

arising from the system being represented

Information is available from many sources.

Although "data" is a term that is often used to mean only numerical information,
the dictionary meaning is far broader. Data is "something that is given from being
experientially encountered" and "material serving as a basis for discussion,
inference, or determination of policy" and "detailed information of any kind".

Human affairs are conducted primarily from the mental data base.

The dominant significance of information from the mental data base is not
adequately appreciated in the social sciences.

The mental data base contains vastly more information than the written data base,
which, in turn, contains far more information than the numerical data base.
Furthermore, the character of the information differs in the three categories.

That is, the written and numerical data bases contain not only less information,
but progressively smaller proportions of the information needed for constructing a
dynamic model.

The mental data base is rich in structural detail; in it is knowledge of what

information is available at various decision-making points, where people and goods
move, and what decisions are made. The mental data base is especially concerned
with policy, that is, why people respond as they do, what each decision-making
center is trying to accomplish, what are the perceived penalties and rewards, and
where self-interest clashes with institutional objectives.

In general, the mental data base relating to policy and structure is reliable. Of
course, it must be cross-checked with all other available information.

Exaggerations and over simplifications exist and must be corrected.

5
The numerical data base is of narrower scope than either the written or mental
data bases.

In complex nonlinear feedback systems, statistical analysis of historical data should

be used cautiously. Even so, numerical data can contribute to system dynamics
model building in three ways.
- First, numerical information is available on some parameter values.
- Second, numerical data has been collected by many authors in professional
literature summarizing characteristics of economic behaviour.
- Third, the numerical data base contains time series information that in system
dynamics is often best used for comparison with model output rather than for
determining model parameters.

Information from the mental data base is recognized as a rich source of knowledge
about structure and the policies governing decisions.

The mental and written data bases are the only sources of information about
litmiting conditions that have not occurred in practice but which are important in
determining the nonlinear relationships that govern even normal behaviour.

6. Learning from models

Model building should be a circular process of creating a model structure, testing

behaviour of the model, comparing that behaviour with knowledge about the real
world being represented, and reconsidering structure.

6.1. Surprise Discoveries

Surprising behaviour will usually point to model defects. But the modeler must be
always alert to the possibility that the unexpected behaviour of the model is
revealing a new insight about the real system.

6.2. General Characteristics of Systems

Even more important than finding unexpected behaviour of a specific system is the
discovery of general characteristics that are applicable to a broad class of systems,
or even to nearly all systems.

Several general characteristics of systems were identified in Urban Dynamics

(Forrester, 1969). Two examples will illustrate.

First, a characteristic like the long-term versus short-term trade off applies to most
decisions.

Second, another inadequately appreciated general characteristic of systems lies in

high resistance to policy changes. Perhaps as many as 98 percent of the policies in a
system have little effect on its behaviour because of the ability of the system to
compensate for changes in most policies.

6
7. System Dynamics and public responses

System dynamics models have the potential for raising the quality of managerial
and political debate. The books, World Dynamics, Limits to Growth, Toward
Global Equilibrium, and Dynamics of Growth in a Finite World, launched intense
world-wide debate even though their subject had been treated in many preceding
descriptive publications. Why? I believe there are two reasons.

The first reason for intense public response to the books arose because of the way
the books illuminated long-run issues. It is commonplace to assert that people take
only a short-run view of life, but that is only partially true.

The four books offered a way to understand the past and present that could assist in
seeing into the future. Good system dynamics modeling contributes to relating the
legacy of the past to decisions of the moment, and actions of the present to their
implications for years to come.

The second reason for intense public involvement arose because a presentation
based on a system dynamics model can have an internal consistency that is beyond
the reach of the usual discussion processes.

8. A new basis for precollege education

System dynamics offers a basis for a new kind of education that leads to a better
understanding of change in social and environmental conditions. But the dynamic
viewpoint takes time to absorb. Several years are needed to organize a student's
thinking to a dynamic frame of reference. By starting in the first year of junior high
school and weaving a dynamic thread through high school and college, we can hope
for a society that is better able to cope with growing social complexity.

Only when dynamic considerations are introduced throughout the educational

process will students have time to develop improved mental models to guide
personal and public action. Just as understanding of the natural world rests on
science studies woven into all educational levels, so will a comparable
understanding of dynamic systems in society and nature need to be made a part of
the entire educational sequence.

Students are stuffed with facts but without having a frame of reference for making
those facts relevant to the complexities of life. Education is fragmented.

Missing from most education is a direct treatment of the time dimension. What
causes change from the past to the present and the present to the future?

How are the lessons of history to be interpreted to the present?

Two mutually reinforcing developments now promise a learning process that can
enhance breadth, depth, and insight in education. These two threads are system
dynamics and learner-directed learning.

System dynamics can provide a dynamic framework to give meaning to detailed

facts.

7
 "Learner-directed learning," refers to a way of organizing a school so that students
work together in teams of two or three to cooperate in meanigful projects for which
they must do research and creative thinking.

There are now several dozen high schools and junior high schools making
substantial progress in combining system dynamics and learner-directed learning.
In several hundred schools some activity is under way.

Remark from Manfred Bundschuh: GAMMA: Methode und

Werkzeug zur Bearbeitung komplexer roblenstellungen,
siehe Hanns Hub:

https://www.academia.edu/31375798/Literaturauszug_aus_Hanns_Hub_GA
MMA_Methode_und_Werkzeug_zur_Bearbeitung_komplexer_Problemstell
ungen
https://www.system-management.com/smg/gamma-ein-pc-werkzeug-f%C3%BCr-
vernetztes-denken-v-30

9. Links to my Papers about J.W. Forrester in www.academia.edu

Literature extracts

Literature extract fo Forrester: Learning through System Dynamica as preparation for the 21st Century (English)
https://www.academia.edu/32713536/Literature_extract_from_Jay_W_Forrester_Learning_through_System_Dy
namics_as_preparation_for_the_21_st_century

Literature extract of Forrester: Counterintuitive Bhaviour of Social Systems (English)

https://www.academia.edu/32713358/Literature_extract_from_Jay_W_Forrester_Counterintuitive_Behaviour_of
_Social_Systems

English OHP Charts /Englische Folien

my OHP charts from Forrester: Counterintuitiv Behaviour of Social Systems (English)

https://www.academia.edu/41078259/my_OHP_charts_of_Jay_W_Forrester_Counterintuitive_Behaviour_of_So
cial_Systems

my OHP charts from Forrester: System Dynamics and the Lessons of 35 years (English)
https://www.academia.edu/41077809/my_OHP_charts_of_Jay_W_Forrester_System_Dynamics_and_the_Lesso
ns_of_35_Years

my OHP charts from Forrester: Learning through System Dynamics as preparation fot he 21st Century
(English)
https://www.academia.edu/73827780/my_OHP_charts_from_Jay_W_Forrester_Learning_through_System_Dyn
amics_as_preparation_for_the_21_st_Century

Deutsche Folien / German OHP charts

Meine Folien von Forrester: System Dynamics und die Lehren von 35 Jahren (German)
https://www.academia.edu/63197720/meine_Folien_Jay_W_Forrester_System_Dynamics_und_die_Lehren_aus
_35_Jahren

meine Folien von Forrester: Lernen durch System Dynamics als Vorbereitung für das 21. Jahrhundert (Deutsch)

8
https://www.academia.edu/73827482/Meine_Folien_zu_Jay_W_Forrester_Lernen_durch_System_Dynamics_al
s_Vorbereitung_f%C3%BCr_das_21_Jahrhundert

meine Folien von Forrester: Kontraintuitives Verhalten sozialer Systeme (Deutsch)

https://www.academia.edu/73826437/meine_Folien_zu_Jay_W_Forrester_Kontraintuitives_Verhalt
en_sozialer_Systeme