FUBUTEC 2013, 9th Future Business Technology Conference University of Lincoln, United Kingdom, June...

FUBUTEC 2013, 9th Future Business Technology ConferenceUniversity of Lincoln, United Kingdom, June 10-12, 2013

FUTURE DECISION-MAKERS AND COMPLEXITY: LEARNING PROBLEM STRUCTURING THROUGH SYSTEM DYNAMICS

Eliseo Vilalta-Perdomo, Lincoln Business SchoolUniversity of Lincoln, UK

FUBUTEC 2013, 9th Future Business Technology Conference

University of Lincoln, Lincoln, United Kingdom, June 10-12, 2013

Rationale

Aim: This paper deals with the challenge of introducing our students, future decision-makers, to the process of simulating complex behaviours.

Proposal: To engage students in a real research project in order to learn complex problem structuring through System Dynamics (SD).

Contribution: The effectiveness and efficiency of different SD educational approaches can be evaluated by means of Forrester’s criteria.



Decision–makingTraditional approach

“I keep six honest working men(They taught me all I knew);

Their names are What and Why and When

And How and Where and Who”.

Kipling R. (1902) ‘The Elephant's Child’, Just So Stories



Limitations to decision–makingInterpretations of ‘complexity’

1. Detailed complexity• Environments constituted

by immense amounts of actors interacting through (almost) infinite relationships.

2. Dynamic complexity

• Subtle changes recognizable only after it is too late to react.

Emergency

Unexpected side-effects



Complexity awareness: System Dynamics as a possibility

• System dynamics (SD) is a computer-aided approach to policy analysis and design. It applies to dynamic problems arising in complex social, managerial, economic, or ecological systems — literally any dynamic systems characterized by interdependence, mutual interaction, information feedback, and circular causality

(System Dynamics Society, 2013)



Complexity awareness: Aspects of reality explored through SD • Business dynamics (Forrester

1961, Sterman 2002; Morecroft 2007; Warren 2008)

• Organizational behaviour (Senge 1992)

• Urban viability (Forrester 1969)• Sustainability (Forrester 1973,

Meadows et al, 1993) • Systems thinking (Kauffman 1980)



SD capabilitiesWhy to teach SD?

• Organising descriptive information• Retaining richness of the real process• Building on the experiential

knowledge of managers• Revealing the variety of dynamic

behaviours according to different policies

(Forrester, 1989)



SD capabilitiesOrganising descriptive information

• Traditional approach: To provide order to observations before these are collected –i.e. use authority (Zeeuw, 2001). – Quality (Deming, Juran and Ishikawa) to systematize

observations and coordinate organizational actions for improvement.

– System (Ackoff, Beer, Checkland or Friend) to identify how to induce certain kind of interaction between diverse elements that constitutes an organization, to improve also the organizations’ performance.

• SD approach : To organize what we observe through ‘generic structures’ –i.e. ‘system archetypes’ (Senge, 1992; Wolstenhome, 2003). – Behaviours such as exponential growth, goal seeking or

oscillation are simulated through accumulators (‘levels’), rates of changes (´flows’), and mutual interactions (‘feedback’).



SD capabilitiesRetaining richness of the real process

• Traditional approach: To select a section of reality, to identify its characteristics, and to extend this characterization to other parts of it. – Statistics and Probability: Limitation unable to look

at emergent behaviours

• SD approach: To identify which elements and/or interactions trigger preferred behaviours– Systems thinking: SSM, VSM, CHS, Interactive

Planning– Complex systems: Chaos theory, Complex Adaptive

Systems



SD capabilitiesBuilding on the experiential knowledge

• Traditional approach: To separate knowledge from action, and thus the bearer of knowledge from the influence of his own intervention.

• SD approach: Learning by doing – e.g. simulation



SD capabilitiesBehaviours related to different policies

• Traditional approach: Impossibility Theorem (Arrow, 1950); Non-technical problem (Hardin, 1968); Wicked problems (Rittel and Webber, 1973)

• SD approach: Testing different scenarios / configurations – e.g. simulation– Key objectives: To define new policies and evaluate

their impact. To increase understanding and also learning, ‘insight generation capacity’

– Main challenge: to make it more accessible to the widest range of scholars, students and policy makers.



Teaching SDSizing the task: What is SD?

42.4%

9.1%

36.4%

3.0%

6.1%

33.3%

15.2%

I don't know

The study of Supply Chain

The study of systems' flows

The study of plant distribution

Application of tools for optimal solutions

To model and observe a system

To model systems that change on time



Teaching SDSizing the task: What is SD for?

24.2%

24.2%

30.3%3.0%

24.2%

6.1%

18.2%

6.1%3.0%

6.1%

I don't know

Better solutions

To improve industrial processes

To make better decisions

To predict

To design a system

To understand systems' behaviors

To run systems smoothly

Effcient use of resoucer

To use in enterprises



How to teach SD?Traditional approach1. Define problems dynamically, in terms of graphs over time.

2. Strive for an endogenous, behavioural view of the dynamics of the system.

3. Think of all concepts in the real system as continuous quantities interconnected in loops of information feedback and circular causality.

4. Identify independent stocks or accumulations (levels) in the system and their inflows and outflows (rates).

5. Formulate a behavioural model –i.e. computer simulation model expressed in nonlinear equations.

6. Derive understandings and applicable policy insights from model outcomes.

7. Implement changes resulting from model-based understandings and insights.



How to teach SD?PSM approach

We induce our students to engage in a process of research.

• To define a problem to be solved (problem-based learning, PBL).

• To introduce a case to be studied (method of cases, MC).

• To enrol students in a project (project-oriented learning).

Problem Structuring Methods:

Family of participatory and interactive methods whose purpose is to assist groups of diverse composition tackle a complex problematic situation of common interest

(Rosenhead 2009)



How to teach SD?PSM approach - Example

• El Bosque de la Primavera - protected area of 30 thousand hectares. The lung of Guadalajara (Mexico) 5 million inhabitants

• The students’ project:– identification of different variables that affect the

viability of the forest. – exploring diverse policies and their impact in the forest

density. – conduct several meetings with the ‘clients’ - engaged

research. – SD modelling (urbanization, geothermal stations,

material banks, illegal hunting, uncontrolled exploitation, excessive pasturing, fires, and motorcycling)



How to teach SD?PSM approach - Example

• Model outcomes were a surprise for ‘clients’: – Amount and size of the fires not related to

visitors, but to weather. Winter rather than Summer the dangerous period, as then it is the dry season in Mexico.

– Impact of reforestation. More effective and efficient to increase the reforestation than buying equipment to reduce fires

– Fires (related to natural causes) are healthy to forest ecosystems

– Restricting access policies are not effective measures – e.g. reducing visitors’ quotas



How to teach SD?PSM approach – Other examples

Different regional/municipal issues:• Pollution impact of a refinery in the

city of Salamanca• Water consumption in Irapuato • Future education requirements in

Zapopan• Public transport in Guadalajara • Deterioration of the Chapala Lake



How to teach SD?Any advantages/disadvantages

Traditional• Aim: Model about

something• Effective: to solve well-

defined problems • Efficient: it reduces

variability and increases standardization in the teaching process

Problem Structuring Method• Aim: Model for something• Effective: to build models

with people unfamiliar with SD

• Efficient: students learn at first-hand how to deal with a complex situations, and ‘clients’ usually become surprised by the outcomes (insight generation)



How to teach SD?Conclusions

SD is an effective and efficient way to teach and learn how to model complex behaviours.– First, it let us to introduce and test what is

known in different scenarios and situations. – Second, it allows bringing new experiences

to what is known. – Third, it can be used to teach and learn

reducing potential damages to the real situation.



How to teach SD?Future activities

• Criteria to test if SD as a PSM is a more effective and efficient educational approach.

• Initial exploration • To conduct SD education through a formal

process of research• To involve students in the development of

‘models for something’:– Effective, some knowledge is acquired and – Efficient, enough to avoid future errors by doing

right actions in the present



Thanks for your attention

Any questions or comments?

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