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The feedback view of business policy and strategy
Author(s) -
Morecroft John D. W.
Publication year - 1985
Publication title -
system dynamics review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.491
H-Index - 57
eISSN - 1099-1727
pISSN - 0883-7066
DOI - 10.1002/sdr.4260010103
Subject(s) - conceptualization , system dynamics , management science , computer science , phase (matter) , dual (grammatical number) , value (mathematics) , conceptual model , organizational structure , knowledge management , process management , management , business , economics , artificial intelligence , art , chemistry , literature , organic chemistry , database , machine learning
A combination of administrative theory and traditional system dynamics modeling promises a flexible model‐based tool to assist businesses in designing policies and programs to support new strategic moves. Administrative theory helps clarify the firm's organization and decision‐making structure. System dynamics highlights feedback loops in the decision‐making structure and shows how structure is related to business behavior. With this dual conceptual framework, a business policy modeling project divides into two distinct phases, each of which has a value in policy analysis. Phase 1 is a descriptive survey of the firm's decision‐making structure, rather like traditional conceptualization but made richer by use of administrative theory. Phase 2 is conventional simulation modeling that builds on the phase 1 survey. Several business cases illustrate the kinds of policy insights that a phase 1 survey can provide. The article also comments on the value that a full‐fledged simulation model adds to the phase 1 analysis.