What is System Dynamics?
System dynamics is a methodology for studying and managing complex feedback systems, such as one finds in business and other social systems. In fact it has been used to address practically every sort of feedback system. While the word system has been applied to all sorts of situations, feedback is the differentiating descriptor here. Feedback refers to the situation of X affecting Y and Y in turn affecting X perhaps through a chain of causes and effects. One cannot study the link between X and Y and, independently, the link between Y and X and predict how the system will behave. Only the study of the whole system as a feedback system will lead to correct results.
“System dynamics deals with how things change through time, which includes most of what most people find important. It uses computer simulation to take the knowledge we already have about details in the world around us to show why our social and physical systems behave the way they do. System dynamics demonstrates how most of our own decision-making policies are the cause of the problems that we usually blame on others, and how to identify policies we can follow to improve our situation.” – Jay Forrester, Professor of Management, Emeritus and Senior Lecturer, Sloan School, Massachusetts Institute of Technology; Founder, System Dynamics System Dynamics is a computer based approach for modeling complex physical and social systems and experimenting with the models to design policies for improved performance. A model embodies a theory explaining internal dynamics of an abstract system built around a problem.
System dynamics is a computer modeling technique that has its origins in control theory, cybernetics, organizational theory, behavioral psychology, economics, and digital computer simulation. It is used to build models of systems that are experiencing problems and/or exhibiting behaviors that are not well understood. The completed models are used as “laboratories” for testing policy changes aimed at improving system behavior. One of the great strengths of the system dynamics method is its ability to span disciplinary boundaries. System dynamics modeling is problem-oriented. That is, problems are modeled, not systems. Any information that is thought to be relevant to the modeling problem at hand, therefore, regardless of academic discipline, can be (and is encouraged to be) formally incorporated into a system dynamics model.
The System Dynamics Group was founded in the early 1960s by Professor Jay W. Forrester at MIT. At that time, he began applying what he had learned about systems during his work in electrical engineering to every day kinds of systems. What makes using system dynamics different from other approaches to studying complex systems is the use of feedback loops. Stocks and flows help describe how a system is connected by feedback loops which create the nonlinearity found so frequently in modern day problems. Computers software is used to simulate a system dynamics model of the situation being studied. Running “what if” simulations to test certain policies on such a model can greatly aid in understanding how the system changes over time.
