There exists a large body of literature on organizational change and on the puzzling effect of change failure. This paper adds the often missing element of combining several reasons for change inefficacy. These reasons for failure to change are low systemic mutability (inertia), insufficient political, rational, and emotional commitment (resistance). Participation and discourse are then presented as one solution to the problem, relieving resistance and enhancing employee commitment.
While large scale diffusion of alternative fuel vehicles (AFVs) is widely anticipated, the mechanisms that determine their success or failure are ill understood. Analysis of an AFV transition model developed at MIT has revealed that AFV diffusion dynamics are particularly sensitive to consumers decisions as influenced by social exposure to AFVs. While some empirical research in this area exists, uncertainty in these parameters remains high. Following principles of partial model testing in this paper we report on research that examines the social exposure parameters. We focus on empirical accounts of diffusion involving diesel passenger vehicles in Europe using the historical data of diesel vehicle registrations and installed base in six European countries - France, Germany, Italy, Spain, Sweden and United Kingdom. To complete diffusion data sets we generate synthetic data from 1970 to 2005. Confidence interval testing for model parameters is conducted using the bootstrapping method.
The results from the calibrations yield parameters that are in line with other marketing studies and help reduce uncertainty in the social exposure parameters. Further, the analysis suggests applicability of this model for alternative fuel vehicle markets and provides further lessons for other AFV technology transition. We discuss challenges and avenues for further research.
Despite its success and growing practitioner base, System Dynamics (SD) still lacks a strong and rich enough support toolbox, i.e. a set of formal mathematical tools that can support the modeler/practitioner in various stages including model identification, calibration, behavior analysis, policy design and sensitivity analysis. The study presented in this paper is an attempt towards developing such a support tool that can be used for pattern-based parameter search, which may be utilized in model identification, validation and policy analysis stages. The tool mainly incorporates a 2D pattern recognition algorithm and an optimization heuristic in order to search values for selected model parameters that yield a model behavior similar to the desired one in terms of pattern characteristics. The proposed tool is implemented, and a series of test experiments are conducted on three sample models in order to reveal the performance of it. Based on these experiments, the primary assessment about the proposed method is that its performance is quite satisfactory and it stands as a promising automated parameter search tool, which can be utilized even in the cases where data series representing the desired model behavior is missing.
Though world-of-mouth (WOM) communications is a pervasive and intriguing phenomenon, little is known on its effect in terms of macro-behavior. The purpose of this study is to investigate the WOM effect on macro-level marketing to explain the herd behavior of Chinese consumers. To achieve our goal, the system dynamics was applied build a simulation model for a popular herd behavior happening in Macao, Hong Kong, and Taiwan, i.e., buying Portuguese custard tarts. Both micro-behavior and macro-behavior were considered in this model and the linkage between micro-behavior and macro-behavior was specially emphasized. The results showed that the market of Portuguese custard tarts would crash quickly under fast distribution of WOM and herd behavior while considering the limitation of capacity.
Shrinking cycle time with concurrent engineering can make projects more difficult to manage. However, the extent, nature and conditions of the causal relationship between concurrence and manageability are not well understood. This study uses Degree of Concurrence and Degree of Concurrence Relationship Curvature as two measurements of dynamic concurrence based on Process Concurrence Relationship, an improved tool for describing and modeling concurrence, and uses the standard deviation of Process Work Queue Acceleration as Manageability Index to model project manageability. Single-phase development process model is applied as a data collection tool to investigate the causal relationship between concurrence and manageability. Two hypotheses were developed to test the causal relationship separately with the two different experiments - Linear and Nonlinear. The study finds a significant inverse relationship between degree of concurrence and project manageability with linear concurrence relationship. When the concurrence relationship was changed from linear to nonlinear the relationship became quite unexpected. The results improve the understanding of the causal relationship between dynamic concurrence and manageability.
Outsourcing maintenance to third-party contractors has become an increasingly popular option for manufacturers to achieve tactical and/or strategic objectives. Though simple in concept, maintenance outsourcing is difficult in execution, especially in a cost-sensitive environment. This project examines the Full Service business under ABB Ltd to understand the key factors that drive the success of an outsourced maintenance operation. We present a qualitative causal loop diagram developed based on the case study of Kinleith Pulp and Paper Mill in New Zealand. The diagram describes the interconnections among various technical, economic, relationship, and humanistic factors and shows how cost-cutting initiatives can frequently undermine labor relationship and tip the plant into the vicious cycle of reactive, expensive work practices. The model also explains how Kinleith achieved a remarkable turnaround under ABB, yielding high performance and significant improvements in labor relations. A case study of Tasman Pulp and Paper Mill provides a contrasting case where success has been more difficult. Results point to the importance of creating sufficient resources (slack) to implement improvement activities and pace implementation based on pre-existing dynamics on site.
Goals play significant role in decision making. Most organizations can be assumed to set and then pursue certain goals either stated explicitly or assumed implicitly. In realistic models, the goal is not a constant but a variable: it can erode due to persistent failure or it can evolve further as a result of confidence caused by success With respect to many different types of goal dynamics, there exist some models of limited and linear goal erosion dynamics in the literature. We extend the existing models to obtain a comprehensive model of goal dynamics, by including organizational capacity limits on performance improvement rate, performance decay when there is no effort, time constraints and pressures, motivation and frustration effects. The model constitutes a general theory of goal dynamics in organizations. Our model also demonstrates some strategies to avoid the undesirable goal and performance erosion in various unfavorable, risky goal seeking environments.
This paper tries to model a dynamic determination of foreign exchange rate
in an open macroeconomy in which
goods and services are freely traded and financial capital flows efficiently
for highest returns.
For this purpose it becomes necessary to employ a new method
contrary to standard methods of dealing with a foreign sector as
adjunct to macroeconomy;
that is, an introduction of another macroeconomy as a foreign sector.
Within this new framework of open macroeconomy, transactions among
domestic and foreign sectors are handled according to the principle of
accounting system dynamics developed by the author, and
the balance of payments is attained.
For the sake of simplicity of analyzing foreign exchange dynamics,
macro variables such as GDP, its price level and interest rate are
treated as outside parameters.
Then, eight scenarios are produced and examined
to see how exchange rate, trade balance and financial investment, etc.
respond to such outside parameters.
To our surprise, expectations of foreign exchange rate turn out to play
a crucial role for destabilizing trade balance and financial investment.
The impact of official intervention on foreign exchange and a path to
default is also discussed.
While the focus of the project management literature has been on the management of single projects, the management of multiproject environments is largely neglected. In this research I am focusing on mutiproject environments which exist within a single firm (hereafter called Alpha). Through my investigation in this multiproject environment I explored root causes for project inefficiencies which rather than being possible to attribute to source within each single project boundary, are caused by the effects which I term them systemic effects. System effects are dynamics triggered by the complex linear , nonlinear and time delayed interaction of large number of factors. I develop a model which explains the dynamics through which the systemic effects deteriorate the performance of the projects in this organization. The model is useful in creating awareness among the managers about the lack of holistic approach in decision making and the effects of suboptimum decisions in this environment.
This paper describes the application of system dynamics to assist decision making in the reallocation of resources within a specialist mental health trust in south London. Mental health service providers are under increasing pressure to both reduce their own costs and to move resources upstream in mental health patient pathways to facilitate treating more people, whilst not compromising service quality. The investigation focuses on the use of the model to examine the case for converting an existing specialist service ward in a mental health hospital into a triage ward, where patients are assessed and prioritised during a short stay for either discharge or onward admission to a normal ward. Various policies for the transition are studied together with the implications for those patients needing post hospital services and relocation within the community. The model suggests that the introduction of a triage ward could meet the strategic requirement of a 10% shift away from institutional care and into community services. The paper includes a number of statements from the management team involved on the benefits of system dynamics to their thinking.