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Supporting strategy using system dynamics

Supporting strategy using system dynamics
Supporting strategy using system dynamics
This paper presents a protocol for supporting strategy development via system dynamics (SD) modeling in consultation with Chief Executive Officers (CEOs) of small organizations; it also reports on the effectiveness of this protocol one year after an initial study was conducted. The protocol was applied in five small organizations; it involves the development of a SD model that is used to generate scenarios of alternative strategic situations an organization may face. We found that when the CEOs identified more feedback loops and causal relationships among key resources through their modeling analyses, they increased their capacities to generate new strategic ideas through more developed mental models. However, those CEOs who were not able to generate alternative strategic ideas to overcome the challenges of scenarios presented during the simulation sessions found it difficult to make strategic decisions when the scenarios occurred one year after our intervention. This finding suggests that SD modeling can affect firm performance when the facilitation process helps CEOs reflect on potential strategic actions that can be taken in the future. When CEOs cannot change their strategic plans by imagining what should be done in a challenging scenario, they are not able to address challenging situations when they arise.
0377-2217
1081-1094
Torres, Juan Pablo
e0bb6b98-9cfa-4578-a448-e61d0684a2c5
Kunc, Martin
0b254052-f9f5-49f9-ac0b-148c257ba412
O'brien, Frances
87aa1a23-19c0-4506-876f-88c04d0f93f5
Torres, Juan Pablo
e0bb6b98-9cfa-4578-a448-e61d0684a2c5
Kunc, Martin
0b254052-f9f5-49f9-ac0b-148c257ba412
O'brien, Frances
87aa1a23-19c0-4506-876f-88c04d0f93f5

Torres, Juan Pablo, Kunc, Martin and O'brien, Frances (2017) Supporting strategy using system dynamics. European Journal of Operational Research, 260 (3), 1081-1094. (doi:10.1016/j.ejor.2017.01.018).

Record type: Article

Abstract

This paper presents a protocol for supporting strategy development via system dynamics (SD) modeling in consultation with Chief Executive Officers (CEOs) of small organizations; it also reports on the effectiveness of this protocol one year after an initial study was conducted. The protocol was applied in five small organizations; it involves the development of a SD model that is used to generate scenarios of alternative strategic situations an organization may face. We found that when the CEOs identified more feedback loops and causal relationships among key resources through their modeling analyses, they increased their capacities to generate new strategic ideas through more developed mental models. However, those CEOs who were not able to generate alternative strategic ideas to overcome the challenges of scenarios presented during the simulation sessions found it difficult to make strategic decisions when the scenarios occurred one year after our intervention. This finding suggests that SD modeling can affect firm performance when the facilitation process helps CEOs reflect on potential strategic actions that can be taken in the future. When CEOs cannot change their strategic plans by imagining what should be done in a challenging scenario, they are not able to address challenging situations when they arise.

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Accepted/In Press date: 10 January 2017
e-pub ahead of print date: 14 January 2017
Published date: 1 August 2017

Identifiers

Local EPrints ID: 427632
URI: http://eprints.soton.ac.uk/id/eprint/427632
ISSN: 0377-2217
PURE UUID: 1e9818e8-6811-478c-a1fe-f55a96dd8af0
ORCID for Martin Kunc: ORCID iD orcid.org/0000-0002-3411-4052

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Date deposited: 24 Jan 2019 17:30
Last modified: 28 Apr 2022 06:25

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Contributors

Author: Juan Pablo Torres
Author: Martin Kunc ORCID iD
Author: Frances O'brien

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