System Dynamics and Strategic Management: love at first sight

By Guido Noto
Located in Palermo, Italy
PhD candidate, Department of Political Sciences and International Relations, University of Palermo


System Dynamics (SD) has been proved to be a useful methodology to support both understanding and learning processes of complex systems and phenomena. Since its origin, SD has been successfully applied to many different fields of studies (e.g., climate change, physics, engineering, environmental sciences, economics, management, and so on). Among these, Strategic Management (SM) has a particular relevance as testified by several streams of research that originate from the combination between SD modelling and SM.

In a study recently published in the journal Systems Research and Behavioral Science, I explored and discussed, together with Dr Federico Cosenz from University of Palermo, the theoretical and empirical development of SD in the SM field through a systematic analysis of scientific literature. The paper’s aim was to understand how and how much SD contributed to SM studies and literature and what are the future challenges of System Dynamics in the Strategic Management field. The systematic literature review suggested us that SD applications to SM are growing in literature (see graph below).

Noto2016_articles-per-year

Trend of articles showing SD application to SM studies in ranked journals (Cosenz and Noto, 2016 – Systems Research and Behavioral Science)

This is probably related to the fact that traditional SM tools are characterized by several limits and pitfalls that may be overcome thanks to System Dynamics.  Our results is indeed that SD can be considered a flexible research methodology which can be soundly integrated with SM approaches and frameworks (e.g., the Balanced Scorecards) to improve strategic learning processes of decision-makers and, as a result, better support them in managing organizations.

However, the future development of the SD adoption in SM field may depend on several factors mainly related to an increasing use of SD methodology in practical SM matters, as well as to the implementation of academic programs (e.g., M.Sc., Ph.D.) oriented to teach how SD may enhance SM approaches.

 

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