Business analysis for responsible
organizations
Mr. Vincent de Gooyert
Inhoud
HC 1 – 06 February 2019........................................................................................................................2
HC 2 – 13 February 2019........................................................................................................................3
HC 3 – 27 February 2019........................................................................................................................4
HC 4 – 13 March 2019............................................................................................................................6
HC 5 – 20 March 2019............................................................................................................................8
HC 6 – 17 April 2019.............................................................................................................................11
HC 7 – 22 May 2019..............................................................................................................................15
1
,HC 1 – 06 February 2019
Chapter 1 + introduction
A system is an interconnected set of elements that is coherently organized in a way that achieves
something.
Elements: not necessarily physical things
Interconnections: relations that hold the elements together
Function or purpose: explicit or implicit
If one element is taken out, the system usually isn’t operating the same anymore or at all. But not
each elements are as important for the system as other (e.g. television channels for a football team
compared to shareholders connected to a team).
E.g. a football team is a system; the elements: team, manager, sponsors, referee, staff, fans, stadium,
etc. , the interconnections: the rules of the game , the function: to win the match/competition.
The opposite of system thinking is the reductionism approach: looking at the small aspects of the
world (few variables) without relations to other aspects. In reality there is overlap.
The system thinking way (feedback loops) is not better than the reductionism way or the other way
around. They complement.
A system is more than the sum of its parts. Adding everything together gives a new thing than the
elements on its own can. Systems can be embedded in systems. Systems happen all at once, they are
connected in many directions. Therefore, language is not enough. We use software: Vensim.
But not everything is a system. E.g. protons, sand on a road.
Function or purpose are expressed explicitly. The best way to deduce the system’s purpose is to
watch for a while to see how the systems behave. Purposes are deduced from behavior, not from
rhetoric or stated goals (espoused theories vs. theories in use (Argyris), intended vs. realized
strategies (Mintzberg). E.g. universities.
Responsible organizations are focusing on sustainability, CSR, waste, all stakeholders, balanced
organization, balance internal and external pressures, employee and company health. But also
People Planet Profit is often mentioned in responsibility (broader perspective). Not so responsible
organizations often tends to look at shareholders only and thus focused on profit maximization
(narrow perspective). ++ Example Alliander
System thinking: looking at the world in a broader way, holistic view. Thus, it is connected to
responsible organizations. Responsible organizing is the challenge, and system thinking/dynamics is
the tool.
Responsible organizations create multiple types of value simultaneously. Multiple value creation is
complex and requires a systematic understanding. System thinking and system dynamics are tools
that provide such understanding.
The basics of system structure and behavior:
Stock: is the foundation of any system. They
are one of the elements of a system, either
physical or non-physical. Everything where things accumulate, where things are collected (to store).
Flows: stocks change over time through the actions of flow (to add and to subtract).
Basic principles:
- A stock will only change through the flows;
- The stock will rise as long as the outflow is smaller than the inflow.
Stock i = stock t-I + (∑inflow1-∑outflow1) ΔT`
2
, Most of the systems have more than one stocks and flows, so are more complicated.
HC 2 – 13 February 2019
Chapter 2 (pages 35-58)
Responsible organizations create multiple types of value simultaneously. Multiple value creation is
complex and requires a systematic understanding. System thinking and -dynamics are the tools
needed.
++ Try mental simulation examples (1 stock, 1 flow only; otherwise too complex (Vensim)) in PPT.
Linear versus non-linear behavior (e.g. assignment 1 interest rate; linear >
exponential):
There are things that grow linearly (e.g. production of food) and things that
grow exponentially (e.g. population). Combining this, at some point a
problem arises: population > food production.
Feedback loops:
Any part of a system where one variable/stock/flow/element is a cause of something and through
that cause, it affects itself = circular causality.
2 types:
- Positive/reinforcing feedback loop (R/+): an initial increase in A leads to a further increase of
A or an initial decrease in A leads to a further decrease of A.
o A system with only one R loop; it will increase/decrease exponentially (graph)
o A snowball effect
- Negative/balancing feedback loop (B/-): an initial increase in A leads to a further decrease of
A or an initial decrease of A leads to a further increase of A.
o A system with only one B loop; it will level off, balance out to a certain point
(equilibrium).
In reality, systems consists of combinations of R and B loops.
All + or - ; reinforcing loop
Uneven + or - ; balancing loop
One stock systems: -> summary
1R1B; S-curve; first half reinforcing loop and then it turns to a balancing feedback loop. In the first
half the R loop is dominant, after the B loop is dominant. Therefore, you get an S-curve.
3
organizations
Mr. Vincent de Gooyert
Inhoud
HC 1 – 06 February 2019........................................................................................................................2
HC 2 – 13 February 2019........................................................................................................................3
HC 3 – 27 February 2019........................................................................................................................4
HC 4 – 13 March 2019............................................................................................................................6
HC 5 – 20 March 2019............................................................................................................................8
HC 6 – 17 April 2019.............................................................................................................................11
HC 7 – 22 May 2019..............................................................................................................................15
1
,HC 1 – 06 February 2019
Chapter 1 + introduction
A system is an interconnected set of elements that is coherently organized in a way that achieves
something.
Elements: not necessarily physical things
Interconnections: relations that hold the elements together
Function or purpose: explicit or implicit
If one element is taken out, the system usually isn’t operating the same anymore or at all. But not
each elements are as important for the system as other (e.g. television channels for a football team
compared to shareholders connected to a team).
E.g. a football team is a system; the elements: team, manager, sponsors, referee, staff, fans, stadium,
etc. , the interconnections: the rules of the game , the function: to win the match/competition.
The opposite of system thinking is the reductionism approach: looking at the small aspects of the
world (few variables) without relations to other aspects. In reality there is overlap.
The system thinking way (feedback loops) is not better than the reductionism way or the other way
around. They complement.
A system is more than the sum of its parts. Adding everything together gives a new thing than the
elements on its own can. Systems can be embedded in systems. Systems happen all at once, they are
connected in many directions. Therefore, language is not enough. We use software: Vensim.
But not everything is a system. E.g. protons, sand on a road.
Function or purpose are expressed explicitly. The best way to deduce the system’s purpose is to
watch for a while to see how the systems behave. Purposes are deduced from behavior, not from
rhetoric or stated goals (espoused theories vs. theories in use (Argyris), intended vs. realized
strategies (Mintzberg). E.g. universities.
Responsible organizations are focusing on sustainability, CSR, waste, all stakeholders, balanced
organization, balance internal and external pressures, employee and company health. But also
People Planet Profit is often mentioned in responsibility (broader perspective). Not so responsible
organizations often tends to look at shareholders only and thus focused on profit maximization
(narrow perspective). ++ Example Alliander
System thinking: looking at the world in a broader way, holistic view. Thus, it is connected to
responsible organizations. Responsible organizing is the challenge, and system thinking/dynamics is
the tool.
Responsible organizations create multiple types of value simultaneously. Multiple value creation is
complex and requires a systematic understanding. System thinking and system dynamics are tools
that provide such understanding.
The basics of system structure and behavior:
Stock: is the foundation of any system. They
are one of the elements of a system, either
physical or non-physical. Everything where things accumulate, where things are collected (to store).
Flows: stocks change over time through the actions of flow (to add and to subtract).
Basic principles:
- A stock will only change through the flows;
- The stock will rise as long as the outflow is smaller than the inflow.
Stock i = stock t-I + (∑inflow1-∑outflow1) ΔT`
2
, Most of the systems have more than one stocks and flows, so are more complicated.
HC 2 – 13 February 2019
Chapter 2 (pages 35-58)
Responsible organizations create multiple types of value simultaneously. Multiple value creation is
complex and requires a systematic understanding. System thinking and -dynamics are the tools
needed.
++ Try mental simulation examples (1 stock, 1 flow only; otherwise too complex (Vensim)) in PPT.
Linear versus non-linear behavior (e.g. assignment 1 interest rate; linear >
exponential):
There are things that grow linearly (e.g. production of food) and things that
grow exponentially (e.g. population). Combining this, at some point a
problem arises: population > food production.
Feedback loops:
Any part of a system where one variable/stock/flow/element is a cause of something and through
that cause, it affects itself = circular causality.
2 types:
- Positive/reinforcing feedback loop (R/+): an initial increase in A leads to a further increase of
A or an initial decrease in A leads to a further decrease of A.
o A system with only one R loop; it will increase/decrease exponentially (graph)
o A snowball effect
- Negative/balancing feedback loop (B/-): an initial increase in A leads to a further decrease of
A or an initial decrease of A leads to a further increase of A.
o A system with only one B loop; it will level off, balance out to a certain point
(equilibrium).
In reality, systems consists of combinations of R and B loops.
All + or - ; reinforcing loop
Uneven + or - ; balancing loop
One stock systems: -> summary
1R1B; S-curve; first half reinforcing loop and then it turns to a balancing feedback loop. In the first
half the R loop is dominant, after the B loop is dominant. Therefore, you get an S-curve.
3
