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Prior studies ascribed people’s poor performance in dealing with basic systems concepts to different causes. While results indicate that, among other things, domain specific experience and familiarity with the problem context play a role in this stock-flow-(SF-)performance, this has not yet been fully clarified. In this article, we present an experiment that examines the role of educational background in SF-performance. We hypothesize that SF-performance increases when the problem context is embedded in the problem solver’s knowledge domain, indicated by educational background. Using the square wave pattern and the sawtooth pattern tasks from the initial study by Booth Sweeney and Sterman (2000), we design two additional cover stories for the former, the Vehicle story from the engineering domain and the Application story from the business domain, next to the original Bathtub story. We then test the three sets of questions on business students. Results mainly support our hypothesis. Interestingly, participants even do better on a more complex behavioral pattern from their knowledge domain than on a simpler pattern from more distant domains. Although these findings have to be confirmed by further studies, they contribute both to the methodology of future surveys and the context familiarity discussion.
SF-failure, the inability of people to correctly determine the behavior of simple stock and flow structures is subject of a long research stream. Reasons for SF-failure can be attributed to different reasons, one of them being lacking domain specific experience, thus familiarity with the problem context. In this article we present a continuation of an experiment to examine the role of educational background in SF-performance. We base the question set on the Bathtub Dynamics tasks introduced by Booth Sweeney and Sterman (2000) and vary the cover stories. In this paper we describe how we developed and tested a new cover story for the engineering domain and implemented the recommendations from a prior study. We test three sets of questions with engineering students which enables us to compare the results to a previous study in which we tested the questions with business students. Results mainly support our hypothesis that context familiarity increases SF-performance. With our findings we further develop the methodology of the research on SF-failure.
This paper describes the design and outcomes of an experimental study that addresses stock-and-flow-failure from a cognitive perspective. It is based on the assumption that holistic (global) and analytic (local) processing are important cognitive mechanisms underlying the ability to infer the behavior of dynamic systems. In a stock-and-flow task that is structurally equivalent to the department store task, we varied the format in which participants are primed to think about an environmental system, in particular whether they are primed to concentrate on lower-level (local) or higher-level (global) system elements. 148 psychology, geography and business students participated in our study. Students’ answers support our hypothesis that global processing increases participants’ ability to infer the overall system behavior. The beneficial influence of global presentation is even stronger when data are presented numerically rather than in the form of a graph. Our results suggest presenting complex dynamic systems in a way that facilitates global processing. This is particularly important as policy-designers and decision makers deal with complex issues in their everyday and professional life.
It is assumed that more education leads to better understanding of complex systems. Some researchers, however, find indications that simple mechanisms like stocks and flows are not well understood even by people who have passed higher education. In this paper, we test people’s understanding of complex systems with the widely studied stock-and-flow (SF) tasks. SF tasks assess people’s understanding of the interplay between stocks and flows. We investigate SF failure of domain experts and novices in different knowledge domains. In particular, we compare performance on the original study’s bathtub task with the square wave pattern with two alternative cover stories from the engineering and business domains on different groups of business and engineering students from different semesters. Further, we show that, while engineering students perform better than business students, with progressing in higher education, students may lose the capability of dealing with simple SF tasks. We thus find hints on déformation professionelle in higher education.
Die Entwicklung dynamischer Balanced Scorecards in enger Zusammenarbeit mit Kunden zählt zum Beratungsgebiet der PA Consulting Group. Das Anwendungsbeispiel beschreibt eine dynamische Balanced Scorecard eines europäischen Automobilherstellers. Dieser verfolgt von jeher das Ziel, internationale Standards bei Technologie, Stil, Design und Leistung zu setzen. Das Unternehmen sah sich allerdings einem zunehmenden asiatischen Wettbeweb ausgesetzt, dem es mit neu entwickelten Fahrzeugen begegnen wollte. Um diese vor der Konkurrenz in den Markt einzuführen, sollten die Entwicklungsprozesse beträchtlich gestrafft werden. Zugleich sollten die Fahrzeuge zu attraktiven Preisen mit wettbewerbsfähiger und qualitativ hochwertier Ausstattung angeboten und die unternehmensweiten Profitabilitätsziele erreicht werden.
It is assumed that more education leads to better understanding of complex systems. Some researchers claim, however, find indications that simple mechanisms like stocks and flows are not well understood even by people who have passed higher education. In this paper, we test people’s understanding of complex systems with the widely studied stock-and-flow (SF) tasks (Booth Sweeney and Sterman 2000). SF tasks assess people’s understanding of the interplay between stocks and flows. We investigate SF failure of domain experts and novices in different knowledge domains. In particular, we compare performance on the original study’s Bathtub task with the square wave pattern (Booth Sweeney and Sterman 2000) with two alternative cover stories from the engineering and business domains on different groups of business and engineering students from different semesters. Further, we show that, while engineering students perform better than business students, with progressing in higher education, students seem to lose the capability of dealing with simple SF tasks from domains other than their field. We thus find hints on déformation professionelle in higher education.
Wasted paradise – imagining the Maldives without the garbage island of Thilafushi : Version 1.2
(2016)
To address the high level of waste production in the Maldives, the local government decided to transform the coral island of Thilafushi into an immense waste dumb in 1992. Meanwhile, each day, 330 tons of waste is ferried to Thilafushi. The policy had the positive consequence of relieving the garbage burden in Malé, the main island, and surrounding tourist atolls. However, it can also lead to serious environmental and economic damage in the long range. First, the garbage is in visual range of one of the most prominent tourist destinations. Second, if the wind blows a certain way, unfiltered fumes from burning waste travels to tourist atolls. Third, water quality can erode as hazardous waste from batteries and other toxic waste is floating in the ocean. Over time, these effects can accumulate to significantly hamper the number of tourists that travel to the Maldives – one of the state’s main sources of financial income. In our paper, we lay out the situation in more detail and translate it into a simulation model. We test different policies to propose the Maldives government how to better solve the waste problem.
The financial crisis of 2007-2010 was probably one of the greatest, most lustrous black-swan events that people of our generation(s) will experience – and at its heart, it was a dynamic phenomenon. It is stated in the vision of the System Dynamics Society that we aspire to transform society by influencing decision-making. Yet, it seems as if system dynamics did not play any significant role in this crisis: we did not examine the markets, we did not provide insights to banks, and we did not warn governments or the people. In our presentation we describe the dynamics involved in a housing bubble, and describe what made the last one different. With the insights gained from this exercise we conclude that, from a system dynamics perspective, the dimension of the financial crisis of 2007-2009 was eminently foreseeable, which will lead us to pose the following question: where were we as a field while this crisis was unfolding, why were we not active players? We present a range of potential answers to this question, hoping to provoke some reflection… and maybe some (re)action.
Strategic alliances have become important strategic options for firms to achieve competitive advantage. Yet, there are many examples of alliance failures. Scholars have studied this phenomenon and identified many reasons for alliance failure, including lack of trust between the partnering firms. Paradoxically, the concept of trust is still not fully understood, specifically how and under what conditions trust comes to break down within the broader process of alliance building. We synthesize a process model that describes the “alliance capability”, including trust, openness, partner contributions, and relational rents. We then translate this framework into a formal simulation model and analyze it thoroughly. In analyzing trust dynamics we identify and explore a tipping boundary, separating a regime of alliance failures and successes. We apply our core findings to openness strategies – decisions about how much knowledge to share with partners. Our analyses reveal that strategies informed by a static mental model of trust, contributions, and openness, under undervalue openness. Further, too little openness risks early failure due to the being trapped in a vicious cycle of trust depletion.
Real estate markets are known to fluctuate. The real estate market in Stuttgart, Germany, has been booming for more than a decade: square-meter price hit top levels and real estate agents claim that market prices will continue to increase. In this paper, we test this market understanding by developing and analyzing a system dynamics model that depicts the Stuttgart real estate market. Simulating the model explains oscillating behavior arising from significant time delays and endogenous feedback structures – and not necessarily oscillating interest rates, as market experts assume. Scenarios provide insights into the system's behavior reacting to changes exogenous to the model. The first scenario tests the market development under increasing interest rates. The other scenario deals with possible effects on the real estate market if the regional automotive economy suffers from intense competition with new market players entering with alternative fuel vehicles and new technologies. With a policy run we test market structure changes to eliminate cyclical effects. The paper confirms that the business cycle in the Stuttgart real estate market arises from within the system's underlying structure, thus emphasizing the importance of understanding feedback structures.