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Management science Decision making through systems thinking Hans G. Daellenbach and Donald C. McNickle Management science Decision making through systems thinking This page intentionally left blank Management science Decision making through systems thinking Hans G. Daellenbach Donald C. McNickle University of Canterbury, Christchurch, New Zealand H. G. Daellenbach and D. C. McNickle 2005 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2005 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N. Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 1–4039–4174–2 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. 10 14 9 8 7 6 5 4 3 2 1 13 12 11 10 09 08 07 06 05 Printed and bound in China “If we investigate our ideas, we have to be willing to give them up.” Gordon Hewitt, PhD Wellington This page intentionally left blank Contents Preface 1 xiii Introduction 1.1 Motivation 1.2 Systems thinking 1.3 Overview of what follows 1 1 5 6 Part 1 Systems and systems thinking: Introduction 2 Systems thinking 2.1 Increased complexity of today’s decision making 2.2 Efficiency and effectiveness 2.3 Unplanned and counterintuitive outcomes 2.4 Reductionist and cause-and-effect thinking 2.5 Systems thinking 2.6 Chapter highlights Exercises 10 10 13 15 17 18 19 19 3 System concepts 3.1 Pervasiveness of systems 3.2 Out-there and inside-us view of systems 3.3 Subjectivity of system description 3.4 Formal definition of the concept ‘system’ 3.5 System boundary and relevant environment 3.6 Some examples of system descriptions 3.7 Systems as ‘black boxes’ 3.8 Hierarchy of systems 3.9 System behaviour 3.10 Different kinds of system 3.11 Feedback loops 3.12 Control of systems 3.13 Chapter highlights Exercises 21 21 22 24 27 29 30 34 35 37 40 42 44 49 50 4 The problem situation 4.1 The problem situation and what is a ‘problem’? 4.2 Stakeholders or roles of people in systems 4.3 Problem situation summary — mind maps 4.4 Rich picture diagrams 53 53 56 59 61 vii viii Contents 4.5 Guidelines for mind maps and rich pictures 4.6 Uses and strengths of rich pictures and mind maps 4.7 Cognitive mapping 4.8 Cognitive map for NuWave Shoes 4.9 Problem definition and boundary selection 4.10 Some conclusions 4.11 Chapter highlights Exercises 5 Systems models and diagrams 5.1 System models 5.2 Approaches for describing a relevant system 5.3 Essential properties of good models 5.4 The art of modellin