Analysis: Systems Dynamics

System dynamics is one approach to modeling the dynamics of complex systems such as population, ecological and economic systems, which usually interact strongly with each other. Systems Dynamics was founded in the early 1960s by Jay W. Forrester of the MIT Sloan School of Management with the establishment of the MIT System Dynamics Group. At that time, he began applying what he had learned about systems during his work in electrical engineering to everyday kinds of systems. What makes using System Dynamics different from other approaches to studying complex systems is the use of feedback loops. Stocks and flows are the basic building blocks of a System Dynamics model. They help describe how a system is connected by feedback loops which create the nonlinearity found so frequently in modern day problems. Computer software is used to simulate a system dynamics model of the situation being studied. Running "what if" simulations to test certain policies on such a model can greatly aid in understanding how the system changes over time.

Traditional analysis focuses on the separating the individual pieces of what is being studied; in fact, the word "analysis" actually comes from the root meaning "to break into constituent parts." Systems thinking, in contrast, focuses on how the thing being studied interacts with the other constituents of the system a set of elements that interact to produce behavior of which it is a part. Therefore instead of isolating smaller and smaller parts of a system, systems thinking involves a broader view, looking at larger and larger numbers of interactions. In this way, systems thinking creates a better understanding of the big picture. This results in sometimes strikingly different conclusions than those generated by traditional forms of analysis, especially when what is being studied is dynamically complex or has a great deal of feedback from other sources, internal or external. develops a dynamic hypothesis explaining the cause of the problem,

  • builds a computer simulation model of the system at the root of the problem,

    tests the model to be certain that it reproduces the behavior seen in the real world,

    devises and tests in the model alternative policies that alleviate the problem, and

    Example of a toolPowersim
    Systems dynamics model used for computer based dynamic simulations in a strategic planning process (Screenshot from SAP SEM / Powersim “in place”)Hines, Jim: Molecules of Structure Version 2.02 — Building Blocks for System Dynamics Models (2005). Jg. (1984a), S. 507-513. [Ordner] Milling, Peter: First Order Systems and S-shaped Growth, Unterlagen des NATO Advanced Study Institute in System Dynamics, Hannover (1972).[Ordner] Senge, Peter: The Fifth Discipline - The Art and Science of The Learning Organization, New York, NY et. al. 1990. [Sy 233] Sterman, John D.: Misperceptions of Feedback in Dynamic Systems, in: Organizational Behavior and Human Decision Processes, Vol. 43 (1989). S. 301-335. [Ordner] Sterman, John D.: Systems Simulation – Expectation Formation in Behavioral Simulation Models, in: Behavioral Science, Vol. 32 (1987). Links

    Systems Dynamics Society


    Society for Organizational Learning


    Systems Dynamics Group at London Business School


    Daniel Aronson’s Systems Thinking Site

    Rarely is one able to proceed through these steps without reviewing and refining an earlier step. For instance, the first problem identified may be only a symptom of a still greater problem.

    The methodology






    The MIT Systems Dynamics Group

    • Last modified: Friday, 2 February 2007, 6:01 PM