Mapping a Business System

Mapping a Business System

Regiane Velez

Kaplan University

GB500: Business Perspectives

Mapping a Business System

1. Offer an overview of systems thinking including any relevant historical information.

Systems thinking is a way of interpreting the universe as a series of interconnected and inter-related wholes. It is a way of identifying the inherent organization within a complex situation and has been called organized complexity. Systems thinkers contrast dynamic complexity (the relationships between things) with detail complexity (details about things). It is an approach, a set of general principles and specific tools and techniques, rather than a subject area in its own right; it can be applied within many different fields and is therefore described as a meta-discipline.

Systems thinking was created in the 1950’s by Jay W. Forrester at MIT and assumes that the structure generates behavior. His initial goal was to determine how his background in science and engineering could be brought to bear, in some useful way, on the core issues that determine the success or failure of corporations. Forrester's insights into the common foundations that underlie engineering, which led to the creation of system dynamics, were triggered, to a large degree, by his involvement with managers at General Electric (GE) during the mid-1950s. At that time, the managers at GE were perplexed because employment at their appliance plants in Kentucky exhibited a significant three-year cycle. The business cycle was judged to be an insufficient explanation for the employment instability. From hand simulations (or calculations) of the stock-flow-feedback structure of the GE plants, which included the existing corporate decision-making structure for hiring and layoffs, Forrester was able to show how the instability in GE employment was due to the internal structure of the firm and not to an external force such as the business cycle. These hand simulations were the beginning...