Modern organizations operate in a fast-paced, uncertain, and increasingly interconnected environment. Decisions made by managers, policymakers, and public institutions often have consequences that do not appear immediately, but only after a time delay and frequently in places very different from where we would expect them. This is precisely why, in recent years, systems thinking and system dynamics have come to the forefront as ways to better understand the complexity of the world around us.
Unlike traditional analytical approaches that attempt to isolate individual variables and measure their “pure” effects, system dynamics is based on the idea that organizations and societies are interconnected systems characterized by feedback loops, time delays, and nonlinear relationships. This means that good intentions can lead to poor outcomes, and short-term improvements can result in long-term problems.
A comprehensive review of more than 50 years of research shows that system dynamics has gradually moved from technical and engineering disciplines into management, organizational studies, and public policy. Today, it is used, for example, in strategic planning, supply chain management, organizational performance measurement, and in addressing so-called “wicked problems”, issues that have no simple solutions, such as climate change, sustainability, or public health.
Research in this field focuses on four main thematic areas. The first is strategic and operational management, where system dynamics helps explain why organizations fall into recurring crises, such as supply problems or capacity constraints. The second area involves behavioral and participatory approaches, which examine how people perceive complex systems—and why they often systematically misunderstand them. The third area is dynamic performance management, which integrates financial and non-financial indicators and emphasizes the long-term effects of decisions. The fourth area is sustainable development, where systems thinking enables analysis of the interconnections among the economy, society, and the environment.
Citation:
Forliano, C., De Bernardi, P., Rozsa, Z., & Bertello, A. (2024). Systems dynamics research in management and organization studies: Overview and research agenda. Journal of Innovation & Knowledge, 9(3), 100512. https://doi.org/https://doi.org/10.1016/j.jik.2024.100512
