Modelling for management: Simulation in support of systems thinking

From the Strategic Planning perspective should certainly lead to a higher awareness inherent in exploiting new technologies!

reading it of the risks

BARRY HOPEWELL, Vice President Systems eering, ICL High Performance Systems

Engin-

Leadership; Styles-Role Models-Qualities-Behaviours, PHILIP SADLER, The Fast-Track MBA Series, Kogan Page (1977), 157 pp., E13.99. Generally speaking the study of leadership is essentially an historical one which is supported by post-hoc rationalisation. There are probably few examples of individuals who have identified the theory that suits them most and then followed it to achieve the position of leader. Yet understanding the nature of leadership is a necessary aspect of our understanding of organisations and the behaviour of their members. Skills, role models, qualities and behaviours-as the title of this book suggests-are all integral to achieving leadership status. The book covers these aspects of leadership quite well with useful examples, although the links and inter-dependencies could have been exploited more fully. Identifying why some managers become leaders and some leaders could never be managers is an interesting process but is dealt with here in a somewhat cursory manner. The author describes theories and concepts which help to make sense of this process and yet at the same time emphasise the complexity of the total picture. The book identifies the theories and concepts but leaves the reader alone to draw their own conclusions. The Conclusion sections at the end of each chapter are little more than summaries. They offer some discussion but not, I feel, enough critical analysis to be challenging for the MBA candidate. The MBA of the millennium is quite likely to be working in a multi-disciplinary cross-national environment. He/she will need to manage him/herself within this environment and understand the issues that leadership in such circumstances engender. This book offers few examples. Nor does it discuss how existing theories might apply to the changing surroundings in which we work. There is a concentration on American/British styles and examples, with minimal coverage of other national or cultural styles of leadership. The role of follower is fundamental to that of the leader-after all you can’t be a leader on your own. Followers ensure the continuance and survival of a leader and among them may be nurtured or discovered a leader of the future. Their relationship to leaders is worthy of greater attention as it has a significant effect on leadership performance and success. The emphasis Book Reviews and Review Briefs

in this book centres very much on a leaders’ impact on followers and hardly considers the “upward” influences of follower behaviour and attitudes. As an introductory text this book will sufficeunless you are a woman. Pages 25-27 contain the most patronising text I have read in a long time. There may not be as many names of women who come to mind as leaders-but then that depends very much on how you define leadership. This author’s list of female leadership characteristics compresses a complex topic to a level of superficiality that renders the topic somewhat demeaning. This is then confirmed by the sentence “women who have the ambition to lead will probably need that extra bit of courage which enables them to challenge the company’s male culture” (p. 26). I wonder what that “extra bit” is? Perhaps the lack of value given to women would-be leaders has more to do with male preconceptions and attitudes than a woman’s lack of courage. Many articles now suggest that the so-called “female” qualities of management and leadership behaviour are those that are most valued in today’s and tomorrow’s organisation and should be emulated by men. The author provides women with a number of handy hints based on his criteria for successful women leaders which are designed to “help” women escape from their victim status. I am saddened that the author continues to perpetuate the myth of the inequality of women and their apparent lack of leadership ability and skills. I am also surprised that the managing editors tolerated such simplistic comments. Leaders do not last for ever. Their career in this role is hardly ever “for life”. Does a good leader know when to leave centre stage? Some analysis or reflection on how and/or why leaders move away or move on would have been very valuable. By the end of the book, I come away with the understanding that there are different approaches to leadership and that the future leadership needs of organisations will be different. There is nothing “new” or enlightening in this book. I feel that I have only skimmed the surface of a subject area which as the author says “is on the agenda in a big way”. MBAs in their exams and dissertations will have to demonstrate their understanding and interpretation of the leadership role and its relevance to what is happening in their organisation. As any text book, it has covered what students need to know but I’m not sure that there is sufficient added value to make it a “must have” purchase. RUTH SACKS, SJS Associates

Modelling for Management: Simulation in Support of Systems Thinking, ed. George P. Richardson, Dart-

mouth Publishing (1997), in two volumes, l), 447pp (Vol. 2). f395.00 (hbk), E55.00 volumes).

493pp. (Vol. (pbk). (Both

The collection of articles in these two volumes are part of The International Library of Management. With the rapid growth in management studies, it is increasingly difficult for managers, and those interested in management, to keep abreast of developments over the widening range of management fields. This series aims to bring together the most important articles in management theory and practice into a core set of titles. Currently the series has over twenty titles covering topics as diverse as internal auditing, organizational psychology, international cultural differences and management buy-outs. The volumes reviewed here complement an earlier title, Decision Sciences, and cover the field of systems dynamics. Systems dynamics has come to the attention of more managers through its inclusion as the fifth of the disciplines in Peter Senge’s The Fifth Discipline.’ However, it has its roots in the work of Jay Forrester at MIT in the 1960s.’ In introducing the book, George Richardson defines three types of tool that address three aspects of strategy and policy development. The first two categories are statistical tools (which help reduce uncertainty) and formal models, such as decision trees and linear programming (which help remove disagreement and help managers to make strategic choices). Simulation models, in which systems dynamics models predominate, represent the third category and are positioned as helping to improve managers’ understanding of the behaviour of complex systems and hence make better decisions. The two volumes comprise 46 articles taken from a relatively narrow range of publications. While the general manger might have stumbled across those in more broad-based journals such as Sloan Management Review and The Strategic Management Journal, they are unlikely to have come across the majority of them which are taken from more specialist journals such as Systems Dynamics Review and Management Science. Most of the articles were originally published from the mid-1980s to the early 199Os, although there is the occasional early “classic”, such as Forrester’s “14 ‘Obvious Truths’ ” (dating from 1960) and three from 1994. The book is divided into five parts, the first two parts covering the methods and use of the methods, parts 3 and 4 describing applications in the private and public sectors, while part 5 entitled “Methods of Modelling with Management” looks at the practical aspects of the modelling process itself. The largest of these sections is that on modelling in the corporate context, and it covers a wide range of applications from modelling a biotechnology start-up company to the use of modelling in MRP (Material Requirements Planning), forecasting sales of new car models, and settling claims on cost overruns in a naval shipyard.

Most managers will find one or more of the applications dealt with in this section of some interest. The foundations of systems dynamics are covered in Part 1. At the heart of the discipline is the circularcausal loop. This portrays how an action, working through various systems elements over time, provides feedback for subsequent decisions. The problem in management decision making, as Davidson says, is that while humans are good at one-way logic, we are poor at circular logic, and cannot cope with anything above a limited amount of complexity: “We are particularly poor at appreciating the role of feedback structure in the dynamics we experience in the systems we strive to manage.. The possibility exists that management policy and decisions may actually contribute to creating the dynamic problems they are intended to solve”

Those who have read about the “beer game” in Senge’s book will understand how seemingly rational management decisions can in fact lead to unexpected outcomes. Often the best decisions are those that are counter-intuitive. Those who remain to be convinced need go no further than read the first chapter of John Sterman’s “A Skeptic’s Guide to Computer Models”. He notes the storm of controversy that surrounded some of the early use of modelling, and the attitude in some early situations of “take it or leave it”, and how improved practice has been developed over the years. Managers who get involved with modellers will find much of value in his eleven-point “checklist for the model consumer”. The second part of the book kicks off with an article by Senge from the Fall 1990 issue of Sloan Management Review. A precursor to his book, it puts systems thinking and modelling in the wider context of a manager’s role in building a learning organization. The article that stood out for me in this section was a reprint of Pegasus Communications Toolbox series. This was Daniel Kim’s “Systems Archetypes” which goes through the main building blocks found in practice in a systems model. These include “drifting goals” “fixes that fail”, “growth and under-investment” and “tragedy of the commons”. Each is shown diagramatically alongside guidelines, followed by a well-written twopage explanation. The two sections on applications bring the techniques to life in real situations. They are very variable in their readability. Some require a fairly in-depth understanding of the discipline and incorporate formulae used in STELLA and other systems dynamics packages. Almost all show causal loop diagrams and graphic output. Another difference is that some treat the application as a framework for model building and analysis, rather like an academic exercise, which undoubtedly some of them were. In others, though, you could see the model being used in earnest to make management decisions, and you even got under the skin of the managers’ thinking at the time. The latter Long Range Planning Vol. 31

February

1998

was very evident in the description by Kenneth Cooper of how a model was built to help Ingalls Shipbuilding of Mississippi make a claim against the U.S. Navy. The model clearly had something going for it when their claim for $447 million in 1978 was successful. On the whole the articles on applications in the public sector seemed rather more theoretical in nature and disconnected from reality. Several analysed situations that had happened, or made policy recommendations without the clear involvement of those who make the policy. A notable exception was the article by Roger Nail1 on FOSSILZ, perhaps the most successful application of modelling that has influenced public policy in the U.S.A. It is a dynamic model of U.S. energy supply and demand, originally developed in the 1970s and one that is continually refined and used at the highest levels of energy policy making. He contributed four main factors to its visibility and success. First, energy is the kind of problem that has the properties that lend themselves to a systems dynamics approach-feedback loops, non-linearities, stocks and flows. Other factors were that the modellers were at the right place at the right time, a specific task was involved and the client had knowledgeable users. One cannot help but get the feeling from some of the articles that there are gaps between modellers who make models and managers who make decisions. Getting the two together seems to be a difficult task. Why is it, for instance, that although these techniques have been around since the 196Os, their use is far from wide-spread even today? The final section of the book partially addresses this issue, with a selection of articles on how modellers work with managers in practice. There are articles on modelling in groups, validating models and the all-important aspect of communication. It is fitting that the final chapter is Donella Meadow’s address “Systems Dynamics meets the press”, in which she describes her role at trying to improve communication with decision makers, a process she says is “continuous, sometimes dramatic, often frustrating”. She urges systems dynamicists (her term, not mine) to seek and co-operate with the public media and bring to the wider management audience “all the clarity, integrity, honesty and systems insights we can muster”. After reading, or to be honest, skimming, these volumes, that challenge still remains. While undoubtedly making a contribution to this aim, which manager or senior decision maker will really buy this 900-page title? It should certainly prove a useful reference source for practitioners of the discipline and is undoubtedly useful for academics and consultants who want what is probably the best selection of relevant articles over the last two decades on the subject (at least up to 1993-94). The way they have been arranged is good, and each section is appropriately introduced with a few pages of well-written editorial. Book Reviews and Review Briefs

Inevitably, in a series of reprints such as this, some articles lose their print quality and reading clarity, since many are significantly reduced in size from their original format. Most of the text was readable, although in several articles the small size proved rather tiring. A few articles had graphs and tables that were almost impossible to read. On the whole, this is specialised reading. But if you are a decision-maker who wants to broaden his/her perspective of Senge’s fifth discipline, this could be a useful addition to your bookshelf. DAVID J. SKYRME, Management

Systems

Consultant

References 1. The Fifth Discipline: The Art and the Practice of the Learning Organization, P. M. Senge, Doubleday (1990) 2. Industrial Dynamics, J. W. Forrester, MIT Press (1961).

by RICHARD KOCH & Publishing (1997), 248

Managing Without Management, IAN GODDEN. Nicholas

Brealey

pp, ElO. A refreshingly easy-to-read business book. It is hard to disagree with the authors’ analysis with one exception which I list below. Their predictions for the future are largely in line with views already expressed by authors such as Handy, Peters, Drucker, Kanter, Hammer & Champy and Goold, Campell &Alexander. The authors quote from these amongst many others. The book is in three parts. The first is an overture where they assert that large corporations can now be run largely without management and without Corporations’ leaders giving up control. They argue that management subtracts more value than it adds. This is based on the premise that most managers’ main role is to manage internal focus. This is of no value to customers or owners. They do admit that there are two serious obstacles to such revolutionary attitudes and these are the vested interests of managers and societal resistance to the subsequent unemployment. The section argues that small businesses are more efficient and focused than large ones and that these large corporations can learn from the smaller ones. However, this section had the only statement I fundamentally disagreed with. This is that management training, including MBAs, would suffer an irreversible decline. There are over 85 business schools in the U.K. and some of these have adopted very innovative approaches to their MBA programmes. City University and Ashridge Business Schools are amongst the many which are challenging old ideas. Of course these insti-