SCHOOL OF BUSINESS

INTERNATIONAL BUSINESS DEPARTMENT

INT XXX – Business Dynamics and System Modeling
Fall 2009, Saturday 9:00AM – 12:00PM

Instructor Information
Pard Teekasap (DBA Candidate, MM, BEng)
E-Mail:Pard.Teekasap@snhu.edu
Office Hour: Monday and Wednesday 2:00 – 5:00 PM, Webster 117 or by appointment

Textbook
Sterman, J. (2000). Business Dynamics: Systems Thinking and Modeling for a Complex World
(Text and CD-ROM). Irwin/McGraw Hill. ISBN 978-0072389159.

Supplementary Reading Material

Morecroft, J. (2007). Strategic Modelling and Business Dynamics: A Feedback Systems
Approach. Wiley. ISBN 978-0470012864.
Warren, K. (2008). Strategic Management Dynamics. Wiley. ISBN 978-0470060674.

Software
We will use Vensim® from Ventana Systems. We have a professional version in the
International Business Modeling Lab (IBML) at Webster 120. Students are encouraged to get the
Vensim Personal Learning Edition (Vensim PLE) by Ventana Systems from the Ventana
Systems website (www.vensim.com). Vensim PLE is free for academic use.

Note: The CD-ROM that comes with the textbook includes the Vensim PLE but it’s not up-to-
date. Be sure to download the updated version from the Vensim website.

Course Prerequisites
None

Course Description
Why do some strategies and policies fail miserably while others are surprisingly successful?
Why does a big project always run behind schedule and over the budget? Why do many
strategies fail to produce the lasting outcome? How do dominant firms lose their competitive
edge? How do the actions that managers take in the service of their goals foster the very
problems they are attempting to solve?
This course explores the complexity of the business environment, illustrates how counter-
intuitive results occur and demonstrates the tools to handle this problem. Students learn to
visualize a business organization and a problem situation in terms of the structure and policies
that create dynamics and regulate the outcome. Students are introduced to the tool of system
dynamics for modeling and analyzing business complexities, including evaluating the business
strategies and policies. Students develop an insight of business dynamics and learn how to
manage the complexity through role playing, model simulations, and case studies. Case studies
include, but are not limited to, the applications of system dynamics in business management,
economics, public policy, and supply chain management.

Course Objectives and Scope

Due to the rapid change in economics, technology, social, and environment, managers need to
catch up with these challenges. We need to cope with these issues by designing and managing
complex systems with multiple feedback effects, long time delays, and nonlinear responses to
our decisions. Though, learning in such environment is difficult because the consequences of our
decisions may not be presented clearly. In order to learn effectively, we need to develop system
thinking to represent and assess such dynamic complexity and learn cutting-edge tools that
facilitate the learning process throughout an organization.

In this course, students are introduced to system dynamics modeling as a tool to analyze the
business policy and strategy. You will learn how to visualize a business organization and a
problem situation in terms of the structures and policies that create dynamics and regulate an
outcome. System dynamics are developed based on the feedback control theory, mathematical
modeling, and computer simulation to replicate the interaction between each factor in the system
structure and the patterns of dynamic behavior over time.

Many times, people have good intentions and act as they believe would lead toward the goals.
Even though, these intentions are often confounded by limited information, pressure to
continually act and make sense of the world, misattributions, complex interactions between
physical and behavioral factors, and misunderstood delays between action and effect. In this
course, we will map these complex dynamics interactions into frameworks that provide insights
for the decision makers. We will use tools e.g. casual loop diagrams to illustrate the feedback
structures, formal mathematical models to represent the causal relationships, and computer
simulations to present the pattern of behavior they generate over time.

System dynamics give us an ability to create ‘microworlds’ management flight simulators where
space and time can be compressed, slowed, and stopped so we can experience the long-term side
effects of decisions, systematically explore new strategies, and develop our understanding of
complex systems. We use role playing, simulation model, and case study. Case studies include,
but not limit to, the applications of system dynamics in international business, economics, project
management, and supply chain management.

Students will learn to understand and deal with situations where policy interventions are delayed,
diluted, or defeated by unanticipated reactions and side effects. You will have a chance to use
state of the art software for computer simulation. Assignments give hands-on experience in
developing and testing computer simulation models in diverse settings.
Grading Policies
• Lab assignment (10 points each x 6 labs) 60 points
• Research paper 40 points
Total 100 points

All lab assignments are due at the beginning of the next class. Late submission will have one
point penalty. Assignments handed in more than one class late will receive no credit. Class
absence is not an excuse for not submitting the assignment on time. All assignments must be
typed using word processors. Assignments done by hand writing are not accepted. There is no
need to create a fancy graph by using graphic software. The graphs shown by the simulation
software is enough.

The purpose of the research paper is for students to apply the knowledge they have learnt in the
class into a real problem. Students are free to choose any topic they are interested in. However,
the contribution of system dynamics modeling to a research finding should be significant. The
topic of the research paper should be narrowly enough to finish within a term and must be
analytical with an empirical dimension besides the model development. The students are
expected to create a publishable quality paper and students should plan to submit this paper to a
major conference in system dynamics or one that is related to the research topic of their choice
such as the International System Dynamics Conference, Academy of International Business
Conference, and Academy of Management Conference.

Research paper is separated into 3 phases. The first step is the research proposal. The students
need to submit and present a 2-page proposal for the research in the 3rd class. The proposal
should at least include the topic of the research, research question, scope of study, brief
background of the topic, why it is important to study this topic, and the contribution the students
expect to make into this topic. The second phase is the research progress which is due on the 7th
class. The student needs to submit and present a 10-page research progress which should
includes introduction, extensive literature review, hypothesis (if any), conceptual model, list of
endogenous factors, exogenous factors, and excluded factors, reference graph, and the source of
the data. The last part is the submission and presentation of the final paper which is due on the
last class.

All assignments and research paper must be submitted in order to pass this class. Failure to
submit all the assignments will result in receiving no grade, incomplete, or fail the class.

Letter Grade Suggested Numerical Equivalent Points

A 95-100 4.00
A- 90-94 3.67
B+ 86-89 3.33
B 83-85 3.00
B- 80-82 2.67
C+ 76-79 2.33
C 73-75 2.00
F 0-72 0.00

General Class Policy

• Students should read the assignment readings before coming to the class. The reading
assignments are extremely essential for understanding the class lecture and finishing the lab
assignment.
• Skim reading is to go through it quickly, not skip the part
• Attending the class is not required. However, all assignments must be submitted by the due
date. Class absence is not an excuse for not submitting an assignment.
• All assignments must be typed. Hand-written assignments are not accepted

Academic Honesty Policy

Southern New Hampshire University requires all students to adhere to high standards of integrity
in their academic work. Academic dishonesty in any form will not be tolerated by the university.
Students involved in such activities are subject to serious disciplinary action. This includes
course failure, academic suspension, and expulsion from the university.

Technological tools may be used to detect plagiarism or cheating at the instructor’s

discretion.

It is the students’ responsibility to understand what constitutes plagiarism (defined below),

guidelines for proper citation, and that ignorance of plagiarism does not and will not constitute
an excuse for the behavior.

It is the responsibility of the student to:

• Review the following document, courtesy of turnitin.com and research resources:

http://www.plagiarism.org/resources/documentation/plagiarism/learning/complete_resour
ces.doc
• Use www.plagiarism.org as a resource throughout the term
• Contact his or her instructor with any questions or concerns.

Definitions of Academic Dishonesty

1. Cheating
a) The unauthorized use of notes, textbooks, oral, visual or electronic communication, or other
aids during an exam, quiz, or other related course assignment.
b) The copying of the work of another student during an exam, quiz, or course assignment.
2. Plagiarism
a) The use, whether by paraphrase or direct quotation, of the published or unpublished work of
another without full and clear acknowledgement through proper citation format.
b) the submission of an assignment or parts of an assignment written by someone other than the
student, including but not limited to, other students, commercial organizations, and electronic
sources.

3. Misrepresentations
a) The substitution of another student/individual for completion of a course, or during the taking
of a quiz, examination or other assignment.

4. Unauthorized collaboration
a) The sharing of quiz/exam questions or answers with another student without the instructors
permission.
b) The copying of another student’s papers, homework or any assignment without the
instructor’s permission.
c) Group collaboration on individual assignments without the instructor’s permission.

5. Alteration or fabrication of data

a) The submission of data not obtained by the student during the course of research.
b) The deceitful alteration of data obtained by the student during the course of research.

6. Duplication
a) The submission of the same or similar paper in more than one course without the express
permission of the instructor.

7. Participation in or facilitation of dishonest academic activities

a) The stealing of quizzes or examinations.
b) The alteration of academic records, including grades.
c) The sabotaging of the work of another student.
d) The distribution of materials for the purpose of cheating.
e) The alteration, forging, or misuse of university-related documents.
f) The intentional reporting of a false violation of academic integrity.
g) The offer of a bribe to any university member in exchange for special consideration or favors.
h) The misuse of university resources, including library resources (print and electronic) and
facilities, computer labs, university equipment and networks, etc.

This list is by no means comprehensive, but is representative of any actions completed in the
spirit of academic dishonesty for which the university’s policy on Academic Integrity might
apply. It is the student’s responsibility to seek clarification from an instructor if the student has
questions about what constitutes academic dishonesty.

ADA/504 Compliance Statement

Southern New Hampshire University is committed to and concerned with meeting the needs of
students challenged by physical, sensory, psychiatric and/or learning disabilities with regard to
the Americans with Disabilities Act (ADA) and Section 504 of the 1973 Rehabilitation Act. At
the beginning of each term, or as soon as you become aware of a disability, we encourage you to
contact the Office of Disability Services to discuss accommodations for which you may be
qualified.
For questions concerning support services, documentation guidelines, or general disability
issues:
Office of Disability Services, Exeter Hall, Suite 59
Hyla Jaffe, Director
603.668.2211 ext.2386 h.jaffe@snhu.edu
For questions concerning disability related compliance matters, grievance or legal issues:
Ms. Jet Goldberg, ADA/504 Compliance Officer
Director of Wellness Center
603-645-9679 j.goldberg@snhu.edu

Off Campus Library Services

Off-Campus Library Services (OCLS) has been established to provide holdings, materials, and
services for faculty and students at continuing education centers and in distance education
programs. A barcode is required to access materials. To obtain your barcode you can access a
request form online. For further information or inquiries please contact Off-Campus Services
Librarian Ed Daniels at ocls@minerva.snhu.edu or go to http://www.snhu.edu/library.asp

Fax: 603-645-9685 attn: OCLS

Phone: 603-645-9605 ext. 2163

Library Resources Statement: In addition to the intellectual resources available on site and
online (http://www.snhu.edu/library.asp), Shapiro Library makes available group and one-on-
one instruction in information literacy, enabling students to define and articulate what
knowledge-based resources are relevant to their research interests. Library staff are available
to assist students in effectively and efficiently accessing information from credible sources, to
compare new knowledge with prior beliefs, and to consider the related ethical, legal, and socio-
economic issues that are inherent in scholarly investigation.

Technical Support
Support for technology and Blackboard software issues can be found at
http://d2.parature.com/ics/support/default.asp?deptID=8141

or by dialing SNHU 24/7 Live Support at 1-877-708-2909.

Copyright Policy
Southern New Hampshire University abides by the provisions of the United States Copyright Act
(Title 17 of the United States Code). As defined by Federal Copyright Law (title 17, U.S. Code)
‘Work for Hire’, SNHU maintains ownership over course materials created under agreement.
Any person who infringes the copyright law is liable. The Copyright Policies can be secured
from the Library Director and is accessible (under Guides/Tutorials) on the Shapiro Library Web
pages. For SNHU guidance on copyright questions go to http://www.snhu.edu/2876.asp
Assignments & Schedule
This class consists of a lecture and the lab. Each week, we will start with a lecture for the first
half of the class (1.5 hrs) and then follow with the lab for the remainder of the class (another 1.5
hrs). All lab assignments are due at the beginning of the next class.

Week Topics Readings/Assignments/Activity

1 Introduction to Business Dynamics The Beer Game
9/26/09

10/3/09 No class

2 Lecture: Modeling process and behavior of Read Business Dynamics [BD], Ch.3,
10/10/09 the system Ch.4

Lab: Vensim Tutorial

3 Lecture: Mapping the stock and flow and Read BD, Ch.6 (Skim sections 6.2.7,
10/17/09 the dynamics of stock and flow 6.2.8, 6.2.9, 6.3.4, 6.3.6), Ch.7

Lab: No lab today Submit and present Research proposal

10/24/09 No class

4 Lecture: Causal Loop Diagram Read

10/31/09 • BD, Ch.5 (Skim sections 5.4, 5.6)
• Richardson, G.P. (1986). “Problem
with causal-loop diagrams.” System
Dynamics Review 2(2): 158-170
• Richardson, G.P. (1997). “Problems
in Causal Loop Diagrams
Revisited.” System Dynamics
Review 13(3): 247-252
Lab: Problem Definition and Model
Conceptualization

5 Lecture: Linking feedback with stock and Read BD, Ch.8

11/7/09 flow structure

Lab: Mapping Stock and Flow and Mental

Simulation

6 Lecture: Modeling the s-shaped growth Read BD, Ch.9 (Skim 9.1.2, 9.1.3,
11/14/09 9.3.5, 9.3.6)
Lab: Modeling Simple System
 7 Lecture: Path dependency Read BD, Ch.10 (Skim 10.2)
11/21/09
Lab: Modeling Network Effects Submit and present research progress

8 Lecture: Delay Read BD, Ch.11 (Skim 11.6, 11.7)

11/28/09
Lab: Structure and behavior of the delay

9 Lecture: Oscillation of supply chain Read BD, Ch.17

12/5/09
Lab: Modeling oscillation system

10 Lecture: SD in Action – Commodity cycle Read BD, Ch.20

12/12/09
Lab: No lab today Submit and present the final paper