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System Dynamics in the Evolution of the Systems Approach

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Complex Systems in Finance and Econometrics
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Article Outline

Glossary

Definition of the Subject

Introduction

Emergence of the Systems Approach

Common Grounds and Differences

The Variety of Systems Methodologies

System Dynamics – Its Features, Strengths and Limitations

Actual and Potential Relationships

Outlook

Appendix

Bibliography

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Abbreviations

Cybernetics :

The science of communication and control in complex, dynamical systems. The core objects of study are information, communication, feedback and adaptation. In the newer versions of cybernetics, the emphasis is on observation, self‐organization, self‐reference and learning.

Dynamical system :

The dynamical system concept is a mathematical formalization of time‐dependent processes. Examples include the mathematical models that describe the swinging of a clock pendulum, the flow of water in a river, and the evolution of a population of fish in a lake.

Law of requisite variety :

Ashby's law of requisite variety says: “Only variety can destroy variety”. It implies that the varieties of two interacting systems must be in balance, if stability is to be achieved.

Organizational cybernetics :

The science which applies cybernetic principles to organization. Synonyms are Management Cybernetics and Managerial Cybernetics.

System:

There are many definitions of system. Two examples: A portion of the world sufficiently well defined to be the subject of study; something characterized by a structure, for example, a social system (Anatol Rapoport). A system is a family of relationships between its members acting as a whole (International Society for the Systems Sciences ).

System dynamics :

A methodology and discipline for the modeling, simulation and control of dynamic systems . The main emphasis falls on the role of structure and its relationship with the dynamic behavior of systems, which are modeled as networks of informationally closed feedback loops between stock and flow variables.

Systems approach :

A perspective of inquiry, education and management, which is based on system theory and cybernetics.

System theory :

A formal science of the structure, behavior, and development of systems. In fact there are different system theories. General system theory is a transdisciplinary framework for the description and analysis of any kind of system. System theories have been developed in many domains, e. g., mathematics, computer science, engineering, sociology, psychotherapy, biology and ecology.

Variety:

A technical term for complexity which denotes the number of (potential) states of a system.

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Appendix

Appendix

Milestones in the Evolution of the Systems Approach in General and System Dynamics in Particular

The table gives an overview of the systems movement's evolution, as shown in its main literature; and that overview is not exhaustive.

Table 1 Milestones in the evolution of the systems approach in general and system dynamics in particular

Systems Approaches – An Overview

Note: This diagram shows three streams of the systems approach in the context of their antecedents. The general systems thread has its origins in philosophical roots from antiquity: The term system derives from the old Greek \({\sigma \acute{\upsilon} \sigma \tau \eta \mu \alpha}\) (systēma), while, cybernetics stems from the Greek \({\kappa \upsilon \beta \varepsilon \rho \nu \acute{\eta} \tau \eta \varsigma}\) (kybernētēs). The arrows between the threads stand for interrelationships and efforts to synthesize the connected approaches. For example, integrated systems methodology is an integrative attempt to leverage the complementarities of system dynamics and organizational cybernetics. Enumerated to the left and right of the scheme are the fields of application. The big arrows in the upper region of the diagram indicate that the roots of the systems approach continue influencing the different threads and the fields of application even if the path via general systems theory is not pursued.

Figure 1
figure 1_41

 

The diagram is not a complete representation, but the result of an attempt to map the major threads of the systems movement and some of their interrelations. Hence, the schema does not cover all schools or protagonists of the movement. Why does the diagram show a dynamic and evolutionary systems thread and a cybernetics thread, if cybernetics is about dynamic systems? The latter embraces all the approaches that are explicitly grounded in cybernetics. The former relates to all other approaches concerned with dynamic or evolutionary systems. The simplification made it necessary to somewhat curtail logical perfection for the sake of conveying a synoptic view of the different systems approaches, in a language that uses the categories common in current scientific and professional discourse. Overlaps exist, e. g., between dynamic systems and chaos theory, cellular automata and agent-based modeling.

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Schwaninger, M. (2009). System Dynamics in the Evolution of the Systems Approach. In: Meyers, R. (eds) Complex Systems in Finance and Econometrics. Springer, New York, NY. https://doi.org/10.1007/978-1-4419-7701-4_41

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