1. Today's decision making faces increased complexity due to accelerating innovation, globalization, and interconnected world problems. Traditional reductionist and cause-and-effect thinking cannot adequately address this complexity. 2. Focusing only on efficiency within parts of a system does not guarantee effectiveness of the overall system in achieving its goals. Unplanned and counterintuitive outcomes can also arise from unintended consequences and feedback loops. 3. Systems thinking views problems holistically as parts of larger wholes and recognizes properties that emerge from the interaction of diverse elements. It provides a more effective approach than reductionism for complex decision making today.

1. Management Science
Decision Making Trough System Thinking
Chapter 02 System Thinking
From Book “Management Science
Decision Making Trough System Thinking”
Daellenbach, Hans, Donald McNickle, and Shane Dye. Management
science: decision-making through systems thinking. Palgrave
Macmillan, 2012.
Presented By:
Rio Aurachman, MT

2. INCREASED COMPLEXITY OF
TODAY’S DECISION MAKING
CHAPTER 2
System Thingking
1.Increased complexity of today’s decision making
2.Efficiency and effectiveness
3. Unplanned and counterintuitive outcomes
4. Reductionist and cause-and-effect thinking
5. Systems thinking
6.Review

3. Complexity
Picture Resources:: www.azquotes.com
W.R. Ashby: complexity as the quantity of information
required to describe something
[‘Some peculiarities of complex systems’, Cybernetic
Medicine, 1973, v9 no2, 1–6]

4. Change of 20th Century
Picture Resources: iacc.hhs.gov , www.scidev.net , www.cbsnews.com
accelerating rate of innovation in
technology and commu-nications The lowering of trade barriers
gap between the rich
developed countries World problem: problems of overpopulation, etc
“Today’s world has thus increased in complexity and inter-dependence to a point where
the traditional methods of problem solving based on the cause-and-effect model
cannot cope any longer”

5. Construction of the Aswan High Dam
in Egypt
Picture Resources: en.wikipedia.org

6. Deterioration of urban transport
Picture Resources:: www.volvogroup.com

7. Assessment of unit production costs
Picture Resources: www.gray.com

8. EFFICIENCY AND EFFECTIVENESS
CHAPTER 2
System Thingking
1.Increased complexity of today’s decision making
2.Efficiency and effectiveness
3. Unplanned and counterintuitive outcomes
4. Reductionist and cause-and-effect thinking
5. Systems thinking
6.Review

9. Efisiensi
Picture Resources:: ecars-now.wikidot.com, alevelnotes.blogspot.com
“Efficiency looks at how well resources are used in a
given activity”
economic efficiency

10. Efektifitas
Picture Resources:: www.myperago.com
“looks at how well the goals or objectives of the entity or activity are achieved”
‘convenient’
Determining Factor for Effectiveness in Transport System
>The choice of bus routes
>the frequency of service at various times of the day
>and the type of vehicles used and how they are maintained
>fare structure

11. Efisiensi Vs efektifitas
Picture Resources:: www.slideshare.net, www.linkedin.com, www.edn.com
“Operating various parts of a system in their most efficient manner does not
necessarily mean the system as a whole is effective in terms of achieving its
objectives”
seem to be so much concerned with
efficiency?
elimination of such seemingly ‘idle’ spares may not be cost-effective

12. Efisiensi adalah Musuh efektivitas?
Picture Resources:: takuminotie.com
“True efficiency looks at the overall goals”

13. UNPLANNED AND
COUNTERINTUITIVE OUTCOMES
CHAPTER 2
System Thingking
1.Increased complexity of today’s decision making
2.Efficiency and effectiveness
3. Unplanned and counterintuitive outcomes
4. Reductionist and cause-and-effect thinking
5. Systems thinking
6.Review

14. Picture Resources::
Counter Intuitive Outcome
ourworld.unu.edu

15. 1
5
“Maybe pushing on that wall to the right will give some space.”

16. 16
“Oops!”

17. 1
7
The real system…
Edited extract
…vs. what we often see…
The trouble with feedback
is that it is often invisible …
“System dynamics demonstrates how
most of our own decision-making
policies are the cause of the problems
that we usually blame on others, and
how to identify policies we can follow
to improve our situation.”
Jay Forrester
Sloan School of Management, MIT
Page 38 of Morecroft, John (2007) Strategic Modelling and Business
Dynamics. Wiley

18. Picture Resources::
Production example

19. Picture Resources :: news.harvard.edu
The Hawthorne experiments

20. REDUCTIONIST AND CAUSE-AND-
EFFECT THINKING
CHAPTER 2
System Thingking
1.Increased complexity of today’s decision making
2.Efficiency and effectiveness
3. Unplanned and counterintuitive outcomes
4. Reductionist and cause-and-effect thinking
5. Systems thinking
6.Review

21. Picture Resources: www.pinterest.com :
Don’t Use Reductionism?

22. Picture Resources:: www.slideshare.net, thescienceexplorer.com
Don’t Use cause-and-effect thinking an sich

23. Picture Resources:: museum2.utep.edu, www.smashingmagazine.com , mrsbursksclass.wordpress.com
Important think to Consider
emergent properties
mutual causality or feedback

24. REDUCTIONIST AND CAUSE-AND-
EFFECT THINKING
CHAPTER 2
System Thingking
1.Increased complexity of today’s decision making
2.Efficiency and effectiveness
3. Unplanned and counterintuitive outcomes
4. Reductionist and cause-and-effect thinking
5. Systems thinking
6.Review

25. Picture Resources:: alandix.com, www.economicsunplugged.com. associationsnow.com
System Thinking
from about 1940 on, a number of
researchers from various scientific
disciplines —
— started to recognize
that all things and events, and the
experience of them, are parts of
larger wholes
effective action for decision making
still use reductionist and cause-and-effect
Thinking as complement

26. Review and Mindmap
Introduction
1.Increased complexity of
today’s decision making
Complexity
World change
Case
Aswan dam
Deterioration of urban
transport
Assessment of unit
production costs
2.Efficiency and
effectiveness
3. Unplanned and
counterintuitive outcomes
Case
Production rate
Hawthorne experiment
4. Reductionist and cause-
and-effect thinking?
Emergent properties
Feedback loop
5. Systems thinking
Picture Resources:
CHAPTER 2
System Thinking