The document discusses systems thinking and its impact on decision making. It begins with introductions to systems concepts and definitions of systems thinking. It describes the difference between system 1 and system 2 thinking, with system 1 being fast, automatic thinking and system 2 being slower, effortful thinking. It emphasizes that in today's complex and interconnected world, systems thinking is needed to understand complex problems and avoid unintended consequences of decisions. Systems thinking provides a holistic view rather than a narrow, reductionist view to help make better decisions. The document provides examples of applying systems thinking in various domains and argues it is a new way of thinking needed to address challenges of the current century.

1. System
Thinking
Affect on Decision Making

2. Presented By
MUHAMMAD AWAIS
CMS: 18250
MSPM-2016
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3. Sequences
 Introduction to the systems concept
 Definitions of Systems
 A System versus a Collection
 Basic Properties of a System
 Definitions of Systems Thinking
 System thinking 1 & 2 in Decision Making
 Making Decisions in such a Complex Web of
Interactions
 System Thinking - A New Way of Thinking
 Application of Systems Thinking
LINEAR THINKING
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4. Introduction to the systems
concept
The six blind men and an
elephant
A partial truth
The moral of the story:
having a ‘holistic’ view
“The behaviour of a
system cannot be known
just by knowing the
elements of the system”
(Meadows 2008, p.7)
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5. Definitions of Systems
“A system is a set of elements or parts that is coherently
organised and interconnected in a pattern or structure that
produces a characteristic set of a behaviours, often classified
as its ‘function’ or ‘purpose’” (Meadows 2008, p.188)
“Simply defined, a system is a complex whole the functioning
of which depends on its parts and the interactions between
those parts” (Jackson 2003, p.3)
“A system is more than the sum of its parts – it is the product
of their interactions” (Ackoff 1999)
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6. A System versus a Collection
 A collection is also
composed of a number
of parts but they are
just dumped together
and are not
interconnected
(Sherwood 2002)
 A marriage: a collection
or a system?
 A Degree program?
Source: http://www.yaseenkhan.org
Honey, are we a
collection
or a system?
I hope we are
a system!
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7. Basic Properties of a System
A system must consist of :
Elements or parts
Interconnectedness & Interactions
Function or purpose
Examples: a business, football team; digestive
system; school; faculty, city; corporation; animal; tree;
etc.
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8. Definitions of Systems Thinking
“Systems thinking is a way of looking at, learning about,
and understanding complex situations” (Wilson 2004, p.7)
“Systems thinking is a way of seeing and talking about
reality that helps us better understand and work with
systems to influence the quality of our lives” (Kim 1999,
p.2)
 Systems thinking is a ‘new way of thinking’ to understand
and manage complex problems (Bosch et al. 2007;
Cabrera et al. 2008)
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9. System 1 vs System 2 Decision
Making
• System 1 is an automatic, fast and
often unconscious way of thinking.
It is autonomous and efficient,
requiring little energy or attention,
but is prone to biases and
systematic errors.
• System 2 is an effortful, slow and
controlled way of thinking. It
requires energy and can’t work
without attention but, once
engaged, it has the ability to filter
the instincts of System 1.
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10. Examples of System 1 Vs System 2
• System 1 is capable of making quick
decisions, based on very little information.
Now, how would you decide which seat to
take in a waiting room, which pasta sauce to
buy, or whether to change lipstick colors?
• How would you decide which college to
attend, which house to buy, or whether to
change careers? These are the types of
decisions that engage System 2. They require
attention and slow, effortful, considered
responses.
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11. Why Systems Thinking?
Climate and
Environmental
changes
Technological
developments
Global Information
Exchange
Increasing
Conflicts
Disruption
of the Value Chain
Social & Political
Developments
Differentiation of
Customer Needs
Social
Responsibility
Dealing with complexity and coping with increasing
dynamics has become the main challenge in project
and program management
Complexity
and Dynamics
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12. Making Decisions in such a
Complex Web of Interactions
Politicians, business managers and all members of society have to make
important decisions on a daily basis in the complex web in which business,
social issues, finance and economics, environment, politics and culture are all
highly interconnected
Do we get it right?
• Do we make good policy and investment decisions?
• Are we aware of the unintended consequences of our decisions?
• Are we effective in our cross-sectoral communication and
collaboration to deal with the multi-dimensional nature of complex
problems?
• Do we go for quick fixes because it is easier to treat the symptoms?
OR
Do we urgently need new and innovative ways of thinking and a fresh
approach and tools to deal with the problems facing our society?
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14. Taking stock of a failed project
Andrew Stellman on July 24, 2009
OOPS
?
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15. Systems
Thinking
“Where the world is dynamic, evolving and interconnected, we tend to
make decisions using mental models that are static, narrow, and
reductionist.” (Sterman 2000)
Narrow focused and isolated solutions often lead to “policy resistance”
and unintended consequences.
To balance and integrate short term and urgent solutions with long term
systemic interventions.
To create resilience collaborative, integrated and systemic approaches.
To enhance cross-sectoral engagement, communication and
collaboration in dealing with complexity
But, fundamentally and foremost, we need a new way of thinking that
allows us to test and challenge age-old assumptions.
A New Way of Thinking
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16. Application of Systems Thinking
Business (Sterman 2000; Walker et al. 2009)
Health (Cavana et al. 1999; Lee 2009)
Commodity systems (Sawin et al. 2003)
Agricultural production systems (Wilson 2004)
Natural resource management (Allison and Hobbs 2006)
Education (Galbraith 1999; Hung 2008)
Decision making (Maani 2002)
Human resource management (Quatro et al. 2007)
Organisational learning and change (Galanakis 2006)
Philosophy, biology, social theory and management (Mingers 2006)
Sustainability and evolutionary learning laboratories for addressing complex issues (
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17. The capacity to redesign in systems and
sustainability terms, will increasingly be
what society and employers will require
from new people entering the workforce
A “requirement” that has become one of the biggest challenges for
education in this century
Only a deep understanding of the disciplines insufficient - need to
fully understand how disciplines fit into societal and global systems
Living in a Century when humanity will meet ever more limits
Didactic autonomous discipline based courses fail to foster a social
networking culture (interactions between students in different
disciplines)
Need innovative curriculum designs and learning environments that
address academic paradigms as well as industry requirements
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18. LINEAR THINKING
Improved
Quality of
Life
Enhance
Tourism
More Tourists
More Jobs
More $$$
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19. Pollution
Temporary
immigration
Empoloyment
opportunity
Land required
for tourism
Natural
beauty
Availability of
underground water
Fresh water
consumption
Employment
opportunity for local
people
+
+
Social
issues
Infrastruture
& facility
+
+
Number of
tourists
Attractiveness
of Cat Ba Island
+
-
-
+
Wealth of
local people
-
+
Waste+
+
+
+
Illegal forest
exploitaion-
-
Total
population
+
Agricultural
Production
Living
cost
-
+
+
-
+
-
+
+
Conservation and
agricultural land
-
+
-
B2
B1R1
R3
R2
B3
B4
B5
B6
Student
population
Assess to
education
+
-
-
-
R5
R4
Investment
+
+
+
Resident
population
+
+
Wealth of
Local
People
Number
of
Tourists
Increasing
n Jobs
SYSTEMS THINKING
© Professor Ockie Bosch and Dr Nam Nguyen
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