Thursday, September 27, 2012

Evaluation of system thinking tools & techniques

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‘At a broad level, systems thinking encompasses many methods, tools and principles that are oriented to looking at the interrelatedness of forces, and seeing them as part of a common process. This includes brainstorming and discovery techniques, scenario planning and graphs or diagrams representing the system relationships, as well as simply an awareness of unintended consequences.

The value of Systems thinking lies in its ability to assist organizations identify and effectively alter the systems they operate within, as a means of resolving the many challenges that may arise.

Through exploration of the concepts of the Learning Organization, this report aims to evaluate three System Thinking tools; Root Cause Analysis, Causal Loop Diagrams and Scenario Planning.

Root Cause Analysis

Many organisations find themselves with unwanted, recurring situations. This is generally referred to as Root Cause Analysis, finding the real cause of the problem and dealing with it rather than simply continuing to deal with the symptoms.

In normal operational environments, it is often difficult to find candidates for root cause analysis as the situations which repeat are either distributed over time so one doesnt realize they are actually recurring, or the situation happens to different people so there isnt an awareness of the recurring nature of the situation. However, ‘those situations which are recurring with the greatest frequency and consume the greatest amount of resources to rectify are generally the most suitable candidates for root cause analysis.

An organisations first challenge in the use of any systems tool is that they must establish if the situation warrants the chosen application. RCA is best used on those situations which occur with the greatest frequency and consume the greatest amount of resources to rectify.

On completion of identifying the situation, the overall aim is to find the root cause of the issue and remove it prior to the cycle commencing again. However, it must be determined whether the removal of the root cause warrants the resources required to resolve the problem, rather than continuing to treat the actual symptoms of the problem.

The goal of root cause analysis is to investigate and determine the following;

• What is happening?

• Why is it happening?

• What is being done to prevent it from happening again?

Dealing with a recurring problem is not seen as an acceptable solution. Firstly, it is a requirement that the root cause be identified by the project team. Secondly, a plan is put in place to ensure the surrounding issues do not surface again in the near future.

Causal Loop Diagrams

Causal loop diagrams (CLD) are a way of attempting to understand inter-relationships which occur within all systems and processes. They trace cause and effect through a system and, in particular, attempt to model feedback.

There are two specific types of loops that are generally used to display system variables at work, the reinforcing loop and the balancing loop. The reinforcing loop depicts either growth or decline that is occurring within a system at an ever-increasing rate. A reinforcing loop is applied to a situation in which an action produces a result which in turn promotes more of the same action.

Represented in the diagram below is an assumption, the larger the Population the greater number of Births as there are more people of child bearing age. From our assumption, that any increase in Population will cause an increase in Births, and then a further increase in Population. These increases can be shown on the CLD by a + sign, as below. The positive sign indicates that a change in the causal variable will cause a change in the variable it is affecting in the same direction. That is, an increase in Population will cause an increase in Births.

This is the simplest CLD and represents a Positive Feedback Loop. A change in any variable will cause the system to continually move in one direction � either continually increasing (a virtuous cycle) or continuously declining (a vicious circle).

The above example demonstrates a reinforcing loop, in which two factors are identified as an explanation into increased population. The ‘elements’ in this example are ‘Population’ and ‘Births’ and the circle structure represents the forces of influence and the ‘+ ‘indicates that the influence adds to the element, had one element had a subtracting influence a ‘-‘would have been displayed. The above diagram is by no means complete. As Population increases, deaths must also increase. And as Deaths increase, the Population will effectively decrease.

The decrease in Population due to an increase in Deaths is shown in the CLD with a - sign. This sign indicates that a change in the causal variable (Deaths) creates a change in variable it is affecting (Population) in the opposite direction. This second loop is known as a Balancing Loop. Balancing loops can be applied to any situation where an action is used in an attempt to bring the other elements within a system into agreement.

The use of causal loop diagrams should be approached carefully as it will only be with a thorough understanding of the process and the ability to identify leverage points within the system that an organization will be in a position to determine the most appropriate ways of influencing change.

Scenario Planning

Scenarios are stories that pose alternative futures for the organization, based on assumptions about current trends and events. Usually a best-case scenario, worst case scenario, and a scenario somewhere in between are developed to map out the ranges of possible futures the organization might face, the threats and opportunities each future might pose, and what the critical success factors might be in addressing those futures.

One of the benefits surrounding the construction of scenarios is to promote learning by the planning team; sensitize team members to plausible, though perhaps unlikely, futures; and develop strategies better able to handle most eventualities. However, the main purpose of scenario planning is to directly face inevitable uncertainties for long-range future and strategic outlooks. E.g. Global Financial Markets

Acknowledging uncertainty in this respect means thinking in terms of different but equally plausible interpretations of what is happening and the effects it will induce in the long run. In scenario-based planning these subjective interpretations and expectations are reflected as a number of alternative paths for future developments. This approach to planning serves as an aid to develop strategies that promise success under most divergent environmental conditions.

In order for the project to be successful, it was imperative for each team member give adequate contribution on the past history and success of this type of technology in their region. However, it was the project manager’s responsibility to ensure that each of the Director’s focus on looking towards the many possible futures that lay ahead of the organisation and the possible challenges these futures may bring.

By the end of the discussion, the working group had a number of scenarios to consider, along with the affects that they may have on the organisation. It then comes down to a vote (at board level) on which of the possible scenarios should be researched further and inevitably be invested in. Exploring these scenarios gave the organisation a better understanding of our current goals and strategies in which to forecast our long term strategic position in the market place.


It is common practice for companies to rethink their business strategies. With systems thinking can come new mental models and a shared vision to take organizations into the next century. Through providing its people with the basic concepts and tools, an organization is in effect encouraging them to take responsibility of the environments within which they work.

Each has to do with how we think, what we truly want, and how we interact and learn with one another.”

However, some of today’s most successful organizations are embracing these ideas to meet the demands of a global economy where the value of the individual is increasingly recognized as our most important resource.


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‘System Behaviour and Causal Loop Diagrams’, http//

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‘Scenario Planning’,

Jepsen, M. Turner, T. Marshall, J. Dibley, C. Paterson, H. Calway, B. Brown-Parker, J. Buchanan, N. ‘LEB50 The eBusiness Environment’, Swinburne University of Technology

‘Causal Loop Diagrams’, http//

‘Root Cause Analysis’, http//

McNamara, C, ‘Systems Thinking’, http//

Senge, P. 14, ‘The Fith Discipline Field book’, London, U.K.

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