10.2. Models of Business and Social Systems

The significance of viewing formal models as transitional objects is the emphasis placed on aiding understanding rather than replicating reality. The idea there is a singular and objective world out there to be modelled is replaced with the softer notion that a formal model can help to improve mental models. It is through mental models that we interpret and make sense of the world around us. In business and social systems, mental models shape decisions and actions. As Forrester (1975, p 213) noted of social systems:

The mental image of the world around us that we carry in our heads is a model. One does not have a city or government in his head. He has only selected concepts and relationships which he uses to represent the real system. A mental image is a model. All our decisions are taken on the basis of models. All laws are passed on the basis of models. All executive actions are taken on the basis of models. The question is not to use or ignore models. The question is only a choice among alternative models.

Figure 10.2 shows the alternative mental models of a management team. Like Papert's gears in the mind, each member of the management team carries around an image of the organisation taken from the real world. Individuals' mental images vary according to their experience, responsibilities, power, ambitions and objectives, represented by different shades of grey in the boxes surrounding each head. A formal model is an instrument to elicit these different mental models with the objective of improving the quality of the decisions and actions taken by the team.

The kind of formal model created depends on the strengths and weaknesses of mental models and common deficiencies in our ways of thinking about business and social systems. System dynamics assumes that competent management teams are good at describing the operating structure of their organisations – how the different functions, divisions and regions work individually. Where teams needs help and where mental models are deficient are in: (1) seeing how the pieces fit together (taking an overview; seeing the forest while not losing sight of the trees) and (2) determining the performance over time (the dynamic consequences) when the parts of the organisation interact with each other. Like Papert's gear-set, the formal model enables the management team to test, reflect and learn something new about their world – in this case to improve their understanding of the relationship between the organisation's feedback structure and its performance over time.

Figure 10.2. Formal model as transitional object for team learning

Source: From Systems Modelling – Theory and Practice, Edited by Mike Pidd, 2004, © John Wiley & Sons Limited. Reproduced with permission.