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Why
participating?
Let's start with a metaphor
taken from Peter Senge's book, The Fifth Discipline
"If you place a frog
in a pot of boiling water, it will immediately try to scramble
out. But if you place the frog in room temperature water, and
don’t scare him, he’ll stay put. Now if the pot sits
on a heat source, and if you gradually turn up the temperature,
something very interesting happens. As the temperature rises
from 70 to 80 degrees F., the frog will do nothing. In fact,
he will show every sign of enjoying himself. As the temperature
gradually increases, the frog will become groggier and groggier,
until he is unable to climb out of the pot. Though there is
nothing restraining him, the frog will sit there and boil. Why?
Because the frog’s internal apparatus for sensing threats
to survival is geared to sudden changes in his environment,
not to slow, gradual changes".
Likewise the frog of Peter
Senge’s metaphor, many entrepreneurs are sadly forced to
see their business ideas fail – even though they are worthy
– because of their inability to timely perceive, in the
muddle of their daily worries, that some arising problems
are becoming unsustainable.
Quite often, particularly in
small firms, financial crises are caused by too a fast and/or
intensive growth rate. For instance, it may happen that entrepreneurs
– in order to increase market share – rise terms of
payment allowed to customers or reduce average delivery time
and/or sale prices.
Even though such "aggressive"
commercial strategies may lead to a higher income rate in the
short term, very often they cause a financial crisis over a
longer time perspective.
Usually many entrepreneurs
cannot figure out the reasons why the achieved growth rate,
which initially led to higher sales revenues and profits, suddenly
threatens the firm’s survival. They cannot understand the
causes of a drastic and progressive reduction in available bank
accounts, in spite of concurrent increasing sales revenues.
Likewise, it seems a contradiction that a remarkable "orders
backlog" cannot be filled because of goods on stock unavailability.
Sometimes it can also be unclear the rationale of customers'
behaviour, who reduced their demand, in spite of aggressive
commercial strategies of the firm.
How does the entrepreneur frame
his firm and competitive system? Which policy levers are perceived
as the most effective to achieve a desired business growth rate?
How are they managed by the entrepreneur? How does he map relationships
with financial institutions, the business-owning family, customers,
competitors, etc? How much time it takes to attain expected
results, as a consequence of a given set of policies?
The entrepreneur’s mental
models strongly affect business growth management: they
can be improved by a continuous learning process, aimed at reducing
the gap between real and perceived state of the
system.
Balancing short with long-term
policies, efficiency with effectiveness allow one to pursue
a sustainable growth rate, in terms of liquidity, profitability
and "debts-to-equity" ratio.
This is the core of business
growth management.
"Dynamic" and "Accounting" models: two complementary
perspectives
Improving mental models to
support business growth management implies that a suitable perspective
and proper operative tools are adopted to support entrepreneur
in relating current decisions and strategic goals.
A proper link between the above
two outlooks may allow one to:
-
prefigure side effects
which could arise because of current decisions, over a long
time horizon
-
identify limits to growth
in the business system
-
focus policy levers
to manage in order to foster growth.
How to embody strategic management
perspective into the business control system to support decision
makers in managing growth? How a small firm could exploit
available information and the entrepreneur's mental database
to match other current decisions with strategic growth goals?
"Dynamic" models
(i.e. those which are based on the System Dynamics methodology)
gather entrepreneurs a complementary perspective to that
of "Accounting" (and "accounting-related")
models in managing business growth.
The application of such a methodology
to business environments mainly consists in:
-
identifying a problem;
-
detecting factors which
mostly affect the observed problem;
-
analysing management
processes and key-factors' causal variables;
-
making explicit policy
levers related to the system's key-factors;
-
identifying delays between
causes and effects, non-linearity and the system
feedback structure;
-
building a computer-based
simulation model;
-
improving policies and
performance by model experimentation.
The outcoming learning process
occurs by:
1. eliciting key-actors' knowledge
and perceptions and building "dynamic"
models. Such a process is oriented to identify main feedback
loops and to exploit available information both from accounting
and mental databases, as well as from external sources;
2. assessing alternative policies
through what-if analysis and scenario making;
3. comparing simulated to
actual system behaviour, feeding back initial working
hypotheses
WHO MAY BENEFIT
FROM THE PROGRAMME
The programme is intended for:
-
small/medium-sized firms’
entrepreneurs;
-
those people who directly
support entrepreneurs in their managerial tasks;
-
consultants who are interested
in applying System Dynamics to small firms;
-
researchers who are interested
in strategic control and small firms related issues.
No computer skills competency
is required to participants.
Key benefits of attendance
Attending the programme will
enable participants to:
-
develop an attitude in
perceiving management phenomena under a system
dynamics perspective;
-
practice in identifying
critical variables for business growth;
-
develop skills in modelling
system structures underlying growth processes;
-
be able to identify current
decisions effects on business growth;
-
learn System Dynamics
methodology principles;
-
build System Dynamics
computer-based models in order to assess different management
policies according to alternative scenarios;
-
understand how "dynamic"
models can be useful in managing small firms growth and
how they can best fit in their organisational and control
system;
-
work
on their own business problems.
FEE AND HOW TO
REGISTER IN THE PROGRAMME
The fees due from each participant
are Lit. 2.000.000 (VAT included)
The above fees include:
Readings and basic bibliography;
The use of Personal Computers
Powersim Constructor demo
You can fax the Application form and your Cv at the
+39.091.6254532.
TIMETABLE
Morning 8:30-13
Afternoon 14:30-18:45
TEACHING STAFF
Professor
Carmine Bianchi –
Associate Professor of Business
Management and Management Control and Planning at Foggia University,
and of Business Management at Palermo University, Associate
Editor of the System Dynamics Review and scientific responsible
of CUSA - System Dynamics Group, Palermo. Professor of
System Dynamics at Bergen Univesity, Master Phil.(Norway).
E-mail: bianchi@unipa.it
Dr. Enzo Bivona –
Doctorla student in Business
Management, University of Catania; Master Phil. in System Dynamics,
Bergen University (Norway), Member of CUSA - System Dynamics
Group, Palermo.
E-mail: enzo.bivona@libero.it
At closing
of the course there will be interventions of Professors:
Paal
Davidsen, System Dynamics
Professor at Bergen University, Norway – responsible of
Master Phil. in System Dynamics, Bergen;
Graham
Winch, Professor of Business
Analysis Plymouth University, England, Chief Editor of System
Dynamics Review.
PROGRAMME LOCATION
The programme will be held
at CUSA - Piazza A. Gentili, 12 - Palermo
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