Question 1
Mapping a Business System
Drawing from insights in Hutchens, The Tip of the Iceberg, (pp. 65- 70), select a system in your work organization, or an organization that you are familiar with, and apply the causal loop diagram, including a reinforcing and balancing process. In a 1-2 page paper, briefly describe the purpose of the system, the components of the system, draw a casual loop diagram, and in plain language describe the diagram.
Causal Loop Diagrams have four basic parts: * Point of Intersection (usually ellipses or circle) that contain values that can change * Lines with an arrow showing influence direction * A reversal indicator * Time delay indicator
Format the paper using APA style (1-2 pages only, not including title and reference page; use in-text citations to support your comments): * Select an organization you are familiar with; * First paragraph: Discuss the purpose of the system, definitely connect your comments to systems thinking research—teach me about systems thinking…; * Second paragraph: Discuss the components of the system using appropriate terminology, again connect to research when appropriate using APA citations; * Next, draw the diagram (use drawing tools in Word) including the balancing and reinforcing sides, arrows including direction, and variables that affect the system; * Third paragraph: in plain English, describe the casual loop diagram’s purpose, components, etc. When an element of a system indirectly influences itself, the portion of the system involved is called a feedback loop or a causal loop. Causal loop diagram presents relationships that are difficult to verbally describe be- cause normal language presents interrelations in linear cause-and-effect chains, while the diagram shows that in the actual system there are circular chains of cause-and-effect.

I am going to discuss a car dealership organization which has a causal loop embedded in their system. This car dealership has been growing continuously for last few years. They started out as a small scale business but they started hiring more salesmen who will pitch the idea to public and they started advertising aggressively to target everyone in the town. However recently they have noticed that the sales are fluctuating from month to month, mostly flat and sometime even declining. The primary system is like this:

# of cars sold: More cars the dealership sells, higher the revenue they generate and given the same profit margin, higher the profit.Profit: Higher the profit, the more available cash they have that, they can afford to spend on advertising. Which in generate knowledge and appeal to the dealership and which will reflect in the number of cars sold.

However with time they figured the problem was that there are only a limited number of people who needed a new car as the cars now last longer and due to bad economy and other factor, they didn’t need to buy it soon. And most of the people now own a car so there was a limiting factor introduced to this growing cycle. The diagram below shows the causal loop.
To complete presentation of terminology for describing system structure, a linear chain of causes and effects which does not close back on itself is an open loop. The external limiting factor is part of the open loop.

Elements of causal loop: * Advertising * Appeal to the dealership * Revenue from Cars sold * Available Future customers * Increased competition from external companies.

Limited # of people in town

Causal links here imply the direction of causation.

References:
J. W. Forrester, Industrial Dynamics, The MIT Press, Cambridge, Mas- sachusetts, 1961.
D. H. Kim, “Toolbox: Guidelines for Drawing Causal Loop Diagrams,” The Sys- tems Thinker, Vol. 3, No. 1, pp. 5–6 (February 1992).
G. P. Richardson and A. L. Pugh III, Introduction to System Dynamics Modeling with DYNAMO, Productivity Press, Cambridge, Massachusetts, 1981.
P. M. Senge, The Fifth Discipline: The Art and Practice of the Learning Orga- nization, Doubleday Currency, New York, 1990.
P. M. Senge, C. Roberts, R. B. Ross, B. J. Smith, and A. Kleiner, The Fifth Dis- cipline Fieldbook: Strategies and Tools for Building a Learning Organization,
Doubleday Currency, New York, 1994.

Question 2 Case Analysis
Short Essay
After reading the story of the “mysterious chain of events” in Tip of the Iceberg, you respond to the following questions in a short case analysis paper of approximately 650 words. Be sure to incorporate APA citations within your paper and include a title and reference page. 1. Describe the primary system described in the story including the parts of the system, the system’s purpose, and the larger system in which it is embedded. 2. In what way did the penguins’ system seek stability? A. How did it respond to the penguins’ initial efforts to change things? B. Why did it respond in this way? 3. Why was it hard for the penguins to recognize and diagnose the feedback in their system?
Directions for Submitting the Case Analysis Assignment
Before you submit the Case Analysis, you should save your work on your computer in a location and with a name that you will remember.
Make sure your project is in the appropriate format (Microsoft Word DOC or RTF).
When you are ready, you may submit to the Unit 4 Case Analysis Dropbox.
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1. The primary system is optimized for maximum harvesting of the clams. Penguins need to get to clams but they cant get to them on their own so they have agreed to walruses harvesting clams in their area/bed. And in return walruses can enjoy all the clams they want. This primary system seemed to work fine on its own as more clams became available, iceberg got popular and more penguins came to the island, which in return recruited more walruses and that brought more clams.
System’s main purpose was to get to clams for penguins but it also served the purpose for walruses to get them access to a larger area for clams. However this seemed to work fine until they noticed that there was a limit on number of penguins/walruses that can occupy the island as it started to sink because of their weight. Recognizing this limitation the primary system became a part of the larger system which works as follows:
As before penguins needed clams so they let walruses hunt for clams in their area and walruses in return can enjoy all the clams they want. And as availability of clams increased, iceberg got popular and more penguins and walruses came to the island. However due to the limited size of the island, given space available on island is limited so that became a limiting factor. Which in turn acted as a turn off for more penguins and walruses to come to island? And there were fighting because the island was sinking in the water, leading to even lesser space available. With this balancing mechanism this is how the larger system (Causal loop diagram) worked. [1]

2. Penguins seek stability by entering a new variable into their primary system which they only recently noticed. As the walruses brought more clams up, more penguins and walruses came, causing the iceberg to sink. Once the iceberg started sinking, that made all of them start fighting which caused others to stop wanting to come there. And to do that they decided to plant new bed near mainland. They thought that having more clams available and keeping other penguins away will solve the problem. But the system resisted as it had a limiting factor. The weight it can take and the available space on the island. Both of them declined as more penguins/ walruses came to the island. It did respond this way because it reached its inherent limit and to expand it even further they will have to look outside their own primary system.

3. It was hard for penguins to recognize the feedback loop initially as the limiting factor was not big enough to appear in the picture. And the larger system as discussed in the first part was pretty much same as the primary system.
Initially the population was a small number and there were not many penguins/walruses to sink the island. And the change was negligible to even notice. So they could only notice the feedback when it reached its limit close to the saturation point.
Once they recognized the limitation, it was hard to diagnose the problem because the system resisted. They wanted to grow given the same island size so that made it harder to find the problem.

References
[1] D. H. Kim, “Toolbox: Guidelines for Drawing Causal Loop Diagrams,” The Sys- tems Thinker, Vol. 3, No. 1, pp. 5–6 (February 1992).
[2] G P. M. Senge, C. Roberts, R. B. Ross, B. J. Smith, and A. Kleiner, The Fifth Dis- cipline Fieldbook: Strategies and Tools for Building a Learning Organization,
Doubleday Currency, New York, 1994.