Ecem Yildiz, A; Dikmen, I and Talat Birgonul, M (2020) Using system dynamics for strategic performance management in construction. Journal of Construction Engineering and Management, 146(2), ISSN 0733-9364
Abstract
Balanced scorecard (BSC) and strategy maps (SMs) are among the most popular strategic performance management methods that have been proposed in the literature to define, analyze, and monitor performance and strategies. Despite their popularity, BSC and SMs have been criticized for their inability to simulate dynamic interrelations between performance measures and strategies over time. In this paper, a dynamic SM was developed by using system dynamics (SD) modeling based on the BSC framework. This paper describes the dynamic SM, which was conceptualized, formulated, tested, and simulated in collaboration with a construction company, as well as the experiences gained during the model development process. Simulation tests demonstrated that dynamic SMs can be used to improve strategic decision making by assessing the impact of strategies on aggregated measures of performance under different scenarios considering changes in internal processes as well as external conditions. However, the findings also revealed that SD models can have some limitations due to problems of generalization, usability, and validity. The model development process and dynamic SM structure proposed in this study can be used by other companies and researchers to develop similar models and to discover potential limitations of SD modeling.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | balanced scorecard; dynamic strategy mapping; simulation testing; strategic performance management; system dynamics |
| Index terms: | maps, strategy, usability, performance measure, construction company, collaboration, system dynamics, mapping, decision-making, model development, balanced scorecard, performance management, validity, modelling, testing |
| Subjects: | professional practice, analytical methods, evaluation and assessment methods, organization, user-centered design, computing systems, decision analysis, performance measurement, management, spatial and geospatial analysis |
| Topics: | Digital Applications, Design Practice, Quality Management, Organizational Design, Business Strategy, Engineering Principles, Research Practice, Risk Management |
| Descriptive scope: | 4 PCTA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here