Transforming an Agricultural Trade Organization: A System-Dynamics-based Intervention

Authors
Michael Weber, Markus Schwaninger

Abstract
The management of agricultural trade organizations in Switzerland is characterized by completely new entrepreneurial challenges due to a progressive opening of agricultural markets and a corresponding reform in the state’s agricultural policy. The need for well-suited strategic management tools has suddenly become manifest. Given this background, our intervention took place in a division of a union of cooperatives in the Swiss agribusiness; which is a typical example for a small to medium enterprise (SME). The aim of the project was to search for possible ways to sustain the viability of the division in the future. The intervention started with the development of an overall descriptive network-type model of the strategically relevant issues faced by the division. A System-Dynamics-(SD)-model was built as a decision-support-tool for one of two crucial strategic issues: the organization of the distribution system. Based on the insights derived from modelbuilding and simulation, the management team changed its shared mental model of the issue at hand, achieving a deeper understanding of the situation faced, the options available and their implications. Thereupon, they have started to reorganize the whole distribution system. In sum, the modeling and simulation activities undertaken had a powerful trigger function in the process by inducing organizational learning at a very fast pace.

Keywords
Agricultural trade organization, System Dynamics, Integrative Systems Methodology (ISM), Methodology of Network Thinking (MNT), Small Business Strategy, Reorganization, Small to Medium Enterprises (SME)

Published
System Dynamics Review 18, 381-401, (2002)

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