Maintaining service quality under pressure from investors: a systems dynamics model as a hands-on learning tool

This article, by Ann van Ackere, Kim Warren and Erik Larsen discusses how system dynamics models can help understand a service company's growth potential and its limitations, as well as the use of such models for executive training. The ideas are illustrated using a model built for a European restaurant chain which grew close to 200 outlets in less than a decade. The model is being used for educating the emerging generation of managers who will have to cope with the tensions described in the model. The authors use the model to study how management policies affect the achievable rate of growth. The issues discussed are relevant to any service based company facing the problem of maintaining and improving service quality against the pressure of performance expectations set by shareholders or corporate owners.