The Study, Based On System Dynamics Of Business Growth

The growth of the firm is a dynamic process, and shows various dynamic characteristics, which is the integrated effect of surroundings and inter structure of the system. Therefore, to probe the dynamic character of the growth of the firm, we should build a scientific dynamic system model first, and next, proceed the simulate research. It is reasonable and necessary to observe and analyze firms in all kinds of related systems.From the view of system, the growth of firm, which means from one state to another systematic state, includes not only the growth of quantity, but also the growth of quality. The growth of firm is affected by changes of the belonging industry and market. On the other hand, how to distribute resources in pushing factors to obtain survival and sustainable growth is the main problem of management. The affecting factors of the growth of firm are complex, and we could analyze the growth of firm from the system of key conditions indexes and affecting indexes. For the uncertainty of the surroundings and changing of the firm's conditions, the motives of the growth of the firm change continuously, and there exists pattern and model in both the way and state of the growth of firm.Analyzing from the view of system dynamics, the growth of firm, from pregnant, born, quick growth to mature, is a reinforcing feedback process both positive and negative. The growth of firm may push development of the positive factors and the reinforcing feedback can push the quick growth of firm. But, at the same time, the restrained factors grow and the restrained circuit begins to affect. And the balancing circuit will slow down and even stop the growth of firm. So, the process of the growth of firm includes at least a reinforcing circuit and balancing circuit, what is more, many feedback circuits may be included. The difference of linking ways leads the difference of the systematic characters of the growth of firm. When the positive feedback takes the predominant place, the firms grow quickly, while slow down even stop if the positive feedback takes place.The SD model of the growth of the firm is built in this paper, in order to simulate and analyze the basic structure, basic circuit, typically dynamic behavior patterns and their SD characteristics during the growth of the firm. The essence of reinforcing circuit being drive and balancing circuit being stabilization mechanism for the growth of the firm is exposed, at the same time, the dialectic relation between them is analyzed. Thespringhead of 'benign circle' and 'vicious circle' during the frowth of the firm are brought forth intuitively. The inherent relationship between the dynamic behavior patterns during the growth of the firm and its policies under the restriction of its endogenous alteration. At last, the dynamic relationship between the growth of the firm and its ability is simulated and analyzed, some apocalypse about management strategy and policy for the growth of the firm is put forward.