Title: 'Representing' value creation: a combined approach of system dynamics and integrated reporting for the airline sector

Authors: Federico Barnabè

Addresses: Department of Business Studies and Law, University of Siena, P.za S. Francesco 7, 53100 Siena, Italy

Abstract: This article explores the potentialities of system dynamics (SD) as a support to integrated reporting (<IR>) for a more transparent representation of value creation processes as well as strategy design and implementation. The article aims to demonstrate that the contribution of an SD approach to <IR> is at least twofold: a) SD is suitable for providing an explanation about how a specific business system actually operates, and for making available the basis for understanding past, present and future paths of value creation; b) SD - in the form of both qualitative maps and formal simulation models - may support decision-makers in their exploration of possible trajectories for future performance, according to the strategy that is being designed and implemented. To pursue these aims the article presents a simulation SD model and discusses three different scenarios that have been developed by taking into consideration the airline industry's low cost carriers.

Keywords: system dynamics; integrated reporting; simulation; value creation; business models; airlines; low cost carriers; airline industry.

DOI: 10.1504/IJASS.2016.079085

International Journal of Applied Systemic Studies, 2016 Vol.6 No.3, pp.202 - 222

Received: 26 May 2015
Accepted: 16 Feb 2016
Published online: 12 Sep 2016 *

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