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The lessons from "Thinking in Systems: A Primer" can be applied to the fluctuating oil market by understanding the relationship between structure and behavior. In the context of the oil market, this could mean recognizing the exponential growth towards a limit, such as the amount of available oil. Companies can choose to increase extraction for quick profits, risking faster exhaustion of the resource, or opt for steadier extraction for a longer period of time. Both choices are gambles due to the constant flux of fuel demand and oil prices. By thinking in systems, companies can make better decisions based on the understanding of these dynamics.
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How do you avoid wasted time, money, and resources from short-sighted decisions? When you think in systems, you can learn to recognize the relationshi...
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A quantity that grows exponentially toward a constraint/limit reaches that limit in a surprisingly short amount of time. If you are an oil company that has identified a new drilling site, and the resource turns out to be much larger than geologists anticipated, you have a few options. You can increase extraction and see profits quickly but exhaust the resource faster. Alternatively, you can make less money but keep a steadier extraction for a longer period of time. With variables such as fuel demand and oil prices in constant flux, either choice is a gamble.
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