A model of organizational growth in automobile parts industry using the system dynamics approach

Growth and profitability are of the main goals and strategic priorities for most companies which show the importance of corporate growth for senior managers. But despite the importance of firms’ growth in the business, it is very little known about the nature and manner of companies' growth. The aim of this study is to develop a model of organizational growth in automobile parts industry using the system dynamics approach. The research method is descriptive- analytical method. The research statistical population is all the members of auto parts producing association in East Azarbaijan province, Iran, including 186 firms of which 126 companies were randomly selected. A questionnaire with Cronbach's alpha coefficient of 0.897 is used to collect information to determine the most important variables in organizational development (system boundary). Then the relationships between variables have been identified with the use of experts view points (dynamic Hypothesis) and an organizational growth model is simulated using causal loop and flow diagrams. To test the validity of the model, the data of Charkheshgar Company are used and after model validation, two scenarios of subsidies elimination and changes of bank interest rate are simulated and their effects on the model behavior have been studied.