Causal Loop Diagram

Abstract

The causal loop diagram (CLD) is a method for explaining and mapping the complexity within a process and how it interrelates. It is another way to illustrate and understand the cause and effects of the process, by linking variables and creating feedback loops between the connected variables.

To create a causal loop diagram two questions are asked; what does this variable affect and how is the effect. The diagram starts with a known variable of the process from where the diagram is created by continuously asking the two questions until the boundaries of the process are reached. The effect is illustrated by an arrow as the link, with the notation of the polarity of the effect as either positive or negative. The polarity is positive when a variable is increasing by the effect of another increasing variable. The polarity is negative when the variable is decreasing by the effect of an increasing variable.

The variables can also affect each other to create a feedback loop, which can either be balancing or reinforcing. Balancing is a negative feedback loop where a balance is kept by a positive and a negative link between two variables. Reinforcing is a positive feedback loop, causing positive effects between two variables and the result is accelerating growth.

This tool can be applied in project management, for the project manager to foresee the effects of the process when modelling a project, and later on, to reflect and advance the process. The project manager wishes to reach the goal of the project, taking into consideration key known variables; time, budget and quality, which are the inputs to start developing the CLD.

The tool can be used in all systems, but especially proves beneficial in complex processes, as a project manager cannot frame all the effects and causes intuitively as they interrelate differently. The activity of diagraming the CLD is where the project manager is revising and organising the complexity, and the result should be clarity. But in the situation of a significantly more complex process the diagram can cause confusion to the reader, as numerous feedback loops has to be considered at the same time to base one decision. In these situations there are too many variables/inputs included in the CLD, as the intention is to create clarity. The appropriate number of inputs therefore has to be selected according to what variables are caused problems and what variables should be left out.

References

1. A project management causal loop diagram, Toole, Michael, 2005

2. Using causal loop diagram to achieve a better understanding of E-business models, Behdad, Kiani, Co., 2009.