ECO101: THE MACROECONOMIC THEORY

REVIEWER FOR FINAL EXAM (1ST SEM, AY 14-15)

PART I
INTRODUCTION TO SYSTEMS THINKING
SYSTEM
- Any group interacting interrelated, or interdependent parts that form a complex and
unified whole that has a specific purpose
SYSTEMS THINKING
- Way of seeing and talking about reality that helps us better understand and work with
organization and communities to influx the quality of our lives.
CHARACTERISTICS OF A SYSTEM
- Systems have a purpose that defines it as a discrete entity that holds it together
- All parts must be present for a system to carry out its purpose optimally
- The order in which parts are arranged affects the performance of a system.
SYSTEMS ATTEMPT TO MAINTAIN STABILITY THROUGH FEEDBACK
- Feedback provides information to the system that lets it know how it is doing relative
to some desired state.
TWO PERSPECTIVES:
- Linear Perspective
Each part is with one single flow and direction
- Feedback Perspective
Parts are interconnecting
SYSTEMS THINKING
The Iceberg
- A pyramid (base at the bottom) in which parts are separated according to
focus/quantitative measure.
- Sequence:
Events What happened?
Patterns of Behavior Whats been happening? What are the trends? What
changes have occurred?
Underlying Structures What has influenced the patterns? (e.g. policies, laws,
physical structures) What are the relationships among the parts?
Mental Models What assumptions, beliefs, and values do people hold about the
system?
Vision What are the shared visions of people involve in the system?

ECO101: THE MACROECONOMIC THEORY

REVIEWER FOR FINAL EXAM (1ST SEM, AY 14-15)

THINKING IN LOOPS
Comparison of linear and perspective model.
Sequence: Sales are down, Marketing Promotions, Orders Increase, Sales are up,
Backlogs, Sales are down, Marketing Promotions

PROCESSES IN WHICH SYSTEMIC BEHAVIORS CAN BE DESCRIBED

Reinforcing Loops
Compound change in one direction with even more change in that direction
As an action will be done, it moves to another then does the previous until it does
a cycle.
Balancing Loops
Seek equilibrium, some desired level of performance
Still a cycle but one action or part has a linked part which is desired. The one on
the loop is the actual.
Every link in a system contains a delay
Be it physical, transactional, informational and perceptual
Put the Pieces Together
ARCHETYPES
o Universally understood symbol, term, or pattern of behavior, a prototype upon
which others are copied, patterned or emulated.
Habits of a Systems Thinker Using the Iceberg on the Job
- Changes perspective to increase understanding
- Seeking to understand the bigger picture
- Observes how elements within systems change over time, generating patterns and
trends
- Consider both short and long-run consequences of actions
- Consider how mental models affect current reality and future
- Surfacing and testing assumptions
- Use understanding of system structures to identify possible leverage actions
- Checking results and changing actions if needed

PART II
AGRIBUSINESS SYSTEMS FRAMEWORK

ECO101: THE MACROECONOMIC THEORY

REVIEWER FOR FINAL EXAM (1ST SEM, AY 14-15)

AGRIBUSINESS SYSTEMS
Environments
1. Socio-economic and Political
2. Agro-climatic-ecological
ANALYZING SUPPLY CHAINS
- Special problems because of the complexity of the relationships in the system;
- It is too complex to analyze by using just one theoretical framework;
- Using a pluralistic approach employing a range of methodologies, taking into
account their combined insights when providing prescriptions for change.
GLOBAL CONTECXT IMPACTING VEGETABLE SUPPLY CHAINS
Globalization Effects
Technological improvements
Economic efficiency
Trade liberalization
Changing consumer demand
Emergence of Value Chains
Food supply chains are increasingly being driven by consumer demands
Differentiated products delivered to selected consumer segments
DUAL AGRIBUSINESS SYSTEMS IN MINDANAO
Soft System
The observer sees an image of systems and of order and relations
Problem areas identified using the approach:
Poor knowledge and application of technology,
Poor infrastructure support
Poor market information
Limited access to finance and capital
Imbalance in power relationships
Problems on land tenure
Supply chain orientation
Hard System
The observer sees a crooked, unbalanced or unordered world

PART III
VALUE CHAIN STRUCTURES

ECO101: THE MACROECONOMIC THEORY

REVIEWER FOR FINAL EXAM (1ST SEM, AY 14-15)

Purposes of Understanding Structure, Components, and Sub-systems

- Enhance understanding of different chain dimensions (linkages and networks)
- Guide data collection activities (Chain Delimitation)
- Create added value by seeing the big picture (visualize collective knowledge)
- Crosscheck results with stakeholders
- Convey findings to appropriate research users
Value Chain Mapping
Analysis of the chain structure
1. Functions
2. Main actors
3. Markets
4. Flows (products, information and money)
Basic Elements of Functional Analysis
1. PRODUCTS
Seed Paddy Milled Rice Cooked Rice
2. FUNCTIONS
Cropping Marketing Processing Retailing Using
3. AGENTS
Farmer Trader Miller Retailer Consumer
Criterions for Differentiating Agents
Scale of operations
Technology
Type of equipment, capacity, source of energy
Practices
Seasonality, family labor versus wage labor.
Localization
Geographical, distance
Type of relation between agents
Cash payment, contract, hierarchy
Status of the agent
Public, private, individual, collective
NEXT SLIDES SOON
PART IV
CHAIN GOVERNANCE AND COORDINATING MECHANISM
CHAIN GOVERNANCE

ECO101: THE MACROECONOMIC THEORY

REVIEWER FOR FINAL EXAM (1ST SEM, AY 14-15)

Set of internal and external, formal and informal, rules, norms and standards
operating in a value chain
System of regulation, coordination and control in which value is generated along the
chain
Distribution of power within a chain

VALUE CHAIN ANALYSIS: GOVERNANCE AND VALUE MAPPING

- Value mapping are complex in which each stage presents materials/processes related
to governance mapping
- Governance mapping shows a more general idea or stage
CHAIN STRUCTURE
- Major determinant of rules, norms, standards, coordination and control mechanisms,
and value creation and distribution along the chain. The incentives and transactions
are shaped by the preceding factors.
PRO-POOR CHAIN GOVERNANCE ANALYSIS: DIMENSIONS AND STEPS
1. Coordination structures
a. Determine chain coordination systems
b. Analyze participation of chain actors
2. Rules and Regulations
a. Identify rules and regulations
b. Analyze their impacts on chain participants
c. Analyze knowledge and awareness of rules, norms and standards, and identify
key gaps
3. Control Mechanisms
a. Analyze relevant information and service provision systems
AFTER COMPLETION OF PRO-POOR CHAIN GOVERNANCE ANALYSIS
Value chain coordination structures
Role of lead firms in chain coordination
Position of the poor in chain coordination structures
Monitoring and enforcement of chain rules, including rewards and sanctions
Access to information about formal and informal rules
Services to chain participants through coordination structures
Systems to support participants to meet chain rules and requirements
PART V
CHAIN PARTICIPANTS AND MARKET TOPOLOGY
CHAIN PARTICIPANTS
- People who purchase and sell products and services

ECO101: THE MACROECONOMIC THEORY

REVIEWER FOR FINAL EXAM (1ST SEM, AY 14-15)

MARKET INTERMEDIARIES
- Middlemen
- Links farmers (mostly small/local) to either the manufacturers of directly to the
consumers
CATEGORIES OF CHAIN PARTICIPANTS
Input Suppliers
Input manufacturers, wholesalers, distributors, retailers
Traders
Collectors, assembly traders, wholesalers, retailers, importers, exports
WHOLESALERS
Modern Wholesaler vs. Traditional Wholesaler
Primary Wholesaler vs. Secondary Wholesaler
MARKET TYPOLOGIES
Physical Markets
1. Assembly
Agricultural products are sold by farmers and collectors to large traders
2. Wholesale
Places where wholesalers, retailers and businesses buy their supplies,
mainly from wholesale traders. Large amount of produce
3. Retail
Places where consumers and businesses buy their supplies
MARKETING FUNCTIONS, ACTIVITIES AND SERVICES
- Assure that the produce is in the correct location, quality, quantity and at the time
needed. Certain processes/workflow should be followed by all of the participants of
the chain to meet the standards of the consumer
BENEFITS OF UNDERSTNADING PROPER MARKETING ACTIVITIES AND
SERVICES
- Calculation of net marketing margins
- Understanding employment along the chain
- identification of opportunities for innovation,
- ieas for development and upgrade