This book considers the role of system dynamics as both a soft and hard approach to system enquiry. It aims to formalize both aspects of the subject and presents both qualitative and quantitative system dynamics. The former is centred on diagrammatic modelling as a means of describing and analyzing complex systems and the latter is based on converting these diagrams into formal simulation techniques, and are presented using both DYSMAP2 and STELLA simulation languages. The book trys to explain some of the insights which are possible from employing the system dynamics method and focuses on the use of system dynamics for policy design and for anticipating "counter intuitive behaviour" of systems. The text also discusses the use of optimization as a method of policy design in system dynamics models. The book is intended for policy makers, modelling analysts and students in strategy and policy analysis and in management science. The book assumes no previous knowledge of system dynamics on the part of the reader and only a general appreciation of algebra is necessary to understand the simulation languages and simulation models used.