Decision-making and interventions in complex systems : an empirical study

Abstract

Decision-making in organisations is a complex feedback process. Human beings, as decision-makers in a high level of complexity, are often incapable of comprehending the dynamics involved, and thus, tend to derive and implement inappropriate interventions for the achievement of certain goals. Such limitations are studied by psychologists and systems theorists (for example, Simon 1957, Morecroft 1983) as the notion of bounded rationality. Many studies are carried out to explore the notion of decision-making in complex systems based upon this limitation and the idea of mental models (for example, Sterman, 1989, Brehmer 1992, Keating et al. 1999, Repenning & Sterman 2001, Maani & Maharaj 2004). The current research is carried out to explore the behaviour of decision-makers in complex systems, and the behaviour’s relationship with performance in managing organisations. This is achieved by testing the following seven research propositions in simulated business scenarios with a significant sample size, that: 1. Dramatic interventions in complex systems do not lead to dramatic (positive) task performance. 2. Fragmented approaches to decision-making in complex systems are counter productive. 3. The more interventions carried out in complex systems, the worse the task performance. 4. ‘Soft’ or ‘qualitative’ performance measures are often ignored by decision-makers while managing complex systems. 5. ‘Systems Delays’ are often ignored by decision-makers while managing complex systems. 6. The sequence of interventions is a critical factor for improvements in complex systems. 7. Mental models of decision-makers tend to inhibit understanding and effective management of complex systems. The findings of this study show that all of the above mentioned propositions are valid, and that the severe limitations in decision-making capabilities are detrimental to the well-being of organisations. A close examination of the findings provided a strong basis for practice and future directions of research.