Maani, Kambiz, "Managerial Intervention and Firm’s Performance", 2005 July 17-2005 July 21

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Decision-makers and managers have often an irresistible tendency to “over intervene” in the systems (companies, organizations, communities, etc) for which they are responsible hence generating unnecessary fluctuations and instability in their organizations. Sterman, et al (1989; 2000) and Maani & Li (2004) have studied these phenomena in simulated and experimental settings. This paper examines the impact of change and managerial intervention on firm’s performance. Frequency and magnitude of change actions are used as proxy for managerial intervention. Based on prevailing assumptions and common practice two hypotheses are postulated as follows: H01 : The more frequent the change (interventions), the better the results. H02 : Dramatic change leads to dramatic (positive) results. The above hypotheses and our own observations collectively inform the key research question posed in this paper: “How do the style (extent) and frequency of change and the interpretation of feedback affect the outcomes of interventions in organizations?” In this research, Microworlds are employed as proxy for complex systems. Research subjects comprise MBA and graduate business students and practicing managers. With some exceptions, the results refute the above hypotheses and suggest that over intervention could often lead to counter productive outcomes.

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  • 2005 July 17-2005 July 21
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