Analysis of Feedback Mechanisms Affecting the Quality of Organizational Managers’ Decision-Making Using a System Dynamics Approach

Abstract

Objective: The present study aimed to analyze the feedback mechanisms affecting organizational managers’ decision-making quality and to identify the reinforcing and balancing loops and intervention scenarios capable of improving this process.

Methodology: This applied study employed an exploratory mixed-method design based on the system dynamics approach. The study population consisted of managers and specialists working in governmental, public, and private organizations in Tehran in 2025. Thirty participants, including 20 senior and middle managers and 10 faculty members, management consultants, and system dynamics specialists, were selected through purposive sampling. Data were collected through semi-structured interviews, document and literature review, and an expert model-validation form. Qualitative data were analyzed using thematic analysis to identify the main variables, causal relationships, and time delays. A causal-loop diagram and a stock-and-flow model were subsequently developed in Vensim and simulated over a five-year time horizon. Model validity was examined through dimensional consistency, extreme-condition testing, behavioral reproduction, expert assessment, and sensitivity analysis.

Findings: Data analysis generated 332 initial codes, 24 subcomponents, and 7 major themes. The final model contained four reinforcing loops and four balancing loops. The mean model-validity score was 4.47 out of 5.00, expert agreement was 87.1 percent, the coefficient of determination was 0.87, and the mean absolute error was 6.8 percent. Sensitivity analysis showed that a 20.0 percent increase in feedback quality improved decision quality by 18.7 percent, whereas a 20.0 percent reduction in information delay increased it by 16.4 percent. Increasing organizational trust and managerial learning improved decision quality by 14.9 and 13.8 percent, respectively. Under the combined scenario, decision quality reached 89.4 by the fifth year, representing a 39.5 percent improvement compared with the baseline scenario.

Conclusion: Managerial decision quality emerges from the dynamic interaction of informational, cognitive, cultural, and structural factors, and the strongest improvement is achieved through coordinated interventions that enhance feedback quality and speed, organizational trust, employee participation, managerial learning, and time-pressure control.