Abstract for: Using System Dynamics to Investigate How Belief Systems Influence the Process of Organization Change
As an enterprise starts to grow larger, management will activate a series of activities of organizational development for creating a better performance. Prior researchers mainly focused on the relationships among organizational structures, those activities which can stimulate the organizational performance at least in a short term, and organizational performance. How organizational changes create superior performance is a popular issue, but the effects of leaders' beliefs are relatively ignored. This study explores the process that how a leaderís belief directly affects the organization structure and indirectly drives organization performance. We developed detailed simulation model of General Electric, including human resources, financial and cost accounting, research and development, and operations. Historical information and archival data was used to specify and estimate the model. The results show that a leader's belief system can impact a company's tradeoffs between short term and long term effects. In the short term, leaders' beliefs influence the strategies of the company and can be beneficial to financial outcomes. In the long term, leaders beliefs may prevent the company from failures in the future.