Experiential research, as well as three decades of working with managers across diverse cultures has revealed an unmistakable pattern of counterproductive decision-making by managers. In general, managers exhibit a tendency to “over-intervene” in the systems they are responsible for. This indicates an inadequate appreciation and understanding of complexity and dynamics, generating unnecessary fluctuations and instability in their organizations. Sterman (1989, 2000) and Maani et al (2004) have studied these phenomena in simulated and experimental environments respectively. Research results, as well as causal observations, highlight a number of mental models and behaviours undertaken by managers in dealing with complex issues. The key research question of this study: “Why managerial interventions in complex organizations often produce counterintuitive failures?” has led to seven propositions investigated in this research. Empirical results from 224 experiments, using two pre-tested microworlds, inform and support our propositions. Research subjects comprise practicing managers, MBA and other graduate students. The findings show congruence with related research, including the multi-year longitudinal study by Collins (2001). The findings have important implications for complex decision-making, leadership and organizational interventions and transformation.