How stock-flow failure and general cognitive ability impact performance in operational dynamic control tasks

Abstract

Previous research has highlighted the importance of individual factors predicting human beings’ relatively poor performance in controlling dynamic operational systems. Taking an industrial and organizational (IO) psychology perspective within a behavioral operations research context, this study focuses on erroneous stock-flow thinking and general cognitive ability. It uses data from laboratory experiments to test a mediating structural equation model firmly grounded in IO psychology theory, proposing both a direct concave impact of general cognitive ability on control task performance and an indirect concave effect mediated by stock-flow thinking. With our results we are the first to demonstrate that stock-flow thinking serves as a mediator of general cognitive ability on performance, while at the same time, general cognitive ability non-linearly impacts performance. These findings contribute to theory building in behavioral operational research and demonstrate how adoption of perspectives other than the traditional paradigms used can help. It also has practical implications as it improves the relative assessment of different levers to increase operational control performance. We find that the total impact of general cognitive ability on control performance is higher than the direct effect of stock-flow thinking. Therefore, companies should add stock-flow thinking tests to their personnel selection toolbox, but put more weight on selecting operational managers with high cognitive abilities and somewhat less weight on training efforts that aim to reduce stock-flow failures.