A Data-Driven Integrated Model of Core Values and Work Behavior for Organizational Performance: A Hybrid SEM-PLS and System Dynamics Approach

Abstract

This study develops a data-driven integrated model combining Partial Least Squares Structural Equation Modeling (SEM-PLS) and System Dynamics (SD) to analyze the relationship between core values, work behavior, and organizational performance. The research addresses a critical gap in prior studies, which predominantly examine these relationships using static approaches and often overlook the mediating role of behavior and the dynamic interactions over time. A quantitative approach was employed using survey data from industrial sector employees, with SEM-PLS used to test causal relationships and System Dynamics applied to simulate feedback mechanisms. The results show that core values have a strong and significant effect on work behavior (β = 0.549; p < 0.001), while work behavior positively influences organizational performance (β = 0.321; p < 0.01). However, the direct effect of core values on performance is not significant (β = 0.112; p > 0.05), indicating that performance improvement occurs primarily through behavioral mediation (β = 0.176; p < 0.01). The model demonstrates moderate explanatory power (R² = 0.415; 0.243) and acceptable predictive relevance. The System Dynamics analysis further reveals reinforcing and balancing feedback loops, highlighting the dynamic nature of organizational performance. The novelty of this study lies in the integration of SEM-PLS and System Dynamics into a unified framework, providing both statistical validation and dynamic simulation. The findings offer significant theoretical and practical contributions by emphasizing that organizational performance is behavior-driven and dynamically sustained through value alignment.