The Organizational Systems Thinking Scale (OSTS): Development and Validation of a Third‐Order Hierarchical Framework

ABSTRACT This study develops and validates the Organizational Systems Thinking Scale (OSTS), a comprehensive instrument for assessing organizational systems thinking capabilities. Using systematic literature review, expert panel evaluation, exploratory factor analysis ( n = 117), and confirmatory factor analysis ( n = 144) with partial least squares structural equation modelling, we developed a 52‐item hierarchical instrument comprising three dimensions (direction, execution and results) and seven sub‐dimensions. Psychometric testing demonstrates strong reliability: Cronbach's alpha ranges from 0.74 to 0.95, composite reliability from 0.85 to 0.96 and average variance extracted from 0.50 to 0.72. The seven‐factor structure explained 68.59% of total variance. The validated third‐order reflective structure reveals that foundational cognitive competencies enable process capabilities, which drive organizational outcomes. Path analysis shows that direction dimensions significantly predict execution capabilities ( β = 0.78, p < 0.001), which in turn predict results ( β = 0.71, p < 0.001). Organizations can use the OSTS for diagnostic assessment, cross‐organizational benchmarking and tracking capability development over time. This research represents the first validated, comprehensive organizational‐level systems thinking assessment tool, integrating cognitive capabilities, process implementation and performance outcomes into a unified measurement framework for evidence‐based capability development. Testing in Iran's automotive supply chain demonstrates applicability in complex operational environments, though cross‐industry validation is needed for broader generalization.