Organizational trauma, as a destructive phenomenon, has created serious challenges for the effectiveness of government agencies. The present study aimed to identify the factors shaping organizational trauma and to develop a paradigmatic model for moderating organizational helplessness in the Iranian Health Insurance Organization. This research was conducted to explain the link between structural damage and individual as well as organizational consequences, and to facilitate a transition from passive crisis management toward a responsive and resilient organization. This study adopted a qualitative approach and employed grounded theory based on the Strauss and Corbin method. The study population consisted of experts and managers of the Health Insurance Organization. Using purposive sampling and the criterion of theoretical saturation, 12 participants were selected. Data were collected through semi-structured interviews and analyzed using open, axial, and selective coding. To ensure the validity and reliability of the findings, member checking and inter-rater agreement using Cohen’s kappa coefficient were applied. The findings were organized within a paradigmatic model including causal conditions, the central phenomenon, strategies, consequences, contextual conditions, and intervening conditions. The results identified managerial discontinuity, inefficient management, and financial challenges as causal conditions, while organizational helplessness emerged as the central phenomenon. The main strategies included a health-oriented approach, empathetic leadership, and bureaucracy reduction. The implementation of these strategies led to improvements in attitudes, organizational culture, and productivity. In addition, a human capital-supportive culture, the political and social environment, infrastructure, and legal-structural foundations were identified as contextual conditions, while individual, organizational, and technological factors functioned as intervening conditions affecting the effectiveness of the strategies.Overall, the findings indicated that moderating organizational trauma requires a systemic perspective on causal, contextual, and intervening factors, as well as the adoption of multidimensional strategies to restore balance, dynamism, and resilience within the organization.