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Application of Knowledge

A business game (also called business simulation game) refers to a simulation game that is used as an educational tool for teaching business.

Learning Objective

  • Justify the use of business simulation games in the process of applying business knowledge


Key Points

    • Business games may be carried out for various business training such as general management, finance, organizational behavior, and human resources.
    • In business simulation games, players receive a description of an imaginary business and an imaginary environment and make decisions (on price, advertising, production targets, and so on) about how their company should be run.
    • There are several important steps to a business game, including: the theoretical instruction; the introduction to the game, where the participants are told how to operate the computer; and debriefing, which is the most important part of the simulation and gaming experience.

Terms

  • simulation

    Something which simulates a system or environment in order to predict actual behavior.

  • distribution

    The process by which goods get to final consumers over a geographical market, including storing, selling, shipping, and advertising.

  • debriefing

    The report of a mission or project, or the information so obtained.


Examples

    • The Beer Distribution Game is a simulation game created by a group of professors at MIT Sloan School of Management in early 1960s to demonstrate a number of key principles of supply chain management. The game is played by teams of at least four players, often in heated competition, and takes from one to one and a half hours to complete. A debriefing session of roughly equivalent length typically follows to review the results of each team and discuss the lessons involved.
    • The purpose of the game is to understand the distribution side dynamics of a multi-echelon supply chain used to distribute a single item, in this case, cases of beer. The aim is to meet customer demand for cases of beer through the distribution side of a multi-stage supply chain with minimal expenditure on back orders and inventory. Players can see each other's inventory but only one player sees actual customer demand. Verbal communication between players is against the rules so feelings of confusion and disappointment are common. Players look to one another within their supply chain frantically trying to figure out where things are going wrong. Most of the players feel frustrated because they are not getting the results they want. Players wonder whether someone in their team did not understand the game or assume customer demand is following a very erratic pattern as backlogs mount and/or massive inventories accumulate. During the debriefing, it is explained that these feelings are common and that reactions based on these feelings within supply chains create the bullwhip effect.
    • For a complete understanding, the game is played not only within a supply chain, but two or three supply chains are set up (when there are enough players and volunteers to help). In real life, more than the understanding one gets by playing as different entities in a single supply chain, it is the learning when supply chains compete with each other that the real strategic intent is made clear. The team or supply chain which turns up with the least total costs when played over 12-15 cycles is the winner.

Full Text

Applying Knowledge Through Games

Business games (also called business simulation game) refer to simulation games that are used as an educational tool for teaching business. Business games may be carried out for various business training such as general management, finance, organizational behavior, and human resources. Often the term business simulation is used with the same meaning .

Business Game

Business game (also called business simulation game) refers to simulation games that are used as an educational tool for teaching business.

Business strategy games are intended to enhance the decision-making skills of students, especially under conditions defined by limited time and information. They vary in focus from how to undertake a corporate takeover to how to expand a company's share of the market. Typically, the player feeds information into a computer program and receives back a series of optional or additional data that are conditional upon the player's initial choices. The game proceeds through several series of these interactive, iterative steps. As can be noted, this definition does not consider continuous (real-time) processing an alternative.

In business simulation games, players receive a description of an imaginary business and an imaginary environment and make decisions – on price, advertising, production targets, and so on – about how their company should be run. A business game may have an industrial, commercial or financial background (Elgood, 1996). Ju and Wagner mention that the nature of business games can include decision-making tasks, which pit the player against a hostile environment or hostile opponents. These simulations have a nature of strategy or war games, but usually are very terse in their user interface. Other types of managerial simulations are resource allocation games, in which the player or players have to allocate resources to areas such as plant, production, marketing, and human resources, in order to produce and sell goods.

The Simulation Gaming Process

Business simulation game developers regard their artefacts to be learning environments. When arguing for this, they most often refer to David A. Kolb's influential work in the field of experiential learning. During the last decades, ideas from constructivism have influenced the learning discussion within the simulation gaming field. The activities carried out during a simulation game training session are:

  • Theoretical instruction: The teacher goes through certain relevant aspects of a theory and participants can intervene with questions and comments.
  • Introduction to the game: The participants are told how to operate the computer and how to play the game.
  • Playing the game: Participants get the opportunity to practice their knowledge and skills by changing different parameters of the game and reflecting on the possible consequences of these changes. Permanent contact with the participants is advisable, as well as keeping the training going to maintain a positive atmosphere and to secure that the participants feel engaged.
  • Group discussions: Each of the participants is given a possibility to present and compare their results from the game with the results of others. The participants are encouraged to present their results to others. The teacher should continually look for new ways of enriching the discussions and to help the participants find the connection between the game results and the problems in the real world. The quality of this group discussion plays a relevant role in the training as it will affect the participants' transfer of knowledge and skills into the real world.

The last phase in the list above is usually called debriefing. Debriefing is the most important part of the simulation and gaming experience. We all learn from experience, but without reflecting on this experience the learning potential may be lost. Simulation gaming needs to be seen as contrived experiences in the learning cycle, which require special attention at the stages of reflection and generalization.

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