Building SimuWorlds: Strategic Management Games of the Future Developments In Business Simulation & Experiential Exercises, Volume 22, 1995. 138 Building SimuWorlds: Strategic Management Games of the Future J.Bernard Keys and Robert A. Wells Center for Managerial Learning and Business Simulation Georgia Southern University and Alfred G. Edge, University of Hawaii ABSTRACT The MMG Simuworld is a multinational management game and case combination simulating the manufacturing, marketing, and financing of microcomputer products combined with a continually developing case study of the most rapidly developing industry technologically in the world. The game is oriented well to develop and stretch the minds of participants from many industries, and it is a useful laboratory for updating managers within the microcomputer and related industries. Additionally, MMG design makes it highly suitable as a laboratory in which other tools of organizational and anticipatory learning can be utilized. INTRODUCTION Imagine a strategic management course in which generic cases are used. The product is defined in a general sense; the company has no specific history other than a few financial statements, the future of the product and the industry is defined only by a long term sales forecast, and the markets are defined as east, west, north and south. Such a case is similar to many of the generic business games that are so useful in teaching tactical decision making and integration of marketing, production and financial data. But how much strategic management can be taught with such a game? Very little we would argue. What will be missing in the strategic plans of students playing the game? Product breakthroughs and new products may not be mentioned or described vaguely. Interrelationships of suppliers, buyers, competitors and substitute products will be difficult to depict. Industry ratios will be meaningless. Even a game built on real products and realistic history of the industry may be truncated in terms of history and future product/industry development. Such is the case with many of our present “specific product” games. To allow for dynamic game play and rich case type analysis a different type of business game is needed. We call such a game a “Simuworld.” An Overview of Simuworld Operation SimuWorlds differ from management games in several ways. Rather than being generic, they are designed around accurately published data about one industry, and model closely a single company within the industry. This article describes such a Simuworld, The Multinational Management Game (MMG) and Compaq Computer Corporation Simuworld, which mode’s the microcomputer industry and COMPAQ Computer Corporation (1). MMG participants are organized into competing companies (teams) and placed in charge of a $200 million dollar company producing and selling microcomputers and related equipment. They are provided job descriptions, share personal backgrounds, and self-select roles of CEO and Senior Vice President as defined by Compaq Computer for their teams. Operations begin by analyzing a game/case history and developing a five-year plan. Providing real corporate history is an improvement over generic case introductions, and provides a connecting link of institutional memory, interrupted for a time by corporate (simulated) activity created by teams, but connected again in the final five year plan. In high tech industries today, such as the microcomputer industry, many interrelated variables must be considered by the top management team in order to develop yearly and long run plans. The Simuworld not only includes a business game but includes a case experience, including many of these complexities. The case experience is provided as a concluding project at the close of game play. THE FIRST FIVE YEAR PLAN Participants in MMG began with real company history, abbreviated, but concluding with the starting financial position and operating data for Compaq Computer Corporation. Considerable industry data and descriptive information is provided so that a complete strategic plan can be developed. Each member is required to develop an individual strategic plan for their job description and functional area with an emphasis on the knowledge and experience gained in their functional area assigned. Next, teams must integrate individual planning into a Developments In Business Simulation & Experiential Exercises, Volume 22, 1995. 139 complete strategic plan. Student teams write term reports that are due at midterm. Executive teams include data in bullet statement and strategic planning form. The term report provides a vicarious learning experience of conducting a country briefing and preparing for international business entry. The game manual provides considerable information on the more industrialized Southeast Asia countries (including Japan) with Malaysia as a producing site, and most European countries, with Berlin as a producing site. The international dimension is portrayed by prime interest rates, inflation rates, tariff/VAT rates, and depreciation rates that are country specific. Culturally, political and demographic characteristics of the various countries in the three regions are included. Prioritizing these international markets for entry then becomes a major strategic issue of the team. Start-up years are usually spent developing the organization, the information processing system, and clarifying team roles. Major alternative strategic choices are outlined, but other combinations may develop. As the tactical side of the business is mastered teams use corporate history, industry notes provided, and research briefings about European and Asian markets, to develop a five-year strategic plan. A MMG Simuworld seminar requires about four and one-half days for an executive program and about ten class periods for an MBA or Executive MBA program. The simulated companies are similar to Compaq Computer Corporation in its start-up years. Teams will try to make reasonable tactical decisions, convert heavy remaining inventories into cash, reduce employee turnover and increase productivity by bringing low wage packages into line, and developing reasonable R & D, advertising, sales, and distribution policies. Effective teams will expand into international markets and will increase yearly sales to around $1 billion. At year three teams must present their first five- year plan to a board of directors. They are allowed to enter international markets of their choice, either as exporters, producers, or both. Combinations of strategies, such as product innovation, price-cost combinations, or marketing development/distribution strategies, similar to those utilized by Compaq, IBM, Apple, and other PC companies are emphasized. After mastering the mechanics of the simulation and stabilizing domestic operations teams usually follow a natural progression of exporting, manufacturing overseas, then financing in other countries and finally an integrated mix of operations throughout the world. Finally, participants are required to present a five- year strategic plan for the future. To allow participants to “break away” from lock step planning and to engage in product line development and other strategies, game rules are relaxed and all strategic moves and creative opportunities are allowed for this presentation. At this point the participants are provided the most up-to-date version of the Compaq Computer Case and industry notes available. Instead of building new plans on the latest products manufactured within the game play, participants are free to envision a totally new product that addresses the new communications highway, computer entertainment games, edutainment, interactive video, etc. LEARNING FROM MMG • Managerial learning is promoted throughout the MMG game play by numerous techniques. Organizational learning that seems to occur mutually across teams and that changes the way teams think, occurs within MMG. • MMG teams learn that the balancing of functional areas is accomplished by organization and influence of each team member. • MMG Simuworld is team learning. The tasks are so complex and time period so compressed that teams quickly realize they must learn different things at the same time. • MMG teams learn to work with intercultural groups. This depends, of course, on assembling teams with a cultural mix, which is often the case in a multinational game. MMG has been used frequently for this purpose at the Pacific Asian Management Institute, University of Hawaii, using an intercultural Asian and Western team mix • Our research with management games and with the MMG Simuworld suggests that many unanticipated things are learned. References 1. Keys, J.B., Edge, A., & Wells, R. A., The Multinational Management Game. Little Rock, AR: Micro Business Publications, 1994. Table of Contents Volume 22, 1995 Simulation Performance, Learning and Struggle Are Good Simulation Performers Consistently Good? Cognitive and Behavioral Consistency in a Computer-Based Marketing-Simulation-Game Environment: An Empirical Investigation of the Decision-Making Process Chalk & Cheese: Executive Short-Course vs. Academic Simulations Revisiting Personality Bias in Total Enterprise Simulations Are Good Strategies Consistently Good? Investigating the Use of a Computer Simulation as an Effective Pedagogical Tool for the Application of a Strategic Model The Problem of determining an Individualized Simulation's Validity as an Assessment Tool A Simulation Based Analysis of the Value of Information in the Hrebiniak Joyce Typology of Adaptation Relative to Porter's Generic Strategies The Impact of Sales and Income Growth on Profitability and Market Measures in Actual and Simulated Industries A Comparison of a Stand Alone Version of a Simulation with the Traditional Competitive Version Computer-Assisted Gaming of International Business Analyzing Simulations with Computer-Based Programs and Applying the Experience to a Real-World Business A Preliminary Investigation of the Use of a Bankruptcy Indicator in a Simulation Environment Graduates' Views on the Use of Computer Simulation Games Versus Cases as Pedagogical Tools An Analytical Advertising Model Approach to the Determination of Market Demand Dealing with the Complexity Paradox in Business Simulation Games A Prototyping Approach for Incorporating Large Data Bases into Media Planning Simulations: An Example Using Magazine Media Through the Looking Glass, Inc: Superior-Subordinate Personality Type and the Leniency effect Evaluating the Effectiveness of Role Playing Simulation and Other Methods in Teaching Managerial Skills Student and Teacher Perceptions of a Management Simulation Course Performance Evaluation: The Effect on the Propensity to Create Budgetary Slack Management Team Formation for Large Scale Simulations Comparative Static Analysis with the Complete PPA Package: A Strategic Market Planning Tool Consistency in Intent: Learning Objectives at the 1994 Intercollegiate Business Policy Competition A New Twist on an Old Game: The Business Strategy Game: A Global Industry Simulation 3ed Evaluation of Performance in Management Simulation: A Management Coefficients Model Building SimuWorlds: Strategic Management Games of the Future Bulls and Bears: A Stock Market Simulation A Systems Thinking Paradigm and Think Computer Simulation Model of Broadcast and Cable Television Industry Competition Jacket Factory The Sales Management Simulation The Marketing Management Simulation A Demonstration of Promodel Demonstrating A New, Cross-Functional Business Simulation: Vision+ A Cost Chain For The Business Strategy Game Simulation Special Session On Experiential Teaching Compensation Dilemmas: An Exercise In Ethical Decision-Making Organizational Storytelling: Telling Tales In The Business Classroom Evaluating Experiential Training: Case Study And Recommendations The Internship Portfolio: An Innovative Tool For Experiential Learning, Critical Thinking, And Communication An Ethnographic Analysis Of The Pedagogical Impact Of Cooperative Communicating Consumer Behavior: A Long-Term Integrated Exercise Using Personal Consumption Journals And Consumer Analysis Papers An Experiential Paradigm For Teaching Business Problem Solving Developing Leadership Skills The Spss® Student Assistant: The Integration of A Statistical Analysis Program Into A Marketing Research Textbook Negotiating With Your Students Using TQM Principles To Transform Accounting Systems Into An Experiential Exercise Enhancing The Effectiveness Of Outdoor-Based Experiential Training Using Virtual Reality Concepts Case Writing In A Developing Country: An Indonesian Example Experiential Learning Using Focus Groups How Real Should Experiential Pedagogy Be? A Viewpoint From Our Students Reengineering The Internship: A New Approach To Experiential Learning Utilizing The Cosmopolitan/Local And Marginal Man Constructs To Measure Students' Propensity For Creativity Developing Experiential Processes For Teaching Quantitative Techniques For Business Team Learning Roles: A Cooperative Learning Technique Creating the Ultimate Small Business Student Experience: Melding Score/Ace with SBI The Development of Trust in Work Teams: The Impact of Touch Some Outcomes of Experiential Learning: How the Cultural Dynamics of Different Countries are reflected in Workplace Norms & Values Incorporation of Job Analysis Results in Various Forms of Selection Interviews Chudesno, Inc.: An Evaluation of an Experiential Training and Development Simulation An Exercise for Exploring the Relationship between Jungian Psychological Types and Organizational Dynamics Partnership: A Radical Approach to Experiential Learning Partnership: A Nice Idea, But How Do I Get Started? Recognizing Discrimination at Work Using Critical Incident Skills Questions to Help Students Become More Successful at Job Interviewing The Video Project Introduction to Psychological Type Theory Come On Down Understanding Facilitation for Development and Continuous Learning: A Micro-Workshop Leadership and Empowerment: An Experiential Exercise in Decision Making Experiential Exercises and Pedagogy Track Workshop: Selecting a Manager for Maquiladora, Inc. Experiential Training In Multi-Cultural Corporate Settings The Role of Facilitation as an Aid to Complete Learning An Experiential Exercise to Illustrate Difference in Information Processing Behaviors and Styles How to Deliver Accessible Survey Results Age Diversity in the Workplace- Family Feud Style Nafta Standoff: A Cross-Cultural negotiating Role-Play Three Strikes and You're Out!: A Downsizing Experiential Exercise