THE BUSINESS POLICY GAME Development In Business Simulation & Experiential Exercises, Volume 21, 1994 171 THE BUSINESS POLICY GAME Richard V. Cotter, Emeritus, University of Nevada, Reno David J. Fritzsche, Florida International University ABSTRACT The Business Policy Game published by Prentice Hall is in its third edition. It is a total enterprise simulation featuring extensive finance, marketing and production decisions. The game is designed for use in business policy/strategy courses and in executive development programs. STRATEGIC PLANNING Teams are strongly encouraged to develop a strategic plan prior to beginning competition. The plan should include a mission statement, measurable objectives and strategy to accomplish the objectives. Teams produce and market a low cost, unnamed durable product. Game administrators may specify a product to generate enthusiasm among competitors. A series of work sheets which may be used for planning purposes is located near the end of the player’s manual. Spreadsheet templates for the work sheets are distributed with the game software. The following work sheets are included: Sales forecast Production plan Capital investment plan Capital budget Cash budget Pro farina income statement Pro forma balance sheet The pro farina income statement, the pro forma balance sheet and the cash budget are linked in one spreadsheet template. This eliminates multiple entries for data, which apply to more than one of the statements. Each team implements its strategy by making a series of decisions over several years of simulated time. Decisions are made for each quarter of play. The decision variables, which a team must manage, are shown below. DECISION VARIABLES Finance Decisions Short-term bank loans Bond sales & repurchases Stock sales & repurchases Dividend payouts Certificate of deposit investments Marketing Decisions Four market areas Product price by area Advertising expenditures by area Sales force management Salary Commission Hiring and firing sales people Assigning sales people to areas Product quality Production/Operations Decisions Production scheduling Straight time Overtime Second shift Capacity reduction Temporary shut down Long-term deactivation Capacity increase New production lines New plant addition New plant R&D Product Process SOFTWARE Versions of The Business Policy Game are available to run on IBM compatibles and on Macintosh computers. The programs are available on 5 1/4” and 3 1/2” disks for IBM compatibles and on 3 1/2” disks for the Macintosh. Both versions use graphical interfaces. Graphical User Interface The IBM compatible and the Macintosh versions of the simulation have identical interfaces with pull down menus. The simulation includes software for the administrator and software for the players. The menus for each program are shown below. Administrator’s Program Menu World number change worlds Simulation run simulation rerun simulation Decisions -- context sensitive help new decisions review/change previous decisions new decisions for years 1 & 2 Reports print reports transfer player’s files--individual decision entry set weights for Z-score evaluation set weights for 100-point evaluation Setup central or individual decision entry designate paths for files initialize data files parameters & company names Quit exit program Players Program Menu decisions -- context sensitive help reports -- print quit Development In Business Simulation & Experiential Exercises, Volume 21, 1994 172 Special Features The game has two decision entry options. Decisions may be entered by individual teams on floppy disks. Alternatively, the game administrator may enter team decisions using the central decision entry option. Individual team decision entry is recommended. Two scoring programs are offered to evaluate team performance. The Z score weighted report evaluates teams on seventeen variables, which may be weighted as desired by the game administrator. The 100-point weighted report evaluates teams on ten variables which can weighted by individual team. One or both reports may be used. Spreadsheet macros are included which enable the game administrator and the teams to graph industry performance for fourteen different variables. Graphs may be drawn for yearly data or for the last four quarters. Macros are available for Excel, Lotus 1-2-3 and Quarto Pro. Ten caselets or vignettes are available to include with simulation output. The administrator simply selects a vignette from a menu and the vignette is automatically included with the output for each team. The vignettes address issues, which are not programmed in the simulation model. They often generate lively discussions among teams. The following vignettes are included: Product safety International Competition Export opportunity Foreign buy-out proposal Price fixing Foreign plant location Health care insurance Sewage treatment Foreign finder’s fee Acquiring foreign product Teaching notes for the vignettes are in a README file on the distribution disks. GAME MANUALS The Business Policy Game Player’s Manual contains a complete description of the simulation in seven chapters. One chapter focuses on the quarterly decisions. There are chapters on the business environment and strategic planning. Multiple chapters cover finance, marketing and production. The decision forms in the manual match the decision form shown on the computer screen when decisions are entered. The Business Policy Game Administrator’s Manual contains material the administrator needs to install and run the simulation. Besides chapters on installation and running the simulation, there are chapters on decision entry, team evaluation, use of work-sheet templates, use of the variable graphing macros and procedures for modifying program parameters. The manual also contains a description of the Z-Score Evaluation Report and the 100-Point Score Evaluation Report. Each sot of distribution disks contains several README text files. These files contain changes and additions that have been made since the manuals went to press and also helpful hints which continue to be collected. The README files can be printed for future reference using a word processor. HARDWARE The minimum hardware required to run The Business Policy Game is shown below: IBM Compatibles 320K memory Printer Storage medium Hard disk or 2 floppy disks or Local Area Network Macintosh 1 meg memory Printer Storage medium Hard disk or Local Area Network The Business Policy Game manuals may be ordered from Prentice Hall by calling 800-526-0485. Information and software may be obtained from Dick Cotter at 503-683-7556. Table of Contents Volume 21, 1994 ABSEL: The Way We Were and Need to Be The Intellectual Structure of ABSEL: A Bibliometeic Study of Author Cocitatons Over Time Activity-Driven Time in Computerized Gaming Simulations An Assessment Framework for Determing the Effectiveness of Total Enterprise Simulations Attributes of Learning Organizations: Simulating the Relationships Business Policy/Strategy Case Extension using Pro-Forma Planning: A Computer Based Model Complexity: Is it really that Simple? A Random-Strategy Criterion for Validity of Simulation Game Participation Enhancing a Computer Simulation with a Structured Reporting Environment Experiencing a Foreign Culture: A Cross-Cultural Simulation Group Cognitive Style and Computerphobia in Functional Business Simulations Human Issues in Technology Implementation Management Simulator Incorporating Advertising Strategy into Computer-Based Business Simulations: A Validation Study Increasing the Effectiveness of Performance Evaluation Through the Design and Development of Realistic Finance Algorithms The Packer-Feeder Game: A Commodity Market Simulator Relationships Between R&D and Profitability: An Exploratory Comparison of Two Business Simulations with Two Real-World, Technology Intensive Industries Simulation of the Predictive Value of Mammography Simulation Performance and Learning Revisited Strange Bedfellows: Competency Models and ACBSP Accreditation Standards Using a Business Simulation to Study the Determinants of Ethical Behavior What Simulation Users Think Players Should be Learning from the Simulations ADA and its Implications for Experiential Training Boss/ Subordinate Perceptions of Instrumental and Supportive Leadership Behaviors in Relation to Myers-Briggs Thinking Type Cluster Analyses of American Universities' Business Core Curricula Structures Utilized to Satisfy Fifteen Curriculum Areas Cooperative Learning or Learning to Cooperate Experiential Learning: Constraining Students with Time Budgets How Different Workplace Experiences Affect Different Worker Values Implications of the Trend Toward Relationship Marketing for Experiential Learning The Increasing Cultural Diversity of the American Workforce: Management's Challenge of the 21st Century Information and Uncertainty as Strange Bedfellows: A Model and Experiential Exercises Leadership as a Medium: It's Emergence and Effect on Performance in Small Leaderless Groups Speed, Depth, and Breadth: Assessing Learning in Learning Organizations Teaching Strategic Planning, Problem Solving, and Decision Making with Envisionary Experiential Exercises Validating an Instrument for Student Evaluation of Teachers: Some Noteworthy By-Products Don't Teach Ethics to Business Students Emotional Reactions Toward a Simulated Layoff: Before and After the Manipulation Enhancing Communication Using a Presentation Package Implementing Marketing Policies through a Business Management Simulation Integrating Action-Based Learning into Executive Development Programs On the validity of using the Microsegmentation Principle in Media Simulationsm Participatory Systems Analysis Some Relationships between Cultural, Organizational, and Educational Experience and Perceptions of Influence The Use of Decision Support Systems with a Marketing Simulation: The Future is Now Astute Business Policy: A Simulation of the Automobile Industry The Business Policy Game CEO II: A Gaming Simulation for Assessment Computer Paced Project Management Simulation Computerized Tutor Support Systems DEAL & GEO: Progressively Integrating Gaming Simulations for Entrepreneurship and International Business An Interactive Simulation Game for Competitive Decision-Making International Operations Simulation/Mark 2000 (INTOPIA) Multimedia Simulation Cuts Training Costs for Anderson Consulting Concepts of Total Quality Management: An Active Learning Exercise Cooperative Learning: The Extended Jigsaw Managing Diversity--Values and Attitudes: An Experiential Exercise in Awareness Navigating the Shoals of International Management Development Evaluating Student Performance in the Use of Computer Simulation Entrepreneurial Simulation Program