One Experience with the V.K. Gadget Company: An Introduction to Managerial Accounting Simulation Games and Experiential Learning in Action, Volume 2, 1975 48 One Experience with the V.K. Gadget Company An Introduction to Managerial Accounting Robert J. Lord School of Business Administration The University of Western Ontario During the past three years I have been teaching management accounting to MBA students at the Amos Tuck School of Business Administration, Dartmouth College, Hanover, New Hampshire; and at the School of Business Administration, the University of Western Ontario, London, Canada. At both institutions I have utilized an accounting game, developed by Ken Goosen, Associate Professor of Accounting Louisiana Tech University. The purpose of this paper is to briefly introduce the game to you; and then to describe how I have used this game to teach the complexities of the budgeting process, but more importantly, to show students how their behaviour can be directly influenced by the type of reports and information they are provided. Finally, the paper describes problems I encountered in installing this game, first on Dartmouth’s Honeywell 635 and then on Western’s IBM 1130. Hopefully these comments may aid other possible users in their consideration of this very useful learning tool. The V. K. Gadget Game The V. K. Gadget game was developed to: 1) increase student’s understanding of the importance of managerial accounting as an aid in decision making, and to 2) be an instructional device for increasing the student’s ability to use managerial accounting techniques and concepts1 In order to meet these objectives the V. K. Gadget game places extensive emphasis on the abilities of participants to undertake the types of cost analysis typically included in an introductory management accounting course; cost-volume-profit analysis, contribution analysis; and to be concerned about the problems introduced in such courses: the problems of performance evaluation, planning and budgeting. 1 Goosen, Introduction to Managerial Accounting: A Business Game, General Learning Corporation, Morristown, N. J., 1973. Simulation Games and Experiential Learning in Action, Volume 2, 1975 49 Technically the V. K. Game is a non-interactive, deterministic model.2 It is non- interactive in that the decisions of one team have no impact upon any other team, and it is essentially deterministic in that the ranges of the few stochastic parameters included in the computer model are clearly defined in the game manual. This basic simplicity of the V. K. game substantially accounts for its usefulness as a tool for teaching management accounting. Its very nature requires the student to utilize the extensive forms supplied with the game manual to prepare detailed operating and cash flow budgets. The model’s outputs (figures 1, 2, 3 and 4) directly relate to these budgets and provide specific feedback regarding the student’s ability to interpret the game manual, and to forecast and plan. Because of the throughness of the V. K. Gadget budgeting experience (requiring detailed marketing, manufacturing and financial budgets), it is a powerful learning aid to developing an understanding of the complexities and importance of the budget and the budget process in industry today. Managing Student Behaviour While the Gadget game was originally intended to provide practice with management accounting concepts, I have found it very useful to show students how their behaviour can be influenced by a management reporting system and to establish the difficulties inherent in creating acceptable measures of performance within such reporting systems. To meet these objectives, I developed a performance measurement system and created an active role for the administrator, in the guise of the Corporate Executive Office. For both the 32 teams participating at Dartmouth, and the 40 teams playing at Western, the game was modified to generate performance parameters each period. These parameters formed the basis for period performance reports (illustrated by the February Performance Reports figures 5 and 6). In these figures the budget variance represents the absolute difference between each team’s estimate of earnings and the actual reported earnings for the month. The remaining data was provided by the game. In figure 5 the teams’ absolute performance on each parameter is reported, while in figure 6 relative performance is summarized by ranking all competing teams over the parameters reported. In addition to the performance reports, the Executive Office also issued monthly directives (figure 7), commenting on the performance reported. 2 The model, written in Fortran, requires about 32K words of memory for execution (although it can be overlayed to smaller systems) Simulation Games and Experiential Learning in Action, Volume 2, 1975 50 Simulation Games and Experiential Learning in Action, Volume 2, 1975 51 Simulation Games and Experiential Learning in Action, Volume 2, 1975 52 Simulation Games and Experiential Learning in Action, Volume 2, 1975 53 Simulation Games and Experiential Learning in Action, Volume 2, 1975 54 Simulation Games and Experiential Learning in Action, Volume 2, 1975 55 Simulation Games and Experiential Learning in Action, Volume 2, 1975 56 Simulation Games and Experiential Learning in Action, Volume 2, 1975 57 The administrator’s ability to modify the students’ decisions is demonstrated in the February and March Performance Reports (figures 5 and 8). In the February report teams were measured (among other things) on their ability to manage working capital. The statistic reported measured the absolute difference between the team’s working capital ratio and a ratio of 2.5 to 1 desired by the Executive Office. As figure 5 suggests, prior to making this objective explicit in the Executive memo, the teams were paying little attention to the management of their working capital. After drawing their attention to it, however, the March Performance Reports shows a significant improvement in the management of working capital (which continued throughout the remainder of the game). This student response to the February Executive memo appears to clearly demonstrate the administrator’s ability to manage the student’s behaviour. A quick comparison of figures 5 and 8 will disclose that the performance parameters reported change from period to period. The purpose of these changes is to force students to develop their own strategy and objectives, rather than merely following the Executive’s directives. In fact, I have gone so far as to provide meaningless or misleading directives to force the students to develop their own plans. The Impact of Instructor Attention In addition to reporting monthly performance the reporting system also served as the basis for establishing the “winners” in our V. K. Gadget world. For this purpose the number of variables across which performance was ranked were considerably expanded (figure 9). To declare a winner each team’s performance on each parameter reported in figure 9 was ranked and then the sum of these ranks (across all parameters) were ranked. This year, at Western, the game was played simultaneously by three different MBA 1 classes. The relative performance of the forty teams drawn from these three Sections is summarized in Table 1. From an administrative perspective it was very interesting that the performance of these three sections was clearly distinguishable. To determine overall section scores, the overall ranks for the teams included in the three groups were summed (yielding an aggregate score for class 4 of 331, for class 2 of 303 and for class 1 of 186). These scores were not comparable, however, because classes 2 and 4 consisted of 14 teams while class 1 had only 12 teams. To adjust for this difference we removed the worst two teams from the aggregate scores of both class 2 and class 4. The resulting aggregate scores still indicated the substantially better performance of class 1 relative to the other two classes (Table 2). Simulation Games and Experiential Learning in Action, Volume 2, 1975 58 Simulation Games and Experiential Learning in Action, Volume 2, 1975 59 Simulation Games and Experiential Learning in Action, Volume 2, 1975 60 Simulation Games and Experiential Learning in Action, Volume 2, 1975 61 Simulation Games and Experiential Learning in Action, Volume 2, 1975 62 The important difference between the three groups appears to be the extent to which instructors were involved with the game. Section 4’s instructor played a very passive role in the game -- he basically was not involved in its administration. In contrast, the instructors of Sections 1 and 2 actively participated in the game. For example, we personally delivered the first Executive memo, with appropriate derogatory comments, where performance differed from “management’s desires”. Finally, because the instructor of group 1 physically administered the game, his students could perceive his extensive involvement in it. We believe it is this differential attention and instructor involvement which basically accounts for the differences in the performances of the three Sections. Installing the V. K. Gadget Game A friend of mine, a manager of a data processing department in a large manufacturing company, swears he never again will buy a canned computer package because it is just too difficult to learn to use someone else’s software, and because the chances of errors and software bugs are just too great. I must admit, that following my experience with V. K. Gadget, I can fully appreciate my friend’s sentiments. I might again consider a “foreign” game because purchased software can save tremendous amounts of developmental and programming time, but I would be much more concerned about the many set-up and conversion hours which such a choice may require. At this stage of my paper, I shall briefly share my experiences in guiding the V. K. Gadget Model through the two conversions, at Dartmouth and then at Western, in order to explain my ambivalence about purchasing games and to suggest possible problems you may face in installing a game like V. K. Gadget. Conversion 1 - Using a Large Computer System Last year I installed the V. K. Gadget game on Dartmouth’s Honeywell 635. In retrospect, this conversion was relatively painless. The first problem we had with this game was in obtaining a complete copy of the source problem. The publisher of the V. K. game manual, General Learning Press, is responsible for providing this deck. Unfortunately, when we received a copy of the program from General Learning Press, it was incomplete. We had received two front halves of the deck, but nary a copy of the second half of the program. Fortunately, a ~panic-stricken” call to Louisiana provided a complete version of the program. Simulation Games and Experiential Learning in Action, Volume 2, 1975 63 I am pleased to report that within 48 hours of receiving the complete source deck the V. K. Gadget Company was “alive and well”, in Hanover, New Hampshire, in spite of some incompatabilities between IBM and Honeywell hardware, and a near fatal problem with the available Dartmouth Fortran. Our conversion problems began with incompatabilities between the character sets of the IBM 370/135 and Dartmouth 635. The Dartmouth system, for example, read IBM’s “=“ character as fl>fl• Fortunately, this problem was fairly easily overcome by means of the powerful text editor on the Dartmouth system. A further conversion problem arose because, as many of you are I am sure aware, THE COMPUTER LANGUAGE at Dartmouth is BASIC (for it is at Dartmouth this language originated). For this reason the development of a Fortran compiler for the Dartmouth computer system had received low priority, and while a Fortran compiler was available it lacked one essential feature required by the Gadget program -- an EQUIVALENCE statement. We were able to overcome this problem by writing a subroutine to perform the equivalence task, but this problem is indicative of the totally unexpected non-routine conversion problems one might face. BASIC led to one major adaptation of the Gadget game. Because BASIC is intended as an interactive time-sharing language, the Dartmouth computer is oriented to supporting terminals, and Dartmouth students are oriented to using terminals, not punched cards. Rather than trying to introduce “cardbatch” logistics, we converted the game input requirements of the original version to a time-sharing disk-data flow. A program was written to interrogate students regarding their play decisions which were then written to a disk file. The main game then run off the data in this file. While the primary reason for undertaking this adaptation was to alleviate the necessity of having students “punch” cards, it also allowed us the ability to “edit” student inputs. This ability turned out to be perhaps the most important advantage of the adaptation, for it allowed us to detect and correct problems in data input before the game was even run. A final problem with the V. K. Gadget company related to one parameter of this game which was supposed to allow teams to factor their accounts receivable. Unfortunately, during trial runs, the factoring logic did not appear to execute properly. Because there was insufficient time to “debug” this problem the “government” declared factoring to be illegal and the game was played without this feature (without any significant apparent impact on the student’s experience). Conversion 2 - The Gadget Company on a Small Computer System Having successfully utilized the V. K. Gadget game with my Dartmouth MBA classes, I looked forward to using it at Western and so set out last fall to bring the game up on the Business School’s IBM 1130. I was encouraged in these efforts by Professor Goosen’s provision of a Simulation Games and Experiential Learning in Action, Volume 2, 1975 64 “1130 version” of the game. Unfortunately, setting-up this version of the V. K. Gadget game required much more effort than expected. Specific problems encountered included: language problems, format problems, assignment problems, numerical problems and problems with misplaced statements. The Fortran computer available on our 1130 represents a limited extension of Fortran II. A recent discussion with Ken Goosen confirmed that his “1130 version” had been developed with a much more sophisticated compiler. As a result we were faced with replacing BOOLEAN IF statements with ARITHMETIC IF statements. The lack of BOOLEAN logic also required a restructuring of computed GO TO logic throughout the game. The original V. K. Gadget game output takes full advantage of the 132 print positions of the standard printer. Unfortunately our printer has only 120 position print characters. This problem required reformatting of most output statements in the game. Perhaps the biggest (and most difficult problem to deal with) occurred due to the limited size of the 1130. The largest integer value the 1130 will handle is 2’~ or 32768. Any integer larger than this is set to 215. This proved a serious problem because the original Gadget game utilized a convention of integerizing the results of many real calculations. On the 1130, when these calculations exceeded 32768 the model “simply blew up”. This problem was only identified by obtaining a complete trace of a run of the model, and was only over-come by redefining several integer variables as real and by modifying the rounding logic utilized within the program. Finally, unexplainable errors in the runs of test data were finally traced to the misplacement and transposition of source cards in the 1130 deck. (These problems were only finally found through line by line comparisons of the 1130 program, with the large system program I had used the previous year). When finally, the Canadian Division of the V. K. Gadget Company began full operations, my research assistant and I had spent at least two man months establishing this version on our 1130. One thing this experience confirmed is there can be no more difficult task than attempting to debug someone else’s software and logic. A great deal of time spent on this conversion was spent in merely attempting to decipher the variables included in the game and the logic effecting these variables. (This effort was not all wasted, however, for during subsequent administration of the game it became much easier to deal with student questions and problems due to my improved understanding of its “workings”.) Comparing my two experiences with setting up the V. K. Gadget game it appears that adopters face two possible sets of problems: incompatibilities between the development and host computer systems and inadequacies in the source programs provided and their documentation. Either of these problems may require many hours of frustrating programming, testing and experimenting to overcome. Table of Contents Volume 2, 1975 ABSEL Research - From Adolescence to Adulthood, Framing the Future of Business Simulation and Experiential Learning Inventory Simulation - A Time Sharing Television Output Simulation OMSIM: An Operations Management Game An Experiential-Cognitive Methodology in the First Course in Management: Some Preliminary Results Experiential Training Methodology, Traditional Training Methodology, and Perceived Opportunity to Satisfy Human Needs Operational Problems and Solutions of Business Gaming: A Primer One Experience with the V. K. Gadget Company - An Introduction to Managerial Accounting A conversational Marketing Mix Exercise The Use of Program BAYES in the Teaching of Sample Size Determination in Survey Research An Experiential Study of Performance in a Basic Management Course Using Student Opinions in Evaluation Results with a Business Game Some Impacts of Varying Amounts of Information on Frustration and Attitudes in a Finance Games Player Performance under Differing Player Configurations in the Investment Game: Some Preliminary Observations Integrating Across Functional Areas with a Computer-Assisted Case Using Computer Assisted Cases for Marketing Research Instruction ACQUIRES: ACcounting QUick Information REtrieval System A Simulation Approach to Data Processing Controls Motivating Simulation Game Performance and Satisfaction with Group Performance-Contingent Consequences The Educational Impact of Supplementary Personal Interaction in Computerized Business Games The Minnesota Manpower Management Simulation Games RAISE II, A Personal Simulation Management in a Test Tube: A Small Group Laboratory Simulation A Methodology for Measuring Decision Making in a Business Game A Case Study of a Capital Investment Simulation Combining Experiential and Clinical Methodologies in a Small Business Management Program Results of Using Gaming to Teach Ethics and Social Responsibility Business and Society: An In-Basket Simulation Crisis versus Non-Crisis Simulation Gaming Warm-up Company: A Business Simulation Business Simulations: Competition or Learning A Computerized Management Training System for Franchized Dealers Mode I Stores, Inc.: Computer Supported Cases on the Marketing Research and Problem Solving Process Experiential Learning in Statistics Through the Computer The COMPUSTAT Analysis System as an Instructional Resource Research on Experiential Learning: Enhancing the Process A Comparison of Lecture-Case Study and Lecture-Computer Simulation Teaching Methodologies in Teaching Minority Students Basic Marketing Student Evaluation of Reaction to a Marketing Simulation Game Under Varying Circumstances The Validity and Usefulness of Packaged Models in Game Play The Effectiveness of Experiential Methods in Training and Education: A Review Guidelines for the Future Development of Business Games The Future Potential of Structures Learning Exercises Turning Them on to Management by Turning Them Out to Managers with Video Tape Recorders