A DEMONSTRATION OF BUSSIM STRATEGY – A TOTAL ENTERPRISE SIMULATION Developments in Business Simulation and Experiential Learning, Volume 28, 2001 A DEMONSTRATION OF BUSSIM STRATEGY A TOTAL ENTERPRISE SIMULATION David A. Jordan, Geneva College dajordan@geneva.edu ABSTRACT BusSim Strategy is the last simulation of the BusSim family of simulations. This integrated business instruction system is a compilation of six programs and companion cases that allow business students to apply business decision-making to a single enterprise. The programs are divided into three levels: the introductory level, the analytical level and the comprehensive level. BusSim Strategy is the program at the comprehensive level and is designed to integrate all the business functional areas and focus on strategy development and profitability. INTRODUCTION The primary goal of a business simulation is to replicate the complexity of today’s dynamic business environment. A greater appreciation of the interconnectedness of topics and the systematic nature of business organizations can be achieved by simultaneously focusing on the variety of decisions a manager must make over a period of time. This simulation seeks to model the decisions made by managers of a small manufacturing business. Three different products are produced by the manufacturing facility. Twelve quarters of simulated operation are provided with this simulation. The student/teams are responsible for setting strategy, developing budgets and scheduling all the resources necessary to produce and sell these products. DESCRIPTION OF SIMULATION BusSim Strategy uses parts of the four functional level programs to form a Total Enterprise (TE) environment. Students familiar with the other simulations in the BusSim family should find this simulation more challenging, while the business environment stays the same. Some levels of complexity at the functional level are left out of this TE simulation so that the strategy level can be implemented. At this top management level teams perform two important activities, set policy and approve budgets. Determining the strategies they will follow in six categories sets the overall direction of their company. These categories include 1) product definition, 2) TQM, 3) firm growth, 4) marketing behavior, 5) financial risk and 6) HR policies. Central to this top level of decision-making is the development of budgets. These annual planning documents will force teams to plan ahead or find themselves without resources during their quarterly decisions. To standardize these documents Excel spreadsheets are provided at each level of the decision making process. Outdoor Limited, Inc. is the company used to provide the framework for the simulation decisions. This company employs around sixty people and produces bags (Paks) that can be used for a variety of activities. The principal product is the OutdoorPak. The hiking enthusiast primarily utilizes this backpack. Outdoor Limited is an ongoing small manufacturing company with a single facility. The goal of BusSim Strategy is to take this company through a life cycle change and provide the dynamics so those students can experience the decisions associated with these changes. BUSSIM STRATEGY USED WITH POLICY/STRATEGY CLASS Figure 1 below suggests how we intend to use BusSim Strategy in our strategy capstone course this semester. Students are formed into four person teams, each person representing a functional specialty. We use our concentrations to determine the assignments. 121 Developments in Business Simulation and Experiential Learning, Volume 28, 2001 Figure 1 BusSim Strategy Decision-Making Process PLANNING ANNUAL DECISIONS ENTERPRISE DECISIONS MARKETING DEC OPERATIONS DEC FINANCE DEC HR DEC QUARTERLY ANALYSIS BOARD MEETING Before the simulation is started each team must develop a business plan for managing their small company. They must determine the overall strategies that will be used to guide their decision-making. Once the strategies are decided upon a complete set of annual plans must be submitted. These include plans for each of the functional areas: marketing, operations, finance and human resources. An annual budget, complete with supporting analysis, must also be submitted before the simulation begins. Once the planning phase is complete, each team goes into the decision-making phase. There are three levels of decision-making in BusSim Strategy. The first level is the annual decision-making level. Here decisions that affect the whole year, such as budgeting, forecasting and compensation are made. The second and third level of decision-making takes place each quarter. The team meets as a group to make the enterprise level decisions. These include any new managers to be hired, equipment to be purchased and building space to be constructed. The final level of decision-making is the functional level. Here individual team members enter the decisions associated with their specialty. For example, the marketing specialist determines how much is to be spent on advertising and the media to be used. The operations specialist sets production parameters such as scheduling, inventories and purchasing. The human resource specialist selects new workers, determines training and manages incentive plans. The finance specialist must provide funding for all the resources necessary to operate the business. When the four quarters in a year are completed each team must present a summary of their performance and their plans for the next year at a Board-of-Directors meeting. This Board is comprised of Business faculty from our department. In this real world activity it is our job to guide the student teams in this unique learning experience. This level of feedback is time consuming but necessary to provide our students with the complete strategic picture while being responsible for all levels of decision-making. We hope that this session assists you in assessing the benefits of using a total enterprise simulation, the challenges associated with it, and to better determine the role of simulation in your curricular design. 122 Table of Contents Volume 28, 2001 Using A Web Based Tutorial Program To Enhance Student Learning Reflecting On Reflection: An Examination Of Reflective Learning And Assessing Outcomes Overcoming Obstacles To A Cross-Global Collaborative Classroom Panel Discussion On Building And Maintaining Trust In The Abselesque Classroom Cosmopolitan-Based Cross National Segmentation In Global Marketing Simulations Strategic Management And The Case Method: Survey And Evaluation In Hong Kong Designing Interactive Self-Learning Modules Using Macromedia Director Teaching Financial Markets Using The Wall Street Journal Core Course Outcomes Assessment And Program Continuous Improvement Using An Integrative Business Plan Œ An Empirical Evaluation Using A Mock Trial Activity For Interdisciplinary Learning Fidelity, Verifiability, And Validity Of Simulation: Constructs For Evaluation 2001 International Collegiate Business Strategy Competition: 37 Years Of Collegiate Competition Motivating Students: An Initial Attempt To Operationalize The Curiosity Gap Model E-Learning: The Next Wave Of Experiential Learning Helping New Game Adopters: Four Perspectives An Initial Validity Invesitigaion of A Test Assessing Total Enterprise Simulation Learning Administering A Marketing Simulation - Common And Varied Practices Among Instructors Issues In Case Method Instruction: Class Discussion Leadership Sex Composition, Cohesion, Consensus, Potency And Performance Of Simulation Teams Integrating Management Curriculum: Linking Courses With Frontpage Absel: The Way We Talk! Teaching Strategic Management: A Case Study In The Diffusion Of Innovation In Education A Demonstration Of Bussim Strategy A Total Enterprise Simulation Teaching Methods: Etic Or Emic Antecedents Of Work Team Performance In A Business Simulation: Personality And Group Interaction When Experiential Educators Reflect Upon Their Craft: A Qualitative Research Report Strategic Sensemaking In Organizations: Model Formulation And Operationalization Panel Discussion: A Model For Initiative Development: Discussion And Ideas Of Individual Spirit Harmonics Assessing The Efficacy Of Experiential Learning In A Multicultural Environment Are Business Schools Producing 21st Century Managers? Blue Horizon Cruises: An International Simulation Exercise To Illustrate Conflicting Economic And Cultural Models Different Perceptions Of The Same Thing: An Experiential Exercise Current Use Of Agribusiness Simulation Games: Survey Results Of University Agribusiness And Agricultural Economics Programs Team Building 101 For Accountants An Online Evaluation Of The Compete Online Decision Entry System (Codes) Total Enterprise Simulation Winners And Losers: A Preliminary Study Gilding The Lily, Enhancing The Pedagogical Experience, Or Fixing What Isn™t Broke: The Dilemma Of New Simulation Versions The Absel Endnote Database: The Perfect Tool For The Bernie Keys Library Decision-Making Exercises (A), (B), And (C): Examining The Role Of Conflict In Group Decision-Making Group Decision Simulation (A)-(F): Examining Procedural Justice In Group Decision-Making Processes Evaluation Of Performance In Business Games: Financial And Non Financial Approaches A Framework For Evaluating Simulations As Educational Tools Congruence II™: A Strategic Business Board Game The Tournament Concept: Extending The Idea Of Using Simulations As Instruments Of Assessment The Economic And Political Transition Of The Mexican State In The Threshold Of Twenty First Century: From The Entrepreneurial State To The State Of Entrepreneurs. Experiential Learning For Accountants: The Not For Profit Project An Investigation Of The Environmental Awareness Attained In A Simple Business Simulation Game A Daily Exercise In Theory Application: Is This Why I Had To Take Marketing, Management, Finance –? An Alternative View to Scoring Selected Simulation Games and Experiential Exercises