Using a Business Game to Demonstrate Broad Business Concepts Developments in Business Simulation and Experiential Learning, Volume 26, 1999 USING A BUSINESS GAME TO DEMONSTRATE BROAD BUSINESS CONCEPTS Dr. James R. Marshall, California State Polytechnic University ABSTRACT To be effective, capstone classes for undergraduates should include more than participating in a computerized business game and the study of cases. Participants in this session will discuss three activities which have proved to be very effective ways to integrate and demonstrate the use of information gained in core courses as well as broad business concepts. INTRODUCTION The most difficult problem in using a computerized business simulation as the main foundation for a capstone class for undergraduates is finding ways to get students to rigorously apply the knowledge and skills they have acquired in core business courses. All too quickly the rules of thumb and guesses they use at the beginning of play become the foundation for their decisions throughout the game-- even after they have acquired sufficient understanding to shift to more rational and accurate approaches to decision making. In addition to playing games and the study of cases, what can be done to augment the learning from undergraduate capstone courses? SPREADSHEETS The spreadsheet assignment provides more learning in capstone courses than any other activity. In almost every case when players are asked what they would change if they could begin again to play the game, they report they would complete the spreadsheet earlier. To be more specific, in the strategic planning classes at California State Polytechnic University at Pomona, The Business Strategy and Policy Game1 is used as the primary learning device. Ten planning forms are presented in the player’s manual to help the students make decisions. For each line of each form there is a description in terms of what information goes in each entry and what calculation is required . Generally, at the beginning of play this multitude of information is ignored in favor of general feelings and guesses, but over time more of the players use more and more of these forms as a basis for their decisions. From the first day of class, students learn that they are required to produce at least a minimum spreadsheet for which they would earn a grade of C. They can improve their grade by improving the quality of their spreadsheet: A fully integrated sheet would earn them a B+. By developing individually designed and executed enhancements a player can raise an earned grade up a full grade level. A minimum spreadsheet requires the completion of a Marketing Plan, a Production Plan, a Raw Material Plan, a Cost Estimates Plan, and a Cash Budget. Players can type as many entries as they want and make as many estimates as they want. They must do at least one if, then, else statement and one two-variable simultaneous equation. On average, it will take about six hours to complete a minimum sheet. In an integrated spreadsheet, data is entered just once. The Income Statement and Balance Sheet are also required. All formulas are entered, all sheets are linked, all calculations are made including two three-constant simultaneous equations. On average, an integrated sheet will take 35-40 hours to complete. 182 Developments in Business Simulation and Experiential Learning, Volume 26, 1999 When properly completed, the integrated spreadsheet will tell a student the result of the current decisions within the limits of the accuracy of the sales forecast. Truly, the student comes to know from personal experience the value of a decision-support system. CALCULATIONS In addition, students renew their acquaintance with techniques gained in mathematics and quantitative methods. Seasonal indexes are calculated and then used to enhance the accuracy of sales forecasts. Methods of forecasting the trend of sales (weighted moving averages, linear regression, exponential smoothing,) are tried. The size of the error between forecasted and actual sales in each market serves as the basis for setting the size of safety stocks. After two-variable and three- variable simultaneous equations are solved, the possible use of a determinates approach for solving more complex equations is described. GOAL SETTING To demonstrate the value of strategic planning, we require students to make strategic plans for their companies and to evaluate the level of their goal achievement. Near the end of the trial period, students set goals, means, and schedules for their first year of play (short-range plans). These goals can be changed when they no longer guide behavior. At the end of the first year, students evaluate how adequately their goals have been achieved. Near the end of the first year of play, students set goals, means, and schedules for their second year of play and also goals for their next 3 years (long- range plans). At the end of the second year, students evaluate how adequately their short- range goals have been achieved. Near the end of the second year of play, students set goals, means, and schedules for their third year of play (short-range), goals for their next 3 years (long-range plans) and goals for the next 12 years (very-long-range plans). At the end of the quarter, students make complete strategic, tactical, and operational plans for the company to be passed on to succeeding managers. In this session, forms and spreadsheets which are used in these activities will be demonstrated and discussed. REFERENCES 1) The Windows 957 Version of The Business Strategy and Policy Game, David L. Eldredge, James R. Marshall, and Abolhassan Halati. Los Angeles: CREDR Corporation, 1998 183 Table of Contents Volume 26, 1999 ABSEL's Historical Research Interests Back From the Future: An ABSEL Merlin Exercise for the Year 2005 The Contributions of ABSEL During the 1980's ABSEL's Contributions to Experiential Exercises in the 90's ABSEL's Contributions to Experiential learning/Experiential Exercises: The Decade of the 1970's Business Simulations - Algorithms and Model Enhancements: A 25 year Review A Study of the ETS General Field Test as an AACSB Assessment Tool and the Impact of Experiential Exercises and Simulation on Learning A Framework for Assessing the Competencies Reflected in Simulation Performance Developing A Learning Culture: Assessing Changes in Student Performance and Perception Financial Simulation Using Distributed Computing Technology Analyzing Managers' Judgements and Decisions with an Educational Business Simulation Understanding Your Business through Home-Made Simulator Development An Examination of a Reanalysis of the Impact of a Market Leader on Simulation Competitors' Strategies Applying Shocks to TE Simulations: A Demonstration Increasing Efficiency of Management Skill Assessment A Testbank for Measuring Total Enterprise Simulation Learning Developing Leadership Skills - Video Live! LEADSIMM: Collaborative Leadership Development for the Knowledge Society A Team Approach to Producing Multi-Media Laptop and Video Formatted Presentation Tinkertoys Revisited: Exploring Trust Based Relationships Overall Dominance in Total Enterprise Simulation Performance Success or Bankruptcy: The Relationship between Personal and Goal Orientation and Simulation Performance Assessing the Effects of Feedback: Muti-method and Muti-directions in Multi-pedagogical Courses The Missing Ingredients in Experiential Learning Purpose and Learning Benefits of Business Simulations: A Design and Development Perspective Building Capabilities for Change through Laboratory Simulations Modeling Innovation as a Process of Design in Educational Business Simulation The Need to Measurer variance in Experiential Learning and a New Statistic to do so Assessing Effectiveness of an Experiential Oriented Course Over Time Developing Participant Satisfaction Models of Experiential Exercises in Business Education Perceptions of Learning in TE Simulations Students' View on the Use of Business Gaming in Hong Kong Management Gaming's Lost Opportunity: Meditations about the Russian Experience and Prospects for the Future Unanticipated Enhancements in the Business Strategy and Policy Game when Running in Windows 95 Using a Business Game to Demonstrate Broad Business Concepts A New Model for Business Courses (Getting the Student Connected) Seeing the Forest and the Trees: Integrating Knowledge Using Large Scale Simulations in Capstone Business Strategy Classes Is It Here To Stay? A Roundtable Discussion of the Inter-Group Interaction Interactive Tools Used in Applying Financial Concepts Strengthening Essential Skills through a Finance Exercise: Calculation of Beta A Model of Currency Exchange Rates Understanding Currency Exchange Rates: A three-part Exercise Student Experiences in the World Intercollegiate Business Game Competition Student Experiences in the International-Collegiate Business Policy Game Competition Using Boards of Directors in Simulation Environments: Comments From Board Members Sharing Best Practices: Teaching Smarter, Not Harder Star Power: A Simulation for Understanding Power and Empowerment The Marketing Game: A Marketing Principles Simulation Alexander Islands: GSSM Tiny Business Simulator on the WWW Putting Strategy into Strategic Business Games Industry Analysis, Porter's Five Forces Model and Strategic Group Maps in the Business Strategy Game Simulation The Use of Concept Mapping to Improve Student Performance and Understanding of Strategic Management Concepts: A Comparison of Techniques Transformational thinking in the Organizational Behavior Course: The Use of Metaphor as an Assessment Tool Creation of a Virtual Learning Community for the Global Virtual Enterprise Project Inter Institutional use of Educational Resources: Joint Use of Management Simulation Games Business Insights: Theory and Practice with the Aid of a Business Simulation Progress: An Experiential Exercise in Development Marketing The ABC's of teaching the Theory of Constraints to Undergraduate Business Students Demonstrating Principles of Organizational Purchasing Behavior through an Experiential Exercise The Virtual Manager: A Different Simulation for Managing Complexity When the Rules are changing and Chaos Breeds Innovation: Recapturing the Value of Constructive Thinking and Play in Simulation Training The Pitfalls, and Potential, of Actual Events as Problem Drivers Using Business Games to teach Environmental Awareness and Green Management: The International Experience with the ENSIM Game A Review of my ABSEL-Related Work Simulation of Government: A Workshop Using GEO Creating Internet-Based Games Using Perl and JavaScript Who's on First? Exploring the Concepts of Problem-Based Learning, Experiential Learning, and Lifelong Learning Students Learn Customer Service and Selling while Conducting Research So You Want to Run an NFL Football Team–An Honors Interdisciplinary Project Supervised Internship: The Employer's Perspective Using Computer Assisted Simulation to Teach International Business Strategy: A Case of the Multinational Management Game (MMG) Multi-Cultural Experiential Learning: A Computer Simulation in China An Appreciative Stance on Diversity as We Move into the 21st Century: A Timeline Exercise to Identify Key Experiences in Good Work Relationships between Black and White Peers A Day in the Life of an Interactive, Real Time, and Internet Delivered Course: A Demonstration Comparing Internet Search Engines: An Experiential Learning Exercise Total Enterprise Simulations and the Internet: Assessing Student Perceptions and Preferences Teaching Accounting Information Systems in a Practicum Format Providing Experiential Learning in Accounting through a Field Study Payroll Project A Spreadsheet Based Business Simulation Game Computer-Behavioral Simulations Training for Project Managers Simulation Scenarios - Rationale and Illustration