Demonstrating Principles of Organizational Purchasing Behavior Through a Buying Game Exercise Developments in Business Simulation and Experiential Learning, Volume 26, 1999 DEMONSTRATING PRINCIPLES OF ORGANIZATIONAL PURCHASING BEHAVIOR THROUGH AN EXPERIENTIAL EXERCISE Jerome M. Katrichis, University of Hartford ABSTRACT The buying game is a simulated purchasing experiential exercise designed to demonstrate concepts of organizational purchasing behavior. The exercise is designed for use in sales and sales management classes, but can also be used in industrial marketing courses, consumer behavior courses, executive education and sales training settings. PURPOSE The concept of the buying center (Robinson, Faris and Wind, 1967) is a central theme in re- search and theory pertaining to organizational purchasing decisions, but it is a difficult one for business students to visualize. It has been de- scribed as a group (Wilson, Lillien and Wilson, 1991), an intergroup (Katrichis, 1998), an adhocracy (Bunn, 1984), and a communication network (Bristor, 1993). The purpose of the exercise is to demonstrate to students how the buying center can be all of these things and to demonstrate behavior patterns, antecedents and consequences of buying center decision making. DEMONSTRATION The purpose of the demonstration is to introduce the buying center game and to provide a hands- on use opportunity to participants. Participants will receive all necessary materials for pro- ducing their own version of the game in the classroom. The demonstration will last about forty five minutes. GAME DESCRIPTION The exercise involves two purchase decisions that participants must make, a new telephone system and a new computer system. Participants are told that bids have been solicited, with five vendors qualify for further consideration for each of the two purchase decisions. Participants are given a total of six documents in order to play the game. These include: -A basic description of the game. -A position description for their department members. -A memo from their CEO spelling out purchase priorities. -A memo from their superior interpreting these priorities. -Vendor descriptions for the two purchase decisions. The game is played in four parts. First, participants are provided documentation and are allowed to familiarize themselves with it. Then participants meet with their own assigned functional group. Functional groups are assigned the task of prioritizing the five vendors for each purchase decision ranking them from one to five. After functional groups meet, participants are assigned to a buying center. The buying centers then meet and come to a decision on the purchase decisions (simple majority vote) concerning one vendor for each purchase decision. Finally, the game is scored and discussed with participants. SCORING There are two possible configurations for scoring the game. How the game is scored can be utilized to demonstrate the effects of the organization’s measurement and reward systems on the buying behavior of organizations 280 Developments in Business Simulation and Experiential Learning, Volume 26, 1999 (Anderson and Chambers, 1984). Scoring can be done in either a competitive or collaborative mode. In a competitive mode, functional departments are scored based on how well their members have promoted their department’s preferences in the buying center. In other words, if a buying decision is the same as the participant’s depart- ment’s first choice of vendors, their department earns three points. If a buying decision is the same as the department’s second choice of ven- dors, their department earns two points. If the buying decision is the same as their depart- ment’s third choice of vendors, the department earns one point. No points are earned for fourth or fifth preferences. In a collaborative mode, buying centers, rather than departments are awarded points based on how well they have accommodated the preferences of all members. The competitive mode of scoring seems to work best as it seems much easier for students to envision how the decision would have changed had a collaborative mode been used rather than vice versa. Either scoring scheme allows the administrator to demonstrate the concept of satisficing versus maximizing. In the competi- tive mode, buying centers tend to attempt to maximize for the department and satisfice for the organization. In the collaborative mode buying centers tend to satisfice for the department and maximize for the organization. ADMINISTRATION The game takes between forty-five and seventy minutes to administer in class depending on the number of participants and whether participants are provided with the materials before the session. If students are required to absorb the materials within class, allow an extra fifteen minutes for game administration. The game needs an absolute minimum of three participants in order to be of any value. The maximum is really only a function of how many groups the administrator is comfortable with. The game has been run successfully with as few as eight and as many as forty-five participants. REFERENCES Anderson, Paul F., and Chambers, Terry M. (1985), “A Reward/Measurement Model of Organizational Buying Behavior,” Journal of Marketing, 49, (Spring), 7-23. Bunn, Michelle D. (1984), “Structure in the Buying Center: The Case of the Adhocracy.” R. Belk et al (eds.), Proceedings of the American Marketing Association Educator’s Conference. Chicago: American Marketing Association. Bristor, Julia M. (1993), “Influence Strategies in Organizational Buying: The Connections to the Right People in the Right Places,” Journal of Business to Business Marketing, 1 (1), 63- 98. Katrichis, Jerome M. (1998), “Exploring Departmental Interaction Patterns in Organizational Purchasing Decisions,” Industrial Marketing Management, Vol. 27, 2 (Mar.), 136-147. Robinson, Patrick J., Charles W. Faris and Yoram Wind (1967), Industrial Buying and Creative Marketing, Boston: Allyn and Bacon. Wilson, Elizabeth J., Gary L. Lillien, and David T. Wilson (1991), “Developing and Testing a Contingency Paradigm of Group Choice in Organizational Buying,” Journal of Marketing Research, 28 (Nov.), 452-466. 281 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