Why use simulations in business training?

The great Samurai, Miyamoto Musashi offered the following principles for those who want to learn the Way of strategy:

• Do not think dishonestly

• The Way is in training

• Become acquainted with every art

• Know the Ways of all professions

• Distinguish between gain and loss in worldly matters

• Develop intuitive judgment and understanding for everything

• Perceive those things which cannot be seen

• Pay attention even to trifles

• Do nothing which is of no use

To paraphrase Musashi, mastery of the Way of business strategy requires:

• Honesty

• Familiarity with every skill and profession of business

• Knowing the difference between profitable and unprofitable activities

• Attention to detail

• Identifying and working on only those activities which will have value in the future

• Continuous training in order to develop what might appear to be an intuitive judgment and understanding of business situations and an ability to perceive things which others can not see.

Musashi believed that it is only through tireless practice that these principles become set in one’s heart and body. • You must study hard.

• You must research this well.

• These are things which you must learn thoroughly.

• Study hard to absorb these things into your body.

• You must train constantly.

• You must train hard to understand it.

• You must learn this through repetitive practice.

• You must pursue the value of this through training.

• Teach your body strategy.

• You must train well to attain this.

Musashi’s advice on training is highly relevant to professional training of future managers.

• Mastery occurs only through thoughtful study and tireless practice.

• There are many methods of training for the future manager.

– Textbooks, lectures, and case studies represent a form of solitary training.

– Business simulations are a form of combative training where students pit their business skills against those of formidable opponents under the watchful eye of a training coach.

Simulations and the Method of Active Learning

• A simulation is an experiential learning exercise.

• The emphasis is on practice and active learning within a cross-functional business experience.

• Students are placed in a realistic business setting where they essentially run a business for five to twelve weeks depending upon course design.

• The problems and opportunities encountered by the students require a total immersion into the business enterprise.

• The simulation exercise is usually so complex that team work is required to achieve success.

• At the same time, the business is small enough that everyone can see and experience every aspect of the enterprise.

• The objective is to help students to internalize business thought through the practice of business decision making.

Creation of Virtual Business Reality

• The players provide the living detail through their own deliberations, actions and interactions with competitors and the market.

• The exercise actually represents a series of interconnected cases.

• Every decision period represents a new case, a new set of circumstances.

• The students do not need to role play.

• Simulations are much richer than the decision outline found in any manual or computer program.

• The process of thinking strategically forces them to go beyond the immediate problem and consider their future and how they want to shape it.

Role of Instructor

• Devil’s Advocate

• Coach

Practice of Important Business Skills

• Delivery of customer value

• Strategic planning

• Management of strategy

• Teamwork and interpersonal skills

• Budgeting and cash flow management

• Expanded organizational responsibility

Are business schools doing their jobs?

“No!” say some critics* who find that MBA graduates are too narrowly educated.

* From a special report in the Harvard Business Review, “Are Business Schools Doing Their Jobs?,” by Behrman and Levin (1984).

Business school critics assert that we place:

• Too much emphasis on quantitative analysis, tools, models, and theory

• Too little emphasis on qualitative thinking, complex tradeoffs, execution, and creativity

• Too much emphasis on short term performance

• Not enough on long term success

• Too much emphasis on bureaucratic management

• Very little on entrepreneurial activities and risk taking

• Too much emphasis on career and corporate goals

• Too little attention on interpersonal relationships and social ethics

• Too much emphasis on separate disciplines

• Not enough on integrative problem solving and management

Comparisons of Alternative Learning Formats

Lectures and Multiple Choice Exams

Very efficient Maximize communication of new concepts maximize number of students minimize instructor involvement Can be standardized to minimize unwanted variance in teaching

But. . . they do not encourage creativity integration problem solving decision making risk taking interpersonal skills

Case analysis

Students are able to analyze and solve complex problems think in strategic ways integrate material across disciplines

But, students do not have to execute their decisions live with the consequences respond to competitive moves and counter moves

Simulation Strengths

Students are able to analyze and solve complex problems think in strategic ways integrate material across disciplines

. . . and execute their decisions and live with the consequences respond to competitive moves and counter moves

Finally, simulations represent high involvement learning. Running their own business gives students a personal stake in the outcome and can help them learn about managing in a competitive situation.

But…. simulations do require

substantial time and effort.

Marketplace will focus you on Strategic Management

in addition to Management Strategy

Both Require

• creativity

• qualitative thinking

• an ability to deal with complex tradeoffs

Strategic Management versus Management Strategy

Strategic Management further requires

• an ability to adapt to

• a changing environment

• a willingness to take risks

• an ability to manage day-to-day issues while trying to position the firm to deal with long term problems and opportunities.

In Strategic Management the emphasis is on

• action

• execution

• responsibility

• a manager’s role

Management Strategy implies

a sedentary role of a consultant whose concern is chiefly analysis and planning, and who can walk away from the implementation of the plan.