Business Simulation Scenario

How the business simulation scenario - the business modeled - impacts relevance, learning and engagement.

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When the business simulation is used in an academic setting where the students have no company affiliation or where it is used on an “open” course where learners are from several different companies, the business modeled is not important. But, when the business simulation is run for in-company training the choice of scenario is vital and you must consider how closely it replicates the business - there are three possibilities:

The choice of scenario depends on relevance, complexity, duration, cost and learning. As discussed below, I feel that for most business learning, an Industry Reflection simulation is the best. The information provided here is from Chapter 6 - Design for Quality in my book Corporate Cartooning. This book can be downloaded free here.

A Generic Business Simulation is one where the simulation scenario was created with no thought about the learners' industry, its structures or issues. Typically, a manufacturing company is replicated.

A Industry Reflection Simulation has the financial, operational and marketing structures and issues of the learners' industry but does not try to replicate an actual company.

A Business Replica Simulation attempts to replicate the learners' company exactly.

Factors impacting choice

Relevance
Complexity
Duration
Costs
Learning

Business Simulation Relevance

Although a generic. manufacturing industry simulation may be relevant for university students or on a business course where the learners come from a range of industries, for learners from a bank or a service company a generic, manufacturing scenario will not be relevant.

For a business simulation to deliver relevant learning it must have a similar financial, marketing and operational structure and involve the issues that are faced by the industry.

Although one might expect that a business simulation that replicates the learners' business would be more relevant, this is not true. This is because its complexity will cause confusion and the learners may feel and argue that the replica is insufficiently accurate.

How a business simulations's relevance changes as it moves from a generic scenario, through and industry reflection to business replica.

Business Simulation Complexity

In terms of complexity a Business Replica simulation will be far, far more complex than a Generic simulation because a really accurate model of a real business is very complex. But an Industry Reflection simulation will be only slightly more or no more complex than a Generic Simulation. Some 40 years ago, I advised companies about building corporate models to help with their business/financial planning. Despite costing £100,000 (in the early 1970's), no company managed to create a full business replica.

How a business simulations's complexity changes as it moves from a generic scenario, through and industry reflection to business replica.

Business Simulation Duration

As a business simulation's duration is strongly correlated with complexity [1] its duration follows the complexity curve (above) with generic and industry reflection scenarios have reasonable durations but with business replica simulations requiring significantly longer durations.

Business Simulation Acquisition and Use Cost

As a business simulation's running cost is strongly correlated with duration and its development cost [2] is strongly correlated with complexity [2] its acquisition and use cost follows the complexity curve (above) with generic and industry reflection scenarios having reasonable costs but with business replica simulations having a significantly higher cost.

So, a business replica is both expensive to develop and has a long duration. Further, focusing on replicating a business misses the point that using a business simulation is to deliver learning.

Business Simulation Learning

Although relevance improves learning, complexity (as in the real world) can become confusing and detract from learning. Perceptions influence learning and I believe that learning peaks for Industry Specific simulation with Generic simulations less effective and Business Replica simulationssignificantly less effective.

My experience with actual use on company training courses means that I feel that the Business Replica simulations do not provide good company training. However the position of the peak depends on maturity with immature students requiring a business simulation closer to being a replica of their business with more experienced business people being able to handle a greater abstraction.

How a business simulations's learning changes as it moves from a generic scenario, through and industry reflection to business replica.

As the reason to use a business simulation is to deliver learning (rather than just replicate the real world), for most training, the Industry Reflection business simulation is the best choice as it delivers relevant learning at reasonable cost and duration.

References
[1] Hall, Jeremy J. S. B. and Benita M Cox (1994) Complexity is it really that simple, Systems Developments in Business Simulations and Experiential Exercises Volume 21 eds. Precha Thavikulwat & John D. Overby, College of Business Administration, Oklahoma State University, Oklahoma

[2] Hall, Jeremy J. S. B. (2007) Computer Business Simulation Design: Novelty and Complexity Issues Developments in Business Simulation and Experiential Learning, Volume 34, 2007 Reprinted in the Bernie Keys Library, 8th Edition [Available from http://absel.org]

© 2011 Jeremy J. S. B. Hall

Most recent update: 13/04/12
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