Business Game or Business Simulation are computer-based simulations designed to learn business-related concepts. It is a learning method of role playing, in a simulated business environment, where participants acquire business skills (both hard and soft skills) to improve both individual and team performance. Business games, as a teaching method, are used in Universities (particularly Business Schools) and for Executive education in Corporations for training in general management, finance, organizational behavior, human resources and such.
Business games belong to a large category of games. the relevant literature classifies business games based on computer technology within the category of digital learning games in turn included in the broader category of serious games, in particular the digital ones (see figure below)
Other Definitions of Business Games
"Business Games can be considered both a digital learning games and business simulations. Simulation is essentially a case study, but with the participants included (Jones, 1998), but it also means driving system model with suitable inputs and observing the corresponding outputs (Bradley et al.,)"
Greenlaw (1974) in "Trends in Programmed Instruction": "A business simulation or game may be defined as a sequential decision-making exercise structured around a model of business operation, in which participants assume the role of managing yje simulated operation." So business games are all the simulations used to support managerial learning through an experience that involves competition and rules in the socio-economic environment.
Greco et al. (2013) argues that Business Games could have up to two "serious" aims: teaching business topics and/or evaluating players' performances. Consequently he concludes that "a business game is a serious game in a business environment that can lead to one or both of the following results: the training of players in business skills (hard and/or soft) or the evaluation of players' performances (quantitively and/or qualitatively)"
History of Business Games
While the history of business games has been traced back to the use of board games and war games in China in the year 3000 BC (Wolfe 1993), the modern business simulation game dates back to 1955. In that year, the Rand Corporation developed a simulation exercise that focused on the U.S. Air Force logistics system. The simulation, called Monopologs, required its participants to perform as inventory managers in a simulation of the Air Force supply system in much the same fashion as current business simulations place the participants in the roles of company managers (Jackson 1959).
In 1956, the first widely known business game, Top Management Decision Simulation, was developed by the American Management Association (Meier et al. 1969). This was followed in 1957 by Greene and Andlinger’s Business Management Game developed for the consulting firm of McKinsey & Company (Andlinger i 958) and the Top Management Decision Game by Schreiber - the first business simulation game known to be used in a university class (Watson 198i). The TOP Management Decision Game was used in a business policy class at the University of Washington in 1957.
From this point, the number of business simulation games grew rapidly. By 1961, it was estimated that there were over 100 business games in existence and that over 30,000 business executives had played at least one business game (Kibbee et al. 1961). The Business Games Handbook (Graham and Gray 1969) listed nearly 190 business games while The Guide to Simulations/Games for Education and Training (Horn and Cleaves 1980) described 228 business simulation games.
Since 1962, a number of studies have reported on business simulation game usage. Several early studies examined simulation game usage among AACSB member schools (Dale and Klasson 1962; Day i 968; Graham and Gray 1969; and Roberts and Strauss i 975). Biggs (1979) estimated simulation game usage in business schools by examining publishers’ adoption lists. Faria and Schumacher (1984) surveyed business firms to develop an estimate of the use of business games in management training programs. Burgess (1991) has reported on business simulation game usage in the United Kingdom while McKenna (1991) examined business game usage in Australia. In the most ambitious study, Faria (1987) mailed over 1,500 questionnaires to universities and business firms to develop an estimate of simulation game usage in academia and in industry.
Taxonomy of Business Games
Starting from the taxonomy of Maier and Größler (2000) and after studying 110 business games, Baldissin et al. (2007) propose 15 classification variables grouped in to three dimensions (business simulation model, simulation technology and marker & company business model) which can characterize a business game:
1st dimension: Business Simulation Model
1. Adaptability of the model
2. Behavior of the model
3. Customization of the model in a new business environment
4. Generality of model in regard to domain
5. Role of simulation model
6. Type of model's internal relationships
7. Transparency of simulation model
2nd dimension: Simulation Technology
8. Frequency of decisions
9. Proceeding of time in simulation engine
10. Web Technology
3rd dimension: Market & Company Business Model
11. Business area
12. Management domain
13. Number of users/companies
14. Number of products
15. Number of markets
Succeeding in a Business Game
In Monopoly, it is often said that the best strategy is to buy all the orange properties, ignore the blue ones, mortgage to invest and cause the housing shortage to be certain to win. For the Business Games, it's much more serious and there is unfortunately no miracle solution, only a few main principles to be respected:
- Have a global managerial vision and evaluate the reciprocal effects of marketing on logistics, finance or R&D of the company managed in a virtual way;
- Reflect on the long-term viability of the company or project and propose solutions that are as profitable as they are sustainable;
- Be prepared to change strategy in the event of unforeseen events: it is often the team that shows maximum agility that prevails;
- Distribute tasks intelligently, leaving each student to focus on his or her area of expertise. In other words, international business and management specialists take care of the international, marketers take care of marketing, financiers take care of finance... nothing fancy in short.
Advantages of Business Games
There is a simple explanation for the growing popularity of business games: they work. Overwhelming scientific evidence confirms that the use of games and simulators improve the learning process. Why? There are at least three reasons:
- Learning by doing. The secret to success of business games resides in their capacity to represent real-life problems and afford the direct practice of knowledge and skills via simulators. Learners are given a safe environment (therefore lacking economic risks) to immerse themselves in the same corporate issues that company executives face regularly, responding and interacting with them from the very beginning.
- Interactive learning. Another key aspect of business games is their capability to capture learner engagement and participation. Numerous studies demonstrate that our brains remember knowledge better if we actively participate or interact when learning it. Compared to classroom-based or video lessons, business games bolster the direct participation, including emotional involvement, of the learners.
- Cost reduction. Even though developing a good business game requires time, knowledge and money, once created, economies of scale entail an enormous competitive advantage. Unlike classroom lessons, these business games can be quickly and securely implemented anywhere in the world. Many of the best business games currently available only require learners to have smartphones and an Internet connection.