Business Simulation and Gaming - Way forward for the Managers

Published by MBA Skool Team, Published on October 06, 2012

Business Simulation and gaming, an environment which is going to revolutionize the learning blueprint of the future managers, is considered by many companies as a teaching medium for managers. This article looks at how "learning by doing" can be reinvented using Business Simulations in the corporate world.

The Indian Gurukul system, one of the most successful ancient education systems, states that: “Mastery in a field can only be attained if one is immersed in it” (Gurukul, 2011). This universal truth can be applied across ages and also across various aspects of learning. In the current IT world, less than 30% of the projects are getting completed (Why Technology Projects Fail, 2012). This is a shambolic figure considering all latest technologies, external consultants, experienced managers, and young innovative managers from top-B-schools. According to Dun & Bradstreet statistics, 88.7% of all business failures happen due to managerial mistakes (Holland, 1998). It is time for us to ponder on the reason behind these failures. The most simplistic reasoning that one can apply here is that “learning by listening” has gradually overtaken the “learning by doing” process.

Here's what Confucius, a Chinese teacher has to say, "I hear and I forget. I see and I remember. I do and I understand" (Percepsys). It is only by doing that a person can understand. Managers will only understand how to take decisions on complex systems by having proper experience of working on it.  One can be cynic and argue about how video and simulation games can help managers solve complex business problems. The Ex-CIO of Starbucks, Stephen Gillett, was only 32 years old when he became the CIO. He is one of the youngest senior executives of a Fortune 500 company. When asked on how he got the managerial experience at such young age, he replied by saying that he got it from playing World of Warcraft, which as we all know is a video game (Lee). This shows that one can definitely utilize experiences from the virtual world.

So, what is a Business Simulation? How will it be helpful in making decisions? Business simulation is the process of creating a virtual business environment for managers and board members to make best business decisions and to derive pertinent solutions for complex problems. These simulations would habituate the managers to difficult real life problems.  The problem with current business leaders is that they have gone through theoretical based approach of learning where they were not exposed to hands on problem solving. A business simulation broadens the prejudiced mindset of a manager. For instance, rather than taking a seminar on risk management, a manager will definitely benefit more if he  is exposed to a simulated risk related situation and asked to learn the problems through a hands-on approach. The decisions he takes when a business problem arises will also be practical and realistic. If managers were better equipped to make decisions which affect the global economy, probably the great crisis of 2008 would not have even occurred. There is a definite need for companies to rethink their strategy and groom their managers.

Monotonous theoretical training given to the managers in classrooms will not effectively engage managers and often they will be lost in their own thoughts. Seeking the listener’s attention is extremely difficult and the speaker needs to be really good in order to maintain the required level of engagement. The desired output of the training is never reached. Here is where business simulations can play a vital role in engaging the managers in such a way that they are excited to play more. Still, there is reluctance on the organizations side to implement the Business Simulation process. Ice breaking sessions should be conducted to make the organization believe that these simulations are not just games and it is in fact the future way of learning. Some companies like Deloitte, Capgemini have already started experimenting with this new concept (Accelerate the implemetation of Corporate Resposibility and Sustainability, 2010).

Some top business schools have started including this in their curriculum to make future managers accustomed to the simulation environment. B-Schools like the Harvard School of Business are changing their mode of teaching to learning through simulations. Even several exams are conducted through simulations. Harvard has simulation software’s like Supply Chain Management - Root Bear Game, Working Capital Simulation etc. and the students performances are evaluated using these simulations (Harvard Business Publishing, 2012). These enable students, the future mangers, to scale up their experience and be confident of the decisions they take in the near future.

One major advantage of simulation is that as the managers are exposed to more such scenarios; their rationale behind decisions will be clear and precise. According to Gary Kasporav, “Chess is just not a game of checks, but it is a game that educates one in business strategy and competition”. A business simulation helps any manager prophesize a future problem they might encounter by taking a decision and learns how to avoid these problems altogether. The current failure in business decisions is mainly due to the fact that managers are exposed to these situations for the first time in their life.  Making them go through these business scenarios through simulation will make real life problems easier to solve with much risk.

A lot companies are working on building a realistic simulation environment to make sure that the managers can take a leaf out of their simulation experience and apply it in companies’ real time problems. Before implementing a simulation environment for training managers, a lot of customization needs to be done for a particular business scenario. This is a transformation which makes managers more effective than they are now. Losses incurred by companies due to managerial mistakes are humongous and rather than blaming the managers, the company can invest on business simulation projects to create better managers, the pillars of a company’s success.

The working environment through simulations makes work more attractive to the managers. According to the 10000 hour rule, an expertise in any field can be achieved with an experience of 10000 hours in the field (Tomforde, 2012). A study reveals that most of the people would spend 10000 hours playing video games before the age of 25. The above facts can be used to inculcate better decision making skills. This not only helps managers take better decisions but also helps the company to provide a brilliant work culture for its employees (McGonical, 2011).

There are a number of products in the market that can be used to scale up knowledge at a faster rate. Knolskape, an Indian firm headed by Rajiv Jayaraman, is creating products, using the concept of simulations, to scale up experience at a faster rate. Learning by gaming and simulation does not mean that one has to get rid of the traditional way of leaning. There is a gap that exists between the traditional way of learning and taking business decisions. This learning through simulation and gaming would help in bridging the gap and it will act as a catalyst for taking successful business decisions in the future.


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Lee, T. (n.d.). Best Buy lands new leader for digital side. Retrieved from Star Tribune:

McGonical, J. (2011). We spend 3 billion hours a week as a planet playing videogames. Is it worth it? How could it be MORE worth it? Retrieved from Ted:

Percepsys. (n.d.). Simulation based e-elearning. Retrieved August 2012, from Percepsys:

Tomforde, M. (2012). Having a Grand Project: Advice for Graduate Students. Retrieved from Having a Grand Project: Advice for Graduate Students:

Why Technology Projects Fail. (2012). (C. C. Ltd, Producer) Retrieved from Why Technology Projects Fail:

This article has been authored by Deebak Mohan and Pawan Kumar Vadulas from S P Jain School of Global Management, Dubai, Singapore, Sydney.

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Views expressed in the article are personal. The articles are for educational & academic purpose only, and have been uploaded by the MBA Skool Team.

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