Innovation and Creativity in Business
Education: Preparing Today's Business
Students for Tomorrow's Workplace
2014 IACBE Annual Conference and Assembly
San Diego, California, USA
April, 2014
The Games Students Play:
Using Business Simulations to Prepare
Tomorrow’s Business Leaders
Thomas D. Cairns, DBA, Fulbright Scholar, Associate Professor,
Graduate School of Business, Azusa Pacific University
Roxanne Helm-Stevens, DBA, Program Director Master of Arts in
Management, Associate Professor, School of Business, Azusa
Pacific University
Cindy Richmond Peck, MA, Program Administrator, Undergraduate
Programs, School of Business, Azusa Pacific University
True or False
True
1. Video games, hardware and accessories produces 4 times
($20B) the annual revenue of the NBA ($5B)
False 2. The average age of a game player is 15.
True
3. 72% of American households play computer or video games.
True
4. 77% of gamers who play with others play at least 1 hour per week
False 5. Boys under the age of 17 represent a significantly greater
population of game players than women over the age of 18.
True 6. 55% of gamers play games on their phones or handheld device.
Let the Games Begin
https://secure.videogamevoters.org/pages/top_10_gamer_facts/
Contents
I.
II.
III.
IV.
V.
VI.
Executive Summary
Background
Literature Review
The Simulation
Research Study
Conclusion
Executive Summary
Using Business Simulations to Prepare
Tomorrow’s Business Leaders
This study presents a comparison of student perception of
simulation game strategy as a learning methodology as
opposed to traditional teaching methodologies.
Additionally, this research examines student perception of
the effectiveness of simulation game strategy as a learning
pedagogy. Finally, this study compares the data gathered
from similar classes in the European Union and the USA.
Introduction
Since business simulation games (BSG) were first used in the
1950’s nearly 100% of business schools have adopted
simulations in their undergraduate, graduate and executive
education curriculum. Technology and access to the internet
has contributed to this growth. However, the effectiveness
of business simulations in teaching effectiveness ranks behind
lectures, and case studies.
This presentation will describe the implementation and
effectiveness of business simulations to teach critical
thinking, problem solving and decision making to
undergraduate and graduate students in the traditional and
online classroom. This presentation will include empirical
measurements of the educational effectiveness of BSG’s to
teach critical leadership and management skills.
Brief Literature Review
• Participants who used simulation performed significantly
better than those who read from a text (Taylor & Chi, 2006)
• Since 1962 Usage has Significantly Increased (71% to 98%)
among AACSB schools (Faria, 1998)
• Optimal teaching and learning occur when teaching styles
align with learning styles. (Proserpio & Gioia, 2007)
• Simulations support a team learning process, and enhance
collaboration skills and overall understanding of the functioning of
business organizations. (Lainema, & Lainema, 2008).
• Respondents prefer collaborative and technology-rich
learning and deemed games a valuable teaching method
(Bekebrede, Warmelink & Mayer, 2011).
• Transfer of learning may be associated with various methods of
teaching the simulation and various aspects of student involvement in
the simulation. (Mayer, Fraccastoro & Moss, 2011).
Background
In addition to the simulation, course assignments
included lecture, reading, exams, and exercises.
•Students participated in the simulation throughout the
semester, with nine decision weeks.
•Subjects covered in the simulation included: start-up
decisions, marketing, operations, management, and
accounting.
Research Methodology
Data was gathered in the Fall 2013 semester from two
business undergraduate classes.
Students Used the Same Textbook – Effective Management
(Chuck Williams) .
Both courses are required for business students.
Students participated in the simulation through nine
successive rounds of play.
Introduction to Management and Teamwork
(National University of Ireland at Maynooth )
Catalog Description:
To develop an appreciation of the broad range of
topics that influence the practice of management to
include: theories of groups and effective teamwork;
the development of management as a field of study
and practice; the evolution of management thought;
management functions, processes and practices;
ethics and future challenges.
BUSI 210: Principles of Management (APU)
Catalog Description:
Elements of planning, organizing, leading, and
control are covered. Particular emphasis is given to
organizing and actuating responsibility and authority,
delegation, decentralization, the role of staff, linestaff relationship committees, board of directors,
organization charting, formal and informal
organization, communication, and reaction to
change.
Simulation: Functions of Management
Determining the goals for
the organization and the
means for achieving them.
Henri Fayol
“Father of Modern Management”
Monitoring progress
toward goal
achievement, taking
corrective action as
necessary
Deciding who will do
what, when, and
where
Inspiring and
motivating workers to
achieve organizational
goals.
Management is a Learned Behavior
Simulation Learning Activities
BizCafe Simulation
Learning Objectives:
Opportunity to learn the fundamentals of business by
running a simple start-up enterprise
Manage staffing and recruiting for a service business
Learn about the impact of marketing and promotion
Practice running the operations side of a small
business
Groups of 4 or 5
Understand how to read and utilize basic financial
statements
Discover the importance of customer satisfaction
Students play the role of coffee shop manager making management, marketing,
operations and accounting decisions. Students will compete with other groups,
competing directly with each other.
BizCafe Simulation
Practice operating and managing a small business using an online simulation.
Focus on learning in an applied way.
Compete against the rest of the class.
Develop a business by planning the following factors critical to every new
venture:
 Management – Whom should I hire? What should I pay
them?
 Marketing – What price should I charge? How do people
learn about my business?
 Operations – What and how much should I purchase?
What equipment do I need?
 Accounting- How do I keep track of money?
The Simulation will be graded based on final cumulative results – (cumulative net income,
customer satisfaction, brand awareness, quality, and employee turnover) - performance of
the business.
• The simulation consists of 9 rounds (weeks) with decisions due at the end of each round.
• Each group prepared a brief report detailing different aspects of the simulation.
Team Paper
I.
Introduction
1.
2.
3.
Provide a brief background on the teams approach to Planning, Organizing, Leading and Controlling.
Did the team behave according to the Team contract?
Briefly discuss the rationale/justification for the following decisions?
a. Management – Whom should I hire? What should I pay them?
b. Marketing – What price should I charge? How do people learn about my business?
c. Operations – What and how much should I purchase? What equipment do I need?
d. Accounting- How do I keep track of money?
II. Team Performance
Assess the effectiveness of the team strategies and tactics using the final cumulative results of the business
(cumulative net income, customer satisfaction, brand awareness, quality, and employee turnover). What
worked? What did not work? What would you do differently if given the opportunity?
III. Team Progress
Using the pre and post results of the High Performance Work Team Questionnaire discuss the team’s strengths and
weaknesses. Which categories helped the team achieve or fail to achieve your goals? What did you learn?
Team Category
Interactive Goals
Resource Optimizing
Conflict Management
Interactive Leadership
Activity Control
Feedback Mechanisms
Decision Style Flexibility
Mutual Assistance
Experimentation
Self-Evaluation
Long-Term Commitment
Performance Influence
Average Score (start)
Average Score (end)
Change +/-
BizCafe Team Paper
IV. Team Development
Discuss how the team successfully overcame or failed to overcome the five dysfunctions outlined by Patrick
Lencioni. Be specific and give examples.
V. Team Effectiveness
What do you believe contributed to your success or failure as a team. Be specific. Explain.
VI. Applying Management Principles
How did this simulation help you understand and apply the principles of management?
The paper must be written in a professional business manner and tone and include a thorough
insight and business analysis of the operations of the business. Each paper must be 7-9 pages
in length and typed double-spaced. Papers must be turned in hard copy (including all graphs
and excel spreadsheets).
Team Presentation
Reflect on the BizCafe experience and compare your decisions and outcomes
with others in the class.
You will present only the most important aspects of your experience.
Assignments should be prepared in PowerPoint and will be presented to the
entire class.
Please keep the presentation to 5-7 minutes, but cover at least these points:
• Highlights of your plan including your objectives and how you chose to
achieve those objectives
• Your café logo and advertisement/storefront (if applicable)
• Number of servers employed and wages
• Your financial performance, including a discussion of important items on
your income statement and balance sheet
• Key success factors in BizCafe
• Important “take-aways” from the simulation experience
Applying Strategy and Innovation to BizCafe
Think Long-Term but Execute Short-Term
1)Using Porter’s Five Industry Forces, map the coffee shop
industry
a) Competitive landscape - Assess the character of the
rivalry among competitors (degree of aggressiveness)
b) Products, Operations and Technology
2)Review the framework of Direct Competition.
a) How do market commonality and resource similarity
interact
3)How can you create a sustainable competitive advantage (i.e.,
menu, pricing, atmosphere, etc.)?
a) Improving efficiency and effectiveness
b) Not possessed by many competing firms
c) Extremely costly or difficult to duplicate
d) Competitors cannot substitute or produce similar
value).
4.What are your distinctive competencies and core capabilities?
a) What restaurants are highly successful in our (local)
market? What factors do you think account for their
success? Have any of these restaurants been
successful for more than five (5) years?
…We asked ourselves, 'If Starbucks did not exist, what
type of coffee experience would we create?“
- Howard Schultz
Research Study
Simulation Usage at AACSB Schools
(Faria, 1998)
•
Sample Size (50% of AACSB members)
•
Since 1962 Usage has Significantly Increased (71% to 98%)
•
Highest Usage at Undergraduate Level
•
Highest to Lowest Usage (Bus. Policy, Marketing, Management, Finance
and Accounting)
•
Approximately 25% of classroom time
•
Faculty ranked Lectures and Case Number 1 in Teaching Effectiveness
(same as Simulation NonUsers)
•
Simulation Users ranked Simulations Number 1 in Teaching
Effectiveness
Business Simulations Are Alive and Growing
Student Feedback from Simulation Experience
Question
1
2
3
4
5
The class lectures and exercises were the most effective
way to learn about management.
20%
57%
60%
36%
16%
7%
3%
0%
0%
0%
The BizCafe simulation was the most effective way to
learn about management.
26%
43%
46%
43%
16%
14%
10%
0%
0%
0%
The textbook was the most effective way to learn about
management.
13%
7%
30%
0%
23%
47%
30%
27%
6%
20%
Did the simulation help you understand the challenges of
running a small business?
40%
50%
46%
29%
6%
14%
7%
7%
0%
0%
How satisfied were you with the simulation experience?
23%
43%
50%
29%
26%
29%
3%
0%
0%
0%
Did the simulation increase your interest in studying
management?
23%
38%
43%
38%
26%
15%
6%
8%
0%
0%
Did your experience with the simulation contribute to
your understanding the principles of management?
16%
31%
66%
69%
13%
0%
10%
0%
0%
0%
Likert Scale
1.
Strongly Agree
2.
Agree
3.
Slightly Agree
4.
Disagree
5.
Strongly Disagree
Red – APU results
Black – NUIM results
Student Feedback from Simulation Experience
Question
APU
NUIM
1. Start Up
Decisions
16%
13%
2. Management
16%
7%
3. Marketing
46%
47%
4. Operations
26%
20%
5. Accounting
10%
13%
In your experience with the simulation,
which aspect did you learn the most from?
Summary
Simulation Experience at APU and NUIM
(Cairns & Helm-Stevens, 2013)
• Sample Size (120 Undergraduate Students)
• Students Ranked Lectures Number 1 in Teaching Effectiveness
• Simulation contributed to understanding the business challenges
(79% satisfied to very satisfied)
• Simulation increased interest in studying management (76 %
satisfied to very satisfied)
• Simulation contributed to understanding the principles of
management (100% satisfied to very satisfied)
• Students ranked Marketing as the Number 1 Learning Outcome
Business Simulations Add to Learning
Conclusion
Our results show that students ………….
although simple decision-makings skills can be acquired
with traditional teaching methods, simulation games
are more effective when students have to develop
decision-making abilities for managing complex and
dynamic situations.
And, when the simulation is embedded into classroom
assignments, such as, lecture, papers, and
presentations.
The class lectures and exercises were the most effective way
to learn about management.
57% 60%
A.
Strongly Agree
B.
Agree
C.
Slightly Agree
D.
Disagree
E.
Strongly Disagree
36%
20%
16%
Key:
7%
3%
Maynooth, Ireland – Orange
California, USA - Red
0%
0%
0%
The BizCafe simulation was the most effective way to learn
about management.
43% 46%
A.
Strongly Agree
B.
Agree
C.
Slightly Agree
D.
Disagree
E.
Strongly Disagree
43%
26%
16%
14%
10%
0%
Key:
Maynooth, Ireland – Green
California, USA - Black
0%
0%
The textbook was the most effective way to learn about
management.
47%
A.
Strongly Agree
B.
Agree
C.
Slightly Agree
D.
Disagree
E.
30%
30%
23%
Strongly Disagree
27%
20%
13%
7%
6%
0%
Key:
Maynooth, Ireland – Orange
California, USA - Red
How satisfied were you with the simulation experience?
50%
43%
A.
Very satisfied
B.
Satisfied
C.
Somewhat satisfied
D.
Somewhat dissatisfied
E.
Very Dissatisfied
29%
23%
26%
29%
3%
0% 0% 0%
Key:
Maynooth, Ireland – Green
California, USA - Black
Did the simulation help you understand the challenges of
running a small business?
50%
46%
A.
Strongly Agree
B.
Agree
C.
Somewhat Agree
D.
Disagree
E.
Strongly Disagree
40%
29%
14%
6%
7%
7%
0%
Key:
Maynooth, Ireland – Orange
California, USA - Red
0%
Did the simulation increase your interest in studying
management?
43%
A.
Strongly Agree
B.
Agree
C.
Somewhat Agree
D.
Disagree
E.
Strongly Disagree
38%
38%
23%
26%
15%
8%
Key:
Maynooth, Ireland – Green
California, USA - Black
6%
0%
0%
Did your experience with the simulation contribute to
your understanding the principles of management?
A.
Strongly Agree
B.
Agree
C.
Somewhat Agree
D.
Disagree
E.
Strongly Disagree
66%
69%
31%
16%
13%
10%
Key:
Maynooth, Ireland – Orange
California, USA - Red
0%
0%
0%
0%
In your experience with the simulation, which aspect did you
learn the most from?
A.
Start-up decisions
B.
Management
C.
Marketing
D.
Operation
E.
Accounting
46%
47%
26%
20%
16%
16%
13%
13%
7%
Key:
Maynooth, Ireland – Green
California, USA - Black
10%
Discussion of Findings
“I attended your Introduction to Business
Management Class last semester, and it was one of
my favorite classes (Kanga Brew). I think I learned
the most because you gave us a hands on
opportunity to really learn the types of choices we
will have to make in the business world.”
-student quote
Bibliography
Bekebrede, G. G., Warmelink, H. G., & Mayer, I. S. (2011). Reviewing the Need for Gaming in
Education to Accommodate the Net Generation. Computers & Education, 57(2), 1521-1529.
Cronan, T., Leger, P., Robert, J., Babin, G., & Charland, P. (2012). Comparing Objective
Measures and Perceptions of Cognitive Learning in an ERP Simulation Game: A Research
Note. Simulation & Gaming, 43(4), 461-480.
Lainema, T., & Lainema, K. (2008). Advancing Acquisition of Business Know-How: Critical
Learning Elements. Journal Of Research On Technology In Education, 40(2), 183-198.
Leemkuil, H., & De Jong, T. (2012). Adaptive Advice in Learning with a Computer-Based
Knowledge Management Simulation Game. Academy Of Management Learning &
Education, 11(4), 653-665. doi:10.5465/amle.2010.0141
Mayer, B. W., Dale, K. M., Fraccastoro, K. A., & Moss, G. (2011). Improving Transfer of
Learning: Relationship to Methods of Using Business Simulation. Simulation &
Gaming, 42(1), 64-84.
McRaith, J. F., & Goeldner, C. R. (1962). A Survey of Marketing Games. Journal of
Marketing, 26(3), 69-72.
Bibliography
Ogunleye, A., Owolabi, T., & Adeyemo, S. (2013). The Design and Development of a WebBased E-Learning Platform for the Understanding and Acquisition of Various
Entrepreneurial Skills in SMEs and Industry. Online Submission.
Pasin, F., & Giroux, H. (2011). The Impact of a Simulation Game on Operations Management
Education. Computers & Education, 57(1), 1240-1254.
Proserpio, L., & Gioia, D. A. (2007). Teaching the Virtual Generation. Academy Of
Management Learning & Education, 6(1), 69-80. doi:10.5465/AMLE.2007.24401703
Stainton, A. J., Johnson, J. E., & Borodzicz, E. P. (2010). Educational Validity of Business
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Business
Simulation
Teaching
Effectiveness
Assessment
Likert Scale
A.
B.
C.
D.
E.
A.
B.
C.
D.
E.
A.
B.
C.
D.
E.
A.
B.
C.
D.
E.
The class lectures and exercises were the most effective way to learn about management.
Strongly Agree
Agree
Slightly Agree
Disagree
Strongly Disagree
The BizCafe simulation was the most effective way to learn about management.
Strongly Agree
Agree
Slightly Agree
Disagree
Strongly Disagree
The textbook was the most effective way to learn about management.
Strongly Agree
Agree
Slightly Agree
Disagree
Strongly Disagree
How satisfied were you with the simulation experience?
Very satisfied
Satisfied
Somewhat satisfied
Somewhat dissatisfied
Very Dissatisfied
Business
Simulation
Teaching
Effectiveness
Assessment
Likert Scale
A.
B.
C.
Did the simulation help you understand the challenges of running a small business?
Strongly Agree
Agree
Somewhat Agree
Disagree
Strongly Disagree
Did the simulation increase your interest in studying management?
Strongly Agree
Agree
Somewhat Agree
Disagree
Strongly Disagree
Did your experience with the simulation contribute to your understanding the principles of
management?
Strongly Agree
Agree
Somewhat Agree
Disagree
Strongly Disagree
In your experience with the simulation, which aspect did you learn the most from?
Start-up decisions: name, furniture, espresso machine
Management: Whom should I hire? What should I pay them?
Marketing: What price should I charge? How do people learn about my business?
D.
E.
Operation: How much should I purchase? What equipment do I need?
Accounting: How do I keep track of money? What is an income statement and balance sheet?
A.
B.
C.
D.
E.
A.
B.
C.
D.
E.
A.
B.
C.
D.
E.