THE INTEGRATION OF ECONOMIC AND HUMAN RESOURCE
ASPECTS BY USING COMPUTER BASED TOOLS
Emanuel Blattner, Anders Tveit and Stig Ytterstad
Norwegian School of Management, P. box 4636 Sofienberg, 0506 Oslo, Norway, E-mail:
emanuel.blattner@bi.no, anders.tveit@bi.no, stig.ytterstad@bi.no
(i)
Aim of the paper
The focus of this paper is on presenting the integration of subjects such as macroeconomics,
organizational behavior, decision-making processes, group dynamics and conflict solving in one
and the same course by using a computer based tool for simulation models.
(ii)
Abstract
This teaching method gives the students a deeper understanding of economics as well as the
knowledge of the interaction between companies, financial institutions and the government. In
addition, the students are required to make decisions in an economy characterized by high
volatility. Students are divided in to groups consisting of 3 to 4 members.
Human resource problems are integrated into the course by using the decision-making processes
in the groups. Group dynamics, negotiation skills and conflict solving theories are consequently
intercalated with macroeconomic analysis. The resulting interaction between the different
subjects studied holistically is unique and even more effective when supported by computerbased tools such as, for instance, simulation models. Decisions involving both economic and
human resource problems are made in a simulation model, which recreates the decisions in a
virtual reality. The results from the decisions are obtained simultaneously and used later in the
course.
Economic aspects dealt with during the course include national accounts and economic growth,
macroeconomic policy in an open economy, the behavior of interest rates, market theory and
market imperfections and the demand theory. Human resource problems dealt with during the
course include motivation theories, perception, decision-making behavior, group dynamics,
communication, and negotiation theories. As already mentioned above, the human resource
aspects are not taught separately but in direct connection to the group work carried out in those
areas of the course devoted to economics.
(iii)
Conclusion
By using the above-mentioned teaching method we have experienced significant positive
response from students. The students are able to make decision in a holistic context, including
both economic and human resource issues. The use of computer based tools enables the
students to carry out their work in a world very closely aligned to the real. Gap time between
the making of decisions and students’ reception of feedback on those decisions is a reduced
substantially.
1.
WHAT ARE COMPUTER-BASED SIMULATION MODELS?
Computer based tools can, in a simplified but realistic fashion, simulate the interdependencies and
goal conflicts of a modern economy. As an interactive learning method, an macroeconomic
simulation gives participants the opportunity to gather relevant experience very quickly and without
risk. The method is often called “learning business by doing business”. Since 1970 simulation
models have been used as a teaching method both among managers and at universities and
management schools (Keim, 1992)
2.
THE ROLE OF THE PARTICIPANTS IN THE SIMULATION
During the session participants learn which internal and external factors have an influence on
reaching their goals. Simulation models focus on team thinking, and use holistic problem approach
and holistic decision-making. Simulation models enable the course participants to use knowledge
gathered in previous stages and the training of making decision in a realistic environment.
3.
LEARNING OBJECTIVES WHEN USING SIMULATION MODELS
(Bernt Høgsdal, 1996)
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4.
Defining objectives and strategies for reaching the goals
Converting the strategies into economic decisions
Establishing early warning system, and analyzing critical situations
Applying macroeconomics in a useful way
Increasing the transparency of the decisions which have been made
Increasing understanding of dynamic processes in groups
Training skills in organizational behavior and conflict solving
THE MACROECONOMIC SIMULATION (TOPSIM-Macro Economics)
In the simulation the participants are faced with the following challenges:
 The prosperity of a country can be improved if it succeeds in maintaining and developing its
competitive advantages
 Dealing with both economic and human resource problems to reach strategic objectives
4.1 Model structure
The simulation model is designed to reflect the essential interdependencies of an economy. Teams
consisting of 3 to 4 members represent the major sectors of the economy, such as the central bank,
the government, trade unions, financial institutions and industrial companies. The success of any of
these sectors is not only dependent on their own decisions, but also on the reaction of the other
sectors. Conflicting interests are to be dealt with and in order to build up a prosperous economy,
the sectors have to exchange information.
4.2 Learning objectives
The participants experiences effects of the economy in progress on their own sector and how each
sector participates in the economy. They learn the range of decisions of their own sector and use
this knowledge in cooperation with the other sectors. They learn to analyze the changes in the
economic, political and social environment. In addition they deal with group dynamics,
negotiations and conflict solving as well as general management problems.
5
PEDAGOGICAL PLATFORM
With regard to how we look upon learning, we support both Piaget’s cognitive constructivism
(Piaget, 1969, 1973) and Vygotsky’s social constructivism (Vygotsky 1962, 1978, 1987). This
means that in our teaching we try to create situations in which accommodation processing is
encouraged (according to Piaget). The point is that the students should reconsider their opinions and
make new interpretations. It is also important that periods of solving new problems are followed by
periods of repetition in order to create balance between new and old material (assimilation versus
accommodation according to Piaget’s equality principle). The important thing about these processes
is that they create operating knowledge that is sustainable and “owned” by the student. At the same
time we recognize Vygotsky’s point of view that learning is a social phenomenon in which
language contributes to the shaping of our way of understanding the world (Vygotsky 1987).
Like Dewey (1966), we maintain that sustainable reorganizing or reconstruction of
experience is a critical sign of quality in education. Consequently we sequence our teaching in the
following way: we start with a situation of activity in which a problem arises so the students’
thinking will be stimulated. This brings the student into a thinking process, which ends in a
suggestion for a solution. Subsequently the solutions are tried out through applications. This process
consists of both an active and a passive element. The experience has the participants first doing
something active. Reflection then follows as movement back from the action and becomes a critical
element in obtaining successful learning. It is in such a setting role-play and data simulations can be
used to reproduce real situations in which the problems become the students’ own (according to
Dewey 1966 page 161-162).
5.1 The role of the teacher
We support Dewey (1963) when we address two conditions for excellent education. On the one
hand, we must take the student’s experience as a starting point. This, together with each student’s
capacity for development, is the foundation of all further learning. On the other hand, it is the
teacher’s responsibility to provide a plan for development with regard to the expansion and
arrangement of the teaching material. The teaching problem then becomes “to get the student’s
experience to move in the direction of what the expert already can” (Dewey 1966 page 183).
5.2 Scientific working pattern
We have also drawn important aspects from Dewey (1966) regarding our experience-based teaching
methods. This concerns both our use of hypothesis instead of well-defined truth, testing of
hypothesis through consequence surveys and a look back for a critical consideration of the
consequences of the thesis. All these elements are important for a reflected overview and to reach
summing conclusions. The working pattern becomes important at this point with regard to students’
ability to conduct themselves rationally.
Like Dewey we criticize traditional teaching because we think it fills the students’ heads with
ready-made subjects and data and that an accumulation of badly digested data is the end result. This
does not function as education for students.
Our education is aimed at focusing on the learning results’ abstraction, generalization and
formulation.
6
THE STRUCTURE OF A COMBINED COURSE IN ECONOMICS AND HUMAN
RESOURCES
The participants are at the beginning of the course divided into groups consisting of 3 to 4 members.
Each group takes over one of the sectors in the simulation (central bank, government, trade bnions,
banks and industrial companies). Each group defines their strategic objectives and how they are
going to reach their goals.
6.1 Presentation of the strategy
The participants prepare a presentation of their targets in plenary sessions. The other sectors and
the instructors, as “journalists”, have the opportunity to ask questions about the strategy.
The presentation of the strategic targets gives the participants the possibility to get acquainted with
the goals of the other teams.
6.2 Preparing a detailed plan for the next year
The participants analyze the initial situation of the sector and the strategy they have chosen. Using
a personal computer, they are now taking decisions concerning their sector. Each decision is
entered into the simulation model. The results from decisions are calculated immediately and
changes are made if necessary. The participants must now actively exchange information with the
other groups in order to obtain a maximum information level and to improve their decisions.
Negotiations take place between the employees and the employers about wages and social security.
The trade unions represent the interest of the employees. They negotiate with the employers over
wages, social security and working time. If the negotiations are not satisfying or unsuccessful, the
trade unions can decide on an official strike and accordingly on the length of the strike.
6.3 Implementation of psychology
How to implement the different psychological subjects such as: motivation theories, perception,
decision behavior, group dynamics, communication, and negotiation theories in the simulation?
The frames of these courses are as follows: The course is held at a hotel. Normally we have one
major common room with a flat floor, and a pair of smaller group rooms nearby. The central room
has a TV and video.
The participants are divided into six groups, each with one PC. Dividing into groups can be done
several ways. It can be done randomly, or we (the instructors) guide the process, on the basis of our
judgment of the participants’ competence. We try to spread competence evenly among the groups.
The discussion surrounding what is called the ”knowing -doing gap” will be familiar. Academics
are known to emphasize the “why” question to handle challenges. It has been less important to
show “how”. We put a lot of focus on the “how”.
The seminar starts with an icebreaker and team building exercises. Participants get to know each
other, and they become more aware of group dynamics. This is important since they have to work
closely afterwards. Our aim through this starting process is to create a good climate for learning.
Research shows that climate is of key importance for further flow in the learning process
Within the field of pedagogics the concepts of inductive and deductive learning are important.
Inductive learning is when the experience is had first, and explanation of theory comes
subsequently. An example of this might be to take a child’s hand and put it on a warm plate. When
the child is asked what it learned, it might reply, “the plate is warm.”
Deductive learning is to be told that the plate is warm, and subsequently to have the hand put on the
warm plate.
Some scientist like Dewey (1963) believe that inductive learning is often a deeper learning process,
and the experience is remembered much longer, than something explained.
A lot of theory exchange is done by inductive learning, by reflection and discussion of theory
afterwards. It is known from the literature (Jensen 1995(2), Dryden and Vos 2001), that to
experience and discover new “things” by oneself makes it far easier to remember and learn for the
student.
Several psychological theories that are central to motivation are the cognitive containment theory,
the social-cognitive theory, and the brain-based learning theory.
Our focus is twofold: partly we want them to have an understanding of how knowledge about these
theories can be useful for them in the simulation processes, partly how they can use this knowledge
further on in the organization they came from.
The understanding of perception’s important role, and possible problems misperceptions may cause,
are also covered. We explain how factors such as biology, schism , motivation and affect may have
a great influence on the results of a perception process. It is important to have knowledge of this, so
the perception can be quality tested.
It is known from research within management (Nutt 1999) that decisions often go wrong, and that
they are biased. After a review of these theories, the students exercise techniques to quality check
decisions. The main principle of learning is that the students, after the introduction of the main
theory, exercise it. Later on they practice this, during the simulation.
Since success in the simulation is dependent on good teamwork, it is important for the participants
to have an introduction to the main principle of good dynamics. To master and use the differences
in a team and to achieve good results make up an important part of the learning process. This
implies that they also learn about several key aspects of conflict and conflict management. This is
important in order for them to be able to manage disagreement in a constructive way, and to use
their energy constructively.
How to communicate clearly and effectively, both to one’s own teamand to the other teams with an
optimal communication, becomes an important learning goal.
To be aware of optimal communication with the receiver is something the participant is actively
trained to recognize. To be aware of central communication mechanisms, and to use them
constructively, is of great importance.
Skills in negotiations are central both in the simulations and in real life. After a short introduction to
basic theory and mechanisms involved, participants get hands-on experience. A live negotiation is
carried out with the lecturer present.
These are the theories that build the basis for the further learning process. Each team has a function
to fulfill. They have a limited set of figures they have to understand. To obtain the ultimate effect of
the simulation, they must know their own sector, while keeping the whole simulation in mind. The
participants must be able to communicate and co-react within the groups in order to reach a good
result. Furthermore, as the play goes on they must be able to negotiate with each other. That is an
important part of the process. They themselves develop negotiation skills that they get direct
feedback on. The feedback will partly be seen through the negotiation result and more specifically
through personal feedback for their efforts.
6.4 Evaluation of the team decisions
After having reached an agreement in the negotiations concerning wages, social security and
working time, each team completes their decision and they are then delivered to the game
management by use of a computer. The decisions of all sectors are now simulated in a model and
the results for each sector and the entire economy are produced immediately. The model produces
reports for the entire economy as well as for each sector. The groups now discuss the results and are
supported and guided by teachers. There will be focus on achievements and errors made during the
first period and the teachers will point to several factorsthat were the reason for the results.
By using the results of the previous period and a scenario of the economic situation for next period,
the participants will make decisions for the following period. This gives the participants the
possibility to repeat previously gained knowledge.
7
COURSE DATA
Basically our courses, based on the macroeconomic simulation model, have been 3 day
introductions to economics, with 25- 40 participants. All in all, approximately 15 courses have been
carried out. One-semester introduction courses in Bachelor’s level economics have also been held,
ECTS credits 6 (4 times), economic and financial change, 3rd year Bachelor’s, ECTS credits 15 (7
times) and a course described in a paper entitled, “Economics and Psychology,” ECTS credits 15.
3rd year Bachelor’s (4 times).
All together we have had approximately 900 participants at our courses.
In a course, each group have their own personal computer - a total of 6. Besides this we use one
master computer connected to a projector and a copy machine. The computers are not connected.
Instead we use diskettes when collecting data.
At the end of the course participants were asked to write down what kind of words they would use
to characterize the course.
The most common replies have been:
 Incredible that such a topic (economics) can be fun
 Interesting
 Instructive
 Informative
 Exciting
 Different
8
CONCLUSION
The teaching method gives the students a deeper understanding of economics, as well as the
knowledge of the interaction between companies, financial institutions and the government. In
addition the students are required to make decisions in an economy with high volatility. Students
are divided into groups consisting of 3 to 4 members.
Human resource problems are integrated into the course by using the decision processes in the
groups. Group dynamics, negotiations and conflict solving theories are dealt with in between the
macroeconomic analysis. The interaction between the different subjects studied in a holistic way is
quite unique and even more sufficient when supported by computer-based tools, such as for
instance, simulation models. Decisions involving both economic and human resource problems are
made in a simulation model, which simulates the decisions in a virtual reality. The results from
decisions are obtained simultaneously and used further on in the course.
Economic aspects dealt with during the course are national account and economic growth,
macroeconomic policy in an open economy, the behavior of interest rates, market theory and market
imperfections and the demand theory. Human resource problems dealt with during the course are
motivation theories, perception, decision behavior, group dynamics, communication, and
negotiation theories. As already mentioned above the human resource aspects are not taught
separately but in direct connection to the group work carried out in the economic part of the course.
By using the above-mentioned teaching method we have experienced an enormously positive
response from students. The students are able to make decision in a holistic way including both
economic and human resource problems. The use of computer based tools enables the students to
carry out their work in an almost real world. The time between the decision making process and the
feedback to the students is shortened down substantially.
9
CLOSING AND FURTHER RESEARCH
To us, an important aspect of our focus is the student’s attitude towards economic topics. As we
claimed in the pedagogical platform section, it is our opinion that students, in traditional teaching,
very seldom use such words as mentioned in this paper to characterize a course in economics.
Several hundred years ago, economics was called “the sad science” (Coyle 2002), perhaps because
of all the sad subjects they were discussing, like reception, unemployment, poverty, starvation and
death. Nonetheless, this might also be because economists often talk about difficult choices and
priorities like when saying, ”There’s no such thing as a free lunch”.
Anyway; we want to study the student’s attitude towards the subject of economics. Could it be that
our teaching methods, and holistic thinking, might make a difference in student attitudes? Could it
be that the use of role-play and simulations could make students believe that economics is fun,
interesting and exciting? It would be interesting to make a comparative study of students learning
economics in traditional classes contra students in our courses.
It would be in the nature of such a study that it be a “quasi-experiment.” That is to say, an
experiment in which units are not assigned to conditions randomly.
It would be a quasi-experiment with a design composed of a pre- and post test. If it were possible to
arrange, we would also have a control group. Latent Variable Structural Equation Modeling
(LISREL) is a statistical technique developed to handle data from quasi-experiments. It would
consequently be natural to use that tool.
LITERATURE
Coyle, Diane (2002): Sex, Drugs & Economics, An unconventional introduction to economics.
Copyright 2002 by Diane Coyle.
Dewey, John (1963): Experience and Education. New York: Collier-Macmillian.
Dewey, John (1964): The Child and the Curriculum, I: R. D. Archambault (red.)
John Dewey on Education. Selected Writings, New York: Random House.
Dewey, John (1966): Democracy and Education. New York: Free Press.
Høgsdal, Bernt. (1996). Planspiele, Kempten: Kösel Gmbh
Keim, Helmut. (1992). Planspiel, Rollenspiel, Køln: Wirtschaftsveralg Bachem
Nutt, P.C. (1999): Surprising but true: Half the decisions in organizations fail. Academy of
Management, executive, 13: 75-90.
Piaget, Jean (1969): Psykologi og pædagogik/ Psychologie et pedagogie. Reitzel, København.
Piaget, Jean (1973): Barnets psykiske utvikling/Six études de psychologie. Gyldendal Forlag. Oslo.
Vygotsky, Lev (1962): Thought and Language. Cambridge, The M.I.T. Press.
Vygotsky, Lev (1978): Mind in Society. The Development of Higher
Psychological Processes, Cambridge, Harvard Univ. Press.
Vygotsky, Lev S (1987): The collected works of L. S. Vygotsky vol 1 in: Robert W. Rieber and
Aaron S. Carton (ed.) Problems of general psychology. New York: Plenum Press.
Information about the macroeconomic simulation model TOPSIM-Macro Economics:
http://www.gamesolution.ch (Aus – und Weiterbildung / Produkte / Simulationen / TOPSIM-Macro
Economics).
Inspiring literature:
Dryden, G & Vos, J., The Learning Revolution, USA 2001.
Howard, P.J., The Owner`s Manual of the Brain. USA 2002
Jensen, Eric, The Learning Brain, San Diego, CA, USA 1995 (1)
Jensen, Eric, Super Teaching, San Diego, CA, USA 1995 (2)
Csikszentmihalyi, M, Flow, 1996