Why use Management Simulations? - Specific advantages
The following is not an axhaustive list but it does demonstrates some of the multi-faceted nature of the advantages to be gained using Topaz-Vbe or Emerald-Vbe as part (and often an integral part) of a management training programme or course.
- GROUP DYNAMICS This is very important but is only viable if there is an assessor with each team. This procedure has been used successfully by a commercial organisation to help identify and select high flyers.
- FINANCIAL DYNAMICS The simulations are ideal for training groups in reading, analysing and using financial data.
The dynamic feature arises because of the constructive, competitive nature of the exercise.
Simulation histories are designed to reflect particular problem areas showing the relationship between the Profit and Loss account,
Balance Sheet and Cash Flow Statements. 'Doing' is a better way to learn how to use financial accounts than the usual lecture process.
The 'talk and chalk' method is nowhere near as powerful as 'experiential learning'.
"I hear and I forget, I see and I remember, I do and I understand" - Confucius - TRAINING FOR SUCCESS The coaching which takes place during the exercise illustrates to team players the way in which information can be used to improve risk taking and analysing proposed development strategies. This is most effective when the team is capable of identifying the skills required and allocating tasks to the team members. The importance of skills such as communication, team management and time management can be demonstrated.
- CROSS FERTILISATION Managers are frequently highly functional and expert in their own departments but woefully ignorant, and often even dismissive, of the difficulties faced my managers in other depatments of the same company. Increasing sales seems to be a valid, if not an unarguably beneficial, objective of the Sales department, but what is the point of increased sales if the Production department is limited in producing the goods. One advantage of Vbe Simutaions, is that it is often very beneficial for participants to be allocated roles within the simulation that is alien to their every-day experience. In that way they can learn (indeed experience) some of the difficulties in participating in a function that they had never really considered in their real-life roles. This can often lead to an increased understanding of the difficulties other manager's face, and a realisation, that to be successful, a company must balance its resources so that individual departments may need to act sub-optimally with regard to its own narrow objectives so that the company's overall objective is optimally achieved.
- MORALE BUILDING Competition among teams is real because results are truly comparative. This generates enthusiasm and team spirit and these qualities build as the Simulation progresses. For standard simulation models, the company's share price is used to rank the performance of teams. For more complex simulations involving simulated companies buying or selling their own shares, investment performance is the equatable criterion used to rank the teams performance. One of the great advantages is that mistakes made in a Simulation can often lead to an even greater learning experience.
- TECHNICAL ANALYSIS The value of forecasting sales orders with underlying trends, seasonality and random variation or the use of mathematical and/or financial modelling for decision making are two examples of the management techniques which can be demonstrated to team members. Clearly, the degree of mathematical analysis that participants can usefully employ will depend on their training and expertise - but Topaz-Vbe and Emerald-Vbe are designed to facilitate quite sophisticated analysis.
- STRATEGIC ANALYSIS Most team players think that strategy is a matter of deciding which grandiose goal should be specified at the beginning. Throughout the Simulation they discover that knowing the strengths and weaknesses of the company and assessing possible changes in the environment are required to develop robust policies with in-built flexibility. The role of shareholders and other financial institutions (investors) have to be considered.
- TUTOR CONTRIBUTION As the tutors gain experience using the simulations they can introduce their own emphasis in the training options. Topaz-Vbe and Emerald-Vbe (Virtual Business Environments) are specifically designed to be general purpose business models of a small manufacturing company. These are specifically aimed at courses where the participating students are different for each Simulation so the students (not the tutor) are new to the model. This offers tutors the significant advantage each time they make use of these models because they become familiar with the underlying behaviour of the models without worrying about re-learning new models every year. Variations on a theme, however, are achieved by using different starting positions (by selecting a different History Code when creating a new simulation).
- CHALLENGING Both Topaz-Vbe and Emerald-Vbe are designed with a view to limiting the number of decisions to be made while maintaining a realistic and challenging business scenario within which the simulation operates. This is a very difficult balance to achieve. Many simulations burden the user with multiple decisions that are simply slight modifications of each other. This means that the time that teams spend repeating the same type of decision can be more productively spent on the highly beneficial and instruuctive exercise of analysing a limited number of diverse but inter-related decisions.
- COMPLEXITY The level of complexity of simulation models must be tailored to the target set of participants. They must be complex enough to tax the intellectually gifted, but not so complex as to be virtually meaningless. Complexity should derive from the inter-relationship between the decisions that the team's make, not only because decisions compete for limited resources, but because the level of one decision can or may affect the way that other (apparently unrelated) decisions function within the model. This is one of the unique aspects of the Topaz-Vbe and Emerald-Vbe simulation models (Topaz-Vbe being the more complex).