Mag Dr. Helga Pammer July 2000

The Didactic Benefits of Business Simulations 1. Introduction What do we mean by and expect from „didactics“? This term has had an eventful history ever since Johann Comenius published his “Didacta Magna” in the 17th century. Hans Berner1 came up with 14 different definitions of the term from wellknown educational experts, all with varying ideas about teaching and learning. Which of these different approaches will be of use to us in our particular situation: the use of business simulation software with adult students at a College of Higher Education? It seems to us that the following guidelines will be of use to us in our work with adults: • •

Good methodology should include strategies to aid in the attainment of a set of predetermined aims.2 “First and last, the aim of our didactics should be to find a method whereby the teacher spends less time on instruction but the students nevertheless learn more.”3

These guidelines should help us work towards the principle of “interactive learning”, whereby a learner sets off upon a journey that does not have a fixed path. Each learner develops a personal relationship to the subject matter and works on it according to his or her particular skills and abilities.

2. Our Particular Situation at the Vienna Chamber of Commerce College of Higher Education In the course of their training our students go through approximately 30 hours of personal development each semester. The aim of these sessions is to endow the students with the communication, interpersonal and problem-solving skills that they will need to take on a management role in the future. In the 5th semester the focus of the course is on teamwork. Under a cross-curricular approach, business and personal development experts jointly supervise students working with the “CABS” (Computer Assisted Business Simulation, www.cabs.de) program. While the business experts support the students with their detailed subject knowledge, we as experts in personal development, focus on communication and management skills. In this work we make use of a video camera. Our method comprises three stages. The preparation phase, the simulation itself over 84 virtual simulation periods (approximately 7 virtual years), and finally a debriefing phase in the form of video 1

Berner Hans, Didaktische Kompetenz, Bern 1999 Cübe Felix, Kybernetische Grundlage des Lernens und Lehrens. Zitiiert nach Berner S.28 3 Comenius Johann, Didacta Magna, ebola S.28 2

analysis. The simulation takes approximately 16 hours, with a further 20 hours available for preparation and debriefing. During the preparation phase questions are formulated that should serve the students both during the simulation, and during the debriefing phase. During preparation the WHAT? stands in the foreground, whereas during the debriefing phase the emphasis is very much on HOW? How did we reach decisions as a team? How did we resolve conflicts? How well did we use the different skills of individuals? Etc. The value of the simulation lies in the fact that it offers both teachers and students the opportunity to examine the following issues:

3. Possible Didactic Benefits of Simulations 3.1 Starting Point The students that take part in the simulation will ultimately be employed as managers in companies that place an emphasis on teamwork as opposed to typical hierarchical management structures. They will have to work with other decision makers to find a common approach to a given problem. Joint decision-making often involves subsuming one’s own point of view and one’s own interests to the interests of the group. This process places a premium on interpersonal and social skills and demands a lot of energy. Furthermore, each decision is taken in the course on an ongoing process, where a balance must be struck between the cost (in terms of time and money) and the benefit of any given course of action. The central challenge of the simulation lies in the fact that students are obliged to find answers to questions, which due a lack of practical experience, they are not in position to answer. They must tackle problems and find solutions even though they are to a certain extent working in the dark; the consequences of their actions will only become clear at a much later date. In addition they are, as in real life under time pressure. From a didactic point of view the aims of the primary phase comprise the following: To establish a mechanism to deal with the problems at hand, or which are to be expected, and to make the decision-making process transparent. The sheer complexity of the CABS program makes great demands on the students’ problemsolving abilities.4 Central questions in this area: • Which members of the team are best suited, by virtue of their particular experience or know-how to tackle a given problem. How can we best link these different abilities together? • How can we avoid coming up with superficial, short-term solutions to problems, and taking action for its own sake? • Will we provide the opportunity for individuals to express their personal preferences, fears and concerns. 4

Greimel Bettina, Das didaktische Potential von Unternehmenssimulationen; in: wist 3/1999, S.158

Point 1: The quality and breadth of the primary analysis, will determine the quality of the work that succeeds it. Joint responsibility is only possible if all participants share a common understanding of the problem facing them.5 3.2 Prescience Like their counterparts in the real world, managers in a virtual environment need to develop a certain amount of prescience. They must take great effort to foresee and avoid possible difficulties. “The best companies are always concerned for the future.”6 Central questions in this regard: • What are we hoping to achieve through the decisions we have taken? • What is a realistic timescale? (Nothing is more motivational than the prospect of realisable success). • What will we define as success? By what shall we measure our achievement? • What are the core interests of this virtual enterprise, which must be developed and strengthened. • Do we intend to communicate results throughout the system? Who bears the responsibility for a particular outcome? Which channels of communication can we use? Point 2: The quality of the decision-making process in terms of content and use of personel, determines whether or not the aims of the project will be realised. 3.3 Networking Networking means carrying the responsibility for the implementation of a given course of action within a realistic timescale. In order to achieve this the necessary steps must be planned in advance. Central questions in this area: • Where should we focus our energies in order to achieve a desired result? Where do have the greatest leverage? • What problems are we likely to encounter? Will the decisions taken produce the desired outcome. • What further action may be necessary after the implementation of a given course of action. Point 3: Establishing an overall concept protects against the chance of our activities losing their focus, as well as providing a reliable base to fall back upon should a situation become too trying.

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Hammer Michael, Das prozesszentrierte Unternehmen, S.94 ebda, S.286

3.4 Core Phase In this phase the decisions taken are implemented over a predetermined number of “rounds”. It is necessary to strike a balance between close supervision of the outcome and a more patient, “watching and waiting” approach. Central questions in this area: • What effects do the measures have? What surprises or disruptions are noticeable? • Do we need to place new emphasis on a particular area? Are any course corrections necessary? • What compromises can we make without endangering our overall aim? • Is there sufficient provision for ongoing appraisal? What progress have we made? What have we achieved? What should our next step be? What areas do we need to address in the light of the progress made? • How can we ensure good communication within the team? Point 4: In business a plan must always be subject to appraisal and revision. Business decisions are experiments based on hypothesis.7 Therefore the possibility of change is a given fact from the very beginning. Adaptability means being able to learn from setbacks and, to derive relevant questions from them.8 3.5 Evaluation In this phase it is time to harvest the fruits of one’s labour. Even if a group has performed disappointingly in relation to other groups, each member of the group has gathered much valuable experience. These experiences must be defined, assessed and made available for future use. Central questions in this area: • Which aims were realised, and to what extent? • In what ways was the performance of the organisation strengthened? • Which decisions had positive/negative outcomes? • In which areas were we as a team particularly successful? • What was comparable to earlier projects? What was different? Point 5: Taking a decision means choosing one path in preference to others. Analysis of one’s own decisions is way of learning about oneself and the strategies one employs in a given situation. Careful reflection offers us the chance to avoid repeating the mistakes of the past in the future.

4. Summary of the Educational Value of Simulations Simulations depict problems that can only be solved if the participants already possess detailed theoretical knowledge of their subject. There is no guarantee that this knowledge will be deepened or broadened through participation in the

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Hammer, S.173 ff. ebda, S. 252 f.

simulation.9 However, the growth in applied knowledge during the simulation is highly valued by participants and by empirical research.10 The educational value lies particularly in the following areas: • The promotion of “joined-up thinking”. • Exercising of the decision-making process. • As a motivational tool in a commercial context. Furthermore, the use of simulations adds an additional method to those the teacher already has at his/her disposal.

5. In Closing Simulations offer students the opportunity to test both their theoretical and their applied knowledge. Students have the opportunity to see the consequences of the decisions they take without having to take responsibility for their actions as they would do in the real world. As such, the educational value of simulations approaches the standard set by Kersten Reich, professor of education at the university of Cologne: “Education should be constructive process that enables that individual to build a view of the world and his/her place within it.”11

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Greimer, WiSt 3/1999, S.159 Bromer, Kollmannsperger: Planspiele, in: WiSt 1998, S.218-220 11 Berner, Didaktische Kompetenz, S.30 10

Bibliography:

Berner Hans, Didaktische Kompetenz, Bern 1999. Bloech Jürgen u.a., Förderung der unternehmerischen Handlungskompetenz durch Unternehmensplanspiele. In: Schelten Andreas u.a. (Hg.), Forschungsberichte des DGfE-Kongresses 1988. Bromer, Kollmannsperger, Planspiele. In: Wirtschaftswissenschaftliches Studium (=WiSt) 1998. Greimel Bettina, Das didaktische Potential von Unternehmenssimulationen. In: WiSt 3/ 1999. Hammer Michael, Das prozesszentrierte Unternehmen, Frankfurt/ Main 1997.