Management Simulations - General Advantages

Virtual business environments

Why use Business Simulations? - General advantages

Management training demands ever more realistic decision situations that mirror real life (frequently referred to as Virtual Reality). Managers and trainees can be exposed to situations that are realistic and learn how to react to them. Time can be compressed so that years of simulated time can be condensed into days or even hours. When a competitive element is added, with several "companies" trying to out-perform each other, the tension can rise dramatically. Under these conditions the training message comes across forcefully and well. Even experienced managers can learn how to cope with the stress of making decisions in complex situations with ever challenging deadlines.

The design philosophy embodies the concept that each decision can be taken with little analysis, yet the environment is such that teams can spend a great deal of time analysing every nuance of a decision (even to the extent of analysing the complex interrelationship between the various decisions) but still not have enough time to understand all the consequences of the decisions they take. It shows that analysis, even at an intuitive level, is generally beneficial, but it can also demonstrate that an entrepreneurial approach to decision-making can prove to be very effective, especially if the decision maker understands the fundamentals of the 'business' being simulated.

However, as decisions are presented in a Virtual business environment, there is no real adverse effect if they get it wrong! In War Games nobody gets killed and, in a Virtual business environment, nobody loses real money.