“Business is a game, the greatest game in the world if you know how to play it.”
—Thomas J. Watson, Founder of IBM
A business idea or a potential skill should be tested before it is put into practice. This is to avoid any inconvenience caused by a possible failure. This is especially true in situations where data is sparse. Business simulation games address this need. Using simplified models, the games imitate business situations or processes. They give “a realistic representation of real operations in a virtual environment,” allowing experimentation in a low-cost, low–risk environment.
In 2007, Baldissin, De Toni, and Nonino state, “Management games are all the simulations used to support managerial learning through an experience that features competition and rules in the socio-economic environment.”
At the very least, business simulation games achieve three purposes. One, they can be used as training tools. Players in the game face the consequences of their decisions. Two, they provide an overall view of corporate strategic functions. And three, they can simulate market trends in order to improve a player’s capacity and flexibility to adapt to changes. As a result, these games are commonly used to develop decision-making skills of managers in most business organizations.
Business simulation games connect theories to a verisimilitude of practice. Apparently, they provide managers a vicarious experience of the competitive dynamics, market trends, business challenges and interdependencies that are unique to an industry. It seems that participation in the games stimulates emotions and amplifies the volume of retained knowledge. The claims suggest that as a result, critical thinking is developed, group dynamics are improved, and cooperation within teams is enhanced. Moreover, potential managerial skills are tested in a safe environment without the danger of losing financial and other company resources. More importantly, players can learn from their mistakes and “practice” all over again.
Using games to test ideas and develop skills seems promising. Yet there is inherent risk and danger. Business may be likened to a game, but it is not a game. In 1997, Koehn argued that comparing business to a game is a false analogy. In 2008, Hamington called this a metaphoric fallacy. According to him, when one confuses this metaphor with definition, there are serious ramifications in social morality.
The stakes of business are consistently very high. In comparison, the losses suffered by losers in a game are rarely life-devastating. A game is usually bound by fixed rules. Rules do not evolve in and through the playing of the game. All players accept the rules of the game. While business practice does recognize some conventions, it is far from being constituted by a set of rules. Games are played primarily for recreation. Players can “pause” the game anytime and continue at a later date. In business, there is no off-season. When a game is over, players only lose what are theirs. In contrast, business losses affect other stakeholders. At the end of a game, only one is declared the winner. In real life, there is a social and moral responsibility to ensure that everyone is benefited.
Hamington warns, “If business is equated to a game, then the potentially negative implications for ethical content . . . are numerous.”
Real Carpio So lectures on strategic and human resource management at the Management and Organization Department of the Ramon V. del Rosario College of Business of De La Salle University. He is also an entrepreneur and a management consultant. He welcomes comments at firstname.lastname@example.org. Archives can be accessed at realwalksonwater.wordpress.com. The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty, and its administrators.