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Chapter 1
Of Games and Game Design
Like so many prior arrivals on the educational scene -- lectures, seminars and case discussions among them -- management games are here to stay. This statement can now be made without any doubt; yet there continues to linger in the minds of many much doubt and many questions concerning the functions, construction and effects of games and their proper place in various curricula as well as in research. The present work makes no pretense at answering all questions or trying to allay all doubts. However, in this introductory chapter we shall discuss basic problems of application and design in a manner which may assist the reader with less practical experience of gaming to form his own reasoned views.
Later chapters are devoted to the International Operations Simulation (INTOP), representative of a small but growing class of fairly complex general management games which we consider particularly suited to executive development in corporations (particularly but not exclusively those engaged in international business), to business school training at functional as well as general business policy and organization levels and to a variety of research and business planning uses.
Games as simulation and training devices originated with the military, who for several decades were the only interested party. The last fifteen years have witnessed the emergence of business games as well as diplomacy and international relations games, and simulation by gaming is rapidly finding many other applications, ranging from the planning of state university systems via city governmental affairs to the determinants of public opinion. No particular degree of familiarity with these developments is required here; neither shall we attempt a systematic analysis of an already oft-surveyed and rapidly burgeoning literature. Pointers from our own experience as participants in and administrators and designers of management games will, however, be used to highlight the discussion.
1. Simulation by Gaming: Purposes of Games
Games represent a form of simulation. The concept of simulation is not without its ambiguities in either popular or scientific parlance. We find it natural and useful to think of simulation as "a technique for studying the behavior of complex systems." Thus, it involves the use of a model of reality comprising a bundle of interrelated variables, and the manipulation and/or observation of the behavior of this system over time. More often than not it is impossible to represent in the simulation all variables at play in reality and to assign them their proper relative weights. The proximate test of the value of simulation is whether by such means we increase our general understanding of the real system; the ultimate test is whether simulation permits us to predict developments in the realistic situation with greater accuracy.
Games are generally designed to meet only the more modest of these tests; that is, they purport to portray reality only in a broad and general way. In this one respect management games resemble the classical economic theory of the firm, although the more complex game simulations at least incorporate a great many more variables, economic as well as institutional, than one would expect to find in any model based on that theory. Game designers usually have not been interested in building a "computerized copy" of reality in any given industry, and we think for good reason. At least at the present stage of the art, the number of variables and the complexity of interaction involved generally speak in favor of highly specialized, non-game models for this more sophisticated but typically also more narrowly applicable species of simulation.
For a more detailed discussion of the purposes of business management games -- and we shall focus on such games -- it is convenient to distinguish three somewhat separate areas of application, namely, education, research and business planning.
A. Education
In the area of education three major types of purposes may be distinguished: to increase the student's understanding of business problems at the functional level (marketing, production, etc.), of the inescapable interrelatedness of the functions and parts of a business and of the various firms in an industry, and to broaden the grasp of, and provide some practical training in, the problems of organization, policy and decision-making processes in general. Many games are designed to provide exclusive or special emphasis on a certain business function, such as marketing or finance. In these simulation exercises students get an opportunity to grapple with such functional and sub-functional problems as market research and forecasting, sales management, pricing, physical distribution, advertising, or investment policy, procurement of financial resources, budgeting and financial control. While the details of these problems will differ from any specific situation facing the students in real life, the principal elements, their general linkage and their dynamics will be sufficiently similar to offer the students a taste closer to "the real thing" than that of almost any other potion educators are in a position to offer.
Even quite simple game models do show up the inevitable interconnectedness between various parts of business. The risks of narrow-minded specialization, "localism," and suboptimization are usually demonstrated quite forcefully and in surprisingly realistic ways. Judging by our experience in the Executive Program of the Graduate School of Business at Chicago and by information from several corporate development programs, this facet of business games seems especially pertinent in training at the middle management level.
The more complex games will do what the simpler games do in the functional and inter-functional areas. In addition, they are generally vastly superior instruments for top management and leadership training in general, due to their automatic emphasis on problems of organization, policy and decision-making processes. The number of decisions to be made, and the amount of information processing required for reasonably intelligent decisions, is so great as to confront the teams with the urgency of a sensible division of labor, the desirability of long-range planning and the merits of applying a variety of techniques of management analysis such as cash-flow budgeting and rate-of-return analysis. The team leader is given an excellent opportunity for sensitivity training, and for all members an experience in group decision-making and action is provided in which they get a chance to observe and improve their own "style" in an informal, if rarely relaxed, organized interaction context. An incidental payoff of participation in a complex game is that it forces players to learn how to live with computers. Whatever the effects of computerization in business will be, we will see more of it. Team members will learn, usually the hard way, that generally speaking computers are characterized by inexorable logic paired with complete lack of judgment. It turns out to be quite a strain on untrained minds to write computer instructions and decision rules under these highly realistic constraints.
B. Research
There can be no doubt that management games hold a vast potential as instruments and settings for research. This is especially true in two fields, economics and marketing constituting one and organization theory and behavioral sciences the other. As to economics and marketing, the discussion about the most efficacious research applications seems to have swung like a pendulum between two extremes. Some persons seem to think that designing game models resembling as closely as possible the constructs of classical economics is highly desirable, presumably with a view to "check out" these as a prelude to th
