From Gaming Simulation to Case Method

From Gaming Simulation to Case Method －Empirical Study on Business Game Development and Evaluation－ Kenji NAKANO, Takao TERANO Graduate School of Systems Management, University of Tsukuba, Tokyo {nakano, terano}@gssm.otsuka.tsukuba.ac.jp Abstract. Both Gaming Simulation and Case Method are traditional and powerful tools to carry out educational courses in a business school. However, there have been few studies to integrate Gaming and Case methodologies. This paper presents a new practical approach for this purpose. At Graduate School of Systems Management, Tsukuba University, we have ten years experiences on the business modeling course with BMDL/BMDS (Business Model Description Language/ Business Model Development System) architecture. Base on the experience, in this paper, we have developed a new business game: "Case of Asahi Super Dry". The aim of this game is to explore managers’ decision-making strategies in a quantitative business operation domain through the successful case of Japanese brewery company. Using the developed model, we tried to evaluate the effectiveness for Case Method on Gaming Simulation. The experimental results have suggested the benefits of the proposed approach.

1

Introduction

Gaming Simulation is an effective method to virtually experience and learn business schemes in the real world. It is recognized and used in a wide range of educational institutions[1]. Case Method of the Harvard Business School is also an effective educational method and is widely adopted in various fields in the name of Case Study[2]. Gaming Simulation and Case Study are the mutually independent methodologies and have evolved separately making the most of their advantages. There have been few studies that attempt to integrate these methodologies. Graduate School of Systems Management (GSSM) in University of Tsukuba has been intensively studying the integration of these two methodologies through the following processes: 1) Model the business actions of corporate managers in the areas of decisionmaking and operations separately in order to create a gaming scenario that is applicable to various cases, 2) Develop a versatile business simulator based on the model of decision-making area using GSSM's business game developing tools, and 3) Implement a case on the simulator into an actual business game. As a concrete example, we develop a business game based on the scenario of the operation area of Asahi Super Dry case. The major contribution of this paper is to propose a methodology for implementing an actual business game, which corresponds to 3) above.

This paper is organized of the following chapters: Chapter 2 reviews the related studies, Chapter 3 overviews the approaches of GSSM (corresponds to 1) and 2) above), Chapter 4 describes the methodology for composing an actual business game (corresponds to 3) above), and Chapter 5 concludes the discussion.

2

Background and Motivation

2.1 Related Studies Business game is recognized as an effective educational method[1] [3] [4] [5]. It enables us to easily produce a pseudo-environment and the players learn by virtually experiencing the pseudo business processes through the game. Arai, et al. point out that the debriefing (an integral process of reporting, discussing, analyzing and reviewing the results after the game) is the most important factor to evolve the virtual experience into deeper understanding and insight or the future motivation for learning[6]. Another important viewpoint on the gaming simulation is the productivity on developing games. Greenblat insists the importance of reusing existing games and mentions the usefulness of versatile frame games [7]. The frame game is a reusable one without changing the basic mechanism, the rules, or the framework even if the theme of the game is changed. This concept is especially effective for the developments of the games applicable to multiple cases.

3

Development of Business Simulator That Handles Cases

3.1 Challenges and Approaches GSSM has addressed to the challenges on integrating Gaming Simulation and Case Study as below: 1) These two methods deal with different types of information (Case Study mainly deals with qualitative information). Therefore we must convert the qualitative decision-making items into quantitative data, 2) Case Study needs to deal with the divergence between corporate manager's decisions and the executions through the organization, which often arises in actual corporate management. For example, the decisions made by a corporate manager of a large firm are represented as a broad operating policy. However, there is no guarantee that the organization conducts the operation in full accordance with the policy. That is, a corporate manager controls the organization indirectly with the operating policy, and the organization basically conforms to the policy but not necessarily in perfect coordination. Therefore we need to contrive the expressions of the game. 3) Corporate managers are always required to attain the financial performance and are not valued with the results of corporate revolutions. We evaluate corporate managers with the financial performance in short-term and with the comprehen-

sive measures, including the results of the corporate revolution, in long-term. The result of corporate revolution exerts a strong influence on long-term performance. Therefore we need to express both of the short-term profit and the long-term vision in the game. 3.2 Framework of Simulator The business simulator has a flexible framework to accommodate to diversified case scenarios. It has separated modules for the long-term corporate decisions (i.e., corporate revolution) and for the short-term operational decisions (i.e., investments for facilities or new product developments). Figure 1 illustrates the framework of the decision-making module and the relations among the major functions. Decision variable

（Financial processing）

Business growth

Technical power

Customer preference

Business reform

（Other processings）

Consistency （Constant） Capability

Basic variable Cooperation

Business reform

Expense

Positive leadership

Difficulty

Rise power

Effective power Effect variable Number Time limit limit

Leadership Social responsibility Customeroriented Business strategy Execution capability Operating process IT use

（Other processings）

Motivation

Actual result

Maturity

（Other processings）

Figure 1 Framework of decision-making module

4

Business Game Development Using Simulator

4.1 Composition of Business Operation Modules We develop a business game on the business operations of Asahi Breweries, one of the major breweries in Japan, in the period between 1982 and 1989. In this period,

Asahi made a great stride with the drastic corporate revolution and the smash hit of Super Dry. The important operational actions in this period were the revolutions of backbone, marketing, and Research & Development (R&D) operations. The key issue on developing this business game is how we implement these three actions as operation modules. 4.2 Conceptual Model In business games, the design of backbone operation directly affects to the financial measures. It is also the key point to accomplish the reality of the game. In the case of Asahi Breweries, the customer focused policy played a major role in the success of Super Dry. Especially in the market research conducted in unprecedented scale, the first analysis resulted the development of Koku-Kire Beer, a new draft beer with both good body and refreshing taste, and the second analysis by the different team brought about the development of Super Dry that targeted at younger generation. Capturing the user needs through marketing research and feeding it back to new product development is highly orthodox and effective method. To implement this kind of actions, we define an endogenous variable called market preference and use it as a key factor of the game. Decision variable

No.1 market share

Selling target Decision variable

Corporate policy

Advertising target

Brand image

Strong leadership Consistency

Advertising expenses （Financial processing）

Cost rate reduction

Effective power

Business reform

Sales promotion expenses

Business posture

Rise power

Production

Sales price

Advertising effect

Products potential

Production directions

Order received

Stocks

Sales

Motivation Productive capacity

Maturity Decision variable

No.1 quality Decision variable

Customer preference

Market preference variable

Facility investment Ability of estimating preference

Bitter

Good body

Refresh

New taste

Rotation Period

Conformity

Market preference creation （Random number ） （Other processings）

Market research Development power

Product power strengthening

Success rate

Decision variable

Attach technology

Preference index

Research & Development

Development index

Expense Period

（Random number ）

New product development

（Threshold set up）

Figure 2 Conceptual model of corporate policy and business operations

Figure 2 shows the conceptual model of the relations among backbone, market research, and R&D operations and how these modules are integrated with the corporate policy module. 4.3 Gaming Scenario of Backbone Operation 1. Asahi has made the huge success of Super Dry by making prompt investments for manufacturing facilities in sync with the new product development. When we design the structure of the module, we give greater importance to the capacity of the facilities than the production itself. If a player fails to invest in the facilities in parallel with the surge in the orders, the production capacity works as a rate-limiting condition that put a ceiling on the sales. This impresses the players with the importance of the balance and the timing of the facility investments. 2. We set out the game as that the corporate revolution exerts a strong influence on financial measures. If a corporate revolution succeeds to motivate the organization, the employees improve the manufacturing processes and this promotes the cut down of the cost percentage. 1. The sales amount has the greatest impact on the financial measures. The sales amount of a company is determined by the sales price and the advertisement expense in consideration of the balance with the ones of the other companies. 2. The advertisement expense is determined based on the broad policy of the corporate manager. The sales price is determined by the sales agency based on the ratio of the sales promotion expense, which is determined by the sales division based on the selling policy. This process accordingly enlarges the uncertain factors. 3. In this process, the motivation level of the organization also exerts various influences. The motivation level is resulted from the demand forecast and the revolution of the sales division. This scheme represents the importance of the corporate revolution in the game. 4. The most downstream order volume is determined based on the value of attractiveness of the product, which is calculated from advertisement investment, cumulative advertisement investment, and sales price of product. 4.4

Gaming Scenario of Market Research and R&D

1. The consumers already recognize the tastes such as bitter, good body, and refreshing and their preference rotates periodically. The consumers in younger generation periodically show a strong demand on a new taste beer, which we call the deviation of the changes in preference. 2. The players conduct market researches to predict the current preferences of consumers and the sequence and the cycle of the preference changes. Ability of estimating preferences is calculated based on the conformity of the prediction with

the actual changes, which slightly affects to the result of the new product development. 3. The period of a deviation of the changes in preference arises randomly. If a player brings a new product to the market timely in this period, he/she may be able to induce customers to prefer the taste of the product (formation of market preference). And then, if the player succeeds to develop and introduce a new product that matches to the preference, the company is able to build a new market in one stroke and enjoys the huge benefit of the first-mover. 4. The player may achieve the formation of market preference depending on the predictive result of the changes in preference, as well as the levels of the maturity of the company and the brand image (which are resulted from the corporate policy and revolution). 5. If the taste of a product does not match to the market preference, the product loses the competitive power and the market share. 1. In order to make R&D successful, a player needs to invest money and time over pre-determined threshold values. Even if the player clears the thresholds, the success rate of R&D is dependent on the development power of the company. It is also affected from the success probability that is set as a random number. 2. The development power is determined based on the maturity of the company and the level of the researchers' motivation, which means that the operating style of the corporate manager affects to the progress of R&D. 3. When R&D succeeds in, it is classified into three grades of success level based on the corporate policy and the involvement of management. Only the highest success level leads to the new product development. 4. The power of the new product is reinforced if the product fits to the market preference. If the formation of market preference has reached to the success level at that time, the new product creates a huge market that is comparable to Super Dry. 5. A player sets a targeted taste to be developed based on the analysis of the market research and makes decisions on the investment amount and the development period. The important point is that if the decisions conform to the corporate policy and revolution. Therefore, the player needs to check if the policy is to attach technology and to induce it when necessary. As described above, we confirm that we can implement a business game from the conceptual model and the created scenario based on a concrete Case Study. 4.5 Relation Between Corporate Policy and Operations Figure 3 illustrates how the corporate policy and revolution are linked to the decision-making in the operation area and how these factors affect to the result of the game.

Corporate policy

Selling target

Brand image

Business Business policy policy

Backbone Operation Sales promotion expenses

Advertising target

Investment

No.1 quality

Achieve ment

Influence domain

Sales price

No.1 market share

DecisionDecisionmaking making

Products potential

Expenses Effect

Determination of orders received

Decision of execution

Up/Down of productive capacity

Reconstruction of a factory

Manufacture expense

Market research / R & D Customer preference

Market research

Research & Development

Attach technology

Market preference evaluation 1

Added value to a product (Koku-Kire Beer)

Product potential strengthening

An epochmaking new product (Super Dry)

Market preference evaluation 2 New product development

Creation of a new market

Strong leadership Business reform

Figure 3

5

Maturity

Relation Between Corporate Policy and Operations

Conclusion and Future Work

This paper has proposed a new game composing methodology that integrates Case Method and Gaming Simulation and has reported on a business game that we developed based on the methodology. As a result of this study, we have confirmed the possibility of a new educational method that capitalizes the strengths and covers the shortcomings of both Case Method and Gaming Simulation. However, we have not evaluated the educational effects of the proposed methodology. As future work, we hope to apply the methodology to various game developments and evaluate them in actual classrooms.

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