Re: Strategy Planning via Computer

Paul Nelson (
Mon, 21 Nov 1994 11:11:11

Charles Barclay's November 19, 1994 message to the group criticized the use
of computer simulation exercises in strategy courses. He indicated that
these exercises are based on algorithms which imperfectly reflect the real
market place, and that enterprising students can "crack the code" and "win".

If the only purpose of the exercise is to see which team of students "wins",
Barclay is right. I have been using various versions of a computer
simulation exercise which I developed twenty-one years ago, and am humbly
aware of how limited and imperfect it is. Yet, I continue to use it because
it is the best vehicle I have found to date to achieve the purposes I want
to achieve in the classroom.

I want students to work together in teams. I want there to a division of
labor in the teams, so that some type of functional specialization evolves.
I want there to be a need to integrate the different functional views in
order to clearly identify problems and formulate solutions. I want there to
be at least a five to ten "year" time horizon for the "solution" to be
implemented and evaluated. I want students to see the chain of consequences
which their "solutions" yield. I want there to be multiple decision periods
so that there can be failures and successes. Most of all, I want there to
be competition and excitement.

Of course it would be better to have teams of students work with a real firm
over a period of years to test their ideas and hone their skills, but
students do not enroll in ten year programs, and businesses do not students
take over their future. I can have individual graduate students in Michigan
Tech's M.S. in Operations Management program work at a firm with a piece of
a real problem for a year to a year-and-a-half as a thesis internship
project, but even that does not yield all the objectives I set out above.

Don't throw away the simulation exercises just yet. They do have value in
an educational program. What Mr. Barclay's message suggests, though, is
that the professor should understand the purpose of the exercise, and use it
accordingly. It also suggests that professors should be a little more
proficient at "software security".

Paul A. Nelson, Chair
Business Administration and Management
School of Business and Engineering Administration
Michigan Technological University
Houghton, Michigan 49931
(906) 487-2809