In the broadest sense simulations are imitations of something real, usually an attempt to model some kind of phenomena in order to learn from it. Imagine riot police preparing for a major demonstration, a business manager projecting cashflow on a spreadsheet or a future pilot stepping into a simulator. All of these are simulations.
Business simulation is simulation used for business training or analysis. Most commonly, simulations are created to model aspects of a business which allow participants the opportunity for experimentation without real-world implications. In fact, this is also true of all simulations if you consider the examples provided earlier.
Clark Aldrich provides the most useful taxonomy of simulations, though he prefers the abbreviated term sims. His classification includes games and simulations for both entertainment and learning purposes:
- Sims
- Games
- Immersive Learning simulations
- Computer Games
- Serious Games
- Educational Simulations
Each of these is an important and distinct genre in its own right but in relation to business simulation it is the need to properly distinguish between Simulation Games and Serious Games/Educational Simulations which is most useful.
Both Serious Games and Educational Simulations are considered to be immersive learning simulations as both plunge the participant into a scenario or world which are designed with clear learning intentions. They may be entertaining and enjoyable, but that is not their chief goal. In this respect they differ from simulation games such as Racing Games or First Person Shooters where the emphasis is directed on the creation of an entertaining and challenging environment which more than anything else is considered fun. Conversely, the requirement for learning in immersive learning simulations has led to numerous variants including virtual reality spaces, interactive spreadsheets and strategy games, all of which can be as engaging as computer games but for necessarily different reasons. Immersive Learning requires that the individual value the outcome from the simulation experience in a way that is not true of a computer game.
As an example, a Serious Game such as Darfur is Dying (a game which is based in a Darfur refugee camp) engages the player in a context where the outcome is of real significance. Few would argue that losing a life in a racing car is equivalent to losing a family member kidnapped by the Janjaweed, which is the scenario presented to players in the Darfur game. Similarly, surgeons who practise procedures on virtual patients will apply the same level of concentration and rigour as they attempt to perfect techniques which will keep real patients alive, as will flight simulator pilots in an educational simulation game.
Against this backdrop it may seem that business related simulations, which can variously fall into both the educational simulation and serious games genres, are less impactful yet this is not the case. Research demonstrates clearly that business simulations engage players meaningfully in their environments as they attempt to cope with scenarios which are analogous to the real world. Again, these forms of simulation require that the individual values the learning outcomes which can be the survival or growth of a business or the effective management of a process or situation. This can be best illustrated with two examples:
- In a branching story, which is a form of educational simulation, a series of choices are made in a given context from multiple options, each with their own pre-defined outcomes. In this type of a scenario a marketing manager may be forced to make decisions on the most appropriate research to conduct and so on, leading eventually to a successful marketing strategy or failure.
- In a Tycoon game, which is a form of serious game, players must manage multiple aspects of a business over a prescribed period of time having the capability to analyze given information and alter business levers such as marketing budgets, production schedules, sales price and so forth. In these types of game industry KPIs and overall market value are the typical measures of performance.
Both examples share the stated requirement for players to value the learning outcomes and it is unlikely that an individual without a keen interest in business would gain much from the experience. Yet for business students or those building a career, both educational simulations and serious games offer incredibly engaging environments as they are immediately intuitively aligned with their value systems. Success in these exercise can be used as motivation to succeed in the real-world, where the rewards are obviously more tangible.
The Business Simulation Blog 