Pigmalyon: Business Simulation Game

Last week (19 February), for four days straight, our class of MBAs were divided into teams and asked to join a business simulation game.

Each team was in charge of a glue manufacturing plant with identical market share and identical products. It was up to each of the teams, therefore, to decide which market it wanted to focus on, the prices it wanted to sell each of its products at, and whether or not to enter a new market for a product called C.

Along the way we had to forecast sales and production needs, and then actually back up the sales forecasts with the right number of sales staff. Too few, and they felt less motivated and sold less. Same with the workers in the plant who manufactured the glue-based products: run them too hard, and their productivity actually goes down, wastage of products increases, and absenteeism increases. All of which have direct costs that decrease your profits.

So the trick is to find the right balance of incentives to keep both sales and workforce satisfied without cutting too deep into your profit margins.

One team pulled out of the least profitable market; our team entered the new market and took huge market share and enjoyed high profit margins.

It's hard to say at the end who won the game: was it the team with the greatest market share, or the most cash on hand (no debt), or a team like us, with a strong presence in each of the three markets and a stable, profitable company?

But of course who won was not really the point of the game. The point of the exercise was to pull together all the things that we had learned in the foundation courses back in October - December, and to apply them, under time constraints, to managerial decisions which were hardly cut-and-dry.

After this game, I respect the CEO or section chiefs who have to be on top of all aspects of running a company in order to keep it profitable. Making do with ambiguity is definitely part of the makeup of a successful leader.