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The Use of Simulations in Business

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business-simulations-studentsBy Dr. George Gannage
Faculty Member, Business Administration at American Public University

Before setting foot in the real world, pilots, military personnel and business students use integrative simulations to learn how to respond to numerous challenges. Simulations put corporate leaders and college students in a virtual setting where they can experience the consequences and benefits of their decisions in a risk-free environment. Business simulations provide a great platform for adult learners to review and analyze data. The repetitiveness of the decision-making process allows for skillful adjustments and improved performance.

The use of business simulations allows for a more practical education where concepts can be applied to real- life decisions. They ignite the competitive spirit within the participants, engaging them emotionally as they learn. This environment is conducive to the development of strategic thinking skills; options evaluation, data analysis, and management by the numbers are becoming second nature to the participants. Business simulations have been used successfully at leading universities and colleges such as: Arizona State University, Tempe, Arizona, American Public University, Charles Town, West Virginia California Polytechnic State University, San Luis Obispo, California, Capella University, Minneapolis, Minnesota, Michigan State University, East Lansing, Michigan, University of Phoenix, Phoenix, Arizona (ILS World, 2013).

Business simulations are critical in building capabilities needed for superior strategy execution. They create a deep sense of ownership and accountability and this ultimately motivates action back on the job. The goal of business simulations is to help educators make the learning process more hands-on, engaging and fun. Learning by doing in a virtual environment greatly improves knowledge retention and stimulates one’s desire to learn and grow.

Experiential learning and cutting-edge learning methodologies have been proven successful in implementations with leading organizations around the world. Such as: GlaxoSmithKline, Golden Tech. Group, HK, Hewlett-Packard, IBM, J.B. Hunt Transportation, Delta Airlines and John Deere (ILS World, 2013). Simulation tools allow companies to develop employee skills and capabilities at all levels of the organization. In academia, the competencies created through business simulations ultimately improve conceptual and practical knowledge which easily translate into the business world.

By customizing computer-based business simulations, clients can incorporate key strategic and financial priorities. Decisions made by one team have a direct impact on another team’s results, creating an engaging and competitive environment. Learning objectives are reinforced by combining the simulation with instructor-led discussion and feedback. The blending of customized simulation technology and curriculum content offers participants a risk-free opportunity to test out a range of relevant strategies and tactics to drive business results.

Business simulations are designed for a specific set of college courses in the areas of marketing, business management, business policy, strategic management, new ventures, e-commerce, supply chain management, ethics, retail management and international management.

Most simulation companies offer full support for their trainers and/or instructors. They offer best practices, coaching tips and unique ways of teaching using the simulation. A few companies also offer on-site training seminars conducted by subject matter experts.

Scenario simulations, sometimes called “best-practice” simulations, are used to build leadership, project management, marketing and sales capabilities. These simulations leverage decision tree structures in realistic story lines, enhanced with text, audio, still photography, and video. As participants read and observe real-world business situations, they have the opportunity to react to the issues presented. When participants choose a course of action, the simulation immediately presents the impact of their decisions relative to the projections and ultimate goal.


Business simulations can be used both in the traditional and online classroom and provide enormous opportunities that capture the essence of business concepts in an engaging environment. Simulations have a dynamic future in both post-secondary education and corporations for those instructor and trainers who seek to satisfy the higher levels of Bloom’s taxonomy. Integration of business simulations into pedagogical curriculums provides opportunities for institutional advancement and higher student enrollments.


Cadotte, E. (2013) Innovative Learning Solutions, website. Corporation and business school list.

About the Author:

Dr. Gannage is a professor of Marketing and International business. His experience includes online course development, training, mentoring and avid user of business simulations at several top online universities. He regularly attends workshops and conducts lectures on adult strategies using business simulations. Dr. Gannage is a sales/marketing consultant for an innovative global business simulation firm headquartered in Knoxville, TN.

For comments and questions: Email: ggannage@yahoo.com or Skype at dr.georgejgannnagejr (newnan, ga.)

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