Since the summer semester of 2012, the University of Göttingen has been using our business simulation Business Management, in which up to 650 students per semester experience the challenges of a medium-sized company in international competition. In the introductory module Unternehmen und Märkte (“Companies and Markets”), which is aimed at 1st semester Bachelor students, Prof. Dr. Matthias Schumann uses our business simulation to familiarize students with the various departments of a value-creating company and to promote cooperation in teams.
All Bachelor students of the Faculty of Business and Economics at the University of Göttingen take the module “Companies and Markets” in the first semester. This includes the study programs Business Administration, Business and Human Resource Education and Business Information Systems. In addition, those who choose a focal point in economics, such as students of Applied Computer Science, can also take it. The module is offered in both the summer and winter semesters.
In the first half of the semester, the students attend a lecture series in which several lecturers teach them the theoretical principles they will later apply in the simulation. Then, in the second half of the semester, they are distributed among several markets, with a total of 25 students per market. In these markets, five teams with five members per team compete against each other. Several student assistants supervise the students, with one assistant responsible for each team within a market.
Goals of the Module
The aim of the module is to provide new students who have not yet had any experience with business topics with a fun introduction to the world of entrepreneurship. They learn how markets work, what they need to consider when running a business and how to compete successfully. The focus is therefore on teaching the basics on the one hand, but also includes soft skills on the other hand. By participating in the business simulation, students also train their communicative, social and organizational skills within the teams.
The lecture teaches students the fundamentals of economics in conjunction with the business simulation. However, the module also includes aspects such as group work. The students are randomly assigned to their teams. They must arrange with their team members and organize themselves within the groups. At the end of the semester, they write a final report together in which they document their decision-making as well as the evaluation of the simulation periods.
The Advantages of the Business Simulation
“Business Management” is characterized above all by the fact that it maps all departments as well as the entire value chain of a company. This includes all steps from the purchase of raw materials to the sale of finished products – production, financing, personnel decisions and much more. This comprehensive representation of an entire company within the business simulation harmonizes with Prof. Dr. Schumann’s objective. He does not just focus on one specific area but offers his students a holistic introduction to economic topics.
For Prof. Dr. Schumann, another advantage of the business simulation is the fact that the students compete against each other in several teams within a market. They are not playing against a computer, but against real competitors. In this way, they learn, for example, how to deal with irrational decisions of competitors, which may result in unexpected changes in the market. In addition to the competitive nature of the module, “Business Management” not only provides a good cross-section of business topics, but also bridges the gap to economic topics such as higher-level markets, price formation and the Homo economicus.
The module “Companies and Markets” is graded in binary form and consists of two partial examinations. After the first half of the semester, students write an e-exam that they need to pass to participate in the business simulation “Business Management“. In the second half of the semester, they apply their acquired knowledge in a practical way over the course of six periods in the simulation and compete in teams with other students. Each team then prepares a 15-page final report in which they justify their decisions – plus an appendix with calculations and graphical presentations.
The final report is graded according to different evaluation criteria. In terms of content, the level and presentation of decision making, and evaluation are critical. The students demonstrate that they have derived their decisions meaningfully from the evaluations of the previous period, the analysis of the competing companies and the changes in the market based on the business news. Adherence to formal requirements, report structure, and language expression are also included in the evaluation. Business simulation performance is not considered in the assessment because students should not be penalized for trying something out. Rather, the goal is to justify decisions in a meaningful way, to reflect on the consequences of flawed decisions and to write down resulting learning successes.
The evaluation of the module shows that 1st semester students rate the business simulation extremely positively. Students who look back on the module after a few semesters also tell us that the simulation is the best module ever. They realize the context of their decisions and how much they have learned by participating. There are only a few modules that are rated so well.
Prof. Dr. Schumann will continue to use “Business Management” in the coming years in the module “Companies and Markets” to teach beginning students the basics of strategic business management and to promote their cooperation. We are pleased about the successful business simulation applications of the University of Göttingen and wish the students a lot of fun and further sustainable learning experiences with our business simulation in the future!