Current usage and potentials of IT-based business simulation games

Bachelor Thesis, 2012

52 Pages, Grade: 2.0


Table of contents

List of figures

List of abbreviations

1. Introduction

2. Basic knowledge
2.1 IT-based business simulation games
2.2 General features of IT-based business simulation games
2.2.1 Content
2.2.2 Immersion
2.2.3 Interactivity
2.2.4 Communication
2.3 Standard process of using IT-based business simulation games
2.4 Standard architecture of IT-based business simulation games

3. Current usage of IT-based business simulation games
3.1 IT-based business simulation games in education and training
3.1.1 Teaching basic knowledge
3.1.2 Teaching cross-functional understanding within the business
3.1.3 Training technical skills
3.1.4 Training social skills
3.2 IT-based business simulation games in experimental research
3.2.1 Economic research
3.2.2 Organizational and leadership study
3.2.3 Psychological research
3.3 IT-based business simulation games in business practice
3.3.1 Forecasting in strategic planning
3.3.2 Employee assessment and recruitment marketing

4. Potentials of IT-based business simulation games
4.1 Potentials concepts for IT-based business simulation games
4.1.1 The serious game concept Introduction to the serious game concept Serious game and IT-based business simulation games Usage, benefits and issues
4.1.2 The role-playing concept Introduction to the role-playing concept Role-playing and IT-based business simulation games Usage, benefits and issues
4.2 Potential technologies for IT-based business simulation games
4.2.1 The real-time data technology Introduction to the real-time data technology Real-time data and IT-based business simulation games Usage, benefits and issues
4.2.2 The dialog system technology Introduction to the dialog system technology Dialog systems and IT-based business simulation games Usage, benefits and issues

5. Discussion


List of figures

Figure 1: The emergence of the simulation game concept

Figure 2: Modern application fields of business simulation games

Figure 3: The standard business gaming process

Figure 4: A standard architecture of IT-based business simulation games

Figure 5: Architecture of a computer game

Figure 6: The role-playing process

Figure 7: A propositional framework for the integration of role-playing in IT-based business simulation games

Figure 8: A classical architecture of a dialog system

Figure 9: A propositional integration of dialog systems into the architecture of IT-based business simulation games

List of abbreviations

illustration not visible in this excerpt

1. Introduction

Business simulation gaming has a long history, which can be traced back to the first simulation gaming practices in ancient China about 5.000 years ago. In modern days, the closest predecessors of modern IT-based business simulation games (IT-based BSGs) first appeared in 1932 in Europe and in 1955 in North America (cf. Faria et al. 2009, p. 465). Over the last century, IT-based BSGs have received much attention from researchers and practitioners. While many studies hitherto focus on the effectiveness and characteristics of specific games, only few have tried to review the current usage of IT-based BSGs thoroughly. In addition, the number of studies taken to evaluate the impacts of specific concepts and technologies on the future of this method is even lower. The two shortcomings in business gaming research have led to two questions, which serve as the foundations for this thesis: “How are IT-based BSGs used right now in practice?” and “How would the future of IT-based BSGs be?”.

By firstly reviewing current literature on business simulation gaming and IT-based BSGs, this thesis will provide an overview on the usage of IT-based BSGs at present. After that, several selected potential concepts and technologies will be studied to discuss how they can affect the future of IT-based BSGs.

In the first chapter, before going to any of the two main questions, basic knowledge on IT-based BSGs will be provided. Additionally, the chapter also introduces their general features, the standard process of deploying them in practice and the standard architecture of current IT-based BSGs. After that, the following two chapters will answer the questions correspondingly. Chapter 3 will focus on the current usage of IT-based BSGs. Each of the application fields and the concrete usage purposes in each field will be presented. In addition, actual and relevant examples will also be presented to demonstrate them. Chapter 4 will proceed with the second question, on the potentials of specific concepts and technologies for the future development of IT-based BSGs. The chapter will be divided into two parts, with the first concentrating on the concepts and the second on the technologies. The last chapter, the discussion, will summarize and discuss the findings in the previous chapters

2. Basic knowledge

Because IT-based BSGs represent only a small subset of a wide and overarching concept of simulation gaming, this first chapter of the thesis is dedicated to provide an understanding of IT-based BSGs by starting with the definitions of simulations, games and simulation games in section 2.1. Subsequently, section 2.2 will present the general underlying features and characteristics of IT-based BSGs. Furthermore, because the term “IT-based business simulation game” can be understood both as the process of playing the games and as the systems, which people use to play the games, the standard playing process and also the standard architecture of IT-based BSGs will be introduced in section 2.3 and 2.4. The introduction of the process and the architecture is not an abundance, because both of them will be used again in chapter 4.

2.1 IT-based business simulation games

Before going to the definition of IT-based business simulation game, one has to understand the two foundations of simulation game, which are the simulation and the game. A simulation is “a representation of the reality it is constructed to depict” (Feinstein et al. 2002, p. 734). Thus, a computer simulation can be defined as an attempt to replicate the characteristics of a system by mathematics or simple object representations (cf. Feinstein et al. 2002, p. 737). Game consists of “interactions among groups of players (decision makers) placed in a prescribed setting and constrained by a set of rules and procedures” (Hsu 1989, p. 409).

Sitzmann (2011, p. 492) described several literatures which introduced games with less entertainment value and simulations with less real-world representation. Those tools inherit characteristics of both simulation and game but it is not appropriate to arrange them to either of the two categories. As a result, the term “simulation game” is the most proper to describe them (cf. Sitzmann 2011, p. 492). In general, a simulation game involves gaming activities in a simulated context and consists of four foundations: the simulation model, interaction, rules and goals. The emergence of the concept of simulation game is described in figure 1 below.

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Figure 1: The emergence of the simulation game concept

Historically, simulation games were used exclusively for military training (cf. Faria et al. 2009, p. 465). In modern day, the use of simulation games has extended far beyond these traditional fields. The figure below describes a hierarchy of the modern application fields of simulation game.

illustration not visible in this excerpt

Figure 2: Modern application fields of business simulation games

Source: Kern (2003, p.83)

All of simulation game types above attempt to simulate real-life situations of the field, in which they are applied, and BSGs are no exceptions. According to Fripp (1997, p. 138), BSGs, which are also named management games or management simulation games by other authors, generally involve the representation of a real or hypothetical business environment where players can compete (cf. Fripp 1997, p. 138).

This paper focuses on IT-based BSGs that are subject to the aforementioned definition of Fripp and are constructed and deployed based on modern information and communication technologies (ICT), in contrary to early BSGs, which were either pencil-and-paper, board or card games. In the literature, there are simultaneously used terms such as “computer-based business simulation game” or “internet-based business simulation game”. However, they refer to the medium in which the games are distributed and can be arranged under the overarching term “IT-based business simulation game”.

2.2 General features of IT-based business simulation games

Up until now, there have been many researches taken to identify the features of simulation games and particularly IT-based BSGs. However, each of them tends to focus on one specific game with all of its technologies and subject matters to investigate its features and then generalize them to be the general features of simulation games. This method of study was considered problematic because it might not identify the underlying mechanism of simulation game (cf. Cannon-Bowers/Bowers 2008, p. 318; cf. Bell et al. 2008, p. 1418). For that reason, Bell et al. (2008, p. 1418 ff.) suggested viewing through all the embedded technologies and subject matters of specific simulation games in order to identify the underlying features. They suggested a framework that divides the underlying features of IT-based business simulations into four categories: content, immersion, interactivity and communication. In each of the categories, the features are arranged from low to high with respect to the richness of information or experience that they provide participants.

2.2.1 Content

This category describes the richness level with which basic declarative information is presented to learners (cf. Bell et al. 2008, p. 1420). Content richness increases from text, through still image, animation and video to voice.

In the past, teachers and learners used traditional instructional methods such as lecture, classroom discussion and case study and had only text and still images at their disposal. With the advancement of ICT, “richer” contents have been used increasingly in the classrooms. IT-based BSGs are no exceptions. They can utilize a wide range of instructional content. Beside those that use only text and still images, some newer IT-based BSGs use videos played by professional actors or animations coupled with audio files and play them when an in-game event takes place (cf. Summers 2004, p. 226). Moreover, experts also believe that the next generation IT-based BSGs made for young learners should also include high-quality graphics equivalent to those in video games (cf. Prensky 2001, cited in Summers 2004, p. 225).

Some studies have proven that a high degree of content richness should motivate learners and consequently increase their performance and satisfaction (cf. Kozlowski/Bell 2007, p. 26; cf. Sun/Cheng 2007, p. 12; cf. Tennyson/Jorczak 2008, p. 7).

2.2.2 Immersion

Immersion contains features that influence the sense of realism of the instructional system. Realism can be defined as “the degree of complexity that exists for a given situation and that this is related to the number of factors that surround that situation” (Micklich 1998, p. 90).

According to Bell et al. (2008, p. 1420), systems with a low level of immersion only bear little resemblance to real-life situations. Those with a medium degree of immersion such as IT-based BSGs can evoke in learners psychological processes relevant to real-life situations and provide them with the feeling of actually involving in the situations. Systems with a higher level of immersions including scientific computer simulations utilize state-of-the-art technologies such as virtual reality and three-dimensional simulation. The immersion feature of IT-based BSGs can be down to the simulation model of the game, which attempt so model a real business environment (cf. Fripp 1997, p. 138; cf. Faria et al. 2009, p. 469).

Several studies on this topic found that the benefits that immersion brings to business simulations are providing participants with realistic practical experience and engaging, as well as maintain the motivation of participants in the gaming process (cf. Bell et al. 2008, p. 1420; cf. Psotka 1995, p. 409 ff.).

2.2.3 Interactivity

According to Kozlowski/Bell (2007, p. 26), features that belong to the category “Interactivity” are those that can influence the potential degree and type of the interactions among participants and between participants and instructors. This category can be easily mistaken for the category “communication”, which focuses more on the technological aspects of the games. The category “Interactivity” concerns the design factors of the games that determine whether the gaming process is centered on individual participant in isolated circumstances or on groups of participants (cf. Kozlowski/Bell 2007, p. 27).

Depending on the purpose of the course, business simulations can be designed with various degree of interactivity. According to Orth (1997, p. 20) business simulations can involve only one player, one group of players as well as multiple players or groups of players. In addition, the games may be facilitated with or without competition between participants. Furthermore, competitive games can be interactive or non-interactive, whereby in non-interactive business simulations the decisions of one player or one group have no influence over the outcomes of the decisions of others (cf. Orth 1997, p. 20).

A high degree of interactivity and competitiveness brings several benefits to IT-based BSGs. Orth (1997, p. 20) claimed that the games can promote interaction between participants and the competitiveness during game play can evoke the desire to win in learners, which consequently increases their motivation.

2.2.4 Communication

The last category contains features that influence the communication richness of the games. Unlike the previous category, this category focuses more on the technological aspects that influence the interaction among participants. Depending on the direction of flow of communication, temporal lag and transferred content, it can be differentiated between one-way and two-way, asynchronous and synchronous as well as audio and audio-visual communications, whereas in each pair, the latter contain more communication richness than the former.

IT-based BSGs can be used in combination with different communication channels with different levels of communication richness. Along with the history of business simulation, researchers have observed the use of a wide variety of communication methods at different levels of richness. Examples are e-mail and chat, forum entries, audio conferencing, Voice-over-IP protocol and even video conferencing services (cf. Fritzsche/Cotter 1992, p. 51; cf. Proserpio/Gioia 2007, p. 71; cf. Rainey/Lawlor-Wright 2011, p. 3 ff.). These communication channels can be embedded into business simulation programs as in the cases of chat and forum, or can be offered by external service provider such as e-mail and video conferencing services.

A high richness of communication can help reducing not only the spatial but also the temporal gaps between participants and allows a flexible use of IT-based business simulation game. Moreover, “richer” communication also means more detailed content can be used in the conversation (audio-visual against only audio), which makes it more understandable. This is also the point where IT-based BSGs differentiate themselves from classroom BSGs.

The aforementioned categories and the arguments have presented the general features of IT-based BSGs. Generally, IT-based BSGs utilize a wide range of content, have a mediocre level of immersion, are highly interactive and allow for a wide range of communication channels. Besides, the general benefits associated to each feature categories are also introduced. These will serve as explanations for the application fields and usage purposes of IT-based BSGs in the next chapter.

2.3 Standard process of using IT-based business simulation games

Before proceeding to study the application fields and usage purposes of IT-based BSGs in the next chapter, it is necessary to understand the process of using this method in practice. However, there is a wide variance of BSGs on the market and each user tends to facilitate the game in his own way depending on the usage purpose. Thus, it is almost impossible to list and describe all the scenarios available. For that reason, this section can only introduce a standard simulation gaming process and a typical usage scenario of IT-based BSGs.

Blötz (2008, p. 13) introduced a typical usage scenario of IT-based BSGs, which conforms to a three-phase process introduced by Orth (1997, p. 30 ff.). This scenario and the three-phase gaming process are summarized in the following figure.

illustration not visible in this excerpt

Figure 3: The standard business gaming process

Source: based on Orth (1997, p. 30 ff.) and Blötz (2008, p. 13)

In the briefing phase, participants familiarize themselves with the simulated environment of the game. Moreover, general information including the purpose, structure, rules and goals of the games will be provided. Besides, organizational preparations also take place, which typically involves the arrangement of participants typically into groups.

The playing phase is the main part of the game, which requires the most time and efforts from participants. At the beginning of the phase, participants have to analyze the starting situation and, by reference to the game goals, construct a game strategy, which sets the guidelines for later decisions. Then, after decisions are reached and submitted, they will be evaluated and their effects will be presented. Then participants will have to analyze the effects of their last decisions as well as the actualized situation to adjust their strategies and make new decisions. According to Blötz (2008, p. 13), this phase is commonly conducted in rounds, each representing a period of time in the real world.

In the debriefing phase, usually with the help of instructors, participants emerge from the game world and discuss with each other to review their experiences and impressions. Then they begin examining the simulation model, which they just played to identify the equivalence between the modeled and the real world. In the last step of the debriefing phase, they only focus on the equivalences they already identified and consider which experiences to be relevant to them and will be kept and applied after the course (cf. Steinwachs 1992, p. 187).

Although the described scenario is the most commonly used one, in practice, many of its aspects can be varied. For instance, there are games that do not require participants to be present at the same place to play. There are also games, in which participants can play individually without any interaction or competition with other peer players. The role, which participants take during game play, can also be different. Examples are functional BSGs such as stock market games, in which participants take the role of stock exchange investors, or games that focuses on the training of specific job skills. In addition, the gaming process need not necessarily be divided into rounds. Real-time BSGs such as the stock exchange game previously introduced require learners to react continuously in a continuous game play. Finally, human instructors are not necessary for some kinds of BSGs either. A more detailed understanding of all the practical usage scenarios can only be provided by studying the classifications of BSGs thoroughly.

2.4 Standard architecture of IT-based business simulation games

Beside the gaming process, the standard architecture of current IT-based BSGs should also be introduced to provide fundamental knowledge for the study of the potentials in the next chapter.

On his website, Hall (2012) summarized his experience in developing BSGs and provided a standard architecture, which is shown below.

illustration not visible in this excerpt

Figure 4: A standard architecture of IT-based business simulation games

Source: Hall (2012)

As shown in the figure, the simulation manager controls the interaction between the systems and users. It receives input data and controls which data will be displayed and printed out for users. The control file defines the operation of the simulation manager while the constants file and text file are used by the simulation manager to control the operation of the engines. The decision entry engine receives user input from the simulation managers, checks their validity and displays comments on the inputs if they are wrong. If the inputs are valid, they will be forwarded to the simulation models to be calculated or to the reporting engine to be displayed back to users. The reporting and hypertext help engines use data from the reporting and help databases to generate reports or helps and send them to the display engine to be displayed or printed out. The core of the architecture is the simulation model, which uses data from the parameter database and input data from users to calculate the results. The result will then be sent back to the decision entry engine, which will adds comment and sends to the reporting engine to generate full reports. The reports will lastly be sent to the display engine to be displayed or printed out.


Excerpt out of 52 pages


Current usage and potentials of IT-based business simulation games
University of Göttingen  (Institut für Wirtschaftsinformatik)
Computer Science - Commercial Information Technology
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ISBN (eBook)
ISBN (Book)
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Planpiel, IT-gestütztes Planspiel, simulation game, business simulation game, current usage, aktuelle nutzung, potentials
Quote paper
Do Hai Dang Le (Author), 2012, Current usage and potentials of IT-based business simulation games, Munich, GRIN Verlag,


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