Executive Development in Small Business

A management game is a laboratory exercise in which trainees assume the role of managers who are required to make periodic decisions relating to a hypothetical company or some functional area in the company. The essence of such exercises is that the periodic decisions require the manipulation of variables that modify the condition of the hypothetical company, and that decisions are made sequentially so that a time dimension is introduced. Many games permit competitive interaction between teams of trainees. The terms “management game,” “business game,” and “business simulation” are used interchangeably in the literature.

For the most comprehensive surveys, evaluations, and bibliographies now available on business simulation, see: Cohen K. J. Rhenman E. , “The Role of Management Games in Education and Research,” Management Science, VII (Jan., 1961), 131–166; Simulation and Gaming: A Symposium (American Management Association, Management Report No. 55, 1961); Proceedings of the National Symposium on Management Games (Lawrence: Center for Research in Business, University of Kansas, May, 1959); Paul S. Greenlow and others, Business Simulation (Englewood Cliffs, N.J.: Prentice-Hall Inc., 1962); Shubik M. , “Bibliography on Simulation, Gaming, Artificial Intelligence and Other Topics,” Journal of the American Statistical Association, LV (1960), 736–751; Jackson James R. , “Learning from Experience in Business Decision Games,” California Management Review, Vol. I, No. 2 (Winter, 1959), 92–107; Joel M. Kibbee and others, Management Games (New York: Reinhold Publishing Corp., 1961).

The computerized business simulation discussed in this article was developed at The University of Texas for the Small Business Administration.

A description of the Carnegie Institute of Technology management game can be found in K. J. Cohen and others, “The Carnegie Tech Management Game,” Journal of Business, XXXIII (Oct., 1960), 303–321.

As an example, see Kuehn W. H. , “Pitfalls in Managing a Small Business”, Advanced Management, XXIII (Apr., 1958), 5–10.

A number of research studies have concluded that small business firms do have unique management problems. For example see Basil Douglas C. , Organization and Control of the Smaller Enterprise, (Minneapolis: University of Minnesota Studies in Economics and Business No. 20; University of Minnesota Press, June, 1959); Christcnsen C. Roland , Management Succession in Small and Growing Enterprises (Boston: Division of Research, Graduate School of Business Administration, Harvard University, 1953); and Freedman H. S. , “Scientific Management and Small Business,” Harvard Business Review, XXVIII (May, 1950).

A survey of 1,323 small business concerns selected at random questioned what sources of help they relied on for aid and/or service. Forty-seven per cent of the respondents indicated they wanted no help. A reply such as, “I found that outside sources are long on theory and short on practical experience” was typical. Dun's Review and Modern Industry, LXXII (Dec., 1958), 69.

The Failure Record Through 1959 (New York: Dun and Bradstreet, Inc., 1960), p. 12.

One study which examined management errors in ten bankrupt small manufacturing firms found the most common deficiencies to be poor financial planning, failure to maintain adequate records, and poor coordination between manufacturing and selling activities, notably in the areas of market research and product planning. Woodruff A. M. Alexander T. G. , Success and Failure in Small Manufacturing Firms (Pittsburgh: University of Pittsburgh Press, 1958).

Alfred G. Dale and others, The Small Business Executive Decision Simulation: Administrators Manual (Austin: Bureau of Business Research, The University of Texas, April, 1962).

For a complete report of the initial testing and finding of the Texas Small Business Simulation, see A. G. Dale and others, Simulation Training for Small Business Executive Development (Austin: Bureau of Business Research, The University of Texas, 1962).