Business war games
From Wikipedia, the free encyclopedia
Business war gaming (Corporate war gaming) or business wargaming is an adaptation of the art of simulating moves and counter-moves in a commercial setting. In a complex global and competitive world, formulating a plan without testing it against likely external reactions is the equivalent of walking into a battlefield without the right weapons or a plan to win. In situations where the cost of being wrong is high, war games can be very helpful to understand from a 360-degree perspective the external opportunities and challenges of all the key stakeholders in the industry.[1]
Unlike military war games, or fantasy war games which can be set hundreds of years in the past, business war games are usually set in the present and are a relatively recent development, but they are growing rapidly.[2]
The rationale for running a business war game is that it is a tool of particular value when the competitive environment is undergoing a process of change, as it allows decision makers to consider proactively how different players can react to the change, and to each other. The benefit of teams role playing competitors and developing more robust strategies is especially notable, and can be inferred from a quote such as the one below from Richard Clark, CEO of Merck and Co., who in an interview to USA Today said: "I am a strong believer in if you’re going to develop a vision or a strategic plan for the future of a company that you have to engage the organization in doing that…it can’t be just the CEO or top 10 executives sitting in a sterile conference room."[3]".
Though war games are used by many companies globally, they are not taught at most MBA programs. At the Southern Methodist University Cox School of Business over 500 students a year study how to war game using different topics each year such as the Battle for the traveler, Battle for the cloud and others.[4] At the Paul Merage School Of Business at University of California, Irvine the final exam for the competitive intelligence class developed by Dr Leonard Land and Arjan Singh is a war game in which the students role play various companies to try to win in the marketplace. Each year student teams have developed strategies - some of which have actually happened in the market place indicating that a war game is a very powerful predictive tool for business when planned properly.