Profits: The False Prophet in Business Gaming

Historically, the profits generated during the course of play by companies in a business simulation have been used as a surrogate measure of the managerial ability of team members. Better measures of managerial ability would be gained by measuring and analyzing errors in forecasting over a wide variety of events. The ability to operate within budget constraints and to allocate limited resources among almost limitless needs is also an indicator of managerial ability. Assigning specific responsibilities to each individual on a team, and then evaluating that individual's effort, allow a grade or performance rating to be assigned to each member of the team. Measuring profit performance requires the limitation that all firms must start as equals. Without this imposing limitation, a much richer simulation environment could be established.