Simulating Capstone business experience

Scores of Indian B-schools are approaching Capstone Business Simulation, an arm of US-based Management Simulations Inc (MSI), to incorporate its simulation programme in their education curriculum.

Dharam Pal, MD, sansRisk Credit Solutions that represents MSI in India, claims that of the existing 1,500-odd business schools in India, nearly 300 institutions have come forward to adopt the simulation programme.

The Capstone programme is a laboratory course that uses enterprise simulation. Teams play the role of managers and engage in an experience that integrates all of the functional areas of business. Special emphasis is given to the application of the strategic management process. The business simulation consists of competing teams, which run hypothetical companies.

The simulation is cross-functional and integrates all major elements of the business decision-making process. Each team will have the opportunity to set corporate strategies and apply strategic concepts and techniques within a practical decision-making framework.

The programme had already become part of the business education curriculum of over a dozen Indian institutions including the Indian School of Business, IIM- Ahmedabad, IIM-Bangalore and in IIT- Kanpur management course. Worldwide, more than 500 universities including Harvard, Wharton, Kellog and Michigan have Capstone programme as part of their business education curriculum.

Capstone conducts strategic workshops for corporate members. While it charges $2,000 per team in case of corporates, it provides the programme to business schools at a subsidised rate of $200 per team. Capstone's participants in the strategic workshops come from over 40 organisations including Infosys, GE, Hindustan Lever, TCS, Citibank, Wipro, Asian Paints and Pepsi.

Pal said a participant gets to run, as part of a team, a $100-million company for eight 'virtual' years, making all the decisions relating to inventory management, cash management, marketing, R&D, equity/bond/short-term financing, production, sales/promotion, total quality management (TQM), HR and labour negotiations. "

They stop looking at business from their function (production, finance, etc) angle alone. Instead, they acquire a strategic/holistic mindset towards business. They come to understand the entire business process and its nuances in a simple and unforgettable manner.

Managers form teams to manage simulated corporations. Each simulated corporation competes with five other corporations, for eight simulated financial years. The winning teams achieve the highest profits, sales, market share, stock price, return on assets (ROA), return on sales (ROS) and other measures. The simulation is delivered in online/on-site formats.

In an online format, participants located at different locations, compete against each other for net profit, stock price, marketshare, return on assets (ROA), return on equity (ROE), return on investment (ROI), ROS, etc. The simulation delivery formats are highly customisable to participants' requirements.

Similarly, the pace of delivery of the simulation is totally flexible, they may opt to complete entire simulation from 2-3 days to 8 weeks. "While most other simulations teach a participant about what a simulation is all about, Capstone teaches a participant how to run a business well," Pal said.