The Virtual Business – Professional (VB Pro) is a computer-based self-paced simulation that is designed for geographically dispersed users (students and executives) to individually and experientially learn the relevant and essential business concepts by running a virtual business. The targeted audience will generally be non-business/technical professionals (e.g., attorneys, engineers) in organizations and non-business students in colleges. VB Pro is also being adopted as a capstone course for business majors. Other VB simulations are available at www.precisedonline.com. 

 

The following concepts are learned from the simulation: 1) Conceptualizing and vetting a business idea including Internal and External Analysis, Break-even analysis, Target Market selection and development of a Value Proposition; 2) Basic Accounting and Finance culminating in Financial Statements – P&L, Stockholders Equity, Balance Sheet, Cash Flow and Financial Statement Analysis; 3) Marketing –  4Ps, Brand Management, SEO and Social Media; 4) Human Resources Laws and Principals; 5) Organizational Behavior – Culture, Politics, Conflict and Leadership; 6) Venture Financing and Capitalization Tables; 7) Exit Strategies – Mergers and Acquisitions, IPO; 8) Business Laws; 9) Research and Data/Digital Analytics; 10) Global Supply Chains and Management; 11) Economics; 12) Corporate Governance; 13) IT and Big Data. Details of the Learning Concepts covered in VB Professional can be reviewed from the Table of Contents of the book ALL THE BUSINESS Your CEO Would Love You to Know.

VB Pro incorporates specially created user-friendly software packages that can be used without learning programming. These software packages encompass spreadsheets, basic accounting and basic statistics. All these packages have been custom-programmed at the right place so that users can use them seamlessly and effortlessly as and when required. 

VB Pro simulation starts as an idea for a tiny restaurant with a gourmet burger as the product and continues until the business grows to be a publicly-traded diversified global company. This burger/restaurant scenario has been intentionally selected as almost everybody is familiar with such products/businesses. The knowledge gained from the simulations, however, is generalizable to other industries – services, B2B. 

The design of all the VB simulations is as follows. Participants individually run the business. While running the business, they are required to make decisions. To make these decisions, they need the applicable business theories. These theories can be accessed by them in real-time at their behest by clicking on an internal link. After reading the theories, users are tested for their understanding of the theories through Test Your Knowledge, TYK, questions. Following the testing, users make their own decisions – that are in the form of answers to Decision Making Questions DMQs. 

The general flow in every simulation is that it starts with Simulation Stories (SSs) that are short descriptions of situations in the virtual business and then moves on to one or more Learning Concepts (LCs). LCs are followed by a set of questions, TYKs. After completion of the necessary number of LCs and TYKs, there are one or more DMQs.

Making their own decisions means that they do not role-play any type of manager – they make decisions as they deem fit. For example, one user may believe that money is not the only critical criterion in a particular decision; employee satisfaction is too. The user is, therefore, allowed and expected to make decisions based on his/her beliefs. Unlike TYKs that have right or wrong answers, DMQs do not have right or wrong answers. A decision is good 1) if it incorporates all the information available at the time of making the decision and 2) if it is consistent with other decisions previously made. It is poor otherwise. 

Learning occurs on a need-to-know basis wherein the concepts from different functional areas are presented in an integrated fashion to the user as and when the need arises. Such real-time problem-driven learning leads to students knowing why the concepts are being learned and, hence, leads to better retention by the students. This real-time problem-driven philosophy can be best described by paraphrasing an old adage, “decision-making is the mother of information-seeking.” In other words, in the traditional model of learning, theories are taught, and then an effort is made to seek applications. In this flipped model of the simulations, users are immersed in an application, and theories are presented to help make decisions.

Besides the real-time problem-driven design of the VB – Professional, other design elements are: 1) All intricate or complex principles and theories are explained in an intuitive manner. For example, in the area of data analytics (a rapidly growing function), an intuitive understanding of why what and when statistical tests are required, if at all, and of how to interpret the results are emphasized. 2) Most business concepts and theories are presented in short modules of about 20 minutes. Finally, 3) Unlike traditional “simulations,” which are focused on one area and are suitable for applying knowledge gained from other courses, VB Pro educates participants cross-functionally across business disciplines as per Peter F. Drucker’s management philosophy. 

Metrics

Each Decision that is made has an Importance rating, and each of the Choices of a decision has a Quality rating. MDQI, Management Decision Quality Index, is an index that is used to measure the overall impact of the quality of all your decisions and of the interactions among the decisions. MDQI moves up or down with every decision made. This movement of MDQI is calculated as the product of Ix and Qx. Ix is the Importance of Decision x, and Qix is the rating of the Quality of the Choice i of Decision x. MDQI starts with a base of 100. Importance is measured on a 3-point scale, with 3 points being awarded to a very strategic decision and 1 point to a tactical decision with low downside risk. Quality of Choice is rated as -1, 0 or +1 to correspond to a Poor, OK or Good choice. 60 DMQs in Stages 1 to 5 are used to calculate MDQI.

Test-Your-Knowledge (TYK) Questions are based on the business concepts and theories that have been presented.  TYK questions appear after the Learning Concepts have been read.  They have right or wrong answers.  These answers are recorded and can be used to evaluate participants’ performance.

Artificial Intelligence (Natural Language Processing) is selectively used to gauge participants’ decision-making processes. Participants are asked to provide some pros and cons of their decision choices. These pros and cons are evaluated using NLP. After a certain number of pros and cons elicitations, it is assumed that critical thinking has been promoted. Users are no longer bothered by repeatedly asking to enumerate their thinking.

Being in the right place at the right time is part and parcel of any business. Many unforeseen environmental changes, unnoticed skills and personalities of new hires, or unforeseen interactions with influential individuals or corporations can help or hurt a business. Such events are called UUU (face Unforeseeable, Unpredictable, and Uncontrollable).  An index called Management Luck Index (MLI) has been created. To simulate whether a participant reaps profits by chance, the participant spins a wheel with different outcomes with different probabilities. There are several situations throughout the simulation where participants can win or lose by chance. The categories of outcomes, the probabilities, and the impact on MLI depend on the situation and are spelled out in detail when those situations arise.

Besides TYKs answers and MDQI, another quantifiable indicator can be used to monitor users’ business acumen.  This one relates to the profitability of the start-up in its initial stage, as judged by the student’s ability to predict demand on a daily basis. Profitability is calculated in Stage 2 only because the notions of “Economic Benefits” are ingrained in this stage only. This is keeping with the overall philosophy of the course –  once taught and learned, concepts are not recycled. 

The Profitability Score is based on wastage which is determined by the difference between the actual demand and purchased amount. (All ingredients used have to be fresh per your value proposition. The other cost and margin factors are more or less the same for all participants.) 

If Dij is the demand for individual i’s burgers in time period j and Pij is the amount purchased, the indicator of profitability used is (D_ij –P_ij)**2 . (The higher the (D_ij –P_ij)**2 the lower the profitability.) A Relative Profitability Index in % form is calculated. 

Estimating daily demand is a painstaking task, but it shows the difference between individuals on the attribute of being able to “keep one’s nose to the grindstone.” The demand is different for different price points and there are small random fluctuations across I and j.

Overall Performance can be judged on 3 factors, TYKs, MDQI and Profitability. Three percentages will be provided to you, one each for TYKs, MDQI and Profitability.

Users can view their progress and performance by clicking on “Dashboard” on the Navigation Bar on the left. Shown below are pictures of what a participant can see upon clicking on the “Dashboard.” Similarly, several reports are available for supervisors/instructors. These reports pertain to users’ progress, TYK performance, and DMQ choices. 

The DMQ reports are such that discussions can be readily facilitated by the instructor.

VB Pro also provides feedback to participants on their Principles-in-Use (PIU). PIUs are values you, consciously or unconsciously, hold and practice in an organization. 40 DMQs in Stage 6 are used to calculate the PIU scores. Eight PIU scores on four dimensions and the corresponding snake diagram are available as feedback on finishing Stage 6 of VB Pro.

Some Endorsements

VB Collegiate and Professional contain the essential content from a core of an MBA program. The rigor is ideally suited for time-starved engineers, attorneys, or other motivated individuals. 

V. “Seenu” Srinivasan

Adams Distinguished Professor of Management, Emeritus

Graduate School of Business, Stanford University

 

Cost-effective + highly efficient; integrated AI/NLP and statistical and business software.

Peter Letsou

Professor of Law and Former Dean 

University of Memphis Law School

I actually really enjoyed this. Optimal for theory acquisition and sharpening decision-making skills. I recommend group debrief sessions.

Corinne Dulles

VP, Optimal Strategix Group

Switzerland

Student Reports

Principles-in-Use (PIU)

Instructor Reports

Graded Questions x User Report

TYK DMQ Progress Report