Goal Setting and Performance Evaluation with Different Starting Positions: The Modeling Dilemma

Computerized business simulations have long been used as a pedagogical tool in business policy courses. Student teams are charged with managing a hypothetical firm and are required to establish goals, strategies, and then implement their business plans. A review of 10 popular strategy-oriented games showed that most do not formally incorporate goal setting as part of the simulation model and all of the games had teams start with identical financial and operating statements. This article proposes a methodology that permits (a) individual team goal setting as a part of the computer model and (b) firms to start with different financial and operating positions. The methodology presented allows administrators to begin the simulation with each firm having different financial and operating characteristics. Firms then select their objectives and goals from a list and establish weights and priorities for each objective. A statistical algorithm, based on Chebyshev's inequality theorem, is then used to partition each firms' goals and results into three levels of difficulty: low, high, and medium. The procedure evaluates the extent to which the firm achieved its goals, the relative difficulty of the goals set by each firm, and makes a comparison to other firms in the industry.