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Hong Kong Monetary Authority (HKMA)

Business insight and common sense is key

PUBLISHED : Saturday, 05 April, 2008, 12:00am
UPDATED : Saturday, 05 April, 2008, 12:00am

Competitors should worry about their opponents and not try to compete with the computer, says organiser

Participants of business simulation games, where players create and manage their own imaginary companies, all too often make the mistake of assuming the secret to winning lies in figuring out a generic strategy that can demystify the complexity of the software.

This couldn't be more ill-advised. In fact, it is this very approach that has more frequently than not contributed to the downfall of contestant teams at the Hong Kong Management Association's (HKMA) annual game event.

Launched in 1971, managers and executives from various sectors have come together to form teams every year, to establish fictitious companies to tackle virtual challenges posed by the game. These issues are designed to mirror everyday business problems and can range from budgeting, marketing and strategy, to planning over the course of several rounds played via e-mail with the exception of the final round.

'Doing business requires some business insight and common sense. As the game reflects business reality, these two ingredients are also required in order to excel in the game,' said Glover Chan Wing-wah, HKMA's senior marketing manager.

He added some of the less successful teams who thought the game was played against the computer spent a lot of time trying to beat the programme rather than addressing the crux of the competition: what other contestants were doing.

'It might have been possible to manipulate the game years ago when we were still using pen and paper to play,' said Russell Morris, a Denmark-based consultant to the HKMA, who has been developing business simulation games for the competition for over two decades. But with the game's growing complexity reflecting different facets of business issues and tricky management problems, commercial know-how has become as important as understanding what other teams are doing.

'This is a competition against other teams, not against the computer, which only provides a platform for the competition. Teams therefore have to plan and anticipate what their competitors will do under the prevailing conditions,' explained Mr Chan.

Issues that arise include deciding whether a company should outsource its business when a downturn is expected, or lower prices and increase marketing in order to recoup more market share, he added.

To raise the reality component of the game, the designer has launched an additional new feature known as winner-takes-all. The game will now allow teams to bid for relevant business contracts, such as sole sponsorship of a television programme or bidding to build a large chocolate model for a newly launched mobile phone company.

'With the flexibility of the system, many business environments can be simulated. The management game is definitely of great value to executives who will come to appreciate the intricacy of strategic decision-making,' noted Mr Chan.

One of the most common weaknesses Mr Morris has observed from his experience of devising business simulation games worldwide is participants' short-sightedness. 'It is common for people to look at things very locally. Hong Kong is not unique in this but very often, people lack the international vision and aren't able to look very widely at things,' he said.

To counter this, the veteran game designer encourages each team member to take responsibility for an entirely new area in the game, different to what they are used to doing at work, as this would give each person a better understanding of the various management roles.

'The game shows how different components of business fit together,' said Mr Morris. 'No single department is considered more important than the other. The game requires no specific knowledge area. It is much more about common sense and thinking about what you are doing and what your competitors are doing.'

Ironically, senior executives and those in management roles can find these games more challenging than their junior counterparts whose minds are generally fresher to the world of business.

'In some cases, managerial experience can be an advantage, but the game can actually be easier for people not in senior management roles because they have fewer preconceived ideas of business. People who have been doing a specific job for 25 years can find it especially hard to take an overview, especially if their experience is in one area only,' he said.

The game is ultimately an ideal platform that allows theoretical knowledge to be tried and tested yet bears none of the intimidating repercussions of the real-life corporate rat race. 'There is no right or wrong answer,' said Mr Chan. 'Consistency, persistence and willingness to take calculated risks win in the long run.'

Classified Post is the official media partner of the event. For the free HKMA game trial, participants must apply by April 15. Registration for the official competition, which will comprise of eight rounds, is set for May 14. Winners of the Hong Kong competition will go on to compete at a regional level.