Learning to manage business

Putting heads together

Putting heads together  

WHAT IS Chanakya best known for? Anyone who has some knowledge of history will tell you that this prime minister of Chandragupta Maurya gave a new definition to administration.

Kautilya, as Chanakya was known, was more than just a prime minister. In fact, it is believed that he was the brain behind Chandragupta's rise to power. His Arthashastra is considered a masterpiece on administrative matters. What Chanakya prescribed for rulers could be applied to businesses as well.

And with managing businesses becoming a tough job, managers need to be `Chanakyas' in their own way to run business operations successfully. As budding managers, students of management should also know the nuances involved in decision-making across functional departments and the business.

The seventh national-level students management games (SMG) based on `Chanakya', the computer-based management simulation developed by the All India Management Association (AIMA), conducted at the Jansons School of Business, recently, aimed at sensitising the students on leadership and teamwork - the key to corporate success.

So, what was the game all about? According to organisers, the objective of the game was to make students understand complex business situations. The game involved decision-making in a company with focus on the measure of performance.

Before the game began, the games administrator briefed students about the rules. Every team was given a company name and ID number. There were a number of decisions to be taken during the course of the game and the team had to identify the ones to be taken on a regular basis.

The game was played in rounds with each representing a quarter. At the beginning of each round, students were presented with new business threats and opportunities. The teams had to take decisions. The impact of these decisions was communicated to the teams in the form of reports at the end of each round.

After receiving reports, team members had to take another set of decisions based on past performance and the emerging scenarios. Though the teams started off with identical financial structure, assets, liabilities and production capacities, the wealth created or lost largely depended on the strategies adopted and the level of competition in each quarter.

Working out strategies

Working out strategies  

But, students did not have total autonomy in decision-making, as they were part of a team where convincing, cajoling and coercing were required to formulate a plan of action. However, they could control the product mix, manage inventories, formulate a credit policy and carry out other operations that CEOs of businesses usually do.

At the end of each round, the profits indicated the effectiveness of the business decisions by each team. Each team had four persons. Members were required to elect a chairperson as the team leader, who allocated the functional responsibilities like finance, operations and marketing to other members.

The constitution of the team and the responsibilities given to individual members had to be intimated to the games administrator.

The chairperson was held responsible for the contents in the decision forms, which had to be handed over to the games administrator.

So, what was the winning criterion? Various performance indices like earnings per share, cumulative profit after tax, reserves and surplus, book value and market price per share and market capitalisation were taken into account for choosing the winner.

The winning team was selected on the basis of accretion of net worth and shareholder value. But, the game was not just about winning. The administrator asked the students to see the game as a learning process and an opportunity to test their knowledge.

During the course of the game, students experimented and in the process made mistakes, which would have cost them dearly in real life. Shirish Sambre and S.C. Tyagi of the AIMA conducted the games in which 65 teams representing colleges in South India took part. The team that won in the Southern region would compete in the finals to be held in New Delhi on October 10.

By Allirajan M.

Recommended for you