Description
During this information point developing entrepreneurial skills through the use of behavioural simulations.
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Developing Entrepreneurial
Skills through the Use of
Behavioural Simulations
Stephen S. Stumpf, Roger L.M. Dunbar and Thomas P. Mullen
Leonard N. Stern School of Business, New York University, USA
Entrepreneurship has been variously defined. Schumpeter[1], for example,
suggested it involves "the carrying out of new combinations of activities".
Drucker[2] describes it as "searching for, responding to, and exploiting
opportunities". McMullan and Long[3] define it as "involving uncertainty and
risk, managerial competence, and creative opportunism". Teaching
entrepreneurship and providing managers with the opportunity to learn about
entrepreneurship continues to be actively discussed as the field evolves and
develops [4].
This article explores how a particular type of experiential activity can be a
vehicle to help people to learn how to enhance their entrepreneurial behaviour.
Our particular interest is in behavioural simulations[5], wherein people experience
the unique character, complexity, and often ill-structured nature of both
management in general and entrepreneurship in particular. The empirical work
of Hills[6] and a discussion of entrepreneurship education research by Block
and Stumpf[7] suggest that goals for entrepreneurship education include abilities
to: acquire knowledge and concepts germane to entrepreneurship; acquire skill
in the use of such techniques in analysing business situations and synthesising
action plans; identify and stimulate entrepreneurial drive, talent and skill; undo
the risk-averse bias of many analytical techniques; develop empathy and support
for the unique aspects of entrepreneurship; and alter attitudes towards change
in such a way that individuals use change as a stimulus for learning rather than
denying or resisting it. If one accepts these learning objectives, then behavioural
simulations appear to be an underutilised technology that can help people learn
to behave entrepreneurially.
Simulating Entrepreneurship
Simulations have been designed to model many different processes, events,
and things. For example, the flight simulators used in the training of pilots by
airlines and the military recreate the cockpit of an aircraft along with most take-
off, in-flight, and landing conditions. The trainee actually sits in the simulator,
moves the rudders, ailerons and throttle, both seeing and feeling the effect
of the simulation capsule moving in response to his or her actions. In contrast,
much simpler "flight simulators" can be run on a personal computer in the
comfort of one's home and can simulate the attitudes of the aircraft on a screen.
What one is able to learn from the former flight simulator is very different from
J ournal of Management
Development, Vol. 10 No. 5, 1991,
pp. 32-15, © MCB University
Press, 0262-1711
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and much more personally relevant than any learning that might be derived
from the latter simulation.
These two different types of flight simulator both involve a computer and have
become possible because of developments in computer technology. A different
type of simulation has also been developed over the past ten or more years as
part of management education programmes which makes no use of computers.
Referred to as a behavioural simulation, such simulations have a distinctively
behavioural focus[5,8]. Like some computer simulations, behavioural simulations
create a corporate entity or context which includes a variety of realistic business
functions. While computer simulations focus on calculating the results of the efforts
of those using the simulation, behavioural simulations focus on the inputs
themselves, including behaviours and other decision-making processes, which
participants use to manage the simulated company. While computer simulations
teach about a fixed set of effort consequences captured by a pre-programmed
model, behavioural simulations teach about the sense-making and opportunity-
seeking processes that are the participants' inputs into the activity.
It is not surprising, therefore, that simulations that are programmed, and
constrained primarily to cognitive inputs from participants, and then to analytic
output from a computer, yield learnings which are different from simulations
that focus on recreating a context in which participants do what they would
do if the simulated environment was replaced with an actual situation. We argue
that it is this latter type of behavioural simulation that has the greatest
applicability to entfepreneurship education.
How Behavioural Simulations Work
Behavioural simulations re-create a business entity through written materials
(an annual report, in-baskets, financial data), an office environment, and lots
of interpersonal interactions around issues and opportunities. The various
functions of marketing, R&D, finance, personnel, operations, and accounting
are generally present. The simulated company is part of an industry; it
experiences competitive, economic, legal, social, political, and regulatory forces
just like real companies. Yet, no programmed model of the firm or industry
is used to specify key relationships among any variables under the control of
the participants.
Individuals assume the varied managerial roles in the simulated organisation,
bringing with them their knowledge base and individual goals, along with any
particular focus or perspective developed within the course of which the
simulation is a part. The participants have complete control of their actions
and of the simulation outcomes. Depending on the goals, styles and skills of
the people involved, different issues may become important, and issues may
be defined in different ways with different solutions for the same issue.
Creative opportunism is both possible and encouraged. There is no single
right way to manage onself, other participants, or the behavioural simulation.
Actions and inactions which evoke attention and discussion depend on the
concepts and theories that are designed into the educational experience and
the participant dynamics exhibited in leading the fictitious organisation. Feedback
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is quick and rich; it is based on participants' views and actions often captured
on a post-simulation questionnaire and subsequent small group discussions.
A large amount of feedback is provided which is linked to the specific behaviours
observed and the actions or absence of actions reported by participants.
There are intensity, excitement and a realism for both participants and
facilitators when taking part in a behavioural simulation that are difficult to
describe. This article will not do it. Videotapes of others performing in a
simulation will not do it. But, when you are in one, you feel it. You can easily
engage others who have experienced one in discussion about behavioural
simulations; people who have not experienced one have difficulty imagining what
one actually does in a simulation or the nature of the learning that occurs.
We have often experienced this sense of helplessness in describing behavioural
simulations to colleagues, deans, and corporate training and development people.
We say things like: "Metrobank and the Northwood Arts Company are in-basket-
based fictitious organisations derived from real events that require participants
to assume the leadership of the organisation." Or "Foodcorp, re-creates a set
of business situations, people work in a typical office environment, read their
mail, conduct meetings, share ideas, and look for ways to improve their individual
and organisational effectiveness." While we get polite smiles to suggest that
this is understood, other non-verbal cues suggest confusion. Worse yet, some
people cannot let go of their image or memory of a computer-based simulation.
To reduce this confusion and redefine the concept of a behavioural simulation
to eliminate the computer image, we invite people to participate. After they
experience a behavioural simulation, they agree that our description is accurate.
But now their problem is akin to ours; they do not know how to transmit to
others what they have experienced in a way that expresses the essence of what
they learned, nor the excitement of what they felt.
What Happens and When
Prior to a programme using a behavioural simulation, participants are provided
with extensive information detailing the organisation's structure, financial status,
product lines, and services. The information comes in the form of an annual
report or business plan, internal and consultants' documents, product
descriptions, and market research. Participants familiarise themselves with the
material before they arrive for the start of what is often a weekend activity
or a three-day off-site educational programme. They have the opportunity to
prepare for the event through conducting whatever analyses or techniques they
find useful.
The facilitators also prepare for the programme by reviewing the programme
materials and participant biographies. Facilitators have already experienced the
simulated company through past participation, have co-trained the simulation
with an experienced facilitator, and have been lead facilitators of a programme
as part of their training.
The agenda for a typical programme would include a pre-programme
assignment that requires four or more hours of reading and analysis, the
completion of a self-assessment of one's skills, and the collection of on-the-job
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peer, boss, and subordinate assessments of one's managerial, leadership and/or
entrepreneurial skills (which are discussed as part of the programme). The
programme begins with participant and staff introductions followed by a review
of the programme objectives. Objectives common to many uses of behavioural
simulations are to: (a) enhance one's understanding of the relationship between
entrepreneurial and managerial behaviours and organisational performance; (b)
examine how one's actions promote or inhibit effective teamwork; and (c) provide
a basis of understanding strategic, organisational, and entrepreneurial processes.
A typical agenda would include:
Prework: Setting up for the Experience
• Overviewing the programme (objectives, agenda, administrative details).
• Introducing and providing an opportunity to practise the concepts, models,
tools, etc., that are part of the programme.
• Discussing the use of simulation as a way to diagnose and practise one's
skills.
• Providing time for participants to self-select roles and prepare for the
simulation.
• Sharing personal learning objectives and feedback from co-workers
through one-to-one meetings with facilitators.
• Meeting with reporters to discuss the work situation facing the company
as a way to help the participants internalise their roles and key company
information.
Day 1: The Experience
• Managing the business for a day; facilitators observe the process.
• Identifying individual and group actions taken by completing a
questionnaire at the end of the day.
• Discussing how the day went, how it felt, what was worked on by whom.
Day 2: Learning from the Experience
Participants and facilitators:
• Review "What happened?" via questionnaire feedback and group
discussion.
• Explore "How did it happen?" via questionnaire feedback and group
discussion.
• Share personal observations of one another's style and skills via peer
feedback.
• Identify implications for real work behaviour through personal conferences
to ensure that both the programme and personal learning objectives are
met.
For a more detailed description of the processes that occur during a behavioural
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simulation, including the role of the training staff, see[8] and[9]. For a detailed
comparison of various behavioural simulations known to the authors, see[10]
and[11].
How the Learning Takes Place
As suggested by the schedule above, much of the learning takes place in
behavioural simulations through working with peers and facilitators in exchange
relationships. Stumpf and Dutton[8] suggest that a "dance" metaphor is a useful
framework for understanding the nature of the learning which occurs. Dancing
is individualised, but often a group event. It can involve different partners at
different times, change in pace, and be customised. Most importantly, it is a
multimedia process — thinking, doing, feeling, feedback, more thinking, doing,
feeling. The result is often a memorable experience with the development of
many personal insights that go beyond what one could get out of a textbook
or case experience.
Since behavioural simulations depend on the quality and nature of many
interactions that are not under the control of the instructor, it is possible for
participation in a simulation to be perceived as threatening by some people.
Behavioural simulations generally minimise this possibility by creating a context
for low-risk, high-pay-off exchanges among participants. Participation in a
behavioural simulation is low-risk because it is encapsulated (typically conducted
away from the usual place of business), of short duration (a few hours to two
or three days), not one's real job (it is a simulation), involves temporary
participants (people do not have to see each other again), and permits the
participants to control the content and pacing of the learning.
In contrast with these risks, behavioural simulations provide a rich context
for high-pay-off learning through:
(1) encouraging personalised learning with different participants;
(2) creating many opportunities and different things to learn as a result of
the rich informational and interpersonal environments;
(3) focusing attention on actual behaviours exhibited and the effects of those
behaviours on the enterprise and its members.
To the extent that this high-pay-off learning is directed towards strategic,
organisational, and entrepreneurial processes, it can have substantial value for
entrepreneurship education.
What Entrepreneurial Skills Can Be Learned?
By observing the language and concepts used by behavioural simulation
participants (both corporate managers and entrepreneurs), as well as analysing
the behaviours they exhibited, two sets of skills have been identified which can
be diagnosed and learned through participation in behavioural simulations:
(1) core competences;
(2) strategic leadership skills.
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Core managerial competences include motivating others, influence skills,
information sharing and collecting, delegation, communications skills, control,
organising, and planning. A second and distinct set of qualities which seem
particularly critical involve:
(1) knowing the business and markets;
(2) managing subunit rivalry;
(3) finding and overcoming threats;
(4) staying on strategy;
(5) being an entrepreneurial force;
(6) accommodating adversity.
We think that this latter set of strategic leadership abilities also represents
the sorts of skills that are particularly relevant to entrepreneurship
education[2,3,12,13].
Research Methods
The research conducted involved a sample of 317 business people as participants
in one of several different behavioural simulations over a two-year period. Twenty-
eight simulations were conducted involving 10-12 participants. Each participant
selected one of the 12 roles in the simulated company, ranging across three
hierarchical levels (CEO, Executive Vice Presidents of functional areas or groups
of businesses, and Senior Vice Presidents of functional areas or lines of
business).
Sixty-seven firms were represented in the sample, including several
participants from such firms as Citicorp, Metropolitan Life, Dow Jones &
Company, Texaco Canada, and First Union Corporation. Each participant had
direct responsibility for determining the strategic direction and accomplishments
for their real-world business or business unit. Based on a pre-programme
questionnaire, participants indicated their company, level within their firm, and
their responsibilities. Based on these responses, 137 individuals were classified
for the purpose of the research as entrepreneurs. Their positions included CEO
or president of a small business or partnership; heading up a new business
venture, start-up operation, or new product launch; self-employed professionals;
and venture capitalists.
In preparation for the three-to-five day educational experience, participants
were asked to have several co-workers on the job (including one's boss, peers,
subordinates) complete a confidential 20-item questionnaire on their leadership
skills and work performance. The questionnaire items were derived from the
business literature and facilitator observations of past participants. Inter-rater
reliability was moderate to good (rs from 0.53 to 0.86). (For more information
on the measurement instrument see[13].)
The dependent variable used in this research was the extent to which an
individual's peers in behavioural simulation assessed the individual as making
important contributions to the performance of the simulated company. Each
participant nominated up to three peers for their contributions to the simulated
company in each of eight issue areas. The sum of these peer nominations across
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issue areas was the measure of peer assessment used. This measure was
collected immediately after the simulation and before any group discussion had
taken place.
Results
Managers who were observed by their real-life bosses to exhibit more managerial
skill were also viewed by their peers in the education programme as being the
ones who made more contributions to the running of the simulated organisation.
All 20 skills were statistically significant at the 0.05 level (two-tailed-test of
significance), and six of them correlated 0.40 or higher with peer assessments
of one's contributions. Thus we can conclude that the assessments of the skills
and abilities of the same individual in real and simulated environments are related.
More importantly, the skills that were viewed as most critical to performance
reflect key skills which are believed to be necessary to become an effective
entrepreneur, e.g. asking thought-provoking questions that relate to the business
unit's future actions; generating many alternatives to key issues; redefining
issues to make them more understandable; seeking to strengthen the business
unit's competitive advantage; creating a vision of what the organisation could
be; and championing innovative ideas, even when faced with scepticism, risk,
and/or resistance.
In addition to these overall results, two additional analyses were performed.
First, we were interested in whether or not there was a "role of hierarchy"
effect within the simulation. That is, do some roles such as the president's
or the chief financial officer's permit more entrepreneurial activity than some
others lower in the hierarchy, e.g. personnel manager? Does hierarchical position
pre-empt or restrict creative opportunism within the simulation? While the
relationships did vary across hierarchical, there were no statistically significant
differences among these correlations at the 0.05 level.
The second analysis involved comparing entrepreneurs with managers. In
five instances, the relationship between on-the-job and simulation assessments
was significantly stronger for the entrepreneur subsample than for the manager
subsample. Specifically, a consistent relationship across the two contexts was
perceived more strongly for entrepreneurs with respect to their abilities to:
(1) identify constraints to remove or avoid them (rs of 0.47 versus 0.26);
(2) create a vision of what the organisation could be (rs of 0.58 versus 0.37);
(3) champion innovative ideas, even when faced with scepticism, risk and/or
resistance (rs of 0.63 versus 0.40);
(4) deal with setbacks by being resilient (rs of 0.45 versus 0.25);
(5) exhibit comfort and tolerance when dealing with ambiguous tasks (rs
of 0.32 versus 0.10).
An interesting reverse effect also occurred. As opposed to entrepreneurs,
managers were perceived as more likely to be able to redefine issues to make
them more understandable (rs of 0.52 versus 0.26).
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This research was not designed specifically to test hypotheses regarding skills
of entrepreneurs versus managers. Nevertheless, the results concerning
perceptions across real-world and simulated contexts seem to be consistent
with the literature regarding what is required to be successful in entrepreneurial
positions. They suggest that, to the extent that a person is recognised as
behaving entrepreneurially in the real world, he/she will also be recognised
as behaving in this way in a simulation. To the extent that a person lacks these
behaviours, a behavioural simulation provides an experiential context wherein
one can meaningfully discuss and learn exactly what it would mean for each
particular individual to behave more entrepreneurially.
Discussion: Objectives of Entrepreneurship Education
What entrepreneurship education objectives could be accomplished through the
use of behavioural simulations? Six objectives for entrepreneurship education
are discussed based on an empirical study conducted by Hills [6] and a discussion
of educational research presented by Block and Stumpf[7]. Following a definition
of each objective, we identify roles for the instructor and managers that
management educational theory suggests would facilitate the accomplishment
of the objective. We then explore the use of behavioural simulations as a
pedagogical tool to accomplish the objective.
Acquire Knowledge and Understand Concepts Germane to Entrepreneurship
The thrust of much entrepreneurship education is to provide content knowledge
about some specific area or discipline. Such knowledge often takes the form
of increasing awareness and understanding of the processes involved in initiating
and managing a new business enterprise. For example, content areas covered
in many entrepreneurship courses include:
• the nature and unique demands of start-up ventures;
• alternative ways of identifying business opportunities;
• techniques for analysing and evaluating opportunities;
• frameworks for identifying resources (capital, materials, labour, advisers,
mentors) and constraints (licences, laws, taxes);
• ideas on how to facilitate the maturation of new ventures into growing
businesses;
• understanding the role of new and smaller firms within the economy.
Knowledge, concepts and techniques are typically taught through lectures, class
discussions, expositions of business practices, "problemettes" and structured
cases. For these learning objectives, Dooley and Skinner[14] propose that the
instructor's role is to narrate, expose, enlighten, provide expertise, and explain
taxonomies, techniques and interrelationships among concepts. The managers'
role is to listen, question, and work problems and examples.
The utility of behavioural simulations in accomplishing this objective is limited.
Managers could apply or use some of the analytic concepts presented within
the course prior to the simulation (e.g. develop a new venture plan for the
simulated company), or they could develop action plans after the simulation
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based on the activities during the simulation (e.g. if managers chose to enter
a particular product-market segment, they could be asked to develop a financial
and marketing plan for doing so). In either case, the power of the simulation
experience will be tangential to the learning objective of acquiring knowledge
and understanding concepts germane to entrepreneurship.
Acquire Skill in the Use of Techniques, in the Analysis of Business Situations,
and in the Synthesis of Action Plans
Entrepreneurship involves the use of the knowledge acquired from many different
fields such as accounting, financial analysis, marketing, information systems,
leadership and general management. The ability to integrate business functional
knowledge into a holistic activity requires exercising skills of analysis and
synthesis.
In contrast with the instructor's role noted above for the knowledge-acquisition
objective, Dooley and Skinner[14] propose that the instructor's role in teaching
analytical skills is to challenge, question and probe managers to develop greater
realism. Complementing the teachers' role, the managers' roles are to develop
skill in applying techniques, evolve an understanding of cause-effect relationships
based on analysis of facts and logical inferences, and establish priorities for
action based on probable outcomes and implications.
Behavioural simulations allow managers to confront realistic business situations
that are complex and ill-structured. The implicit emphasis within simulations
on taking some action encourages managers to go beyond the knowledge they
have acquired to using that information in constructive ways. Just as developing
a business plan for a new venture or product requires the integration of separate
functional skills into a single document and presentation, participation in a
behavioural simulation stimulates the integration of separate functional skills
into verbal arguments and proposals for action. By encouraging managers to
grapple with the ambiguity and conflicts implicit in such activities, a behavioural
simulation provides an opportunity to move from concepts to practice.
Identify and Stimulate Entrepreneurial Drive, Talent and Skill
The willingness and ability to lead a venture under conditions of relatively high
uncertainty vary among individuals, and possibly within individuals depending
on the situation and their life experiences. A third objective of entrepreneurship
education is to increase manager awareness of the new-venture/smaller company
career possibilities and to help individuals develop an awareness of their
entrepreneurial interests, capability and potential. What does it mean to be an
entrepreneur? How does one create a mission and vision for the enterprise
that inspire others to follow? How well does one function under conditions of
ambiguity, adversity, and personal or professional risk? Does one have the ability
to champion an idea, yet remain flexible in approach and have the resilience
to bounce back after setbacks? Developing an awareness of what it feels like
to manage under such conditions may be as important to developing successful
entrepreneurial careers as are the knowledge, concepts, and skills acquired.
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The role of the instructor in identifying and stimulating entrepreneurial drive,
talent, and skill is that of a counsellor or coach. Most of the time should probably
be spent listening, observing, and sharing constructive feedback. The manager's
role involves active diagnosis and reflection, sharing one's insights, and seeking
additional viewpoints and experiences to validate the insights. The current
opportunities for instructors to help individuals assess their entrepreneurial
drive, talent, and skills are severely constrained within a classroom setting.
In contrast, behavioural simulations are specifically designed to provide the
opportunity for managers to enact their role with respect to this learning
objective. Peer, instructor, and self-appraisals can lead to self-understanding
and insights. Such feedback may also stimulate an awareness of and interest
in one's entrepreneurial potential. Thus behavioural simulations can be an
important vehicle for achieving this teaching objective.
Undo the Risk-averse Bias of Many Analytical Techniques
Many analytical techniques and managerial practices tend to reinforce a risk-
averse value by discouraging personal and interpersonal risk taking. Managers
who generate creative answers to standardised cases or critical incidents are
typically discouraged from doing so. With the exception of programmes on
creativity, few management development efforts place much emphasis on finding
lots of "right" answers to situations or exploring the ethics, values and
entrepreneurial aspects of issues[15]. The result has been a bias towards
quantitative analysis and the delay of actions until all the desired data are available
and analysed. Since there is rarely an obvious or single right answer to the
more interesting business situations, analysis dominates intuition, envisaging
and other less analytical ways of thinking.
A fourth objective of some entrepreneurial education has been to undo this
bias towards analysis and finding the "analytically right solution". Undoing the
bias means education on the risk-taking process, how to manage risks through
actions that spread risk across a wider group of stakeholders, and how to cut
losses and stretch gains well beyond what history tends to suggest. The extent
to which the bias towards risk aversion is reduced is difficult to assess through
testing. In contrast, it is potentially observable in manager actions, either in
actual entrepreneurial activities or in behavioural simulations.
The instructor's role in helping individuals to reduce their risk-aversion bias
is first deconstructive, followed by reconstructive. Through the examination
of issues from many different perspectives, a variety of possible courses of action
can be articulated. By denying the more risk-averse possibilities, attention can
be directed towards those actions that balance risk with precautions and rewards.
The manager's role in this is to debate outcomes while remaining open to
multiple, viable courses of action.
Behavioural simulations create an environment with nearly unlimited risk-
taking opportunities. We have observed participants take actions that, as
facilitators, we had not even imagined. The high-risk actions are not viewed
as either right or wrong within a behavioural simulation because no computer
models or algorithms are used to evaluate the actions. Rather the debriefing
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process is used to raise discussion about high-risk actions, how they are
promoted, how they are agreed to, and what sorts of procedures are actually
used in practice to safeguard against risk. In these discussions, attention can
focus on both the content and interpersonal issues, facilitating the debate and
awareness about the nature of deconstructive and reconstructive processes.
As a result, how the riskiness and trade-offs inherent in various actions are
perceived, explored, or ignored can be examined.
Develop Empathy and Support for the Unique Aspects of Entrepreneurship
Not all individuals who seek education in entrepreneurship wish to be
entrepreneurs. Some may. Others may wish to explore entrepreneurship on
an intellectual level. Still others may recognise the need for entrepreneurship
in society, and attend a programme so as better to understand this discipline.
A learning objective for this latter group is to have them develop an understanding
of the distinct characteristics of a business in evolution from the seed of an
idea to a stable, ongoing enterprise. Similarly, it may be useful for them to
understand better the distinct behaviours of individuals as entrepreneurs, both
cognitively and emotionally.
The value of such an objective is similar to individuals taking courses in any
area outside their major area of study. They are interested in content knowledge,
but not for its direct application to their immediate career. Rather they are trying
to broaden their understanding of their life or work environment so as to be
more effective in working with and through other people.
The instructor's role in developing empathy and support for entrepreneurship
is to raise the issue of managerial attitudes towards entrepreneurship and
stimulate excitement about entrepreneurial activities. The manager's role is
to develop a meaningful place for entrepreneurship within their work lives through
both their understandings and experiences.
Behavioural simulations provide a rich experience base in which to explore
entrepreneurial activities and actions. Participants become aware of one another's
entrepreneurial spirit and values. Because the behavioural simulation process
involves many interpersoail exchanges, participants often develop an
understanding of and empathy for others.
Change Attitudes towards Change
Many people resist change. Others accept it, but only when it is thrust upon
them or does not directly affect them. Still others embrace change as a catalyst
for learning — they look for it and actively accept it when it can lead to a more
efficient or effective way of conducting business. A sixth objective of
entrepreneurship education may be to educate people on how to embrace change
and stimulate the desire to innovate. As with the objectives of reducing risk
aversion and developing empathy and support for entrepreneurship, creating
a positive attitude towards change involves emotional as well as cognitive learning.
The role of the instructor is to assist individuals in developing more open
attitudes towards change. The manager's role is to tolerate the ambiguity
created, accept the uncomfortable feelings that initially emerge, and trust their
intuition that changes can be managed to be productive.
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Pedogogical preferences
Objectives Instructor role Student role
Acquire knowledge Narrate, expose, enlighten Listen, question, work
germane to and explain various problems, and gain content
entrepreneurship techniques, concepts, etc. knowledge
Acquire skill in the use Challenge, question, and Develop skill in applying
of techniques, in the probe students to develop techniques, evolve
analysis of business greater realism understanding, establish
situations, and in the real-world priorities
synthesis of action plans
Identify and stimulate Be a counsellor or coach Active diagnosis and
entrepreneurial drive, — listen, observe and reflection, share insights,
talent and skill share feedback seek many viewpoints and
experiences
Undo the risk-averse Deconstruction of past Debate outcomes, remain
bias of many analytical perspectives, open to alternatives
techniques reconstructive attitudes
Develop empathy and Raise questions about Develop a sense of the role
support for the unique attitudes, stimulate of entrepreneurship in their
aspects of excitement work lives
entrepreneurship
Change attitudes towards Assist people to develop Tolerate ambiguity, accept
change more positive attitudes uncomfortable feelings, trust
towards change intuition
Behavioural simulations are ideal tools for changing attitudes towards change.
The very nature of simulation — it is realistic but not real — allows people
to see clearly what their own and others' attitudes to change may be, without
being able to defer to real-world constraints as a way to avoid looking at what
change would mean to them personally[9,16]. While some people may believe
that their way is the best possible way to do something, after participation in
a behavioural simulation they are often more open to exploring alternative ways
of approaching both tasks and people. It is generally some critical but constructive
feedback that is a necessary jolt to their system that opens it up enough to
consider change.
A summary of these six objectives for entrepreneurship education and the
proposed instructor and manager roles for each objective is given in Table I.
Simulating Entrepreneurial Experiences
Behavioural simulations, which have become popular as a way to experience
strategic and organisational processes, may be equally useful for participants
Table I.
Objectives and
Pedagogical
Preferences for
Entrepreneurship
Education
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to experience entrepreneurial processes. Our research results support this
possibility. Each of the entrepreneurial educational objectives identified can be
partially addressed through instructors and managers assuming particular
teacher-learner roles and participating in a behavioural simulation. The specific
benefits of behavioural simulations over many other pedagogical techniques can
be summarised as follows:
(1) A behavioural simulation has a known and fairly comprehensive framework
with respect to financial information, structure, product lines, and past
activities. While this framework may initially guide participants' thoughts
and actions, it places few constraints on future possibilities. It provides
a level playing-field on which to begin — the activity enacted and how
it is enacted are up to the participants. As such, participants determine
the organisation's mission, vision, objectives, and strategic action plans.
(2) Because behavioural simulations have a known and constant starting-
point, it is possible to assess or develop an understanding of the unique
contribution of participants to the leadership of the simulated organisation.
(3) There are many possible alternatives and choices for participants to invent,
evaluate, and pursue or deny. Few of these choices are clearly known
prior to the start of the simulation. Options are developed out of thousands
of stimuli; choices are made with little likelihood of obtaining timely
feedback on their success. Yet the processes by which the options are
identified and choices are made are explored a few hours after the
experience.
(4) Participants are in control of the experience — at least as much as they
are in control of other activities in their lives. They choose the roles
they wish to assume and the issues they wish to pursue in the simulated
company. They create their own strategic agendas, apply whatever
entrepreneurship concepts and models they wish, and exercise those
skills of which they are capable.
(5) Behaviours are observed by facilitators, peers, and oneself. Through
discussions of what was observed from these different perspectives,
participants are able to develop a personalised understanding of strategic,
organisational, and entrepreneurial processes.
(6) Behavioural simulations focus on personal development, not evaluation
per se. The process involves a guided self-assessment of knowledge, skills
and the ability to apply one's knowledge and skills in a realistic situation.
As such, behavioural simulations provide a type olpradicum similar to
that provided in many other disciplines such as medicine, law, and the
performing arts.
(7) Participation in behavioural simulations is stressful. The stimuli are often
viewed by participants as ambiguous. The instructions provided do not
tell participants what to do, whom to meet, or what the criteria are for
"right answers". Peer pressure to perform well encourages personal
and interpersonal risk taking.
Developing
Entrepreneurial
Skills
45
Behavioural simulations offer a substantial opportunity to entrepreneurship
educators and managers. The use of such simulations is neither easy nor
inexpensive. Their use tends to violate some of the closely held traditions of
management development programmes, e.g. get as many managers as possible
into a classroom, tell them what they need to know, see what they learned
through case presentations, and then tell them to go out and try it on the job.
In violating these norms we are creating something critical to the future of new
enterprises — we are creating a mutual learning experience for faculty and
managers of strategic, organisational, and entrepreneurial processes[15].
References
1. Schumpeter, J ., The Theory of Economic Development, Harvard University Press, Bostpn,
1934.
2. Drucker, P., Innovation and Entrepreneurship, Harper & Row, New York, 1985.
3. McMullan, W.E. and Long, W.A., Developing New Ventures: The Entrepreneurial Option,
Harcourt Brace Jovanovich, New York, 1990.
4. Vesper, K.H., "Entrepreneurial Academics — How Can We Tell When the Field is Getting
Somewhere?", Journal of Business Venturing, Vol. 3 No. 2, 1988, pp. 1-10.
5. Stumpf, S.A., "Business Simulations for Skill Diagnosis and Development", in London,
M. and Mone, E. (Eds), The HR Professional and Employee Career Development,
Greenwood Press, Westport, Conn., 1988, pp. 196-206.
6. Hills, G.E., "Variations in University Entrepreneurship Education: An Empirical Study
of an Evolving Field", Journal of Business Venturing, Vol. 3 No. 2, 1988, pp. 109-22.
7. Block, Z. and Stumpf, S.A., "Entrepreneurship Education Research: Experience and
Challenge", in Sexton, D.L. and Kasarda, J .D. (Eds), Entrepreneurship in the 1990s, PWS-
KENT, Boston, Mass., 1991 (in press).
8. Stumpf, S.A. and Dutton, J .E., "The Dynamics of Learning through Management
Simulations: Let's Dance'', Journal of Management Development, Vol. 9 No. 2, 1990, pp. 7-15.
9. Dunbar, R.L.M. and Stumpf, S.A., "Trainings that Demystify Strategic Decision-making
Processes", Journal of Management Development, Vol. 8 No. 1, 1989, pp. 36-42.
10. Stumpf, S.A. and Dunbar, R.L.M., "Using Behavioral Simulations in Teaching Strategic
Management Processes", Organizational Behavior Teaching Review, Vol. 14 No. 2, 1990,
pp. 43-62.
11. Dunbar, R.L.M., Stumpf, S.A., Mullen,, T.P. and Arnone, M.A., "Management
Development: Choosing the Right Leadership Simulation for the Task", Journal of
Management Education, Vol. 1, 1991, (in press).
12. Kanter, R.M., The Change Masters, Simon & Schuster, New York, 1983.
13. Stumpf, S.A., "Leadership and Beyond: The Need for Strategic Management Skills",
Advances in Strategic Management, Vol. 5, JAI Press, Greenwich, Conn., 1988, pp. 245-61.
14. Dooley, A. and Skinner, W., "Casing Case-method Methods", Academy of Management
Review, Vol. 2 No. 2, 1977, pp. 277-89.
15. Porter, L.W. and McKibbin, L.E., Management Education and Development: Drift or Thrust
into the 21st Century?, McGraw-Hill, New York, 1988.
16. Stumpf, S.A., "Work Experiences That Stretch Managers' Capacities for Strategic
Thinking", Journal of Management Development, Vol. 8 No. 5, 1989, pp. 31-9.
doc_836073620.pdf
During this information point developing entrepreneurial skills through the use of behavioural simulations.
J ournal of
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Developing Entrepreneurial
Skills through the Use of
Behavioural Simulations
Stephen S. Stumpf, Roger L.M. Dunbar and Thomas P. Mullen
Leonard N. Stern School of Business, New York University, USA
Entrepreneurship has been variously defined. Schumpeter[1], for example,
suggested it involves "the carrying out of new combinations of activities".
Drucker[2] describes it as "searching for, responding to, and exploiting
opportunities". McMullan and Long[3] define it as "involving uncertainty and
risk, managerial competence, and creative opportunism". Teaching
entrepreneurship and providing managers with the opportunity to learn about
entrepreneurship continues to be actively discussed as the field evolves and
develops [4].
This article explores how a particular type of experiential activity can be a
vehicle to help people to learn how to enhance their entrepreneurial behaviour.
Our particular interest is in behavioural simulations[5], wherein people experience
the unique character, complexity, and often ill-structured nature of both
management in general and entrepreneurship in particular. The empirical work
of Hills[6] and a discussion of entrepreneurship education research by Block
and Stumpf[7] suggest that goals for entrepreneurship education include abilities
to: acquire knowledge and concepts germane to entrepreneurship; acquire skill
in the use of such techniques in analysing business situations and synthesising
action plans; identify and stimulate entrepreneurial drive, talent and skill; undo
the risk-averse bias of many analytical techniques; develop empathy and support
for the unique aspects of entrepreneurship; and alter attitudes towards change
in such a way that individuals use change as a stimulus for learning rather than
denying or resisting it. If one accepts these learning objectives, then behavioural
simulations appear to be an underutilised technology that can help people learn
to behave entrepreneurially.
Simulating Entrepreneurship
Simulations have been designed to model many different processes, events,
and things. For example, the flight simulators used in the training of pilots by
airlines and the military recreate the cockpit of an aircraft along with most take-
off, in-flight, and landing conditions. The trainee actually sits in the simulator,
moves the rudders, ailerons and throttle, both seeing and feeling the effect
of the simulation capsule moving in response to his or her actions. In contrast,
much simpler "flight simulators" can be run on a personal computer in the
comfort of one's home and can simulate the attitudes of the aircraft on a screen.
What one is able to learn from the former flight simulator is very different from
J ournal of Management
Development, Vol. 10 No. 5, 1991,
pp. 32-15, © MCB University
Press, 0262-1711
Developing
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33
and much more personally relevant than any learning that might be derived
from the latter simulation.
These two different types of flight simulator both involve a computer and have
become possible because of developments in computer technology. A different
type of simulation has also been developed over the past ten or more years as
part of management education programmes which makes no use of computers.
Referred to as a behavioural simulation, such simulations have a distinctively
behavioural focus[5,8]. Like some computer simulations, behavioural simulations
create a corporate entity or context which includes a variety of realistic business
functions. While computer simulations focus on calculating the results of the efforts
of those using the simulation, behavioural simulations focus on the inputs
themselves, including behaviours and other decision-making processes, which
participants use to manage the simulated company. While computer simulations
teach about a fixed set of effort consequences captured by a pre-programmed
model, behavioural simulations teach about the sense-making and opportunity-
seeking processes that are the participants' inputs into the activity.
It is not surprising, therefore, that simulations that are programmed, and
constrained primarily to cognitive inputs from participants, and then to analytic
output from a computer, yield learnings which are different from simulations
that focus on recreating a context in which participants do what they would
do if the simulated environment was replaced with an actual situation. We argue
that it is this latter type of behavioural simulation that has the greatest
applicability to entfepreneurship education.
How Behavioural Simulations Work
Behavioural simulations re-create a business entity through written materials
(an annual report, in-baskets, financial data), an office environment, and lots
of interpersonal interactions around issues and opportunities. The various
functions of marketing, R&D, finance, personnel, operations, and accounting
are generally present. The simulated company is part of an industry; it
experiences competitive, economic, legal, social, political, and regulatory forces
just like real companies. Yet, no programmed model of the firm or industry
is used to specify key relationships among any variables under the control of
the participants.
Individuals assume the varied managerial roles in the simulated organisation,
bringing with them their knowledge base and individual goals, along with any
particular focus or perspective developed within the course of which the
simulation is a part. The participants have complete control of their actions
and of the simulation outcomes. Depending on the goals, styles and skills of
the people involved, different issues may become important, and issues may
be defined in different ways with different solutions for the same issue.
Creative opportunism is both possible and encouraged. There is no single
right way to manage onself, other participants, or the behavioural simulation.
Actions and inactions which evoke attention and discussion depend on the
concepts and theories that are designed into the educational experience and
the participant dynamics exhibited in leading the fictitious organisation. Feedback
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is quick and rich; it is based on participants' views and actions often captured
on a post-simulation questionnaire and subsequent small group discussions.
A large amount of feedback is provided which is linked to the specific behaviours
observed and the actions or absence of actions reported by participants.
There are intensity, excitement and a realism for both participants and
facilitators when taking part in a behavioural simulation that are difficult to
describe. This article will not do it. Videotapes of others performing in a
simulation will not do it. But, when you are in one, you feel it. You can easily
engage others who have experienced one in discussion about behavioural
simulations; people who have not experienced one have difficulty imagining what
one actually does in a simulation or the nature of the learning that occurs.
We have often experienced this sense of helplessness in describing behavioural
simulations to colleagues, deans, and corporate training and development people.
We say things like: "Metrobank and the Northwood Arts Company are in-basket-
based fictitious organisations derived from real events that require participants
to assume the leadership of the organisation." Or "Foodcorp, re-creates a set
of business situations, people work in a typical office environment, read their
mail, conduct meetings, share ideas, and look for ways to improve their individual
and organisational effectiveness." While we get polite smiles to suggest that
this is understood, other non-verbal cues suggest confusion. Worse yet, some
people cannot let go of their image or memory of a computer-based simulation.
To reduce this confusion and redefine the concept of a behavioural simulation
to eliminate the computer image, we invite people to participate. After they
experience a behavioural simulation, they agree that our description is accurate.
But now their problem is akin to ours; they do not know how to transmit to
others what they have experienced in a way that expresses the essence of what
they learned, nor the excitement of what they felt.
What Happens and When
Prior to a programme using a behavioural simulation, participants are provided
with extensive information detailing the organisation's structure, financial status,
product lines, and services. The information comes in the form of an annual
report or business plan, internal and consultants' documents, product
descriptions, and market research. Participants familiarise themselves with the
material before they arrive for the start of what is often a weekend activity
or a three-day off-site educational programme. They have the opportunity to
prepare for the event through conducting whatever analyses or techniques they
find useful.
The facilitators also prepare for the programme by reviewing the programme
materials and participant biographies. Facilitators have already experienced the
simulated company through past participation, have co-trained the simulation
with an experienced facilitator, and have been lead facilitators of a programme
as part of their training.
The agenda for a typical programme would include a pre-programme
assignment that requires four or more hours of reading and analysis, the
completion of a self-assessment of one's skills, and the collection of on-the-job
Developing
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35
peer, boss, and subordinate assessments of one's managerial, leadership and/or
entrepreneurial skills (which are discussed as part of the programme). The
programme begins with participant and staff introductions followed by a review
of the programme objectives. Objectives common to many uses of behavioural
simulations are to: (a) enhance one's understanding of the relationship between
entrepreneurial and managerial behaviours and organisational performance; (b)
examine how one's actions promote or inhibit effective teamwork; and (c) provide
a basis of understanding strategic, organisational, and entrepreneurial processes.
A typical agenda would include:
Prework: Setting up for the Experience
• Overviewing the programme (objectives, agenda, administrative details).
• Introducing and providing an opportunity to practise the concepts, models,
tools, etc., that are part of the programme.
• Discussing the use of simulation as a way to diagnose and practise one's
skills.
• Providing time for participants to self-select roles and prepare for the
simulation.
• Sharing personal learning objectives and feedback from co-workers
through one-to-one meetings with facilitators.
• Meeting with reporters to discuss the work situation facing the company
as a way to help the participants internalise their roles and key company
information.
Day 1: The Experience
• Managing the business for a day; facilitators observe the process.
• Identifying individual and group actions taken by completing a
questionnaire at the end of the day.
• Discussing how the day went, how it felt, what was worked on by whom.
Day 2: Learning from the Experience
Participants and facilitators:
• Review "What happened?" via questionnaire feedback and group
discussion.
• Explore "How did it happen?" via questionnaire feedback and group
discussion.
• Share personal observations of one another's style and skills via peer
feedback.
• Identify implications for real work behaviour through personal conferences
to ensure that both the programme and personal learning objectives are
met.
For a more detailed description of the processes that occur during a behavioural
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simulation, including the role of the training staff, see[8] and[9]. For a detailed
comparison of various behavioural simulations known to the authors, see[10]
and[11].
How the Learning Takes Place
As suggested by the schedule above, much of the learning takes place in
behavioural simulations through working with peers and facilitators in exchange
relationships. Stumpf and Dutton[8] suggest that a "dance" metaphor is a useful
framework for understanding the nature of the learning which occurs. Dancing
is individualised, but often a group event. It can involve different partners at
different times, change in pace, and be customised. Most importantly, it is a
multimedia process — thinking, doing, feeling, feedback, more thinking, doing,
feeling. The result is often a memorable experience with the development of
many personal insights that go beyond what one could get out of a textbook
or case experience.
Since behavioural simulations depend on the quality and nature of many
interactions that are not under the control of the instructor, it is possible for
participation in a simulation to be perceived as threatening by some people.
Behavioural simulations generally minimise this possibility by creating a context
for low-risk, high-pay-off exchanges among participants. Participation in a
behavioural simulation is low-risk because it is encapsulated (typically conducted
away from the usual place of business), of short duration (a few hours to two
or three days), not one's real job (it is a simulation), involves temporary
participants (people do not have to see each other again), and permits the
participants to control the content and pacing of the learning.
In contrast with these risks, behavioural simulations provide a rich context
for high-pay-off learning through:
(1) encouraging personalised learning with different participants;
(2) creating many opportunities and different things to learn as a result of
the rich informational and interpersonal environments;
(3) focusing attention on actual behaviours exhibited and the effects of those
behaviours on the enterprise and its members.
To the extent that this high-pay-off learning is directed towards strategic,
organisational, and entrepreneurial processes, it can have substantial value for
entrepreneurship education.
What Entrepreneurial Skills Can Be Learned?
By observing the language and concepts used by behavioural simulation
participants (both corporate managers and entrepreneurs), as well as analysing
the behaviours they exhibited, two sets of skills have been identified which can
be diagnosed and learned through participation in behavioural simulations:
(1) core competences;
(2) strategic leadership skills.
Developing
Entrepreneurial
Skills
37
Core managerial competences include motivating others, influence skills,
information sharing and collecting, delegation, communications skills, control,
organising, and planning. A second and distinct set of qualities which seem
particularly critical involve:
(1) knowing the business and markets;
(2) managing subunit rivalry;
(3) finding and overcoming threats;
(4) staying on strategy;
(5) being an entrepreneurial force;
(6) accommodating adversity.
We think that this latter set of strategic leadership abilities also represents
the sorts of skills that are particularly relevant to entrepreneurship
education[2,3,12,13].
Research Methods
The research conducted involved a sample of 317 business people as participants
in one of several different behavioural simulations over a two-year period. Twenty-
eight simulations were conducted involving 10-12 participants. Each participant
selected one of the 12 roles in the simulated company, ranging across three
hierarchical levels (CEO, Executive Vice Presidents of functional areas or groups
of businesses, and Senior Vice Presidents of functional areas or lines of
business).
Sixty-seven firms were represented in the sample, including several
participants from such firms as Citicorp, Metropolitan Life, Dow Jones &
Company, Texaco Canada, and First Union Corporation. Each participant had
direct responsibility for determining the strategic direction and accomplishments
for their real-world business or business unit. Based on a pre-programme
questionnaire, participants indicated their company, level within their firm, and
their responsibilities. Based on these responses, 137 individuals were classified
for the purpose of the research as entrepreneurs. Their positions included CEO
or president of a small business or partnership; heading up a new business
venture, start-up operation, or new product launch; self-employed professionals;
and venture capitalists.
In preparation for the three-to-five day educational experience, participants
were asked to have several co-workers on the job (including one's boss, peers,
subordinates) complete a confidential 20-item questionnaire on their leadership
skills and work performance. The questionnaire items were derived from the
business literature and facilitator observations of past participants. Inter-rater
reliability was moderate to good (rs from 0.53 to 0.86). (For more information
on the measurement instrument see[13].)
The dependent variable used in this research was the extent to which an
individual's peers in behavioural simulation assessed the individual as making
important contributions to the performance of the simulated company. Each
participant nominated up to three peers for their contributions to the simulated
company in each of eight issue areas. The sum of these peer nominations across
J ournal of
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issue areas was the measure of peer assessment used. This measure was
collected immediately after the simulation and before any group discussion had
taken place.
Results
Managers who were observed by their real-life bosses to exhibit more managerial
skill were also viewed by their peers in the education programme as being the
ones who made more contributions to the running of the simulated organisation.
All 20 skills were statistically significant at the 0.05 level (two-tailed-test of
significance), and six of them correlated 0.40 or higher with peer assessments
of one's contributions. Thus we can conclude that the assessments of the skills
and abilities of the same individual in real and simulated environments are related.
More importantly, the skills that were viewed as most critical to performance
reflect key skills which are believed to be necessary to become an effective
entrepreneur, e.g. asking thought-provoking questions that relate to the business
unit's future actions; generating many alternatives to key issues; redefining
issues to make them more understandable; seeking to strengthen the business
unit's competitive advantage; creating a vision of what the organisation could
be; and championing innovative ideas, even when faced with scepticism, risk,
and/or resistance.
In addition to these overall results, two additional analyses were performed.
First, we were interested in whether or not there was a "role of hierarchy"
effect within the simulation. That is, do some roles such as the president's
or the chief financial officer's permit more entrepreneurial activity than some
others lower in the hierarchy, e.g. personnel manager? Does hierarchical position
pre-empt or restrict creative opportunism within the simulation? While the
relationships did vary across hierarchical, there were no statistically significant
differences among these correlations at the 0.05 level.
The second analysis involved comparing entrepreneurs with managers. In
five instances, the relationship between on-the-job and simulation assessments
was significantly stronger for the entrepreneur subsample than for the manager
subsample. Specifically, a consistent relationship across the two contexts was
perceived more strongly for entrepreneurs with respect to their abilities to:
(1) identify constraints to remove or avoid them (rs of 0.47 versus 0.26);
(2) create a vision of what the organisation could be (rs of 0.58 versus 0.37);
(3) champion innovative ideas, even when faced with scepticism, risk and/or
resistance (rs of 0.63 versus 0.40);
(4) deal with setbacks by being resilient (rs of 0.45 versus 0.25);
(5) exhibit comfort and tolerance when dealing with ambiguous tasks (rs
of 0.32 versus 0.10).
An interesting reverse effect also occurred. As opposed to entrepreneurs,
managers were perceived as more likely to be able to redefine issues to make
them more understandable (rs of 0.52 versus 0.26).
Developing
Entrepreneurial
Skills
39
This research was not designed specifically to test hypotheses regarding skills
of entrepreneurs versus managers. Nevertheless, the results concerning
perceptions across real-world and simulated contexts seem to be consistent
with the literature regarding what is required to be successful in entrepreneurial
positions. They suggest that, to the extent that a person is recognised as
behaving entrepreneurially in the real world, he/she will also be recognised
as behaving in this way in a simulation. To the extent that a person lacks these
behaviours, a behavioural simulation provides an experiential context wherein
one can meaningfully discuss and learn exactly what it would mean for each
particular individual to behave more entrepreneurially.
Discussion: Objectives of Entrepreneurship Education
What entrepreneurship education objectives could be accomplished through the
use of behavioural simulations? Six objectives for entrepreneurship education
are discussed based on an empirical study conducted by Hills [6] and a discussion
of educational research presented by Block and Stumpf[7]. Following a definition
of each objective, we identify roles for the instructor and managers that
management educational theory suggests would facilitate the accomplishment
of the objective. We then explore the use of behavioural simulations as a
pedagogical tool to accomplish the objective.
Acquire Knowledge and Understand Concepts Germane to Entrepreneurship
The thrust of much entrepreneurship education is to provide content knowledge
about some specific area or discipline. Such knowledge often takes the form
of increasing awareness and understanding of the processes involved in initiating
and managing a new business enterprise. For example, content areas covered
in many entrepreneurship courses include:
• the nature and unique demands of start-up ventures;
• alternative ways of identifying business opportunities;
• techniques for analysing and evaluating opportunities;
• frameworks for identifying resources (capital, materials, labour, advisers,
mentors) and constraints (licences, laws, taxes);
• ideas on how to facilitate the maturation of new ventures into growing
businesses;
• understanding the role of new and smaller firms within the economy.
Knowledge, concepts and techniques are typically taught through lectures, class
discussions, expositions of business practices, "problemettes" and structured
cases. For these learning objectives, Dooley and Skinner[14] propose that the
instructor's role is to narrate, expose, enlighten, provide expertise, and explain
taxonomies, techniques and interrelationships among concepts. The managers'
role is to listen, question, and work problems and examples.
The utility of behavioural simulations in accomplishing this objective is limited.
Managers could apply or use some of the analytic concepts presented within
the course prior to the simulation (e.g. develop a new venture plan for the
simulated company), or they could develop action plans after the simulation
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based on the activities during the simulation (e.g. if managers chose to enter
a particular product-market segment, they could be asked to develop a financial
and marketing plan for doing so). In either case, the power of the simulation
experience will be tangential to the learning objective of acquiring knowledge
and understanding concepts germane to entrepreneurship.
Acquire Skill in the Use of Techniques, in the Analysis of Business Situations,
and in the Synthesis of Action Plans
Entrepreneurship involves the use of the knowledge acquired from many different
fields such as accounting, financial analysis, marketing, information systems,
leadership and general management. The ability to integrate business functional
knowledge into a holistic activity requires exercising skills of analysis and
synthesis.
In contrast with the instructor's role noted above for the knowledge-acquisition
objective, Dooley and Skinner[14] propose that the instructor's role in teaching
analytical skills is to challenge, question and probe managers to develop greater
realism. Complementing the teachers' role, the managers' roles are to develop
skill in applying techniques, evolve an understanding of cause-effect relationships
based on analysis of facts and logical inferences, and establish priorities for
action based on probable outcomes and implications.
Behavioural simulations allow managers to confront realistic business situations
that are complex and ill-structured. The implicit emphasis within simulations
on taking some action encourages managers to go beyond the knowledge they
have acquired to using that information in constructive ways. Just as developing
a business plan for a new venture or product requires the integration of separate
functional skills into a single document and presentation, participation in a
behavioural simulation stimulates the integration of separate functional skills
into verbal arguments and proposals for action. By encouraging managers to
grapple with the ambiguity and conflicts implicit in such activities, a behavioural
simulation provides an opportunity to move from concepts to practice.
Identify and Stimulate Entrepreneurial Drive, Talent and Skill
The willingness and ability to lead a venture under conditions of relatively high
uncertainty vary among individuals, and possibly within individuals depending
on the situation and their life experiences. A third objective of entrepreneurship
education is to increase manager awareness of the new-venture/smaller company
career possibilities and to help individuals develop an awareness of their
entrepreneurial interests, capability and potential. What does it mean to be an
entrepreneur? How does one create a mission and vision for the enterprise
that inspire others to follow? How well does one function under conditions of
ambiguity, adversity, and personal or professional risk? Does one have the ability
to champion an idea, yet remain flexible in approach and have the resilience
to bounce back after setbacks? Developing an awareness of what it feels like
to manage under such conditions may be as important to developing successful
entrepreneurial careers as are the knowledge, concepts, and skills acquired.
Developing
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41
The role of the instructor in identifying and stimulating entrepreneurial drive,
talent, and skill is that of a counsellor or coach. Most of the time should probably
be spent listening, observing, and sharing constructive feedback. The manager's
role involves active diagnosis and reflection, sharing one's insights, and seeking
additional viewpoints and experiences to validate the insights. The current
opportunities for instructors to help individuals assess their entrepreneurial
drive, talent, and skills are severely constrained within a classroom setting.
In contrast, behavioural simulations are specifically designed to provide the
opportunity for managers to enact their role with respect to this learning
objective. Peer, instructor, and self-appraisals can lead to self-understanding
and insights. Such feedback may also stimulate an awareness of and interest
in one's entrepreneurial potential. Thus behavioural simulations can be an
important vehicle for achieving this teaching objective.
Undo the Risk-averse Bias of Many Analytical Techniques
Many analytical techniques and managerial practices tend to reinforce a risk-
averse value by discouraging personal and interpersonal risk taking. Managers
who generate creative answers to standardised cases or critical incidents are
typically discouraged from doing so. With the exception of programmes on
creativity, few management development efforts place much emphasis on finding
lots of "right" answers to situations or exploring the ethics, values and
entrepreneurial aspects of issues[15]. The result has been a bias towards
quantitative analysis and the delay of actions until all the desired data are available
and analysed. Since there is rarely an obvious or single right answer to the
more interesting business situations, analysis dominates intuition, envisaging
and other less analytical ways of thinking.
A fourth objective of some entrepreneurial education has been to undo this
bias towards analysis and finding the "analytically right solution". Undoing the
bias means education on the risk-taking process, how to manage risks through
actions that spread risk across a wider group of stakeholders, and how to cut
losses and stretch gains well beyond what history tends to suggest. The extent
to which the bias towards risk aversion is reduced is difficult to assess through
testing. In contrast, it is potentially observable in manager actions, either in
actual entrepreneurial activities or in behavioural simulations.
The instructor's role in helping individuals to reduce their risk-aversion bias
is first deconstructive, followed by reconstructive. Through the examination
of issues from many different perspectives, a variety of possible courses of action
can be articulated. By denying the more risk-averse possibilities, attention can
be directed towards those actions that balance risk with precautions and rewards.
The manager's role in this is to debate outcomes while remaining open to
multiple, viable courses of action.
Behavioural simulations create an environment with nearly unlimited risk-
taking opportunities. We have observed participants take actions that, as
facilitators, we had not even imagined. The high-risk actions are not viewed
as either right or wrong within a behavioural simulation because no computer
models or algorithms are used to evaluate the actions. Rather the debriefing
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process is used to raise discussion about high-risk actions, how they are
promoted, how they are agreed to, and what sorts of procedures are actually
used in practice to safeguard against risk. In these discussions, attention can
focus on both the content and interpersonal issues, facilitating the debate and
awareness about the nature of deconstructive and reconstructive processes.
As a result, how the riskiness and trade-offs inherent in various actions are
perceived, explored, or ignored can be examined.
Develop Empathy and Support for the Unique Aspects of Entrepreneurship
Not all individuals who seek education in entrepreneurship wish to be
entrepreneurs. Some may. Others may wish to explore entrepreneurship on
an intellectual level. Still others may recognise the need for entrepreneurship
in society, and attend a programme so as better to understand this discipline.
A learning objective for this latter group is to have them develop an understanding
of the distinct characteristics of a business in evolution from the seed of an
idea to a stable, ongoing enterprise. Similarly, it may be useful for them to
understand better the distinct behaviours of individuals as entrepreneurs, both
cognitively and emotionally.
The value of such an objective is similar to individuals taking courses in any
area outside their major area of study. They are interested in content knowledge,
but not for its direct application to their immediate career. Rather they are trying
to broaden their understanding of their life or work environment so as to be
more effective in working with and through other people.
The instructor's role in developing empathy and support for entrepreneurship
is to raise the issue of managerial attitudes towards entrepreneurship and
stimulate excitement about entrepreneurial activities. The manager's role is
to develop a meaningful place for entrepreneurship within their work lives through
both their understandings and experiences.
Behavioural simulations provide a rich experience base in which to explore
entrepreneurial activities and actions. Participants become aware of one another's
entrepreneurial spirit and values. Because the behavioural simulation process
involves many interpersoail exchanges, participants often develop an
understanding of and empathy for others.
Change Attitudes towards Change
Many people resist change. Others accept it, but only when it is thrust upon
them or does not directly affect them. Still others embrace change as a catalyst
for learning — they look for it and actively accept it when it can lead to a more
efficient or effective way of conducting business. A sixth objective of
entrepreneurship education may be to educate people on how to embrace change
and stimulate the desire to innovate. As with the objectives of reducing risk
aversion and developing empathy and support for entrepreneurship, creating
a positive attitude towards change involves emotional as well as cognitive learning.
The role of the instructor is to assist individuals in developing more open
attitudes towards change. The manager's role is to tolerate the ambiguity
created, accept the uncomfortable feelings that initially emerge, and trust their
intuition that changes can be managed to be productive.
Developing
Entrepreneurial
Skills
43
Pedogogical preferences
Objectives Instructor role Student role
Acquire knowledge Narrate, expose, enlighten Listen, question, work
germane to and explain various problems, and gain content
entrepreneurship techniques, concepts, etc. knowledge
Acquire skill in the use Challenge, question, and Develop skill in applying
of techniques, in the probe students to develop techniques, evolve
analysis of business greater realism understanding, establish
situations, and in the real-world priorities
synthesis of action plans
Identify and stimulate Be a counsellor or coach Active diagnosis and
entrepreneurial drive, — listen, observe and reflection, share insights,
talent and skill share feedback seek many viewpoints and
experiences
Undo the risk-averse Deconstruction of past Debate outcomes, remain
bias of many analytical perspectives, open to alternatives
techniques reconstructive attitudes
Develop empathy and Raise questions about Develop a sense of the role
support for the unique attitudes, stimulate of entrepreneurship in their
aspects of excitement work lives
entrepreneurship
Change attitudes towards Assist people to develop Tolerate ambiguity, accept
change more positive attitudes uncomfortable feelings, trust
towards change intuition
Behavioural simulations are ideal tools for changing attitudes towards change.
The very nature of simulation — it is realistic but not real — allows people
to see clearly what their own and others' attitudes to change may be, without
being able to defer to real-world constraints as a way to avoid looking at what
change would mean to them personally[9,16]. While some people may believe
that their way is the best possible way to do something, after participation in
a behavioural simulation they are often more open to exploring alternative ways
of approaching both tasks and people. It is generally some critical but constructive
feedback that is a necessary jolt to their system that opens it up enough to
consider change.
A summary of these six objectives for entrepreneurship education and the
proposed instructor and manager roles for each objective is given in Table I.
Simulating Entrepreneurial Experiences
Behavioural simulations, which have become popular as a way to experience
strategic and organisational processes, may be equally useful for participants
Table I.
Objectives and
Pedagogical
Preferences for
Entrepreneurship
Education
Journal of
Management
Development
10,5
44
to experience entrepreneurial processes. Our research results support this
possibility. Each of the entrepreneurial educational objectives identified can be
partially addressed through instructors and managers assuming particular
teacher-learner roles and participating in a behavioural simulation. The specific
benefits of behavioural simulations over many other pedagogical techniques can
be summarised as follows:
(1) A behavioural simulation has a known and fairly comprehensive framework
with respect to financial information, structure, product lines, and past
activities. While this framework may initially guide participants' thoughts
and actions, it places few constraints on future possibilities. It provides
a level playing-field on which to begin — the activity enacted and how
it is enacted are up to the participants. As such, participants determine
the organisation's mission, vision, objectives, and strategic action plans.
(2) Because behavioural simulations have a known and constant starting-
point, it is possible to assess or develop an understanding of the unique
contribution of participants to the leadership of the simulated organisation.
(3) There are many possible alternatives and choices for participants to invent,
evaluate, and pursue or deny. Few of these choices are clearly known
prior to the start of the simulation. Options are developed out of thousands
of stimuli; choices are made with little likelihood of obtaining timely
feedback on their success. Yet the processes by which the options are
identified and choices are made are explored a few hours after the
experience.
(4) Participants are in control of the experience — at least as much as they
are in control of other activities in their lives. They choose the roles
they wish to assume and the issues they wish to pursue in the simulated
company. They create their own strategic agendas, apply whatever
entrepreneurship concepts and models they wish, and exercise those
skills of which they are capable.
(5) Behaviours are observed by facilitators, peers, and oneself. Through
discussions of what was observed from these different perspectives,
participants are able to develop a personalised understanding of strategic,
organisational, and entrepreneurial processes.
(6) Behavioural simulations focus on personal development, not evaluation
per se. The process involves a guided self-assessment of knowledge, skills
and the ability to apply one's knowledge and skills in a realistic situation.
As such, behavioural simulations provide a type olpradicum similar to
that provided in many other disciplines such as medicine, law, and the
performing arts.
(7) Participation in behavioural simulations is stressful. The stimuli are often
viewed by participants as ambiguous. The instructions provided do not
tell participants what to do, whom to meet, or what the criteria are for
"right answers". Peer pressure to perform well encourages personal
and interpersonal risk taking.
Developing
Entrepreneurial
Skills
45
Behavioural simulations offer a substantial opportunity to entrepreneurship
educators and managers. The use of such simulations is neither easy nor
inexpensive. Their use tends to violate some of the closely held traditions of
management development programmes, e.g. get as many managers as possible
into a classroom, tell them what they need to know, see what they learned
through case presentations, and then tell them to go out and try it on the job.
In violating these norms we are creating something critical to the future of new
enterprises — we are creating a mutual learning experience for faculty and
managers of strategic, organisational, and entrepreneurial processes[15].
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