Management: Gamesmanship for Real

Among top U.S. executives, 1961 model, one of the hottest fads going is the business game. J. P. Morgan would have sniffed in disdain, and Scots-born Andrew Carnegie would have howled at the expense. But today hundreds of U.S. companies, from small Texas printing firms to A.T. & T., are sending their employees forth to wrestle, sometimes for weeks at a stretch, with supersophisticated versions of Monopoly.

The notion of business games was borrowed from the war games developed by the U.S. Naval War College, and has been fanned to a hot flame by the development of the digital computer. In the typical business game, from two to 20 players are assigned to a mythical company and given data on assets, production, prices, advertising, market conditions. Then they are let loose to make decisions in competition with other teams—and to make their firms grow or die.

In one popular game, sponsored by the American Management Association, a fiscal quarter is telescoped into 45 minutes’ playing time, during which the players must decide whether to raise or lower prices and how much to spend for production, marketing, plant expansion, research and development. The decisions are fed into a whirring IBM computer, which measures the results of one team’s performance against the others, then “feeds back” new market data from which the teams make decisions for the following quarter—and so on, for five make-believe years of business. It is a costly sport. Charge for a four-week A.M.A. course: $850 per player.

Better Without People. To save money and to play on their own special situations, many companies have devised their own games. Procter & Gamble puts college students who are thinking of working for the company after graduation through a summer game in which each player “runs” an imaginary plant producing “synthetic granules and bulk-oil food products.” General Electric has six games going under such ear-shocking titles as Uniflo, Inven-trol and Dispatch-0. “It’s really a way to adjust your mind to top management,” explains one G.E. executive. “The quicker you start to think of a business problem as a thing without human beings, the bet-er you’ll do.” Not to be outdone, competing Westinghouse has its own game, oo. “But,” says its training director, [. C. McKeon, “we have no illusions hat you can play a game and then step 3ut and manage a company.”

One reason is that smart gamesters do not always score high as real-life executives—and vice versa. Boston’s John Hancock Mutual Life Insurance Co. puts its 225 district managers (salary range: $14,000 to $60.000) through a two-day game, and some of them, says a Hancock Dersonnel man, make “horrifying” decisions in play. Hancock uses the “In-30x” game: each player is given 100 typical memos, letters and records, then must act on every one. What to do for a clerk celebrating her 25th anniversary with the company? (Wise answer: Send her a cake with 25 candles.) What to do with a small company that has just renewed its group insurance? (Wrise answer: Ask its boss to lunch and try to sell him still more insurance.)

Cheating Can Pay. Such games have all the flaws of the men who design or umpire them. Says Harvard Business School Professor Lewis Bookwalter Ward: “If you second-guess the designer, you can beat hell out of the game.” He cites the example of a popular game devised by a research-and-development-minded designer; one sharp team easily drubbed its competitors by pouring virtually all of its resources into R. & D. And it is not how you play the game, but whether you win or lose that counts. In a Princeton game simulating the used-car business, one team grew “rich” simply by cheating its “customers.”

Without exception, companies that use business games profess to regard them merely as training devices, insist that the results are not taken into account in hiring or promotions. But most players take such assurances with a grain of salt and, because they believe the results can influence their careers, grow grimly serious. “It is amazing,” reports Remington Rand Executive Jim Evans, who conducts games on the Univac. “You’ll see grown men cry when they come out with a loss.”