Saturday, May 12, 2007

Management Development Programme: Phase 5 - Management Game

The final phase of the MDP programme was not a module per se but rather a game. Yes, a management game to be exact. The location for the finale of the MDP was held at the Residence Hotel for 1.5 day with 0.5 day briefing on the May 7th and actual game on May 8th 2007. The course instructor for this module was Mr Lau X X. Actually, Mr. Lau was so eager to start the briefing on day 1 that he actually forgot to properly introduce himself to the class. Until today I am in the dark of detail background of Mr. Lau to put them in this blog and I hope someone from my group will furmish me with this info later. Mr. Lau was assisted by Ms Fam Li Ling of MIM and her role was to help process the inputs for the game and also to distribute the results when they were available.

The game was a business simulation game of which the participants were asked to form four different groups and manage four different companies to compete against each other. The objective is to see which group will have the largest profit at the end of period five of the game allocated time. The summary of the company profile given to us all of us as following.

Company Description

Palmtastic is a company that produces and sells personal digital assistants (PDA). A PDA is a small mobile handheld device that provides computing and information storage, retrieval capabilities for personal or business use, often handy for keeping schedules, calendars and addresses. It is known by different names such as handheld computer, pocket PC, handspring and palm top.

Palmtastic is a comparative new company. The owners are more interested in developing new products than running a company. They have hired you to give the professional management to the company. Their demand to you is that you make significant profits so as to enable them to develop profitable and technologically advanced products.

Palmtastic has two products: Product A is an entry level PDA and Product D has more features and functions. The differences between the two are in terms of its screen resolution (mono and color), Storage (2 & 8 MB) and Battery type.

Competition is very keen with more companies entering the market. Marketing is a major parameter in determining demand.

A discussion with the Board of Directors has shown a certain, but restrained, desire to inject new share capital, if necessary. The maximum available is up to 3 million per year. Application for increase in share capital is usually at the first half of the year (odd periods). That is, however, dependant upon a preference dividend of 5.9% per annum, of any share capital expansion granted.

A meeting with the banker has also had a positive but restrained reception. The bank has agreed to consider increasing the maximum loan ceiling at the second half of each year (even periods). However, they are unlikely to approve more than 50% of the quantum applied for.

The length of a period is 5 months and all costs etc. are based upon this period length.

Winning Criteria:

The winner will be the team with the highest accumulated Profit & Loss account at the end of Period 6.

We were also briefed in detail about the game rules and regulation on day 1. The starting condition for every group is similar in the beginning and each group has got to plan and strategise to reap maximum profit. As of in the actual bisness climate, there are several decisions that need to be made on each round. The decision include number of products and type to be manufactured, pricing structure, cash flow control and also loan to be paid or made. These decisions were later translated into the inputs for the simulation on every round. The inputs from each group were then remotely processed by the simulation software located at the MIM office.

In the beginning our group did quite reasonably and able to make some profits. However, beginning with period 3, our cyber company suffered some losses and the overall profit carried from the previous periods was slightly reduced.Only after period four that we realised we have made a mistake and also misunderstood several key inputs. By that time, it was already too late to correct the mistake and as a result, our profit from period one to period five was cut into more than half and our company was the least profit making company among the four !

Although the management game was just a game, it taught us many things about business. One thing for sure, one must be brave to take a lot of risk in business and to understand economic climate and other surrounding factors. This is quite new to me being salary man all my life and I hope courses like this can help me to understand the market and business better to be a good manager in the future..

The assignmnet for this module is due on June 20th. We are asked to write a report on the game we played and explain the reason behind the decisions made. I hope I will be able to complete this assigment on time so that I can focuss on the PROGEM module in Kuantan starting on 21st May...insha'allah...

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