Simulating Multinational Business
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The basic disciplines of business schools-accounting, finance, management, marketing, and production-generally do not emphasize the environmental warp of firms operating abroad, with the consequence that students are often inadequately prepared for the subtle differences which foreign environmental features may have upon a given business decision. We believe that these special problems of multinational business can be presented to novices most effectively by simulation techniques. Three new computer-assisted simulations havebeen devised for use in senior undergraduate or graudate level courses in multinational management. The first is a general simulation of the international community, featuring enterprises, governments, and consuming publics, in which the political parameterspredominate: the SW-2 simulation. The second is a simulation of regional features-in this case Latin American-in which political parameters are de-emphasized and economic and social parameters are brought to the fore: the RLA-1 simulation. The third simulation depicts relationships among global companies of a given industry; for this purpose the major considerations of national energy requirements,cartel arrangements, and transfer pricing within the international petroleum industry have been simulated: the OIL-1 simulation. The SW-2 Simulation The SW simulation of international business decision-making in a political setting, now in its second version called SW-2, depicts the world environment in which businessmen must operate. It has been the writers' experience that political transactions predominate in this simulation, even though economic parameters are also an integral part.' The roleplayers of 1. For a lengthier discussion of the writers' experience with the SW-2 simulation, see Clifford N. Smith and Marshall H. Whithed, "International Business Decision-Making in a
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this simulation include, as a minimum, a head of state, an enterprise director, and a citizen for each of the countries in the simulation.2 The number of countries in the simulated world has varied from 9 to 14 and is a matter to be determinedby the game director at the outset of the game.3 Political parameters include the following: -Population at the outset of the game -Expected population growth per simulation period -Political characteristics of the government: dictatorship; obligarchy with disorderly and irregular changes of regime; oligarchy with orderly and regularchanges of regime -Control of business enterprise:state or private ownership -Attitude of government toward foreign governments and enterprises:hostile-xenophobic; aggressive intervention in the domestic affairs of other nations; cosmopolitan-neutral and hospitable to foreign investment. Economic parameters in the form of a beginning balance sheet are provided each roleplayer by the game director at the outset of a game. Assets, cash, plant and eq
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