Wharton Pioneers Business Learning Simulations Innovative Technologies Provide Hands-On Experiences
Students need to solve real-world problems to learn about business. So how to include practical business experiences in classroom learning?
Wharton’s Alfred West Jr. Learning Lab, founded in 2001 with a $10 million gift from alumnus Alfred West Jr., creates innovative learning simulations to involve Wharton students in real-world business decision making. The technology has now been licensed to dozens of other schools, and has already been used by over 6000 students at Wharton.
25 Wharton professors to date have worked with the Lab to develop simulations for their classes. A simulation, explains finance professor Karen Lewis, allows “students to experience an actual outcome. A whiteboard does not allow them to get directly involved in a scenario and quickly see the causes and effects of their decisions.”
New Simulations for Currency and Entrepreneurship
Two recent learning simulations involved MBA students in hedging foreign currency risks and innovating entrepreneurial products.
In HEDGE, used by students in International Corporate Finance classes under the leadership of Professor Lewis, students simulate being international financial managers who face different kinds of foreign exchange risk. They then have to decide how much currency to hedge and which financial instruments to use for specific situations.
Wharton’s Innovation Toolkit simulation — used by students in Innovation and Entrepreneurship courses under the leadership of Professor Ian MacMillan, director of the Sol C. Snider Entrepreneurial Research Center — gives students a framework to think through each step of a new product’s lifecycle. It provides online course modules based on MacMillan and Rita MacGrath’s book The Entrepreneurial Mindset, leading students through such stages as product design, business design optimization, and competitive market segmentation.
“These simulations push the envelope in terms of how professors can teach and what students can learn,” maintains Deirdre Woods, chief information officer and associate dean of the Wharton School. “Without Learning Lab simulations, many types of learning would be off-limits to students, since the concepts require real-time interaction. These new interactive offerings will help solidify Wharton’s position as the leader in creating and disseminating business knowledge through the use of technology.”
Simulations for Executive Education
Innovative learning simulations are also central to Wharton’s executive education programs, in which they help executives learn practical lessons that they can take right back to their workplaces. “We can create something that is more lifelike and bring a more realistic element to market simulations,” says Professor Robert Holthausen, academic director of Wharton's executive program in Mergers & Acquisitions.
Simulations allow managers to go back and change strategies after they see the results of their original decisions. This experience often gives them a new appreciation for the complexities of acquisitions and the strategies that can lead to success.
“The reason for the simulation is to get the participants to understand that there are many facets of an M&A process that normally are treated as independent, but all these things are interdependent,” explains Holthausen. “They realize the integration decisions that lead to higher value or lower returns.”
Unlike in many actual business decisions — where the professional stakes may so large that honest evaluation is impossible — participants in simulations are usually very candid about what went right or wrong. "People are pretty thoughtful about how the team worked and why," says developer Bruce Gresh, who created the M&A simulation with Holthausen. "It is amazing how much insight teams have into things that went on that influenced their decisions."
A simulation’s open-ended complexity is a big part of what makes it so realistic. "There are a lot of environments where executives struggle to integrate tons of information," says Gresh. "This is the stuff they are actually considering in their decision-making. Simulations help make them aware of what the organization is facing in the business environment.”
This complexity creates a powerful, experiential educational tool. "There are many different ways to learn," adds marketing professor David Reibstein, who uses marketing strategy simulations in programs on Pricing Strategies and Competitive Marketing Strategy. “Each has its own value. But sometimes we learn best only by doing.”
