Professor Luis Fernando Balarezo, head of the business simulation laboratory at Universidad Señor de Sipán (Peru), shares his experience using Cesim Business Simulations in his courses. From their multidisciplinary approach to their impact on students' practical understanding, he explains how simulations help connect theory with decision-making in real-world business environments.
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(Business simulations have) a series of benefits, above all, the ability to see what the results could look like, how the process could be viewed, how the figures would change once you entered a value. You can see in a holistic way what was actually happening, if you changed one figure or another, what really changes. What really happens in a company: you change something, and it's not just that part of the company that changes, everything changes. Since the covers several courses at once, that means you need to have multiple areas of knowledge at once, and it serves as a practical course to review all the courses taken before. So we placed the simulations in the sixth, seventh, eighth, and ninth terms to align with courses students are already prepared for, which are mainly accounting and finance, and the other courses that follow. But essentially accounting and finance, so they can understand, from that point on, what it means to obtain financial results from the simulation. And in the lab, business students, accounting students, international business students, and engineers gather. And that makes it multidisciplinary, people in a group come from different majors, which is what happens in a real company.
Initially, I had to prepare myself quite a bit in other areas as well in order to understand what prior knowledge is required to explain different things. Because to go deeper into the topics covered by the simulation, you don't just need accounting and finance, but also statistics, macroeconomics, microeconomics, and different types of marketing. So the prior knowledge must be quite broad to explain to students what each element means or could mean. Also, since there are engineering and hospitality schools, or hotel and restaurant services, I've also had to learn a bit about that to explain how a hotel or restaurant is managed in real life. Obviously, you don't need to know everything, but you do need a foundation. I believe that managing six simulations has also allowed me to develop personally.
What helps students is that they see specific points that are changing, and those points are the important ones for that simulation, or important for them. And in the end, they may be making mistakes, but they begin to realize what those mistakes are. In other words, their attention is drawn to where they are failing, because, since there are several groups, and later everything is explained, once the round ends, everyone is told what happened as a result of their decisions. So feedback is given to the entire class. Since I've been teaching at the university for 21 years, I've had students who learned a lot from the simulations, and later I've run into them again—some even work here— and they've told me: "the simulation opened my eyes to see the relationship between theory and practice. Because now, when I look at a factory, I think, 'oh, that's done and calculated this way, and you can do this over here.'" So they don't start from scratch.
Essentially, what I'm looking for is for students to see what happens in reality. I know many of my students may never set foot in the boardroom of a multinational automotive company. But if they can see, for example, how a multinational
company operates globally dealing with figures that are astronomical, as happens in Cesim Global Challenge, or in pharmaceutical labs operating at a continental level, this gives students the opportunity to see that other types of businesses exist and that they could aim to reach them someday.
Initially, there are four practice sessions in which students are tested on the simulation manual. If they do not pass those four sessions, they remain there and simply receive the grade they obtained and continue with their regular classes; they no longer attend the simulation. Those who pass form the groups. And those who pass are assumed to handle the simulation better. So I present what the goal of their simulations will be, that is, what they should aim for. Each simulation has different calculations to determine the objective. I present that goal, and then they know what they need to aim for. As they progress through the simulations, I explain how they are reaching that goal. Because it can be seen graphically, but they need to understand what they are doing wrong or what they are doing right to reach that goal. And there, you can clearly tell who understands and who doesn't, based on the questions. While they are working on the simulation, I let them ask general questions so everyone can hear and learn from them. But not questions like, "What do I do here?" Ask me about the general situation, what you understand or don't understand, but don't ask "what do I do here," because that would be direct help. So feedback is for everyone. And once the simulation ends, we spend half an hour explaining the results of all groups together. The sessions we have are 2 academic hours, which is 110 minutes. The first part is dedicated to making decisions as a group. Because what happens is, they already come with an individual decision made beforehand, because at home I grade the time they spend within the simulation —what is called the activity— I also grade that. So it is visible when someone logs into the simulation, and for how long. And in addition, they can make decisions and see what happens. Then, when they come here, they put the group decision into practice. So the individual decision is one thing, but the group decision is another, because there they have to compromise, see what works, and reach an agreement. So it also helps students learn how to work in teams. Because in the end, in a company you also work in teams, you don't make decisions alone. You might say, "hey, we should do this," but someone else will say, "no, we can't do it that way because it will affect something else."
The experience with artificial intelligence has been interesting, the fact that you introduced AI not in a direct way to solve the problem, because that would have been like giving away the answers. Instead, it serves as an analysis advisor, for example.
Competitions help people realize that they can go further than what is immediately next to them. For example, the last time we placed sixth, and we competed with top-tier universities. When we found out the results, naturally, it made us very proud. Because the students come from schools that are not top-tier, schools that have certain shortcomings. They learn and improve (at the university), and they realize that they can compete with universities that are at a much higher level. Thank you, because you are truly doing great work so that students can improve themselves.