Recommended Decision-Making Procedure

As you and your co-managers approach the task of making decisions for an upcoming year, we strongly recommend using the following procedure. The recommended steps come from our experiences of having administered hundreds of simulations for thousands of participants, and they should work well for you — especially for the first few decision rounds when you are trying to figure things out.

Step 1: Print the GLO-BUS Statistical Review (GSR) — Review your company’s performance on the scoreboard pages (pp.1-3). Scrutinize the numbers on the Industry Overview (p 4), the Performance Benchmarks (p.5-6), and the Financial Performance Summary (p.7). There is a Help button at the top of every report page that provides line-by-line explanations of each item and how to make effective use of the information on these report pages. Skim/read the Help text to be sure you understand the numbers and what they tell you about the strong and weak aspects of your company’s performance. (Skip this step in the first decision round since the first GSR issue appears after the Year 11 decision round deadline passes.)

Step 2: Print the Company Operating Reports (ideally one printout for each company co-manager). This 6-page report provides you with all the details relating to your company’s operations. The Company Operating Reports consist of a Production Cost Report, an Operations Report for each region, and a set of financial statements (Income Statement, Balance Sheet, Cash Flow Statement). Studying these reports — especially for Year 5 when you are trying to get a grip on your company’s business — needs to be automatic. There is a Help button at the top of every report page that provides line-by-line explanations of each item and how to make effective use of the information on these reports. Skim/read the Help text until you are confident you understand the numbers and what they tell you about the strong and weak aspects of your company’s performance. It is perilous to rush into making decisions for the upcoming year without first having a good command of your company’s prior-year results.

Step 3: Make extensive use of the Competitive Intelligence Reports. Start by printing at least one copy of the Quarterly Snapshot (printouts for Q4 only will do) showing the competitiveness of your company in each of the 4 geographic regions (four 1-page printouts are needed here — one for each geographic region). These reports show your company’s competitiveness (as measured by your competitive effort on all the variables that affect market share) against the industry average efforts for all companies competing in the region. The Strategic Group Maps indicate your company’s market position versus. The bottom of the page lists your company’s competitive strengths and weaknesses — this is very important information. Using the Company button at the top you can view Quarterly Snapshots showing how any company’s competitive efforts compare to the industry-averages in each geographic market of interest and identifying that rival company’s competitive strengths and weaknesses as well.

Use the Company Analysis report to view or print a close rival’s effort on each market variable for all years to date. The more you and your co-managers study the decision patterns of key competitors and are able to anticipate their moves, the better you will be prepared to counter their strategies with offensive and defensive moves of your own.

Step 4: You are now ready to begin decision-making for the upcoming year. You should have a better idea at this juncture of some of the things you want to change/improve/correct, and what it might take to improve your company’s performance in the upcoming year. We suggest moving through the decision entry screens in the order they appear on the menu. You will always need to cycle back and forth through the decision entry screens to arrive at a cohesive and compatible set of entries that hold promise for producing good performance.

Each time you change an entry, an assortment of on-screen calculations will instantly show the projected impact of the entry on unit sales, revenues, market share, unit costs, profit, EPS, ROE, and other pertinent factors. The on-screen calculations are there to help you evaluate the relative merits of one decision entry versus another. They provide instant feedback on the possible outcomes and consequences of alternative decisions and are intended to support wiser decision-making and strategizing on your part. Often, it will take a minute or two to digest all the changes in the on-screen calculations that occur when you make a particularly significant change — the best way to deal with this is to put the prior number back in the entry field and then redo the entry and watch the changes in the on-screen calculation a second or third time.

No decision entry is “final” until the decision deadline passes, so you can enter as many numbers in the decision fields and try out as many different decision scenarios as you wish. When you have made entries that you wish to retain, be sure to click the Save button at the top-right.

Step 5: Review and print the projected Company Operating Reports. As you finalize your decision entries for the year, it is a good idea to review some of the numbers in the projected Company Operating Reports. Check the projected Production Cost Report and the Income Statement page to see if the projected costs are higher/lower than the prior year and if costs are moving in the right direction. Check to see if profitability in each geographic region is better/worse than the prior year; check the projected costs against those on the Benchmarks pages (page 5-6) of the GSR to see if your costs compare favorably with the industry lows and industry averages. If you spot areas where costs are rising and/or profitability is headed downhill, you may want to reconsider some of the decision entries to see if you can turn things around.

When your reach a final set of decisions, it is always a good idea to print a copy of the projected Company Operating Reports. Then, when the results for the round are generated, you can compare the numbers in the projected Company Operating Reports with the numbers in the actual Company Operating Reports. Having the ability to see “what went wrong” should your company have a bad year is important (and you really can’t diagnose what went wrong without a copy of the projected Company Operating Reports to find the differences between what was projected and what actually happened).

Step 6: Print your decision entries. From any decision entry screen, click the Print button to print a summary of the entries you have made for the year. Retain a copy of the “Current Year Decision Summary” for your records so that you may refer to it later if necessary. Check the printout carefully to be sure that all the entries are as you want them.

Step 7: End the decision-making session. When you are ready to end the session, close the Decisions/Reports Program window. If you have any unsaved decision entries the program will prompt you with a message. You can click the Save button to retain the unsaved entries or simply close the window to discard them.

The entries that exist on all the decision screens when the Save button is last clicked by any co-manager are the entries that will “count” when the deadline passes. Until the deadline for the round passes, you may launch a new decision-making session at a later time and change any of the entries that were previously saved.

Special Note: It is normal for company co-managers to log-on simultaneously and each be engaged in decision-making. When you log-on and get to the Corporate Lobby, there’s a box indicating if other co-managers are currently logged on. It is important that company co-managers coordinate their activities, especially when it comes to entering and saving decisions. The communication center located at the bottom-left of the Decision/Reports Program window allows you to communicate (by text or voice) with any co-manager currently active in the Decisions/Reports Program.