Understanding the Relative Influence of Several Factors in ERP Simulation Performance: An Exploration of Ecological Validity

Abstract

This study evaluates the relative factors that influence business simulation game outcomes through exploring ecological validity. A regression model analysis was conducted to access the impact of real-world industry factors that influence performance outcomes in a business simulation game. The factors represent a composite of typical company industry measures to evaluate profitability. The study extends beyond prior literature performance outcome measures of return on investment (ROI), and return on assets (ROA) to evaluate business simulation performance. The results showed that 77% of the variance associated with performance outcome is explained by this study’s independent variables. The implications for this study is the first of a two-part research effort to examine the question of whether the ERP business simulation game, ERPSim exhibits natural market structures. The part one study provides the basis to understand the factors that influence profitability in the simulation game. These results lay the ground work to complete the ecological validation of the ERPSim. The findings strongly indicate important real-world factors to predict profitability outcomes in the ERPSim business simulation game. Thus, providing evidence to compare business simulation market share and profitability levels between ERPSim and PIMS (Profit Impact of Marketing Strategies) manufacturing industry project data for eco-logical validity.