Negosim - A great experience !

Welcome back. As I mentioned in my last post the highlights of the ongoing week are in Negosim and the On Campus TEC Program at HEC. This post focuses on my experiences with the former i.e. Negosim.

Negosim is a business simulation game with a difference. It involves teams, each comprising of 4 to 5 MBA participants, running companies in different geographical markets but producing & selling a particular product although at different quality & price levels. The game is overseen by HEC Professors who provide know-how and also act as Bankers when needed. What differentiates Negosim from other simulations is primarily the negotiation aspect emphasized in the game. We need to negotiate with companies operating in other markets for buying raw material or finished good, establishing joint ventures and creating strategic alliances for making investments in R & D. We also need to speak with our (negosim) Bankers to borrow capital or to raise it by selling equity.

The entire game is spread over 6 quarters in the life of a firm, each ending with a set of decisions which every team needs to take so as to improve the shareholder value with an eye on maintaining healthy growth rates and profits in the long term.  The decisions collected from all firms are then collated and processed in a market simulated by characteristics similar to those in real life but of course with appropriate simplifications. The quarterly results so obtained form the input for the decision-making of the next quarter.

The best part is that the whole exercise is spread over a period of 4 days and starts with a trial and error approach. As one professor puts it "You will be put in a swimming pool and you HAVE TO try and swim to get out". This is true because we are made to play this game in the very 2nd week of our MBA program. However, the nuances of different business aspects unfold during our group interactions and our know-how is augmented by short, intermediate class room sessions held by HEC professors following which the exercise gets more interesting and competitive.

My team includes an American man, an Estonian woman, a French man and myself. The experience of getting organized, from scratch, and aligning focus within such an international team while having stringent deadlines to meet has been tremendous. It has exposed me to a new situation which is very different than what I had seen in my previous workplace - wherein the teams were international but had been already constituted with a well or pre defined structure. The team synergies increased every quarter and I learned something or the other from everyone in my group. I particularly feel benefited as this is the way things would be until the end of Core 2. From next week onwards we will be assigned new work groups for Core 1 (Sep - Dec '08). The working groups will again change for Core 2 (Jan - April '09).

Today was the last day of the Negosim exercise. The agenda was to make decisions for the 6th and last quarter, obtain results and present the strategic views with which each team has tried to take decisions for the 6 quarters in the life of their firm.  After the Quarter 5 results were declared, we had a strong position in terms of sales, new business and also financial leverage. We ended up buying a 33% stake in another firm and becoming their White Knight while driving a 70% rise in our share price and shareholder value. I am proud that my team fared amongst the best in our group of competing companies in terms of shareholder value creation.

The whole exercise has been extremely stimulating and I ended up getting introduced to 3 new friends, strategy professors at HEC, a lot of business concepts and inter-cultural group dynamics.

Core 1 starts next week and I believe, Negosim has done a solid groundwork before the storm arrives.

Signing off.