Edition of 2013 with a new version of the Simulator
The next edition of the competition will feature a new version of the simulator that will introduce several new decisions.
In a changing world, the Global Management Challenge also feels the need to update and innovate to stay ahead. The aim is always to be at the forefront of strategy and management competitions. The Organization of the competition, together with its partners, EDIT 515, now present this new version of the simulator that will be used worldwide, in more than 30 countries where the competition takes place.
The new version has several new features – both in factors and decisions.
Pedro Alves Costa, CEO of SDG says that «over the years we have been updating our product in accordance with the financial, economic or macroeconomic concepts of the global market in which we live ». With this new version, the competition increasingly mirrors the current reality and the future.
So far the new version of the Simulator is being tested with Portuguese university students, so that soon it may be used on a larger scale.
The increasing importance of environmental factors in business:
There are new decisions for purchasing ‘premium quality’ materials that are both more environmentally friendly and of superior quality.
Each company’s primary carbon footprint is measured in terms of the energy used in its various processes. The company is able to off-set its carbon footprint completely by paying a charity to plant new trees. However, future legislation may impose taxes on this footprint and/or other environmental factors.
Space limitations can be just as important as funding constraints:
Companies can now subcontract (or ‘out-source’) some, or all, of its supply of machined components instead of manufacturing them itself. This additional flexibility may have advantages (in terms of physical space or investment costs) but there are corresponding risks associated with exchange rate movements, etc.
Because of the need to consider the physical space required for the company’s activities, there is a new decision for expanding the company’s factory to allow for more machines, assembly operations or material storage. This decision will be constrained by funding limits and the area of land owned by the company.
The need to motivate and retain staff in challenging times:
«In the training area we go a little further than before», reveals Pedro Alves Costa. The idea is to use training to achieve a better level of performance in all dimensions, which will become a critical decision in the evaluation of the company.
A new decision for training existing staff (at all levels of the company) will have consequences for staff morale, retention and efficiency.
Banks will apply heavier penalties for breaching loan conditions:
The higher rate of interest for unauthorized bank overdrafts will now be applied to the whole overdraft and not just to the excess over the authorized limit.
Listed companies are not limited to funding solely by bank loans.
Each company may be allowed to issue more shares on the stock market as an alternative to funding by long-term loans. Conversely, a proportion of existing shares may be re-purchased if, for example, the company has spare cash.
Both the format and terminology of the company accounts have now been brought into line with the latest IFRS standards (International Financial Reporting Standards) for SME companies.
New criterion – Investment Performance
Previously, the winning team was decided by a simple criterion – ‘the company’s share price in the last period’. This criterion is now no longer a suitable means of assessing a team’s performance because companies can now raise capital by selling shares, or can use surplus funds to re-purchase shares.
The winning team will be decided by a new criterion – Investment Performance. This is because the number of shares each company has may vary. The new criterion measures the investment ‘return’ for the original shareholders not just as the value of their shares at the end of the competition but also after allowing for any shares purchased, or sold, and also any dividends received.
These and some minor changes are fully described in the new on-line manual.
With the changes now disclosed the Global Management Challenge is now increasingly at the forefront of the business world.
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