Another Look at the Use of Forecasting Accuracy on the Assessment of Management Performance in Business Simulation Games


  • Hugh M. Cannon
  • Moises Pacheco
  • Ricardo R. S. Bernard


Research in business games show that the reduction in forecast error can be used as a predictor of team performance. The objective of this study was to evaluate these findings with respect to high- versus low-level individual management functions. Using multiple linear regression, the study found that the set of independent variables (prediction error for indicators relevant to each management function) explained 40.75% of the overall company performance, while another portion is explained by external factors. As expected, the study found that the forecast accuracy for high-level functions (general management) had the greatest predictive impact and lowlevel functions (sales, human resources, and finance) the lowest. This supports the notion that Teach’s (1990) forecast-accuracy approach to performance evaluation can be used in top-level strategic management simulations as well as lower-level functional simulations rather than limiting it functional simulations only, as Wolfe (1993a) suggests.