Business Simulation Report: Performance Analysis of IMOTO Motor Work

This report presents an analysis of a business simulation centered on IMOTO Motor Work, a new venture in the European motors manufacturing industry. The report evaluates the company's performance over four rounds, examining key performance indicators (KPIs) such as production, sales, profit, an...Read More

Running Head: REPORT
The Business Simulation
[Name of Writer]
[Name of Institution]

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Table of Contents
1 Introduction..............................................................................................................1
2 Critical Evaluation of the Company Performance...................................................2
2.1 Key Performance Measures over the Four Rounds..........................................2
2.2 Evaluation of the Company’s Performance......................................................3
2.2.1 Goal Setting Theory...................................................................................4
2.2.2 Expectancy Model......................................................................................5
2.2.3 The Control Theory of Performance Management....................................5
3 Critical Evaluation Of and Reflection on Decision Making....................................6
4 Conclusion...............................................................................................................7

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The Business Simulation
1 Introduction
In an assimilated business simulation, executive is considered as an integral part of
this simulation that models the manufacturing industry of European motors (Sweet, Madeo
and Dubin 2017). This business simulation helps in the company executive to strategically
plan and work on the company’s performance. The new venture of “IMOTO motor work” in
the European manufacturing industry was launched and aim towards achieving long term
profitability in the manufacturing industry and gain competitive advantage. The business
simulation game will help in the analysis of the business choices and aids in making effective
decisions for enhancing the new venture’ performance in the European manufacturing
industry (Katz et al., 2016).
The aim of “IMOTO motor work” is to bring innovation, efficiency and originality
that results in high quality cars and other automobiles and contribute towards environmental
sustainability (Watson, 2018). The company’s mission statement is “to maintain a global
perspective and supply such products that are of high quality at reasonable price to achieve
customer’s loyalty and satisfaction”. The vision of IMOTO motor work is to “Serve people
from all over the world with the joy of expanding their life's potential as well as lead the
advancement of mobility and enable people everywhere in the world to improve their daily
lives”. Several competitive strategies have been devised by the executives these are cost
advantage, differentiation, increasing market share through unique and innovative products as
well as sales growth. Moreover, they can accomplish market leadership through operational
excellence, meting their customers need through their products and achieve premium market
prices. The company intended to target those customers that are interested in contributing
towards sustainability (Mustata, Alexe and Alexe, 2017).

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2 Critical Evaluation of the Company Performance
The manufacturing industry uses key performance indicators (KPI’s) that helps in
tracking the performance of an organisation (Cotter and Fritzsche, 2014). These indicators
helps the company in accomplishing their organisational aims and objective as well as
compete in the industry. Similarly, IMOTO motor work has been working towards improving
their performance by working on the key performance measures over the four rounds refer to
Appendix B.
2.1 Key Performance Measures over the Four Rounds
Key Performance
Measures for IMOTO
motor work
CARRO ACCION CARERR JAZZ
Market Sector 5 10 14 9
Production (units) for each
model
86025 87368 46593 29596
Sales (units) for each model 52965 68683 46593 29596
Unsold stock (units) for
each model
33060 18685 0 0
Sales revenue for the
company
3246.39 3246.39 3246.39 3246.39
Profit after tax (%) 22 35 70 70
Bank Balance $500 millions $500 millions $500 millions $500 millions

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Outstanding Loan $523.67 millions $523.67 millions $523.67 millions $523.67 millions
Shareholder Funds $644.50 $644.50 $644.50 $644.50
Market Share (%) 1.02 1.41 0.96 0.57
Productivity 143.38 124.81 110.94 295.96
Productivity Index 3.20 3.20 3.20 3.20
The above-mentioned table represents the vital factors that are important for increasing
the performance of IMOTO motor work to compete with their competitors that are BMW,
Honda Motors, Toyota, Litex Motors and Hyundai. In order to enhance as well as improve
their performance, the company need to launch new and innovative car models that are
different from their competitor’s car products and target those customers the young customers
that are always looking for new and innovative cars refer to Appendix A.
2.2 Evaluation of the Company’s Performance
IMOTO motor work performance over the four rounds can be analysed using the
performance management theories such as the goal setting theory, control theory of
performance management and expectancy model (Mustata, Alexe and Alexe, 2017).
According to Ebrahimi Moosavi and Chirani (2016), “Performance Analysis is a continuous
process of identifying, measuring and developing the performance of individuals and aligning
performance with the strategic goals of the organization”. Critical evaluation of these
performance element will help IMOTO motor work to achieve their organisational aim and
missions.

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2.2.1 Goal Setting Theory
This theory focuses towards setting future organisational goals by doing the analysis
of the present organisational factors such that future strategies can be adopted and
implemented (De Simone, 2015). The purpose of utilising this theory is to work on setting
efficient goals that has helped or will help in achieving organisational aims and objectives.
Implementing this theoretical framework has helped IMOTO motor work in devising
strategical goals that will help them in competing with their competitors in the manufacturing
industry and lead in the market. This theory can benefit IMOTO motor work in enhancing
their motivation as well as productivity (Katz et al., 2016). There are five characteristics of
this theory which includes clarity, challenge, commitment, feedback and complexity of the
task (Ebrahimi, Moosavi and Chirani 2016). Their objectives are clear i.e. bring sustainable
and innovative cars in the market that will attract the potential customers towards their
products as well as contributes towards bringing change in the environment. The set goal
needs to be challenging i.e. IMOTO motor workplan on increasing their customer’s rate of
conversion from the present by 15%. They have set their goals by critically evaluating and
comparing their KPI’s with the competitor’s that might help them in maintaining their
position. By taking feedbacks from the customers i.e. the greater amount of sale and revenues
generated on each model, will reflect how much customers are interested in their car
products. Their organisation has set complex tasks that will motivate the employees to work
hard achieving theses goals increasing their sales growth and revenues.
2.2.2 Expectancy Model
This theory is considered as a necessary model that outlines as well as analyse the
performance of ACE motors. According to Salaman et al. (2005), “Performance of an
individual should always be aligned with organisational expectations regarding achievement

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of identified goals in future”. The main features of this expectancy model are expectancy,
valence and instrumentality. The models launched by IMOTO motor work lack expectancy as
their performance goals are away from their goal accomplishment resulting in lowering their
employee’s motivation towards company’s goals. They need to appreciate and reward their
work force that will motivate the employees in increasing and improving their performance
that will help them in achieving their goals. Another element IMOTO motor work need to
inculcate in their organisation is valence. As stated by De Simone (2015), “Valence is the
significance of the reward individuals get for exhibiting desired performances.” Valence
comprises of values, goals, differential needs and source of motivation (Cotter and Fritzsche,
2014). The more the employees of this company are motivated and encouraged their
performance will be increased helping them to compete in the European industry.
2.2.3 The Control Theory of Performance Management
For the purpose of increasing the organisational performance, the company executives
are required to accomplish the assigned objectives and goal that will not only enhance their
performance as well as upgrade their employee’s performance (Katz et al., 2016). IMOTO
motor work need to analyse the key factors that are highly contributing in declining their
organisational performance as well as restricting them to achieve completive advantage in the
industry. IMOTO motor work is required to control certain factors to meet their desired goals.
There are three types of controls systems that are defined in this theoretical model. This
includes behavioural control, output control and input control. In behavioural control, the
executives need to analyse their employee’s actions as per the standards of the company and
reward the workforce accordingly. One of their car models has been successful sold in the
market due to its uniqueness, fuel efficiency, sustainability as well as improved build quality.

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Moreover, they have been recruiting new employees that requires to hire such individuals that
are competent and have skill that will contribute in the company’s growth and development
(Sweet, Madeo and Dubin 2017). The company’s output performance can be controlled by
limiting the production of those model that are not being sold in the market or have lower
sales units generated in the four rounds. IMOTO motor work can opt for any control system
or an amalgamation of diverse models for managing their organisation’s performance.
3 Critical Evaluation Of and Reflection on Decision Making
Referring the cost and data sheet (see Appendix A) as well as the key performance
measures mentioned above, the executives was required to make decision with respect to the
production process of model CARERRA and JAZZ as well as increase their sales units. The
decision was made to completely stop the production of CARRO as the revenue generated as
well as its sales unit were relatively low as compared to other models launched by IMOTO
motor works. Moreover, it was decided to re-launch this product in the market by shifting it
to biofuels, enhancing its build quality and adding more feature that not only benefits the
customers as well as make their driving experience good. The production unit will play a vital
in the decision making. The functional unit i.e. the production unit was chosen for making the
effective decisions because according to the team and the executives, production unit has the
capability to produce effective product as well as control the operations in case of excessive
production that has been observed after the business simulation (Appendix A).
Production management basically involved making the important decisions related to
quantity, quality, cost and production of the car models. This decision will prove to be
effective as most of the as it immensely benefit the in increasing the growth of the company
as well as improving the overall performance of the organisation. According to Katz et al.,
(2016), “Top management teams make strategic decisions, and the products of their decision

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making influence organizational performance. A step by step approach that is essential for
implementing the decision is to work on research and development by bringing innovation in
the model that the executives of IMOTO motor work decided to re-launch. In addition to this,
the pressure on the production unit to produce and control the production of those models that
are not being sold in the market is quite high. The decision made, emphasise on the fact that
implementing this decision will result in increasing the growth of the company. Moreover.
Production unit is involved in planning and converting raw material into valuable products
therefore, they are considered as the core part of manufacturing industries. On the other hand,
the game result attached in Appendix B represents that all these four models of IMOTO
motor works are somehow very much successful in achieving their target production
potential. Their successful products are JAZZ and CARERRA which can increase their
overall annual revenue proving to be beneficial for their organisation.
4 Conclusion
This report gives insight on business simulation exercise and how it contributes
towards determining the key measures and the element that will help in improving the
performance of the organisation. The new venture in the manufacturing industry named
“IMOTO motor work” has been working towards achieving their organisational objectives
and strive towards becoming the top leading car manufactures in the market. They have
successfully launched four models over the four rounds and out of which only two models
have been successful in the market. In addition to this, this company has been a bit successful
in their venture but there are certain element that needs improvement. The performance of the
company can be improved through their products as well as workforce. They need to work
towards bringing more luxury and fuel efficient products as well as lower down the prices of
their products to attract the customers’ attention towards their products. Besides this, through

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effective promotion the will be able to grab the attention of more customers towards their car
models. Promotions can be done by sponsorships, reviews, promotional offers and through
social media. Furthermore, they need to enhance the performance ability of their employees
that will contribute towards their organisational performance.

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References
Cotter, R.V. and Fritzsche, D.J., 2014, March. The business policy game. In Developments in
Business Simulation and Experiential Learning: Proceedings of the Annual ABSEL
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Faria, A.J., 2001. The changing nature of business simulation/gaming research: A brief
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with and without supervision: An analysis based on the TAM model. Journal of
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Mustata, I.C., Alexe, C.G. and Alexe, C.M., 2017. Developing competencies with the general
management II business simulation game. International journal of simulation
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Ebrahimi, P., Moosavi, S.M. and Chirani, E., 2016. Relationship between leadership styles
and organizational performance by considering innovation in manufacturing
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De Simone, S., 2015. Expectancy Value Theory: Motivating Health Care Workers. American
International Journal of Contemporary Research, 5(2), pp.19-23.
Katz, L.N., Yates, J.L., Pillow, J.W. and Huk, A.C., 2016. Dissociated functional significance
of decision-related activity in the primate dorsal stream. Nature, 535(7611), p.285.
Sweet, B.V., Madeo, A., Fitzgerald, M., House, J.B., Pardee, M., Zebrack, B., Sweier, D.,
Hornyak, J., Arslanian-Engoren, C., Mattison, D. and Dubin, L., 2017. Moving from
individual roles to functional teams: A semester-long course in case-based decision
making. Journal of Interprofessional Education & Practice, 7, pp.11-16.

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Watson, G.H., 2018. How Is Decision Making Affected by Organizational Roles?. The
Journal for Quality and Participation, 41(2), pp.25-30.

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Appendix A: Business simulation of IMOTO motor work

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