Simulating board of directors decisional dynamics: a system dynamics application for upper echelons theory

This work deals with the development of a business game, named Board Leadership Game (BLG), which is still under further development at the University of Rome “Tor Vergata”. The final goal is to build a powerful didactic tool for students and management professionals in order to favor the understanding of underlying dynamics in the decisions’ formulation processes inside groups; this also takes into account principles that come from the Upper Echelons Theory, developed in management science, which establishes a direct relationship between top management’s demographic characteristics and the strategies carried out by the firm. In the developed framework, each player plays the company CEO, making up strategic proposals that are examined by the company’s Board of Directors (BoD) and could be eventually changed in accordance with the top management demographic characteristics and with CEO’s leadership (the ability to influence the BoD’s final decisions). Strategies chosen by the BoD, together with market’s characteristics and competitors’ actions, determine the company’s economic and financial results, which in turn close the loop by having a direct influence on CEO’s leadership.