Small business education: an organizational development activity

Business teachers can educate students on organizational development with this simulation. It's a great discussion starter that will challenge students while having fun completing this activity.

Teaching organizational development can become tedious for the instructor and boring for the student when the classroom is not enlivened with interesting examples or creative activities. Indeed, simulations and creative activities help foster a supportive learning environment where students of all learning styles can learn.

One of the basics of business education is learning the difference between centralized and decentralized organizations. In centralized organizations, most decision making is done by top management and orders are passed down through the ranks. Decentralized organizations distribute decision-making authority throughout the company.


Organizations may discover that both approaches can be useful depending on their situation. In times of financial crisis, an organization may require a high degree of centralization so that top management can work through the crisis. Decentralization can help an organization be highly flexible when in conditions of high competition or fast-changing market conditions.

How can this information be taught in an exciting way that will help increase the likelihood of students retaining the knowledge? Try the following simulation after teaching students the basic structure of centralized and decentralized organizations.

Divide students into two groups. Tell one group they are going to simulate a centralized organization. Tell the second group that they are going to simulate a decentralized organization. The organization will be a manufacturing business that sells its products directly to its customers.

Give students 15 to 20 minutes to create an organization chart for their group and assign roles. For example, group A might select several managers and have employees who are responsible to each manager. Group B might create several work teams that interact with the other teams.

Use the organization charts they created to select the most appropriate person to be a group representative and to whom to assign a task. Give each group’s representative a box of paper clips, a flip chart page, three colored markers, a paper cup, a stapler, three rubber bands, and some magazines. Tell them their task is to crate a product using the materials provided, name it, and create a two-minute sales pitch. Remind each group that the task must be performed following the organizational structure they have established. Give students 20 minutes to complete this task and let each group present their sales pitch.

Discuss how the different organizations tackled the problem. What were the pros and cons of each organization in solving the problem and completing the task? How did their organizational structure help or hinder their task? What organizational changes would they make to be more effective at the task?
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