Modeling innovation processes for decision support and management simulation



The article describes results from an ongoing research project that was started several years ago. It outlines the concepts of computer-based decision support and the role of management simulators for innovation management. It presents a modularly composed model of the innovation process which reflects the tight relationships between corporate actions and competitors' response. The model explains how the dynamics of a product life cycle are generated, and how the firm's performance influences market behavior. Different innovation strategies, such as pricing, capacity expansion and the role of effective quality control, are analyzed and evaluated. The model is then extended to include the processes of research and development and their relationships to resource allocation and market success. A management simulator—based on the comprehensive innovation model—is introduced which supports teaching and training and fosters organizational learning.