Understanding simulations in business learning
Simulations come in many forms, and understanding how they differ helps organizations design learning experiences that build real insight and capability.
At Celemi, simulations are not viewed as tools or technology first. They are learning experiences designed to help people reflect on complex realities, make decisions, experience consequences, and understand how different parts of a system interact. This is what turns abstract concepts into practical understanding.
So what are the three main types of simulations, and how are they used in business learning and education?
What Is Considered a Simulation?
A simulation is a simplified but realistic representation of a real-world system, situation, or set of dynamics. In business learning, simulations often model companies, markets, projects, or organizational environments where multiple factors influence outcomes over time.
Unlike lectures or case studies, simulations require participants to act. People make decisions, see the results of those decisions, and reflect on what happened and why. The purpose is not to find the right answer, but to understand cause and effect, trade-offs, and interdependencies.
In learning and development, simulations help participants by:
- Making complex situations tangible
- Allowing experimentation without real-world risk
- Revealing how decisions interact across a system
- Creating shared understanding across roles and functions
Whether physical or digital, learning happens through doing, discussing, and reflecting.
What Are the Three Types of Simulations?
While simulations can be designed in many ways, most learning simulations used in organizations fall into three broad categories. These categories are often described by format, but in practice the most important distinction is how learning is designed and experienced.
1. Live Simulations
Live simulations are facilitated, in-person experiences where participants interact face to face in real time. Teams work together around physical materials, boards, or shared models and respond to evolving scenarios.
Live simulations can be supported by either physical materials or computer-based models, with the same pedagogical design and facilitation principles applied in both cases.
Live simulations are highly social. Participants discuss priorities, negotiate trade-offs, challenge assumptions, and experience pressure similar to real work situations. Learning emerges through dialogue as much as through decisions.
At Celemi, live simulations are often used to:
- Build shared business understanding across functions
- Create alignment in leadership and management teams
- Strengthen decision-making under time pressure
For example, in CELEMI Apples & Oranges, teams manage a fictional company over several business cycles. They make decisions about pricing, investments, capacity, and working capital, then experience the financial consequences together and reflect on how the system behaved as a whole.
Live simulations are particularly effective when alignment, trust, and collective insight are central to the learning objective.
2. Computer-Based Simulations
Computer-based simulations use digital models to represent systems and calculate outcomes based on participant decisions. These models are often used to represent complexity such as financial dynamics, market behavior, or interdependencies over time.
At Celemi, computer-based models are used in both live and virtual simulations and follow the same pedagogical design as board-based simulations. The presence of a computer does not change the learning logic. It extends what can be modeled.
Computer-based models are especially valuable when a simulation involves many decision points or variables. In these situations, digital models allow richer and more consistent representation than would be practical with purely physical materials.
At the same time, increased modeling power introduces an important learning risk.
When many decisions are made simultaneously and outcomes are generated through complex calculations, it can become harder for participants to see exactly how specific decisions led to specific results. If this linkage is not made explicit, cause and effect risk becoming opaque.
At Celemi, computer-based models are therefore used as shared learning tools, not black boxes. Decisions are surfaced, assumptions are discussed, and results are unpacked collectively so that participants can clearly follow the logic from action to outcome and build accurate mental models of how the system behaves.
3. Virtual Simulations
Virtual simulations refer to how simulations are delivered rather than how they are designed. In virtual settings, teams collaborate online instead of being in the same physical room, often supported by a digital platform and a facilitator.
Virtual delivery is typically chosen when:
- Teams are geographically distributed
- Learning needs to scale across regions
- Consistency of experience is important
When virtual simulations are synchronous and facilitator-led, they preserve the same learning design as live simulations. Teams still make decisions together, reflect collectively, and build shared understanding of complex systems.
The pedagogy remains the same. Only the delivery context changes.
Individual Digital and AI-Based Simulations
In addition to team-based simulations, individual digital simulations, including those powered by AI, are increasingly used in learning contexts. These experiences are usually self-paced and designed for individual exploration.
Many digital and AI-based simulations feel highly organic. Responses adapt dynamically, interactions feel realistic, and outcomes vary in nuanced ways. Some also include a large number of decision points, closely mimicking the complexity of real organizations.
These simulations can be useful for individual reflection, experimentation, and skills practice. They allow learners to test ideas privately and explore different approaches.
However, this realism also introduces learning limitations.
When many levers are adjusted at the same time, it becomes difficult to see which decisions actually drove the outcome. Cause and effect blur. AI-based simulations can reinforce this challenge by hiding underlying logic, making the experience feel convincing while remaining difficult to explain.
As a result, learners may gain intuition without building explicit mental models that help them interpret complex organizational reality or transfer learning back to their work.
Big Picture Understanding and Mental Models
At Celemi, simulations are designed to help people understand the big picture. Whether the context is a company, a market, or a complex project, participants are encouraged to reflect on how different parts of a system interact and influence one another over time.
This system-level perspective helps people build mental models. Mental models are the internal representations people use to interpret reality, make sense of complexity, and anticipate the consequences of their decisions.
Team-based simulations make these interdependencies visible. Participants see how actions in one area affect outcomes elsewhere and how collective decisions shape overall performance. This is what enables learning to transfer beyond the simulation itself.
A Practical Way to Think About Simulation Design
Simulation approaches are often described by format, but learning effectiveness depends on design and intent.
- Team-based, facilitated simulations are well suited when learning requires shared understanding, dialogue, and alignment across roles or functions.
- Computer-based models support deeper exploration when many decision points or variables are involved, provided cause and effect are made transparent.
- Virtual delivery enables scale and geographic reach while preserving shared learning when simulations are run synchronously.
- Individual digital and AI-based simulations can complement team learning by supporting individual exploration and skill practice, but are less effective for building shared mental models.
Different approaches support different moments in a learning journey. What matters most is whether the simulation helps people understand the whole system they are part of.
How Simulations Create Learning at Celemi
At Celemi, simulations are designed to balance realism with clarity. Complexity is present, but it is made visible. Decisions are explicit, consequences are traceable, and participants can clearly see how actions influence results.
Across board-based, computer-based, live, and virtual simulations, the same principles apply:
- Learning is social and happens through dialogue
- Decisions are made in teams, not in isolation
- Consequences are experienced, not explained
- Facilitation and reflection turn experience into insight
The pedagogy stays constant. The medium adapts to context.
Simulations as a Learning Philosophy
At their best, simulations are not standalone events. They are part of a learning philosophy built on participation, transparency, and shared understanding.
A strong simulation does not tell people what to think. It helps them build mental models that allow them to interpret reality more effectively and make better decisions together.
This is what makes learning stick.
Explore business simulation examples to see these models in action
From financial acumen to strategic agility, simulations turn passive learning into powerful capability. Discover the right approach for your team’s needs: Explore Celemi’s business simulation examples.