How VR can enrich lessons in business strategy

A "visit" to Kenya to understand the context for developing a business strategy… Yet another one to an Amazon warehouse to observe the delivery chain of the e-commerce giant in India… These "trips" were taken by students of the Competitive Strategy course at the Indian School of Business (ISB), Hyderabad – right in their classroom. Keeping up with its efforts at spearheading innovation and experimentation for an enhanced learning experience for students, the Competitive Strategy course at ISB introduced four virtual reality (VR) case studies in addition to the normal case studies undertaken as part of the curriculum. And the results have been there for everyone to see.

VR and augmented reality (AR) are no longer the hallmarks of the gaming and entertainment industries. Extended reality (XR) technologies, such as VR, AR and mixed reality (MR), are the latest technological innovations transforming higher education by creating immersive experiences for students, taking them right to the centre of action. The global virtual reality in education market is projected to grow from USD 17.18 billion in 2024 to USD 65.55 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 18.20 per cent during the forecast period, according to a Fortune Business Insights report.

Using VR in classrooms especially proves to be a useful tool while teaching abstract concepts such as business strategy, says Professor Anand Nandkumar, Associate Professor of Strategy, Executive Director for SRITNE at ISB, and Associate Dean - Centre for Learning and Teaching Excellence.

"Students generally have had no prior experience with formulating strategies. VR enables us to not only get a context but also gives students the ability to use that context and think about how they can develop a strategy that is in alignment with that very context," says Professor Nandkumar. He adds that one of the challenges that teachers face while describing a phenomenon or tools and techniques in a traditional business classroom is that they are either not linked well enough to the context or there aren't enough real-world examples.

"VR fulfils both of these roles," says Professor Nandkumar. "But the additional dimension that it adds at the same time is spurring students to critically think about how they can come up with a strategy that is also coherent with the environment."

Boosting interactive learning in classrooms

During the sessions, it was seen that the contextual intelligence provided by VR improved the quality of discussions in the class. Armed with VR headsets providing a 360-degree experience, including the sights and sounds of a location, students are able to think critically about the case at hand.

"A strategist has to generate options and then narrow down on a bunch of options, one of which is eventually formulated as a strategy," explains Professor Nandkumar. "VR helps students to think about several alternatives, and some that they came up with have been even better than what the companies themselves had implemented."

VR case studies also help to improve the social learning context for students by lending a fine balance between teaching them theory, which is sometimes a-contextual, and its application to a context, which cannot be theorised. It also teaches students to go to the field and look at the problems in an environment.

"For example, we had a discussion on a case in Africa," recalls Professor Nandkumar, pointing out that most of the students hadn't been to that region and that there was a popular misconception that most of Africa is very poor. "But when we showed them certain affluent parts of Kenya, the penny dropped, and the students actually saw that Africa is very heterogeneous."

This kind of contextual intelligence would be really helpful for managers who often find themselves in unfamiliar contexts in which they are supposed to strategise. "VR functions as a good training ground for people to go into the field, understand what's happening, and then think about what are the relevant problems for a company to solve in terms of formulating a strategy," says Professor Nandkumar. And all of this is made possible only because the VR experience brings in the ambience of what typically happens in the real world.

How VR tops video as a learning tool

A VR experience brings to the student an insight that watching a video, or even an immersive in-field experience, does not. All the students are exposed to the same stimuli and a real-world setting, and when they get back together in the classroom and exchange their personal observations that may be different in each case, it results in a rich, in-depth discussion about the problems to solve and the priorities for the case. This is different from the experience that watching a video brings since the two-dimensional medium essentially presents the setting through the eyes of the filmmaker or the cameraperson, thus preventing the audience from observing multiple things going on simultaneously. VR, however, allows people to see what they want to see, recognise subtleties and then take a step back before deciding on the issues to resolve and the order of their priority.

Also, unlike a physical field visit, a synchronous, in-class VR experience allows the class to discuss problems while the memory of the context is fresh in the minds of the students.

"A synchronous experiment like this gave me an opportunity to link the theory with what the students have seen through VR and then embellish numbers from the financial statements coherent with what they saw, as well as what the company's strategy was or what the context meant to them," says Professor Nandkumar. He adds that if a similar practice was done in a lab kind of setting outside the classroom in an asynchronous mode, students would have come prepared to the lecture with answers prepared for a set of questions. Also, they wouldn't have been able to gauge the incoherences between what they saw and the strategy that the company had formulated.

"It enabled me as a strategy professor to tell the students that coherence is the hardest thing for companies to achieve when they are formulating their strategies," says Professor Nandkumar.

On the other hand, it's also important for the teacher to pull the students back from the VR experience to the classroom since the VR experience generates a lot of excitement during the session. Bringing their attention back to the problems being discussed can be done by linking the context to theories and numbers. "If the theory is not matched with the numbers and the numbers are not matched with the experience, then the session is going to be only about visiting a particular place, and not the learning," emphasises Professor Nandkumar. This is an issue that arises with physical immersions as well because in the absence of a well-defined structure, the class may end up with excitement around the experience pervading the learning as well.

When seeking information is the key

A principal advantage that using VR in classrooms offers is, of course, enhanced appreciation for abstract concepts such as business strategy. The experiment at ISB also resulted in students acquiring "structuring" as an important skill.

"The students were excited about being able to structure something that is fundamentally unstructured into problems that can then be analysed and solved," says Professor Nandkumar, talking about the way the students also took away the idea of how to use observations and then distil them into numbers. "A lot of them said if they did not have this experience, they would have reached a different conclusion," he says. "So VR adds a lot more to the ability of students to think critically, which is probably the most vital skill for managers to have."

This also brings home the realisation about the importance of seeking contextual information, which works as a defining factor in situations of time constraint. Time compression diseconomies often mean that managers, when pressed for time, use their intuition drawn from personal experiences rather than look for information.

"Use of VR in classrooms may especially prepare students to pause a little bit and seek more contextual information to figure out the right problems to be solved, and that too in the right way, in congruence with the context," says Professor Nandkumar.

For students, the VR experiment was a never-before experience, giving them a chance to move from understanding case studies on pen-and-paper to actually going to the hubs of activity in a three-dimensional manner. They, for instance, saw how Amazon's delivery chain operates in India. It gave them a close look at the conditions on the ground, the steps that lead to the last-mile delivery, and how people involved in various roles function behind the scenes. This was, for instance, especially useful for marketers working in the technology space who would otherwise have no way to get a peek inside a warehouse or logistics space. Describing the experience in a succinct manner, one of the students said, "It's like reading a storybook while you are in the world of the story."