Welcome to the Boat Building Exercise – IIM Indore!

IIMs have always been known for their out of the box teaching pedagogy. MBA is a course that should be practiced rather than learnt. The faculty at IIMs is always on a hunt to make the teaching sessions lively so that the participants can make the best out of those learnings in the future. The ‘Organizational Behavior’ faculty at IIM Indore followed a unique pedagogy which is illustrated as follows.

The curriculum for the PGP-1 participants required them to get well-versed with some of the topics such as group dynamics, organizational design, negotiation, and collaboration. To make sure that the classroom learnings of these topics get applied in the real world, the OB and HR faculty of the campus held an exercise called the “Boat Building Exercise”.


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The idea was to make paper boats and sell it to customers via agents. The entire batch was given various roles as described below. The duration of the exercise was 3 hours. It was designed in such a way that it would test the skills of the participants on various grounds such as group formation, group dynamics, negotiation, collaboration, power and politics and all other topics that were discussed during the OB-II classes.


Strategic business unit members (SBU members) – 30 strategic units were established and each strategic unit had 11 members and 1 designated CEO. The CEO was responsible for designing the organization and directing its activities. Each SBU also had a union leader.

Agents- The agents had to give orders to the SBUs on the basis of the customers’ demand in the market. They were also required to make a suitable margin and make a deal with the SBUs.

Supplier– The supplier was responsible for providing raw material to the organization for making the paper boats. They were to make a profit out of their selling deals.


Banker – The banker provided loans to the SBUs. The SBUs were given paper/token currency and the currency was limited. The SBUs could take loans from the banks in order to expand their business.

Observer- The observers had to assess the changing phases of the organization while it was interacting with the environment.

Auditors- The auditors were responsible for checking the accounts of the SBUs, whether they had been maintained properly or not.

Vigilance Department- It was responsible for ensuring that all companies, agents and suppliers follow the code of conduct.


Objective – Each team was asked to maximize their profits and the three SBUs that made the maximum profit were awarded a prize. There were prizes for agents, banks and suppliers that performed the best.

Boat Building Company in action

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The exercise started with each SBU registering themselves with the registration department. Each team was handed over a folder that comprised of raw materials for making the boat and instructions to make paper boats. Once the teams finished with the basic resources they could buy resources from the vendors.

Followed by the registration, the teams decided the organization structure and assigned various roles within the team. They followed the parameters that had to be kept in mind while designing the structure of the organization such as boundary spanning and strategy fit. After forming the company, the norms were set up. The union head was responsible for collecting a currency of 1 token after a boat was manufactured and was to be dispatched to the agent, as a measure of work labor charges. It was observed that the teams were initially considering the exercise to be a normal exercise but later on they got so engrossed in it that they were really imagining themselves in a real scenario.


The marketing or sales people presented their paper boat samples to the agents and negotiated a deal with the agent for a required number of boats within a specific period of time at a specific price. There were several people approaching the agents to sell their boats at a specific price. Beautifully decorated paper boats were made to lure the agents to get the price demanded. Once the contract of purchase was made a document was signed between the two parties – the agent and the SBU representative. This order forms were later verified by the auditing team. The vigilance department ensured that best trading practices were followed.


As the SBUs finished with the basic raw material provided and wanted to expand further they borrowed funds from the virtual banks that were set up. The whole exercise went on for 1.5 hours. Everyone was using tactics of negotiation and collaboration to make the best profits and win the prize. The teams were managing their team dynamics to work together in the best way. Everyone was on full heat until there came a twist in the story.

Twist in the story

The agents now refused to buy the paper boats foreseeing a war situation and wanted boats that can resist rugged war like situation. The inventories that several teams had prepared turned out to be of no use. The teams didn’t give up and started preparing themselves as per the demand. This part carried on for some time and finally at the end of 2 hours the accounts of all the SBUs were frozen. The auditors conducted their auditing exercise.


At the end of the exercise, the faculty discussed their observations with the participants and was happy to see that the learning of the Organization Behaviour course was applied in a simulated environment. The winners were declared and token of appreciation was given to all.

This exercise is unique and conducted at few schools like IIM Indore and IIM Ahmedabad . It helped the participants reminisce over the fact that the store of knowledge that they garner from this place would be handy at a great deal of situations they would face in the real world.

We were overwhelmed to have this innovation at this stage in our curriculum and the credits go to the wonderful faculty: Prof. Sushanta Kumar Mishra, Prof. S. Jeyavelu and Prof. Sangeetha Rajan.


– Barleen Kaur



Barleen Kaur is currently pursuing her first year PGDM at IIM Indore (Class of 2015). She did her B.Tech degree from GGS Indraprastha University in Computer Science and Engineering and worked as a training manager at a consulting company and also started a coaching center. She has a strong affinity for writing and is an avid orator.

Read everything about IIM Indore here

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One comment

Shrinivas SG

Good one. Brought back memories of my experience with the Boat Building exercise! 🙂

On a side note, that also means “This exercise is one of a kind and is not conducted in any other Indian b-school.” isn’t right 🙂