Critical Thinking In Business Studies

The following guest blog is provided by Dr Claire Moxham, Director of Studies for the online MBA programme at the University of Liverpool Management School and a Senior Lecturer in Operations Management.

Today’s fast-paced competitive business environment is characterised by change and innovation. Organisations need to understand and respond to ever increasing customer demands, to develop agile supply chains and to mitigate risk. Decision making is often equally fast-paced, with little time to gather evidence and to consult with colleagues. The desire to reach consensus in the shortest possible time seems to have reduced our appetite for debate and deliberation. Within this rapid fire environment, there are countless examples of the phenomenon known as ‘groupthink’ – whereby the fear of challenging the views of colleagues overrides a critical evaluation of possible alternatives. From retail stores to airlines, groupthink almost always results in failure. Why, when we have seen the consequences of poor decision making, do we not give ourselves the opportunity to stop and think?

Now, more than ever, the ability to challenge the norm (be it business models or accounting practices) is of vital importance. Examining alternatives from a range of viewpoints in order to critically appraise the situation is essential to business success.

In my view this is where the online MBA from the University of Liverpool comes in. I see critical thinking and reflection as the cornerstones of the programme. We have designed the programme so that from day one you will have the opportunity to engage with current research and will be encouraged to apply theory to critique current business practice. The online approach allows you to study in a truly international environment where you will debate and discuss with your tutor and your peers. You will be encouraged to challenge existing business practices and will bring your own experience to the programme. I see the online MBA as a learning journey. I believe that it will allow you to develop your critical analysis skills, build on your experience and expose you to tools, techniques and approaches that you can apply in practice. And above all, I feel it will give you the opportunity to stop and think.

But don’t just take my word for it. Can I ask our MBA students: how have you applied what you have learned to practice? Let me know by leaving a comment.

The phrase “critical thinking skills” is often heard in business circles or seen listed in job requirements and MBA program descriptions. However, it’s not always clear what it actually means. True critical thinking involves an intervention in one’s own thought process in order to efficiently solve a problem. Unfortunately the administrative demands on today’s educators don’t leave much time to teach this process; as a result, there are an enormous amount of people in our workforce who lack this understanding.

What Exactly Is Critical Thinking?

Whenever any of us approach a problem, we bring biases to the table, often unintentionally. Prior experiences, cultural influences, assumptions about knowledge on the subject, or public opinion all play into our thought process, whether we’re aware of it or not. The challenge in critical thinking lies in first becoming aware of those biases, and then in stepping outside of them to clearly reason your way through a problem. Successful critical thinkers make better business decisions because the process allows them to gather more information, collaborate with others and evaluate a business decision with objectivity.

For example, a new solution to an old problem may be expressed during a workplace meeting. People who are naturally resistant to change may not exercise critical thinking skills, and instead respond that “We’ve always done it that way, why change it now?” Instead of shooting down a new idea without giving it any thought, the application of critical thinking could result in a more effective way of doing business. Perhaps the marketplace has changed, or new data has been made available that suggests a different direction. Successful companies are ones that take a process apart, examine its components carefully, and gather relevant information. This collaborative process encourages creative thinking and oftentimes results in very effective problem-solving.

There are several schools of thought that detail core steps in the critical thinking process. Each of them leads to intellectual analysis of the information at hand, identifies areas that require more research, and finally indicates a course of action that best solves the problem. Successful critical thinkers generally share the following characteristics:

  • Open-minded. Acceptance of new ideas, even with their inherent biases, is crucial to this process. Not everyone approaches a problem with the same experience or knowledge, but that doesn’t mean their ideas are not valuable. The ability to accept that our idea may have been wrong or incompletely thought out is an extension of this open-mindedness.
  • Think logically. Applying critical thinking requires that criteria must be defined for a problem’s components. Using precisely defined criteria to measure information allows for a more objective evaluation of data, removing biases and setting a standard to which all stakeholders must adhere. Replacing emotional barriers with logic can help you spot flaws in your processes that you may not have otherwise.
  • Reasonable. The best decision-making involves arguments from multiple angles, including negative ones. Using carefully researched data to entertain all possible outcomes requires an unbiased approach to the information. Informed decisions are based on sound reasoning of all aspects of the problem.
  • Collaborative. Loyalty to “our” idea is a human trait, but stepping outside of our own frame of reference requires conscious thought. By working with a group of individuals, each of whom has their own biases and knowledge levels, new ideas can be exposed. Good critical thinkers welcome the opportunity to make the right decision, versus inflexibly insisting on a particular solution.

How Is Critical Thinking Relevant to Business?

Effective management skills include the ability to think critically, and making the right decision under pressure is what defines successful businesspeople. Managers and staff must weigh all possible solutions; this can be time-consuming and require involving many people in the decision, but ultimately it leads to better choices. Some examples of critical thinking applied in the workplace follow.

Innovation creates successful business products, and being closed off to new ideas automatically stifles innovation. Opening up to a variety of solutions can help you create new options for your customers.

Let’s say a publisher of textbooks is informed by its sales team that educators want better options for creating exams. A manager resistant to new ideas, technology or expense may insist the company continue to provide the printed exams it always has. A critical-thinking manager instead may take the time to explore providing new, digital exam-building tools. In the first scenario, the company risks losing market share to competitors who provide its customers with better tools; in the latter, responding to direct customer requests with new offerings keeps the company competitive in a dynamic market.

Critical thinking makes it far more likely that you can create a range of products to suit your customer’s needs. Using the same example, a critical-thinking manager at the textbook publisher not only takes the time to investigate options, but is comfortable taking the problem to colleagues across other departments. The collaborative nature of this process generates ideas from individuals who might not have otherwise been involved in the decision-making process. Ultimately, the company may discover that there are cost-effective ways to offer customers choices among several digital and print exam-building tools. The critical thinking process can easily generate multiple solutions borne out of one question.

In another example, applying the critical thinking process to product development may allow for a more polished product. A company that markets to legal professionals, recognizing that their customers are required to maintain continuing education credits, decides to create an online continuing education delivery tool.

The team member who first suggested the idea is heavily invested in the product, having dreamed it up and spent long hours developing it. Launching such a product without exposing it to a critical thinking process would be unwise; namely because the original developer may be too emotionally involved to spot potential flaws in their proposal.

A lengthier process that allows colleagues to test the product can reveal glitches or inconsistencies that deserve to be addressed ahead of time. The tool may get to market later and require more funding to develop, but will ultimately stand as a better product, which in turn could solidify the company’s relationship with their customer base.

Marketing professionals especially benefit from critical thinking. A product’s packaging, message and advertising is most successful when targeted at a specific demographic. Because marketing also relies on an emotional reaction from customers, it is absolutely crucial that multiple voices and viewpoints are brought to the table. Applied critical thinking skills also drive research and preparation. Take focus groups; when properly incorporated into product development, these groups can provide invaluable feedback – feedback that could alter the course of development altogether. And while the collaborative process takes longer and costs more – focus groups, for instance, can eat up a lot of time – the findings will bring about a highly targeted, highly effective marketing campaign.

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