The Importance of Critical Thinking in Organisational Management

Critical Thinking in Organisational Management: Benefits and Applications of Critical Thinking in the Corporate World

Critical reasoning is crucial for success in all areas of life, not only business. It helps you identify assumptions and establish a clear line between fact and opinion in order to make decisions based on evidence rather than assumptions. Thus, critical thinking is the ability to think about and analyse ideas and problems with a critical eye. It is a metacognitive ability that we use to think about the thinking we’re doing. And it is important for everyone, not just for those who are in the business world.

Concepts of Critical Thinking


Critical thinking has been defined as “the art of clear thinking, sound reasoning, and intelligent decision-making.” In order to be effective at critical thinking, you must have the ability to analyse your thoughts and determining whether or not they are valid or flawed.

There are four different concepts that contribute to critical thinking: metacognition, clarification of values, clarification of assumptions, clarification of questions. These four components work together in order to help you be more effective at critical reasoning.

Applied critical thinking is a huge part of the process of innovation, of being an entrepreneur, especially when design and produce something. In any design project, for example, from the beginning to the end, critical thinking is important. Engineering teams, industrial design teams, the business team trying to understand how to bring something to market. Basically, any challenge involves critical thinking as a way to find a solution.

What is Critical Thinking?

Socrate thinking

More than 2.500 years ago Socrates established the importance of asking deep questions, seeking evidence, assessing basic concepts before we accept ideas as worthy of belief. He is considered one of the most influential philosophers in all of history and the father of  western philosophy. He is credited with taking a methodical approach to philosophical inquiry. His dialectic, which he used to help others improve their critical reasoning capacity, was revolutionary for its time.

Aristotle and Plato are both well-known for their contributions to the field of critical thinking. Aristotle was the first to identify syllogisms and Plato is famous for his allegory of the cave, which is a metaphor for how we might perceive reality.

 

Critical thinking, as defined by Aristotle and Plato, is the ability to evaluate arguments and come to the best conclusion based on evidence. This way of reasoning can help people become better at their jobs, build more authentic relationships with others, and create positive change in today’s society.

Critical thinking, therefore, is the process of reviewing and evaluating thoughts, ideas, and beliefs. It can be applied to anything we experience in life. In the business and management realm, there are many benefits to critical thinking such as improved decision making and the ability to solve problems more effectively. The critical analysis also improves problem-solving skills, creative thinking, and overall intelligence.

Critical Reasoning Skills to Defend Your Ideas

In the past, critical reasoning skills were a key factor in determining a person’s intelligence. But today, it has been found to be less important. In fact, the more important aptitude for success in this new age may include deductive reasoning.

Deductive reasoning skills are typically required when people have to solve complex problems and find solutions that follow certain rules and patterns. This skill is most often used in mathematics, engineering and programming fields. It is also used in law enforcement and crime solving where investigators need to identify what happened from the evidence they gather at the crime scene. Deductive reasoning skills are also useful for solving puzzles such as crossword or Sudoku games where you need to determine which words go into which spaces based on certain rules or clues provided by the puzzle constructor.

The Unspoken Battle Between Thought and Emotion

When thoughts and emotions are at odds, achieving a healthy equilibrium requires a calm mindset. Balance is impossible to achieve while we are upset. It is critical to set aside some time and space to contemplate and reflect on such disagreement.

In the corporate world there is a common belief that says that the IQ gets you hired and the EQ gets you promoted. The advantages of emotional intelligence lead to personal achievement in business and all other areas of life. Self regulation, or self management, is a key component of emotional intelligence. The capacity to regulate personal reactions and resilience in front of challenges is critical for guaranteeing leadership and management performance. Emotionally intelligent leaders and managers are also able to help others manage difficult times, change or stressful situations.

Managing emotions allows us to make choices so we can choose how we respond to any situation. Hence, self-regulation or self-control is a key part of emotional intelligence. It is the ability to choose how we think, how we feel, and the actions we take, being mostly about being able to control your emotions and responses to situations and other people; also about feeling positive emotions and expressing positive emotions to others.

Researches have been made on how reason vs. emotion interacts with our spending habits, for instance:

  • Increased cognitive load decreases self-control. This is something marketers are well aware of: distracted people are more likely to spend money. Most shops are filled with shiny, complicated distractions – bright colours, music and ‘incredible offers’ – designed to confuse us and open our wallets.
  • Our supply of self-control is limited. Studies show that our self-control is actually sapped each time we use it (Baumeister & Vohs, 2003). It’s also sapped, predictably, by alcohol, lack of sleep and stress.

Or how our self-control is affected by our emotions:

  • Sadness makes us want a change (any change). Sadness may well increase the chance we want to spend. One study found that those who are sad are more likely to want to sell at a lower price and buy at a higher price (Lerner, Small & Loewenstein, 2004).
  • Disgust makes us want to get rid of everything. When we’re disgusted we want to get rid of the things we have and don’t want to buy anything.
  • Anxiety makes us want to reduce uncertainty. Anxiety makes us prefer low-risk options (Raghunathan & Pham, 1999).

Self-control is linked to ageing more slowly, a new study finds. People who are better able to control their thoughts, feelings and behaviours have biologically younger brains and bodies at age 45.

The Role of Critical Thinking in Problem-solving

Everyone experiences problems from time to time. Some of our problems are big and complicated, while others may be more easily solved. There is no shortage of challenges and issues that can arise on the job. Whether in an office or on a construction site, experiencing difficulties with the tasks at hand or with co-workers, the workplace presents ongoing challenges on a daily basis. Whether these problems are large or small, they need to be dealt with constructively and fairly. Having the necessary skills to identify solutions to problems is one of the abilities that employers look for in employees.

Problem-solving and critical thinking refers to the ability to use knowledge, facts, and data to effectively solve problems. This doesn’t mean you need to have an immediate answer, it means you have to be able to think on your feet, assess problems and find solutions. The ability to develop a well thought out solution within a reasonable time frame, however, is a skill that employers value greatly.

Employers want employees who can work through problems on their own or as effective members of a team. Ideal employees can think critically and creatively, share thoughts and opinions, use good judgment, and make decisions. As a new employee, you may question why an organization follows certain steps to complete a task. It may seem to you that one of the steps could be eliminated saving time, effort, and money. But you may be hesitant to voice your opinion. Don’t be; employers are usually appreciative when new employees are able to offer insight and fresh perspective into better and more efficient ways of doing things. It is important to remember, however, that as someone new to the organization, you may not always have the full picture, and thus there may be factors you are unaware of that dictate that things be done in a particular way. Another important thing to remember is that when you are tasked with solving a problem, you don’t always need to answer immediately.

What Is Critical Analysis? What Does It Look Like?

“Critical analysis” is a desirable skill in all aspects of work, but what actually is it? As Brown and Keely (2012) discuss, analysing critically is a process of deconstructing what you read, write and listen to, rationally and logically. It requires you to move beyond describing and analysing to evaluating, criticising and postulating on what you process.

Critical analysis is associated with a “deep approach” to your work, which means that you relate new knowledge to what you already know. It also requires the examination of theoretical concepts and ideas; comparing and contrasting issues and perspectives to challenge your own understandings and speculate and seek out implications. Furthermore, you should be able to distinguish between what is evidence and what is an argument. This involves questioning assumptions, recognising generalisations, and identifying bias in what you see, read and hear. Thinking critically helps you to uncover links across large and diverse bodies of knowledge enabling you to synthesise your own informed ideas.

The evaluation and analysis of a certain set of data in connection to a business forms the basis of any critical analysis. Financial ratio analysis, for example, deals with evaluating financial statements and the company’s financial performance relating to efficiency, profitability, and its ability to continue the business.

A SWOT analysis for business, on the other hand, deals more in identifying the strengths and weaknesses of your business. It also helps recognise areas in the business where there may be opportunities or threats to the business. Simply put, it is building upon what is working for the company and cutting down or prevent any threat or weakness that would affect business otherwise.

When looking to make the best possible choice or decision regarding any project or change, employing critical analysis allows you to properly assess all factors and processes involved in a project. Be able to prioritize functions and tasks and create an order in which they are to be done in order to make the least possible risks and at the same time get the project moving at the intended pace.

Take-away

Critical thinking is the important process of assessing a situation and arriving at a judgement. It is a reflective type of thinking that evaluates information and reaches a conclusion about the truth, validity, relevance, meaning, importance, or suitability of data or ideas.  In management it is used to make decisions that are logical and informed based on knowledge and expertise.

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