Our business leaders must think critically
Critical thinking has become highly valued in business, but these skills aren’t taught to business students. Part of the problem is that we still haven’t defined exactly what critical thinking is.
Business scandals have existed for almost as long as the idea of ‘business’ has been around.
In 2017, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry made 76 recommendations to ‘fix’ the finance industry and to reduce the risk of future misconduct.
Between 2007 and 2010, the American subprime mortgage crisis triggered the Global Financial Crisis while more recently, the Australian Competition & Consumer Commission (ACCC) has taken Coles and Woolworths to court.
The ACCC alleges Coles briefly boosted prices of some products before dropping them to a higher-than-original price as part of the ‘Down Down’ promotion. The ACCC has made similar allegations about Woolworths’ ‘Prices Dropped’ promotion.
Back in 1494, the Medici Bank, once the largest banking conglomerate in Europe, collapsed after profligate spending. The issue of ethical behaviour in business has a long history.
So it’s not hard to understand why banks and large corporations are viewed with suspicion, and why a customer preference for ethical (socially responsible) businesses is on the rise.
What does critical thinking mean?
Is the failure of some corporations due to business leaders failing to think critically about their core responsibility as good corporate citizens?
And what does it mean for a leader to ‘think critically’?
Something like 60 years of concerted work on critical thinking, mainly in the US, has created a host of definitions. But there is not a single uniformly and universally agreed-upon definition of critical thinking, so it becomes difficult to teach.
We think the definition is clear – when it isn’t. We know critical thinking consists of certain skills and dispositions, but there is even disagreement as to what those skills and dispositions are.
Everyone emphasises how essential critical thinking is, but no-one really knows what it is.
More than problem-solving
Problem-solving is something quite different. One can ‘solve’ the problem of climate change by culling cars and polluting factories, turning off power stations and killing all cattle worldwide. But would that response be critically well thought through? Hardly. Hospitals would no longer work and we’d all starve.
Critical thinking is particularly vital to business.
It helps health care professionals make important decisions that save lives and it assists lawyers to make decisions in the interests of their clients. In business, critical thinking helps business practitioners make strategic investment decisions to optimise clients’ returns in an ethical and socially responsible way.
A lack of critical thinking can lead to unethical corporate behaviour that has real implications on real people.
If Australia’s financial services industry had properly practised the requisite skills and dispositions of a critical thinker, there would have been no need for a Royal Commission.
How do we avoid these kinds of scenarios? It surely starts with business education.
“A strong professional development program allows professionals to practice making decisions, like deciding what to invest in. It can help give leaders ways to judge the strength of any evidence behind ideas and understand risks,” says Owen Shemansky, Director of Melbourne Professional Education (MPE) at the University of Melbourne. All this involves critical thinking.
Teaching critical thinking for business
But critical thinking is seldom taught explicitly, despite new ways on offer such as computer-assisted argument mapping. This shows great promise, but hardly anyone knows about it.
In fact, ‘critical thinking’ is rarely – if at all – given prominence in the curriculum within business schools. Students are assumed to absorb critical thinking skills – by osmosis – through studying economics, accounting, finance and management.
But without explicit instruction, students won’t learn critical thinking skills.
Add to this the problem of few people being clear about how to teach critical thinking.
There are three questions still to be answered:
- Are current approaches to teaching critical thinking in business education effective?
- Do business students really learn to apply critical thinking skills to a variety of business problems and in business-related situations?
- Is critical thinking specifically inculcated in professional practice in business contexts, so that graduates seamlessly transfer these skills to the corporate world?
A globally in-demand skill
A definition of ‘critical thinking’ is sorely needed – there isn’t one dedicated to commerce-related disciplines though attempts have been made. Yet the World Economic Forum ranks it higher than AI and big data, resilience, creative thinking and technological literacy.
How should we educate the next generation of business leaders to avoid repeating the mistakes of the past? To avoid future corporate disasters, educating business leaders must involve teaching them to be disposed to be critical.
Having the right disposition at the right time
The skills on their own are not enough – one needs to want to exercise them.
Having the disposition of a critical thinker means being open minded and fair minded with regard to divergent views. It means seeking and offering reasons, being diligent in seeking relevant information, and having a discrepancy-seeking attitude.
Mindfulness, inquisitiveness, maturity and a preparedness to participate in the community, as well as honesty, empathy and concern for others are also part of a critical thinker’s key dispositions.
These are all dispositions that business students should develop in their journey to becoming business leaders.
This article was authored by:
Associate Professor Martin Davies, Faculty of Education, University of Melbourne.
Dr Angelito Calma, Senior Lecturer in Higher Education, Faculty of Business and Economics, University of Melbourne.
