Understanding Critical Thinking

Critical Thinking

• "Critical" signifies questioning, analyzing, and making sense of information.
• Critical thinking is an approach involving questioning, examining assumptions, and evaluating arguments.
• Critical thinking strategies help determine whether to believe what is read or heard.
• Critical thinking is important for enhanced decision-making through self-awareness, curiosity, and independence.
• Self-aware critical thinkers introspect on their thinking, recognizing biases and judgment strategies.
• Curious critical thinkers explore issues deeply, challenge assumptions, and seek diverse viewpoints.
• Independent critical thinkers consider others' ideas but form their own informed opinions and judgments.
• Experts may be incorrect and disagree, and their knowledge may be perceived as nonsense.

Business Schools

• The first US collegiate business schools were established around 1900, including École Supérieure de Commerce de Paris, Wharton, and Harvard Business School.
• The goal was to develop a professional degree for managing corporations with a code of ethics, serving stakeholders, similar to law and medicine.
• Business schools grew rapidly post-WWII because returning soldiers needed jobs and there was a public policy goal to have no unemployment.
• Carnegie and Ford foundations commissioned studies in the late 1950s resulting in a shift to a more traditional academic curriculum.
• The studies led to specialized functional disciplines and increased legitimacy/power within universities.
• Milton Friedman proposed the goal of business is to maximize profit, which became the predominant view.
• The two main teaching methods in business are traditional skill-based lectures and the case-method.
• In the case method, students assume the role of decision-makers, analyze detailed accounts of business practitioners, and offer recommendations.

Management

• A manager is the person in charge of an organization or its subunits.
• Henri Fayol's classical view defines the manager's role as planning, organizing, coordinating, and controlling.
• Henry Mintzberg debunked certain myths about managers, including that managers perform systematic planning.
• Mintzberg also stated that managers do have regular duties.
• He also argued that managers do not need aggregated information provided by formal management information system.
• Mintzberg also debunked the fact that management is a science and a profession.
• The manager's roles can be informational, interpersonal, and decisional.
• Introspection involves examining one's own thoughts and feelings, essential for effective management.
• Self-knowledge involves understanding one's strengths, performance style, values, fit, and potential contributions.

Claims

• Claims are the main conclusions the author is trying to persuade you to accept.
• Identification involves checking the title, introduction, and conclusion for the main conclusion.
• Cue words like "therefore," "in summary," and "as a result" may indicate a claim.
• Avoid referencing only the title, being distracted by strong openings, or latching onto secondary claims
• Claims can be uncontested or contestable.
• Uncontested claims are consistent with experiences, independent facts, agreements among experts, or technical/mathematical.
• Contestable claims require more evidence and justification.
• Claims should be presented clearly, emphasized near the beginning or end, use cue words, and be memorable.
• Alfred Chandler argues that "bigger is better", for industrial success organizations must be large.
• Chandler also argues that large firms are able to capitalize on economies of scale and scope.
• E.F. Schumacher argues that "small is beautiful", appropriate organizational size depends on the nature of the activity.
• Schumacher suggests that some human endeavours require a large scale, while others require smallness.

Organizations

• An organization is an entity with a collective goal linked to an external environment.
• Primary characteristics include being social entities, goal-directed, and linked to the external environment.
• Traditional types include business/for-profit, government/public sector, and non-profit/NGO/civil society.
• Organization theory studies formal social organizations and their relationship with the environment.
• Major topics in organization theory include size, strategy, and structure.

Evidence

• Evidence is any statement that responds to "why is it true?".
• An argument is a claim supported by evidence.
• Evaluating the quality of evidence involves assessing accuracy, precision, sufficiency, representativeness, and authority.
• Accuracy is difficult to judge without an independent source, but precision and authority can help gauge it.
• Precision means that good evidence is appropriately precise.
• Bad precision includes over precision and overuse of abstract words.
• Sufficiency means the amount of evidence required depends on the importance of the claim, and the fallacy of hasty generalization.
• The fallacy of hasty generalization can occur if we jump to a conclusion based on insufficient evidence.
• Representativeness: the variety in the sources of information should match the variety in the population relevant to the claim.
• Authority increases with special training, credentials, and experience, there can be a fallacy of false appeal to authority.
• Clarity of expression is needed as data must be interpreted for the reader.

Corporate Social Responsibility

• Howard Bowen authored "Social Responsibilities of the Businessman."
• Rachel Carson authored "Silent Spring," linking pesticide use to harm and launching the environmental movement.
• Ralph Nader authored "Unsafe at Any Speed," accusing auto manufacturers of prioritizing cost over safety.
• The term Corporate Social Responsibility became increasingly used by business leaders during the late 1960s.
• This came as a response to increased social pressure for corporate reform and activist stockholders.
• Milton Friedman claims that only people can have responsibilities, and corporations are artificial structures.
• Friedman also suggests that corporate executives (agents) are employees of the shareholders (principals).
• Friedman also suggests that there is no corporate responsibility, other than for profits.
• The Environmental Protection Agency is the first government department with a mandate for the natural environment.
• OPEC initiated an oil embargo creating a global energy shock, leading to fuel efficiency standards.
• Ed Freeman argues that firms perform better if they focus broadly on stakeholders.
• WCED defined sustainable development as meeting present needs without compromising future generations.
• ISO 14000 is the first major environmental standard for industrial firms.
• John Elkington defines the triple bottom line of sustainability as economic, social, and environmental performance.
• CEOs of Business Roundtable adopted a new statement saying, companies should serve their stakeholders, deliver value to customers, invest in employees, deal fairly with suppliers and support communities.

Conceptual Models

• Conceptual models help us make sense of the world and where business fits in it.
• The disparate view involves business as a distinct and most important entity, separate from society/nature.
• The intertwined view involves business being separate but connected and overlapping.
• Implications of the intertwined view include "doing well by doing good" creating win-win-win scenarios.
• The embedded view shows hierarchical dependency of business, needing nature and society to exist.

Foundations of Economic Thought

• Foundations include Moral philosophy (Ethics) and Political economy.
• In 1776, Adam Smith authored "Wealth of Nations", and he is considered the founding text of modern economics.
• "Wealth of Nations" key concepts include division of labour, factors of production, self-interest, and the invisible hand.
• In the 19th c. Jeyons, Menger, Walras discovered the theory of marginal utility.
• Diminishing marginal return: each additional unit is of less value.
• Behavioural assumptions of the economic 'human' includes acting as self-interested, rational, and independent.
• A perfectly competitive market is a theoretical ideal type used as a baseline to contrast other market structures.

Market Assumptions

• There are unrealistic assumptions with rational or 'bounded rationality'.
• The representativeness heuristic: commonality between objects of similar appearance is assumed.
• The availability heuristic: judgement is based on how easily we can remember/imagine an event.
• The framing effect shows decision-making under risk is very sensitive to how choices are framed rather than the probable outcome.
• Loss aversion (prospect theory) means individuals prefer to avoid losses than to make gains.
• Risk seeking = when choices are framed as losses
• Risk averse = when choices are framed as gains.

Political Ideology

• 20th c. F.A Hayek and Milton Friedman developed political ideology based on interdependency between market relations and democratic freedom.
• Neoliberal claims: competition is the only means of coordination that does not require coercion
• Neoliberal claims: money is an instrument of freedom.
• Neoliberal claims: the market is the only instrument capable of coordinating activities.
• Microeconomics studies behaviour of individuals and organization in making decision on the allocation of scare resources relating to management and corporate strategy.
• Macroeconomics deals with performance, structure, behaviour, and decision-making of an economy as a whole.
• Underlying assumptions are logical link that fills the gap between the evidence and the claim
• Assumptions are underlying because a person's assumptions are the foundation of what they think, say, and do.
• Reality assumptions: beliefs about reality - the way things really are.
• Challenging reality assumptions: present information showing that notions of reality are debatable or wrong.
• Value assumptions: our ideals (goals), our standards of right and wrong (morals/ethics).
• Easterlin paradox: rich people in a society are happier than poor people, but rich societies are not happier than poor societies.
• Relative income can weigh heavily on people's minds.

Explore critical thinking: questioning, analyzing, and evaluating information. Strategies enhance decision-making through self-awareness and curiosity. Independent thinkers form informed opinions.