Why Is Critical Thinking Important in Business?

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A businessman thinks critically about data he sees on his laptop.

Critical thinking can be defined as the process of analyzing and evaluating information to guide beliefs or actions. When students choose where to go to college, for instance, they put critical thinking to use by weighing the advantages and disadvantages of the various schools they have been accepted to, factoring in relevant information such as cost and location. Critical thinking entails not only acquiring information but also analyzing it to identify essential elements.

Why is critical thinking important in business? Business leaders take major actions every day, from hiring and firing to reviewing financial earnings reports, participating in board meetings and handling public relations crises. These are the precise areas in which critical thinking comes into play, as business leaders use this skill to make tough decisions, such as letting an employee go or issuing a press release when scandal threatens to tarnish a company’s reputation. Professionals looking to advance their critical thinking skills can benefit from pursuing an online Master of Arts in Business Communication degree.

The Role of Critical Thinking in Business

When applying critical thinking in business, a leader must use logic to identify, understand, analyze and solve problems. This requires patience and practice. The successful application of critical thinking often results in more efficient work processes.
The following three examples help answer why critical thinking is important in business:

Improve communication strategies. Communicating with different types of people requires defining the needs of the target audience, which demands critical thinking. For example, if a company is being bought out by a competitor, the CEO must consider how this will impact everyone, from low-level employees to investors, and determine what messages to convey to each party. Acting quickly is essential, as he or she should be the first to give the employees the news to maintain their trust.

Support smooth operations. Maintaining daily operations in an ever-changing environment requires constant critical thinking. For example, if the power goes out at a restaurant and there is no emergency generator, the manager must decide not only what to do with the customers and staff but also whether and how to salvage refrigerated food. The quicker the manager acts, the more likely he or she is to make the best of an unfortunate situation.

Streamline product development. A product development role requires multiple decisions to ensure efficacy, marketability and safety. For instance, if a company is marketing a new kitchen gadget, designing it a certain way would make it look more appealing, but that design could also make it more difficult to use. Should the company prioritize function or fashion? The sooner it reaches a decision, the sooner production can begin.

In each of these examples, critical thinking directly impacts efficiency in the workplace.

The Demand for Critical Thinking in Business

Critical thinking is considered a soft skill. Unlike hard skills, such as proficiency in a foreign language, the interpersonal skills characterized as soft are hard to quantify. Communication, leadership and teamwork are examples of soft skills; they might not be “measurable” with a test or numbers, but they are recognizable in how people interact with others. While hard skills, as evidenced in grades, certificates or demonstrable competencies (such as typing speed), are part of what recruiters look at, they’re only part of the picture.

The job market is increasingly acknowledging the importance of soft skills. In fact, according to a 2016 PayScale and Future Workplace joint report, about 60% of hiring managers believe recent graduates lack problem-solving and critical-thinking skills.

Given that critical thinking is important in business, professionals must make an effort to develop this soft skill. Critical thinking, just like problem-solving, can be an acquired skill, given the right amount of dedication to practicing and mastering it.

Real-world simulations or settings can provide the background for professionals to develop this skill. What’s more, to have an impact on business, critical thinking must be complemented by clear and confident communication (another soft skill). Even professionals with business savvy likely won’t succeed if they can’t communicate their insights to senior leaders, managers or co-workers.

How Critical Thinking and Communication Are Linked in Business

If communication refers to the meaningful exchange of information in an organization, critical thinking is the engine that provides the meaning. The ability to identify a problem and develop a cogent explanation and solution is important for business communication.

Rider University’s online Master of Arts in Business Communication teaches these competencies and provides students with opportunities to hone their talents. It allows people to study 100% online and complete their degree in less than two years.

Students can learn to apply critical thinking and communication skills for business success in the following ways:

Assessment of various situations in a business setting. Take, for example, the head of a marketing team managing nine people. To develop a marketing proposal for a new product, he divides his team into three groups of three. Each group pitches a concept. The head of the marketing team then selects one, justifying his choice with clear communication that rewards those whose concept was chosen without discouraging the others. This is one of the many situations that may arise in a business setting that requires using critical thinking while communicating.

Collaboration among teams/departments. Leaders need to manage their teams’ internal communications, as well as their interactions with other teams. For example, the aforementioned marketing team might have to work directly with the product development team to identify a product’s most notable selling points. In this case, a course focused on communication and organizational culture prepares managers to recognize that the product development department might have a very different day-to-day approach to work and collaboration.

Teamwork. Leaders need to be able to navigate the differences among groups of people from a variety of backgrounds. Rider’s online Master of Arts in Business Communication features coursework that focuses on the multicultural aspects of teamwork in an organization and can be a useful tool in business.

Presentation strategies. Critical thinking allows individuals to make business-influencing decisions and convey their conclusions with confidence. For example, an individual has to present the results of a financial quarter, and the figures show a loss. He may recognize that this is due to a major investment in a new work productivity tool, which is projected to increase turnover and result in a large profit next quarter. The program’s business presentation coursework equips professionals to make this kind of judgment.

Verbal communication. Leaders may have to use verbal skills to change another person’s opinion in business. For example, if they are sitting on the board, and the board votes on an important issue that results in a tie, they may want to speak up and present an argument for their side of the vote. The coursework focusing on techniques for persuasive discourse provides students with the competencies needed to change people’s opinions and behaviors.

Written communication. Not all business cases are made in face-to-face situations. For example, leaders can inspire their teams through a powerful email. A course in strategic business writing provides students with the tools needed to harness their writing skills to support strategy and produce desired outcomes, such as motivating employees.

Learn More About the Master of Arts in Business Communication

Now that you have a clearer understanding of why critical thinking is important in business, consider honing this skill through Rider University’s online Master of Arts in Business Communication. This online program teaches the tools you need to take charge in business. As an emerging trailblazer in your organization, you will have the potential to exceed expectations. If you dream of being a leader, this degree can set you on the right path. Learn more about Rider’s program today.

Recommended Readings:

Business Communication Careers and How to Choose the Right One

How Can Health Communication Experts ASsure Sound Ethics in Health Care

Five Valuable Business Communication Skills for Corporate Leaders


The Balance Careers, “Hard Skills vs. Soft Skills: What’s the Difference?”

Chicago Tribune, “Critical Thinking Skills Are Now in Top Demand in Sales, Business”

Journal of Leadership Education, “Let’s Argue: Using Debate to Teach Critical Thinking and Communication Skills to Future Leaders”

PayScale, “PayScale and Future Workplace Release 2016 Workforce-Skills Preparedness Report”

PayScale, “These 5 Soft Skills Will Get You Hired”

The Foundation for Critical Thinking “Defining Critical Thinking”