4 dangerous fallacies business school graduates can avoid

May 08, 2018

Simple logic principles can help businesspeople make better decisions. Here are four logical fallacies all business school graduates should avoid.

a marble statue of a thinking man

Logic helps people of all backgrounds become better thinkers, developing a critical eye toward common assumptions and long-term beliefs. Whether it alters one’s ideas or simply refines day-to-day tasks, logic yields sound and justifiable conclusions.

In many cases, logic lessons boil down to strategic principles for specific fields. As business graduates are concerned, logic is crucial for interpreting market data, and making sound decisions in a high-pressure environment. Logical principles help top businesspeople make better choices across all sectors and careers.

Want to know four logical fallacies that will benefit your future business career? Keep reading to find out.

1. Avoiding ad hominem improves work culture

Business schools prepare graduates to manage stressful environments throughout their rewarding careers. When it comes to important business decisions, a temptation often arises to target the credibility or intelligence of those with adverse opinions. While this might seem to have an immediate impact, it most often reduces the chances of consensus and persuasion.

Ad hominem, Latin for “to the man,” describes this phenomenon. These arguments are logical fallacies, since an opponent’s arguments are not automatically nullified by past proof of questionable character and intelligence. Avoiding this fallacy will produce more accurate business decisions, and forge a more harmonious work culture.

2. False dichotomies limit business options

Another important business fallacy is the false dichotomy, which wrongly establishes an ‘either-or’ scenario between two given options. Also known as the ‘false dilemma fallacy’, false dichotomies portray absolute categories where there typically exists a range of possibilities. Since businesses thrive by assessing all available options, false dichotomies can be very limiting.

a group of people working together on an over-sized schedule
Avoiding false dichotomies makes for more adaptable business strategies

Classical business dichotomies include ‘buyer-seller’ markets and ‘online-offline’ business strategies. While there is some truth in these dichotomies, businesses must always question them rather than blindly accept having half the options. As office culture is concerned, eliminating false dichotomies can also establish possibilities for compromise and cooperation.

3. The burden of proof is crucial in Business School and beyond

An effective MBA degree encourages students to develop original insights, supporting their conclusions with thorough research. Proving ideas requires more than simply a lack of evidence to the contrary. In business as in higher education, compelling cases are made with positive evidence – proof that establishes one’s case, rather than simply nullifying an opposing one.

The burden of proof fallacy describes these cases of misidentified proof. The burden of proof should always fall on the person making the assertion rather than their adversaries, who may or may not have compelling proof to the contrary. While pursuing the best options in a competitive market, business professionals must always take this into consideration.

4. Correlation vs. causation is key in data interpretation

Business school graduates are all too familiar with the dangers of misidentified causes. Also referred to as “Post Hoc” thinking, this fallacy identifies the wrong cause for a related outcome. While cause A and outcome B might be related, a real cause C might be acting on both, subjecting them to congruent changes. In business, real causes must be established through careful statistical analysis, which eliminates the possibility of mere correlation.

Confusing correlation with causation is a dangerous fallacy, but correlation is still important. Correlated data provides a more complete picture of a phenomenon – even if it does not have causal force.  While assessing a business outcome, distinguishing correlated and causal data helps businesses make more informed uses of both.

A business meeting of six young people of different ethnics
Standard logic helps business people share their knowledge with professionals in other fields

Are you looking to refine your business logic skills at a top MBA university?Contact WU Executive Academy to learn more!

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