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Critical Theory, in basic terms, is any theory founded on critique (Wikipedia), and is used in many different fields, but it is most used in Sociology to define a work or plan based on criticism of the methodology and sources. In literature, it is a method of analyzing a work with outside sources to better understand it, while in business, it covers methods of reorganizing management and economics.
The most important part of critical theory is the ability to use both primary and secondary sources to analyze a work; the ability to remain objective is integral but understood to be difficult, and so a certain amount of subjectivity is appropriate. Importance is also placed on the ability of the analysis to change the thing it is analyzing; other methods of analysis merely seek to interpret, while critical theory tries to show weakness and strength, and thereby improve the next version of the analyzed work.
In business, for example, critical theories of management have altered the working environment; Peter and Hull's 1969 theory of The Peter Principle was written partially as satire, but became an important work in business models of the 1970s and 1980s. By showing the problems with traditional management, Peter and Hull caused the common perception to change, which affected actual business practices.
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