MBA FPX 5002 Assessment 1 Critical Thinking in Action MBA-FPX5002 MBA Leadership

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Introduction

This paper explores a situation that prompted Turo to reevaluate its business strategy. It provides a concise yet comprehensive overview of the business challenge, analyzes it using a critical thinking framework, and details how each step enhances the understanding of the situation. Furthermore, the paper offers evidence-based solutions and discusses how VUCA (volatility, uncertainty, complexity, and ambiguity) could influence both the problem and its resolution.

Turo’s Situation

Turo is a renowned car-sharing marketplace based in San Francisco, California. Initially established as RelayRides by Shelby Clark, Turo is now owned by InterActiveCorp (IAC) and led by CEO Andre Haddad. As RelayRides, the company encountered significant issues related to insurance coverage for private vehicle owners renting their cars to strangers for short periods. The company needed to find a solution to protect both the owner and the renter while potentially allowing longer rental periods.

Framework for Critical Thinking

In his book Think Smarter (2014), Michael Kallet outlines three core elements of critical thinking: clarity, conclusions, and decisions. Clarity helps the thinker better understand issues, strategies, and goals, reducing the risk of misunderstanding. For RelayRides, clarity came from recognizing that the lack of appropriate insurance coverage was a liability and a barrier to growth by limiting rentals to short terms. Once clarity was established, the company could draw conclusions and explore various solutions. RelayRides ultimately decided to rebrand as Turo and partnered with a major insurance company to offer several coverage options for hosts and renters. This ensured that state insurance requirements were met and minimized the company’s liability, allowing for longer-term rentals. After implementing these policies, Turo raised $47 million in Series C funding and saw 60% of its revenue generated by out-of-town travelers.

VUCA

The VUCA framework stands for volatility, uncertainty, complexity, and ambiguity (Kraaijenbrink, 2018). Businesses often use VUCA to navigate challenges. RelayRides understood the issues they faced but could not predict the outcomes of potential solutions, introducing uncertainty. The company’s lack of familiarity with the insurance market added complexity and ambiguity. Therefore, partnering with an experienced insurance provider was a wise, low-risk decision, as it leveraged the insurer’s knowledge and expertise. By incorporating VUCA into its decision-making process, RelayRides mitigated potential risks and positioned itself for future success. Had VUCA not been considered, the outcome could have been financially catastrophic.

Conclusion

The critical thinking framework and VUCA are valuable tools for company leaders facing challenges. Turo’s situation could have negatively impacted the company if it had not been carefully considered. Without proper insurance coverage for hosts and renters, liability risks would have escalated. The use of critical thinking and VUCA enabled Turo to make informed, low-risk decisions, ultimately moving the company forward. Business challenges are inevitable, but understanding and applying VUCA and critical thinking can significantly benefit companies.

References

Kallet, M. (2014). Think smarter: Critical thinking to improve problem-solving and decision-making skills. Wiley.
Kraaijenbrink, J. (2018, December 19). What does VUCA really