In the context of an increasingly volatile, uncertain, complex, and ambiguous (VUCA) global business environment, traditional pedagogical paradigms within undergraduate management education face unprecedented challenges in adequately preparing future leaders and decision-makers. This article interrogates the imperative for a paradigmatic shift from conventional didactic instruction toward innovative, experiential learning modalities, specifically focusing on problem-based learning (PBL) and digital simulation technologies as catalytic agents of cognitive and professional development in management curricula. By critically synthesizing extant theoretical frameworks from constructivist learning theory, situated cognition, and experiential pedagogy, the study elucidates the epistemic foundations justifying the integration of PBL and immersive digital simulations to cultivate higher-order critical thinking, adaptive expertise, and ethical decision-making competencies among undergraduate business students.

Situating the investigation within the global educational discourse, this article foregrounds the urgency of reconfiguring business education systems to meet the demands of rapidly evolving market dynamics, technological disruptions, and the increasing complexity of organizational challenges. The research highlights the incongruence between traditional lecture-centric approaches and the requisite active, learner-centered modalities that foster integrative problem-solving and collaborative innovation.

Empirically, this study employs a robust mixed-methods research design encompassing a multi-institutional sample of 624 undergraduate management students. Quantitative data were collected measuring critical thinking disposition, self-efficacy in decision-making, and collaborative problem-solving skills pre- and post-intervention. Qualitative insights were garnered via semi-structured focus groups, reflective journals, and instructor interviews, elucidating the lived pedagogical experiences and perceived transformative impacts of the intervention.

The intervention comprised a semester-long curriculum embedding complex, real-world business scenarios through PBL frameworks, augmented by state-of-the-art digital simulations that replicate authentic market conditions, strategic challenges, and ethical dilemmas. Results indicate statistically significant improvements (p < 0.001) in students’ cognitive engagement, metacognitive regulation, and collaborative competencies, alongside enhanced motivation and perceived relevance of learning. Notably, digital simulations were instrumental in bridging theory-practice divides, fostering experiential knowledge construction, and enabling iterative learning cycles under simulated uncertainty.

This article advances a comprehensive conceptual model for integrating PBL and digital simulations in undergraduate management education, emphasizing pedagogical scaffolding, authentic assessment practices, and faculty development as pivotal components. It critically addresses barriers to adoption, including resource constraints, faculty resistance, and technological disparities, proposing strategic institutional policies and frameworks to enable scalable implementation.

Keywords: Problem-based learning in management, digital business simulations, experiential learning pedagogy, undergraduate business education innovation, cognitive and collaborative skill development.