I have a BA and MA in English Lit, and I can’t sincerely answer you. I know several of the standard answers—most of which are derived from and are designed to promote various literary theories and the associated coterie of career minded professors. I left Lit in large part because of those (non-) answers, and did my PhD in Rhetoric instead.
Painting with a very broad brush here, but mainly why people study lit groups into five areas.
Art for art’s sake-->new criticism, structuralism, deconstructuralism: those fields that see studying literature of value in itself for understanding how literature works.
Author worship-->few scholars still do this, but these see studying literature as valuable as a way to understand a great writer. A modern version is the “shrink crit” types who use literature to do armchair psychoanalysis of the author (too often using extremely outdated Freudian theory).
Reader worship-->reader response theory, mainly, though some accuse rhetoricians of doing this: these theories mainly look at what readers make of a text as being the meaning/value of that text (sometimes they argue that the author is nothing more than a first reader).
How a text works-->linguistics and literature, mainly. These critics study literature to understand how the artistry shapes and is shaped by the constraints of language.
What it means in context-->there’s two separate groups here. One is the social/cultural critics who build out of the class/race/gender studies (Marxist, Feminist, et al). The other are the “New Historicist” critics who study lit to see how it lends insight into it’s historical context and how the historical context lends insight into the text.
There’s a graph of this, but my ability to do ASCII art is … not up to the task. Basically, you draw 5 circles, one in the center, the other for at the cardinal points. In the center are the text focused people (art for art’s sake). To the left are the author focused types, to the right are the reader focused types. You can draw arrows from the author circle to the text circle and from the text circle to the reader circle, but that leads to a whole ’nother can of worms. Anyhow, above the text circle can either be the linguistics/language one or the history/culture one. The other goes below. (What gets put on top can be telling about the teacher’s biases.
And, of course, any literary critic worth their salt will immediately violate any of these groupings if that’s what makes the most sense to developing insight into the text/reading experience.
I hope that helps.
Finally noticed this conversation. If this meet-up isn’t buried on the North side, we (SoulessAutomaton and I) could possibly make it. We’d have to drive in from Grand Rapids.