Research Paper 04

HUMANISTIC MANAGEMENT NETWORK
RESEARCH PAPER NO. 2460665
Why the Question of Practical Wisdom

Should Be Asked in Business Schools:
Towards a Holistic Approach to a Renewal
of Management Education
Claudius Bachmann
Cristian R. Loza Adaui
André Habisch
June, 2014
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Why the Question of Practical Wisdom Should Be Asked in Business Schools:
Towards a Holistic Approach to a Renewal of Management Education
Claudius Bachmann
Faculty of Economics and Business Administration
Catholic University of Eichstätt-Ingolstadt
Ingolstadt, Germany
claudius.bachmann@ku.de
Cristian R. Loza Adaui

Ingolstadt, Germany
cristian.loza@ku.de
&
Friedrich-Alexander University of Erlangen-Nürnberg
Institute of Economics
Erlangen, Germany
cristian.loza.adaui@fau.de
André Habisch
Ingolstadt, Germany
andre.habisch@ku.de
&
Academy of Business in Society (ABIS)
Brussels, New York, Shanghai
June 2014
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Why the Question of Practical Wisdom Should Be Asked in Business Schools: Towards a
Holistic Approach to a Renewal of Management Education
Abstract:
Dealing with the issue ‘Why should the question of practical wisdom be asked in business
schools?’, we first identify three types of criticism commonly addressed to business schools: an
inadequate intra-system logic, an insufficient toolbox, and unfitting educational environments
and methods. In order to find an answer to these critics we introduce the concept of ‘practical
wisdom’. Therefore, we conduct a cross-disciplinary analysis of the concept considering on phil-
osophical, theological, psychological, and managerial perspectives. Based on this, we propose a
holistic approach for the renewal of management education developing a three-pillar model of
practical wisdom. The first pillar embraces the integrative dimension and includes deliberation,
the passing of judgment, balancing, and integration directed at action and practice. The second
pillar is concerned with the normative dimension and includes all sorts of knowledge about or
orientation towards a normative guidance concerning the fulfilled life and what comes beyond.
The third pillar is concerned with cultural heritage that is being transmitted from generation to
generation through various kinds of traditions. By operationalizing this model, we finally pro-
pose methods, strategies and ideas for a successful implementation of practical wisdom in busi-
ness schools and in management education programs.
Keywords: Practical wisdom, management development, management education, managerial
wisdom.
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Bachmann, Loza-Adaui, & Habisch, 2014. Why the Question of Practical Wisdom Should Be Asked in Business
Schools: Towards a Holistic Approach to a Renewal of Management Education
Critic of business schools and management education is not a novel idea and it has, over the
last decades, repeatedly been uttered. Most recently, students of economics from 19 countries
have published a call for rethinking business theories and for a renewal of management educa-
tion (Inman, 2014). Thus, they echo the findings and arguments of a wide range of articles and
books pointing out the failure of business schools to educate well-prepared managers. Concur-
rently, they add a student contribution to a discourse about what is being taught to students of
economy, what relationship is being established between the assignment to impart knowledge
and the need to make sure the students’ personality development keeps in step with it, and – to
make a long story short – about which questions should be asked in business schools.
Among the extensive voices that criticize the mainstream business school model and demand
a renewal of management education one can observe a broad diversity of approaches and at-
tempts depending on the respective research focus or interest. Some scholars, for example, argue
from a historical point of view by providing a chronological analysis of how business schools
have pursued a wrong path (e.g. Khurana, 2007). Other authors are rather focusing on specific
issues or aspects such as the missing link between theory and practice (e.g. Bennis & O’Toole,
2005), the lack of a moral, religious, or spiritual dimension (e.g. Malloch, 2010; Roca, 2008), the
absence of a professional ethos (e.g. Pfeffer & Fong, 2004), the perspective on human nature
(e.g. Dierksmeier, 2011), and many more. In contrast to this rather specific criticism, other re-
searchers are choosing a universal perspective by criticizing the missing awareness of critical
thinking and reflective capacities (e.g. Waddock & Lozano, 2013), the destructive potential of
management theories (e.g. Ghoshal, 2005), or the character damaging impact of business schools
(e.g. Crossan, Mazutis, Seijts, & Gandz, 2013). Still others are collecting and summarizing a
whole range of aspects and evidences (e.g. Euler & Seufert, 2011).
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MAPPING BUSINESS SCHOOL CRITICISM
Invariably, however, such contributions – although highly valuable and undoubtedly neces-
sary – are missing an essential point in order to provide a holistic basis for reacting to the criti-
cism directed at business schools: Remaining within their textural setting, the problem and solu-
tion presented in this discussion are limited by the previously chosen focus. Therefore, we have
scanned the very diverse business school critiques in order to identify the main categories within
the international literature discourse irrespective of whether the argumentation is structured in a
chronological, specific, universal, or summarizing way. Following this strategy three categories
become obvious:
First Category of Criticism: Inadequate and Damaging Intrasystem Logic
Over the last two or three decades many authors have suggested that today’s business schools
use an intrasystem logic which has been proven to be inadequate or even society damaging. This
criticism targets the general way of thinking, the normative orientation, and the guiding princi-
ples which influence and determine – implicit or explicit, open or hidden – business schools’
teaching and research. For example, already in the 1970s Argyris doubts the adequacy and the
validity of the widespread theory of the ‘rational man’ that focuses mainly on rational techniques
and excludes the process of intuition as well as of tradition and faith (Argyris, 1973: 254). How-
ever, even though the theory of the ‘rational man’ can be considered a strictly descriptive gener-
alization due to scientific reductionism, its implementation has normative consequences. In this
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sense, he argues, the generalization of the ‘rational man’ “which began as a descriptive statement
[…] become a self-fulfilling prophecy” (p. 265). More recently, Ghoshal (2005) argued in the
same line pointing out that the common practice within management training to use one-
dimensional theories, focuses exclusively on the economic side of things, excludes any role of
human intentionality or choice, and denies any moral or ethical considerations. According to
Ghoshal this intrasystem logic of mainstream economics is essentially based on “both unrealistic
and biased assumptions”, however, he states that this theory still tends “to be self-fulfilling”
(Ghoshal, 2005: 77): The recipients of such teaching will construct their own reality and change
their behavior precisely according to this one-dimensional theory. Analogously, economics have
shifted their guiding question from the “(moral) concerns about ‘better’ versus ‘worse’ into a
(technical) calculus of ‘more’ over ‘less’” (Dierksmeier, 2011: 21).
Moreover, the intrasystem logic of today’s business schools, which Khurana describes as a
kind of “neoliberal utopianism” (Khurana, 2007: 363), is not only considered inadequate and re-
ductionist but also as damaging to companies and even societies. In this sense, over the past 15
to 20 years an international group of management and social sciences scholars has established
the influential movement ‘Critical Management Studies’. They criticize the political and philo-
sophical base of management and point out the effects of dehumanization and anomie in society
(Alvesson & Willmott, 1992; Alvesson et al., 2009). More dramatically, they accuse business
schools of “turning out some very skilled criminals […] because they are bereft of socially re-
sponsible values” (Gioia, 2002: 143) as well as of resulting in an enormous number of “so-called
leaders” who lack ethical leadership and good character (Crossan et al., 2013: 285). Quite simi-
lar, Giacalone (2004) complains that today’s business schools have no higher order ideals but a
simple pay-off matrix that is assessed in quantitative and financial terms (Giacalone, 2004: 416).

Pfeffer and Fong (2004) deplore an “absence of a professional ethos” (p. 1501) at business
schools: They refer to the results of the Aspen Institute’s survey of MBAs (2001) which reveal
that during the two year program, participant’s priorities shifted away from customer needs and
product quality to an emphasis on shareholder value (p. 1505). More recently, Krishnan investi-
gated the impact of a 2-year fulltime MBA program on student’s values over a period of seven
years, discovering that while self-orientated values (e.g. comfortable life; pleasure) become more
important, others-oriented values (e.g. being helpful) become less important (Krishnan, 2008).
Not least because of the events of the financial and economic crises in 2007 and the recent
examples of excesses of management practice (such as the Enron or Libor scandal) the criticism
of management education has been gaining ground by suggesting that these events have their
roots in a way of thinking and acting that has emerged from and was taught in business schools.
Therefore, management scholars demand a multidisciplinary mind-set and systems thinking in
management education (Waddock & Lozano, 2013: 267) and a “broadening of responsibility
[…] to contribute to issues and challenges that are of concern to society and the world” (Muff,
2013: 488).
Second Category of Criticism: Inappropriate or Insufficient Teaching Content
A second strand of authors have voiced their concerns about how today’s business schools
are offering an inappropriate or, at least, insufficient toolbox and content to their students. By
focusing mainly on analytic and mathematical models and technique-based approaches on the
one hand and by reducing or rejecting social, cultural, moral and metaphysical thinking on the
other hand, management education often fails to prepare the students properly for the multifacet-
ed reality with which they will be confronted within the context of a global and intercultural

business world. Already in 1974 Hayek dedicates his famous Nobel Memorial Lecture to the top-
ic The Pretence of Knowledge harshly criticizing economists’ “propensity to imitate as closely as
possible the procedures of the brilliantly successful physical sciences” (Hayek, 1989: 3). Some
years later, in 1980, Hayes and Abernathy (1980) also describe this phenomenon (Hayes & Ab-
ernathy, 1980). More recently, Clegg and Ross-Smith (2003) problematized the scientific ten-
dency within the economics and management education by contrasting the dispositional reaction
of iron filings when introduced to the poles of a magnet – which is irrespective of the location
and the social context of the experiment as well as the identity of the experimentalist – with the
behavior of managers responding to the twin poles of a strategic threat which is far more inde-
terminable, complex, and context specific (Clegg & Ross-Smith, 2003: 87). This catchy picture
exemplifies Fleyvbjerg’s well-known critique of the purely analytic or technical style of the so-
cial sciences, which flirt with the idea of emulating the natural sciences. Particularly in view of
teaching he deplores that “people and entire scholarly disciplines [became] blind to context, ex-
perience, and intuition, even though these phenomena and ways of being are at least as important
and necessary for good results as are analysis, rationality, and rules” (Fleyvbjerg, 2001: 24). In
this sense, Mintzberg (2004) also demands – programmatically anticipating his claim in the title
of his efficacious book “Managers, Not MBAs” – an educational model which is not overly ana-
lytic but rather managerially oriented conveying a broad perspective on business in order to ena-
ble long-term management success (Mintzberg, 2004). Bennis and O’Toole (2005) support their
approach that business schools are “failing to impart useful skills” (p. 98) by arguing that pre-
cisely such aspects like ‘human’ matters (e.g. judgment, ethics, and morality), which are routine-
ly ignored by economists, “are exactly what make the difference between good business deci-
sions and bad ones” (p. 100). In terms of the history of ideas, Dierksmeier (2011) explains that

the turn away from humanities in economics and, in consequence, the teaching of management
tools which are exclusively focused on analysis and mathematics - and therefore inappropriate
for the multifaceted reality - are a result of a fusion process beginning in the late 1800s between
the paradigm of the mathematical mechanics on the formal side and the paradigm of the utilitari-
anism on the material one (Dierksmeier, 2011: 20-21). As a consequence, this development re-
duced the multidimensional goals and tools imparted by management education to nothing but
quantitative (formal side) and pecuniary (material side) objectives (p. 21). Exemplarily, Frey and
colleagues (2001) were able to give empirically established proof that strategies taught by busi-
ness schools which are centered on extrinsic motivation such as incentives, regulations, and sur-
veillance are not only destroying intrinsic motivation but are also damaging corporate success in
the long run (e.g. Frey & Jegen, 2001).
In light of these findings, it is not surprising that also management scholars doubted or even
denied the practical relevance of management education. Management pedagogy was accused of
being ineffective considering its impact on management practice, its influence on managerial
performance, and foremost regarding its ability to prepare graduates for their day-to-day realities
(e.g. Hill, 1992: 274; Mintzberg, 2004: 40; Pfeffer & Fong, 2002; Roca, 2008: 607). In this
sense, Grey collected empirical proof that business schools offer “an entrée into a managerial
habitus” (Grey, 2002: 501) instead of providing especially useful knowledge to their graduates.
He comes to the conclusion that management education is more about status and legitimation
than about practice-oriented management tools and skills.
After the financial and economic crises 2007/8 the debate about the practical impact of the
economic teaching context and content has intensified. If it is the case that, as the financial and
economic crisis suggests, managers have made decisions resulting in devastating effects on their

own company as well as on the society at large – managers who are graduates from the world’s
most renowned business schools, who have excellent theoretical abilities and who are considered
to be “the smartest guys in the room” (McLean & Elkind, 2004) – then, or so the complaint,
something seems to have gone dramatically wrong. The methodological reductionism adapted
and promoted by the business schools has resulted in an inappropriate toolbox taught to students
of economics and – subsequently – in an inadequate management of economic reality. In this
sense, “the ensuing crisis was thus endemic” (Dierksmeier, 2011: 23).
Moreover, some researchers emphasize contemporary or future changes of the global society
in order to point out that the toolbox business school’s offer their graduates is insufficient: First
of all, they refer to the globalization, which includes the extensive development of new commu-
nications and transportation technologies on the one hand and on the other the far-reaching pro-
cess of a deterritorialization beginning with the fall of the iron curtain. Another important influ-
ence is the phenomenon of governance gaps. These are resulting from both the fundamental
fragmentariness of governance rules that are due to the complexity and the dynamics of modern
societies and from the uncontrollability of existing global rules (Scherer & Palazzo, 2008: 425-
26). As a consequence, the former dichotomy between the private and the public sector becomes
blurred and corporations have tended to partly take over certain functions which were formerly
solely expected from governments (Matten & Crane, 2005). The new landscape of business leads
to the need to rethink business education and the sort of tools and skills which should be taught
in order to provide a realistic scenario for future business decisions including situations of pub-
lic-private dialogues and social responsibilities (Escudero, 2011). Faced with those far-reaching
challenges, management scholars are emphasizing the importance of greater interpersonal skills
such as the capacity of “heart” and “soul” (Waddock & Lozano, 2013: 267) or leadership and

integration skills, a sensitivity for foreign cultures, norms, and behavior as well the ability to
think critically and act creatively (Datar, Garvin & Cullen, 2010: 8; 327-28), and are demanding
“reflective executives” (Euler & Seufert, 2011: 214).
Third Category of Criticism: Unfitting Educational Environment and Methods
Finally, business schools have been accused of doing a poor job regarding the educational
environment and the methods employed by them. Following the inadequate, reductionist logic
revealed above, management programs do not have a multidisciplinary but a one-dimensional
design which focuses on concepts and techniques (Waddock & Lozano, 2013: 267) by presenting
themselves as a path to a successful career, higher salaries, and financial riches (Pfeffer & Fong,
2004). Therefore, business schools’ methods have been questioned that focus on teaching rather
than on learning while reducing the attention paid to the development of critical thinking and re-
flective capacities (Bennis & O’Toole, 2005; Euler & Seufert, 2011: 218). Along these lines,
Mintzberg and Gosling (2002) are arguing that “no one can create a leader in a classroom” (p.
64). More recently, Datar and colleagues (2010) evaluated numerous in-depth interviews with
business school deans and business executives as well as an extensive collection of hard data in
order to rethink the MBA programs. As a result from their findings they emphasize the need of
new pedagogies such as experimental or active learning which involves team projects or group
exercises and combines classroom learning with real-time experiences (Datar et al., 2010: 331).
Conclusively, many business professors’ conception of themselves as transmitters of knowledge
rather than facilitators of learning processes has been found fault with. Not only their high level
of competence as fact collectors is required in the classroom but also their capacity to deal with
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multidisciplinary issues (Bennis & O’Toole, 2005: 101). Nevertheless, this role change requires
the instructors to take “different and more engaged roles than in typical lecture-case approaches”
(Waddock & Lozano, 2013: 267).
Mapping Business School Criticism
In order to provide a holistic basis for answering to the criticism directed at business schools
we now attempt – based on the considerations outlined above – to figure out a model displaying
the very diverse business school critiques (cf. figure 1):
Figure 1. Mapping Business School Criticism
As the figure exemplifies, the three categories of business school criticism we identified are
corresponding to a macro-, meso-, and micro- level design of management education. According
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to a deontological or backcasting process (cf. Robinson, 1982), in this model normative orienta-
tions and guiding principles act as a reference point from which the teaching content and the cur-
ricula are derived. Afterwards, the methods and educational environment are examined that
could facilitate the realization of the desirable knowledge, skills, and tools. However, as the fig-
ure demonstrates, alongside the deontological direction there are many other forms of interde-
pendencies between these levels.
We are convinced that an operationalization of the concept of practical wisdom can answer to
these critics by considering the three design levels of a business school as well as their interde-
pendencies. However, this presupposes a closer look to the concept itself that goes beyond the
ostensible limitations of disciplines, theories, and contexts and provides a profound basis for fur-
ther steps.
PRACTICAL WISDOM – A CROSS-DISCIPLINARY ANALYSIS
During the last years, resurgent attention has been paid to the ancient topos of practical wis-
dom and its implications by the members of the economic community in academia. Inspired by
recent research, mainly in the fields of psychology and philosophy, a remarkable number of
books and articles have been published in the last months and years which aim at adopting the
concept of practical wisdom into the field of management. Nevertheless, these attempts have re-
mained either on a rather explorative-descriptive level using a vague and more general concep-
tion of practical wisdom or were focused on a very specific aspect while lacking a well-reasoned
philosophical base (see e.g. the critics of Eikeland, 2006). Other authors even assume that the
idea of practical wisdom is a slippery concept, difficult or even impossible to capture without
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been either too exclusive or too vague (Kinsella & Pitman, 2012: 2; Schwartz & Sharpe, 2010),
or that practical wisdom and has only the “function as a placeholder term” (Ellett, 2012: 15).
Therefore, we now attempt to provide an analysis of the concept of practical wisdom, which
goes across the relevant disciplines and looks behind the disciplinary borders. By asking what
other disciplines, which have already developed or adapted the idea of practical wisdom, might
contribute to an holistic approach of management education we are looking from a philosophical,
a theological, a psychological, and a managerial perspective on the topic ‘practical wisdom’.
Therefore, every part of this analysis concludes with a summarizing evaluation that outlines the
identified core issues of practical wisdom in an overview table.
Practical Wisdom from a Philosophical Perspective
Philosophers are people – at least etymologically –who ‘love wisdom’. Therefore, it stands to
reason that our cross-disciplinary analysis of wisdom begins from the philosophical perspective.
Thinking about and aspire to wisdom is not a novel phenomenon of today’s information age,
but arguably goes back to the earliest stages of mankind spreading through cultures and genera-
tions. The “earliest ‘wisdom literature’” dates back to the Sumerian culture flourishing more than
5000 years ago and one of the oldest known civilizations which was located in the area called
Mesopotamia, modern-day Iraq (Birren & Svensson, 2005: 4). With the intention to impart their
wisdom to the next generations, the Sumerians recorded their philosophical reflections and their
pieces of practical advice for daily routines on clay tablets. In a similar way, the ancient Egyp-
tians emphasized, in their ‘wisdom texts’, practical virtues such as patience and honesty in order
to provide paternal guidance and cultural knowledge to their descendants (Takahashi & Overton,
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2005: 34). Later on, these wisdom sources influenced the Hebraic tradition and were incorpo-
rated into their wisdom literature. Interestingly, the Hebrews added a strong religious aspect by
linking wise human behavior to a Divine order (Assmann, 1994).
While the topic has been neglected in literature focused on the West, there are Eastern inter-
pretations of wisdom in antiquity as well which – compared with Western traditions – are more
open, less petty, and embrace also non-cognitive aspects. According to Takahashi and Overton
(2005), there are roughly three features of wisdom to be derived from the Eastern traditions (pp.
36-38): First, the transformational feature which focuses on transcendental experiences and is
associated with the spiritual practices in Hinduism and in Buddhism; secondly, the integrative
feature which refers to a process of understanding which centers less upon cognitive and intellec-
tual structures, but involves emotional experiences instead. In this sense, the Taoist philosophy
of the early Chinese civilization 7000 years ago considered intuition and compassion to be the
path to wisdom (Birren & Svensson, 2005: 9); third, the pragmatic feature of wisdom which re-
sembles the traditional Western concept and refers to useful and established knowledge treasured
by family members.
Nevertheless, it was probably the ancient Greek philosophers who established a tradition of
systematically reflecting on the nature of wisdom by distinguishing it clearly from ‘knowledge’
and examining the factors that constitute a wise man. For Socrates and his pupil Plato, the excel-
lence in character, the principle of self-control, and the ability to subordinate passion and desire
to the authority of reason are required in the quest for wisdom (Robinson, 1990: 14). The Platon-
ic type of wisdom, however, was understood to be quasi-utopian and to require no less than to
know “the rightness […] of all actions in all circumstances, whenever those may arise” (Cooper,
2012: 47). No wonder that, for Platonists, only the gods can attain true wisdom, while humans
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can merely chase after it in order to become philo-sophers, lovers of wisdom. In this sense, the
most important factor for Socrates’ understanding of wisdom is a spirit of open-mindedness and
the awareness of one’s own intellectual limitations.
Although Socrates and Plato already knew different sorts of wisdom, it was Aristotle who
was the first to develop a systematic and sophisticated understanding of what constitutes a wise
person who would also partake of practical wisdom. In several places of his extensive oeuvre,
specifically in book VI of the Nichomachean Ethics, he tackles this issue, classifying the intellec-
tual virtues that are supposed to lay the foundation of ‘wisdom’. In order to get a quick – and
necessarily rather simplifying – picture of the scene and place of practical wisdom within it, a
first distinction can be made between those intellectual virtues “by which we contemplate the
kind of things whose originative causes are invariable”, and those “by which we contemplate
variable things” (NE 1139a7-9). Within the first category of intellectual virtues (related to things
which are stable and invariant), Aristotle introduces an additional distinction between ‘scientific
knowledge’ (epistêmê) and ‘intuitive reason’ (nous). The virtue of scientific knowledge (cf. NE
VI,4) observes and analyses existing things e.g. by deductive demonstration, identifying similari-
ties, or examining lawful relationships. All scientific knowledge, however, is based on and fol-
lows after the first principles which, in turn, cannot be objects of scientific investigation them-
selves. Therefore, according to Aristotle, it is the virtue of intuitive reason (cf. NE VI,6) that
grasps and defines those principles which underlie and enable scientific knowledge. Both, the
scientific knowledge and the intuitive reason constitute the virtue of ‘theoretical wisdom’
(sophía) that is considered to be “the most finished of the forms of knowledge” (NE 1141a15).
At the same time, Aristotle describes theoretical wisdom, despite its elevated status, as “useless”.
He illustrates this by giving the example of the philosophers Anaxagoras and Thales who were
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both known for their theoretical wisdom as well as their unworldly lifestyle. As a consequence,
they were ignorant of their own benefit and did not know which human goods to seek (NE
1141b4-8).
Therefore, Aristotle emphasizes the importance of the second category of intellectual virtues
which are concerned with things that are variable and modifiable. These things are related to
human affairs, particular circumstances, or concrete occurrences that can be controlled, chosen,
initiated, constructed, changed or developed. In this sense, such virtues are prescriptive and ac-
tion-guiding. According to Aristotle, this category of intellectual virtues includes two different
ways of handling those variable things: ‘Technical reason’ (tekhnê) is the application of theoreti-
cal knowledge and seeks to produce or change objects (NE VI,4). It acts by calculating the ex-
pected chain of causes and produces an effect under particular circumstances, induced by certain
means and predicted through invariable knowledge in order to achieve the intended outcome. As
an example of technical reason, Aristotle uses the picture of architecture (NE 1140a6). While
technical reason calculates, intellectual virtue of practical wisdom deliberates “what sorts of
things conduce to the good life in general” both for oneself and for one’s community (NE
1140a26). By considering not only the concrete particularities but also the teleological objectives
and the relevant ethical aspects, practical wisdom goes far beyond tactical cunning or cleverness
(NE 1140a28). This means that – according to the Aristotelian phronêsis – in all situations and
actions, a practically wise person keeps the final ends and aims in mind and deliberates in a
“well-balanced, well-proportioned, rationally ordered way” (Cooper, 2012: 119). Thus, practical
wisdom requires the openness to receive and understand each particular situation as it is, theoret-
ical knowledge and the experience to choose and apply the fitting means, and the excellences of
character to define the right ends.
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Later on, the virtue of practical wisdom took a prominent place within in the ancient popular
philosophy and assumed a key role as one of the four cardinal virtues. In view of its coordinating
and integrating ability regarding the theoretical, moral, and particular aspects of any given situa-
tion, the virtue of practical wisdom was characterized as the auriga virtutum, the charioteer of
the virtues (Schockenhoff, 2006). By adapting the Aristotelian phronêsis, the Roman philosopher
Cicero translated the Greek term by the Latin providentia focussing mainly on the aspect of fore-
sight. In the Middle Ages, this Latin term providentia was contracted to form the new term pru-
dentia (Beabout, 2012: 420). It was, however, St. Thomas Aquinas who, by synthesizing ancient
Greek philosophy and Christian beliefs and traditions, most influentially integrated the concept
of practical wisdom into the Western way of thinking (see: theological perspective). Thinkers
from the Renaissance like Montaigne connected practical wisdom with a life in accordance with
nature, self-knowledge, knowledge of the world, and self-management (Birren & Svensson,
2005: 9).
With the beginning of the Age of Enlightenment, however, the virtue of practical wisdom lost
its former appeal for occidental philosophy. Instead, rationality and reason took the place at the
top of the pyramid of virtues while practical wisdom was gradually reduced to a sort of technical
cleverness. In a world in which morality was founded upon the laws of reason (e.g. Kant’s cate-
gorical imperative) and where scientific inquiry excluded any attempt at transcendental thinking
(e.g. Locke’s empirical school of philosophy), the deliberating virtue of practical wisdom be-
came redundant. On that note, Osbeck and Robinson (2005) state that “there are few concepts
toward which contemporary philosophers show greater reticence” (p. 61) than to practical wis-
dom.
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During the last decades, however, the emergence of a remarkable number of philosophical
approaches, inspired by the concept of practical wisdom, proves a burgeoning interest in the an-
cient topos. Arguably, it was Martin Heidegger who first recognized Aristotle’s analysis of
phronêsis to have far-reaching ontological implications and who initiated a kind of renaissance
of the concept (Long, 2002: 43). Following this path, Hans-Georg Gadamer appropriated the Ar-
istotelian phronêsis as a model for hermeneutics in his fundamental book “Wahrheit und
Methode” (Gadamer, 19942: 312-324). More recently, Bent Flyvberg (2001) developed a new
approach to the social sciences mainly based on the Aristotelian notion of phronêsis (Flyvberg,
2001: 2-4; 53-65). Addressing today’s impasse of the social sciences which originates in the at-
tempt at emulating the natural sciences and their research methods and principles, he recurs to
the three intellectual virtues episteme (scientific knowledge; analytical rationality), techne (craft /
art; instrumental rationality), and phronesis (ethics; value rationality) (p. 57). Instead of focusing
exclusively on the first two virtues (which are mainly concerned with the realm of the natural
sciences), the social sciences should, according to Flyvberg, cultivate a new phronetic approach
that is involving values, getting close to reality, looking at practice before discourse, and is enter-
ing into dialogue with a polyphony of voices (pp. 129-140). Most recently, Frederick S. Ellett
(2012) outlined, in his attempt at recovering Aristotle’s phronêsis for the professions, the two-
fold role of practical wisdom: first, as the virtue of social practice which implicitly rejects moti-
vational hedonism and rational egoism (Ellett, 2012: 16-17); secondly, as the capability of delib-
erative judgment which involves complex interactions between the generals and the particulars
and rejects maximizing of any quantity, e.g. the rational-choice theory (pp. 16-19). On the other
hand, Ellett emphasizes the need to fit the ancient concept into today’s post-enlightenment
frame. In this sense, he opposes the Aristotelian “moral essentialism” that all humans have a de-
18

termined, unique, and ultimate end which the good life should be directed at (ib. 20 f.). On the
contrary, a modern version of practical wisdom has to consider the pluralistic perspective saying
that each individual can live his or her life in many reasonable ways. Moreover, Ellett claims that
a recovered concept of the Aristotelian phronêsis needs to integrate the modern idea of probabil-
ity which has become today’s central “guide to life” (p. 23). Meanwhile, Cooper (2012) suggests
a holistic Aristotelian approach as a complete “way of life” (Cooper, 2012). According to this
life guide, “the virtuous political leader and the virtuous private citizen possess the virtue of
practical wisdom [knowing] that activity is the absolutely highest human good” (p. 139).
The following table displays a summary of the core issues of practical wisdom we have been
able to identify from a philosophical perspective:
Table 1. Practical Wisdom from a Philosophical Perspective
Source / Author / Refer-

Core Issue Concept ence
Cultural heritage and wis- Wisdom as philosophical reflections and practical ad- Sumerian culture
dom vises for daily living transferred on to the following
generations
Wisdom as useful and established knowledge treasured Eastern traditional cul-
by family members tures
Traditional virtues and cul- Wisdom as practical virtues such as patience or honesty Ancient Egyptian culture
tural guidelines to provide paternal guidance and cultural knowledge to
the descendants
Transformational feature Wisdom as transcendental experiences associated with Hindu and Buddhist phi-
the spiritual practices losophy
Emotional feature Wisdom as a process of understanding which includes
less cognitive and intellectual structures but involves Taoist philosophy
more emotional experiences (e.g. intuition and com-
passion)
Excellence in character Wisdom requires the principle of self-control and the Socrates and Plato
ability to subordinate passion and desire to the authority
of reason Aristotle
Practical wisdom as the ethical virtue to follow the right
ends
Quasi-utopian knowing Wisdom as the knowing of the rightness of all actions Socrates and Plato
in all circumstances, whenever those may arise
Limitation of knowledge Wisdom the spirit spirit of open-mindedness and the Socrates and Plato
awareness of one’s own intellectual limitations
19

Prescriptive and action guid- Practical wisdom as an intellectual virtue by which we Aristotle
ing feature contemplate variable things
Practical wisdom as a concrete way of life Cooper, 2012
Deliberative Judgement Practical wisdom as the openness to receive and under- Aristotle
stand each particular situation as it is and as the ability
to pick the fitting means out of the accumulated theoret-
ical knowledge and experience
auriga virtutum / charioteer Practical wisdom as the coordinating and integrating Occidental popular phi-
of the virtues ability regarding the theoretical, moral, and particular losophy
aspects of a concrete situation
Providential / foresight Practical wisdom as a kind of foresight Cicero
th
Self- and other-awareness Practical wisdom as a life in accordance with nature, Montaigne (16 cent.)
self-knowledge, knowledge of the world, and self-
management
Value rationality Practical wisdom as a pragmatic, variable, context- Flyvberg, 2001
dependent, and value-orientated paradigm for the so-
cial sciences
Professional knowledge Practical wisdom as the virtue of social practice and as Ellett, 2012
the capability of deliberative judgements
Pluralistic perspective Practical wisdom as the ability to consider the diversity Ellett, 2012
of the ultimate ends in today’s post-enlightenment
framing
Practical Wisdom From a Theological Perspective
Although the concept of wisdom goes back in the ancient ages and has been adapted in many
different cultures, it still was mainly linked to the sphere of theology and religion (Takahashi &
Overton, 2005: 32). As we have seen above, already the Greeks have connected their understand-
ing of wisdom with a divine attitude. According to Plato, only the gods can attain true wisdom
which was personified in the Olympian goddess Athena. In this sense, the Greek literature nar-
rated about wisdom as a sort of divine gift not as an achievement (Osbeck & Robinson, 2005:
64-65).
To a far greater extend the divine sphere played a role within the Hebraic tradition. Influ-
enced by wisdom traditions from Mesopotamia and Egypt, Hebraic wisdom literature delivers
accumulated and reflected experiences of the living in society as well as with God to posterity.
20

By the means of parables and exhortations these texts lead to a truly succeeding life. They are
encompassing everyday advices as well as practical virtues and are concerning all aspects of life
(Marböck, 2006: 1033-36). In this sense, wise human behavior is always connected to a life ac-
cording a divine order (Assmann, 1994; cf. book of Job). Concurrently, as the story about King
Solomon reports, wisdom was thought to be a divine gift from YHWH (Birren & Svensson,
2005: 7; cf. 1Kings 3,12). On the other hand, in the Hebraic tradition wisdom is the attribute of
the omniscient and omnipotent God who has created the order of the cosmos. Finally, it is worth
to note that, according to the Hebrews, fear of the LORD is the beginning of wisdom (Proverbs
1,7; 9,10).
In a very similar way, the texts of the New Testament are following along these lines. They
provide strategies for dealing with particular situations and convey a normative life codex (Eb-
ner, 2006: 1036-8). Furthermore, rather speculatively in the New Testament and then more elab-
orated in the theology of the Church Fathers, Jesus Christ was identified as the personified wis-
dom.
The Islamic traditions as well were quite familiar with an understanding of wisdom (al-
Hikmah) that includes a practical and moral guidance for a life pleasing in the sight of God
which is to be transferred and taught to the following generations (cf. Verse 2:129 of the Quran).
In this sense, teaching wisdom is an integral part of the mission of the earlier Prophets (Burhan,
2014). In addition, an application of al-Hikmah was well known that correlates highly with the
Aristotelian concept of practical wisdom (El Garah, Beekun, Habisch, Lenssen & Loza Adaui,
2012: 993). Burhan (2014) provides an often quoted definition of this understanding of Al-
Hikmah that “means a total insight and having sound judgment concerning a matter or situation
through understanding cause and effect phenomena” (Burhan, 2014).
21

In the Occidental philosophy of the Middle Ages, however, it became a widespread view that
wisdom consists of two parts: the timeless and eternal sapientia on the one side and scientia –
knowledge of the material world – on the other (Birren & Svensson, 2005: 7). It was, finally,
Thomas Aquinas who recovers the Aristotelian concept of practical wisdom as prudentia in his
Summa Theologiae (II-II, 47-56). On the one hand, Aquino pursued the ancient topos of wisdom
as a divine gift. In baptism, every Christian receives, along with the new life in close relationship
to God, a supernatural prudence, as a prerequisite for one’s eternal salvation (Pieper, 1966: 14).
On the other hand, he echoes Aristotle describing prudentia as “the right reason in matters of ac-
tion” (recta ratio agibilium; II-II, 47,2 sed contra) which applies universal knowledge to a par-
ticular case (cf. II-II, 47,3 ad1). In this sense, Aquino’s prudentia embraces the regard for as well
as the openness to reality and presupposes the knowledge of reality (Pieper, 1966: 9). For the
right action, however, prudentia needs, quite similar to Aristotle as well, not only knowledge and
the knowing of how to apply, but also the rightness of desire (cf. II-II, 47,4c.). Therefore, as Pie-
per (1966) outlines, there is a strong connection between being prudent / practical wise and being
good, which can only simultaneously be realized (pp. 5; 8). In summary, Thomas Aquinas de-
rives three steps to act prudently (cf. II-II, 47, 8c.): First, the process of deliberation which be-
longs to discovery (consiliari, quod pertinet ad inventionem); second the process of judgment of
the findings (iudicare de inventis); and third, the act of commanding to put into practice the
things deliberated and judged before (praecipere). Overall, however, practical wisdom contains a
moment of uncertainty as well. Quoting Thomas: “The certitude of prudence cannot be so great
as completely to remove all anxiety” (II-II, 47,9 ad2; transl.: Pieper, 1966: 18), that requires – as
an additional component of practical wisdom – the ability of intuition which is donated, to come
to full circle, from the grace of direct and mediated divine guidance.
22

Since then, the conception of prudentia / practical wisdom of Thomas Aquinas influenced the
Occidental Christian view of men as well as the metaphysics to date (see e.g. Rhonheimer, 1994)
stating that prudence is the foremost of the virtues. Most recently, however, resurgent attention
has been paid to wisdom traditions that refer to the traditional and cultural heritage of religions.
Addressing an increasing loss in today’s modern society of common values and jointly shared
moral standards which cohere a societal ethos structure these attempts want to bring back the
practical and moral wisdom accumulated and established over the centuries by the different cul-
tures and religions. This sort of practical wisdom embraces “the fund of beliefs, examples, and
commitments that are transmitted from generation to generation through a religious tradition, and
which attach people to the transcendental source of human happiness” (Malloch, 2010: 756). On
the scientific level, a reintroduction of such a pluralistic understanding of practical wisdom de-
rived from religious traditions could play an important role as a counterpart to the disciplinary
forms of scientific rationality (Habisch & Loza Adaui, 2010). Along these attempts, for example,
a common initiative of the Academy of Business in Society (ABIS) and the Yale University Cen-
ter for Faith and Culture wants to “explore the value of practical wisdom in management from
the religious and philosophical traditions and thereby reconnect with lost treasures” (Lenssen et
al., 2012: 989).
able to identify from a theological perspective:
Table 2. Practical Wisdom from a Theological Perspective
Core Issue Concept Source / Author / Refer-

ence
Divine gift Wisdom as a divine gift not as an achievement Ancient Greek literature
Hebraic tradition
23

Wisdom as a prerequisite for one’s eternal salvation Thomas Aquinas

donated in baptism
Divine sphere or attribute Wisdom as a divine attribute that only the gods can Greek Philosophy
attain, while humans can merely chase after it
Wisdom as the attribute of the omniscient and omnipo- Hebraic tradition
tent God who has created the order of the cosmos
Jesus Christ was identified as the personified wisdom Patristic tradition
Religious heritage Practical Wisdom as the fund of beliefs, examples, and Hebraic tradition
commitments concerning all aspects of life that are Texts of the NT
transmitted from generation to generation through reli- Malloch 2010
gious tradition and practice ABIS-Yale initiative
Practical Wisdom as a normative and practical life co- Texts of the NT
dex Islamic traditions
Uncertainty and human Fear of the LORD is the beginning of wisdom Hebraic tradition
limitations Practical Wisdom as a awareness of uncertainty that Thomas Aquinas
requires the ability of intuition which is donated from
the grace of direct and mediated divine guidance
Right reason applied to Practical Wisdom as the regard for and the openness to Thomas Aquinas
action reality which presupposes the knowledge of reality
Practical Wisdom as the total insight by having sound Islamic traditions
judgment concerning a matter or situation through un-
derstanding cause and effect phenomena
Rightness of desire Practical Wisdom as a moral virtue that allows one to Thomas Aquinas
do what is good because it is good
Foremost of the virtues Practical Wisdom as the superior virtue that coordinates Occidental Christian moral
and integrates the others towards action philosophy
Pluralism Practical Wisdom as a integrative concept to bring back Habisch & Loza Adaui,
and to inculturate different worldviews and beliefs in 2010
modern societies Lenssen et al., 2012
(Practical) Wisdom from a Psychological Perspective
While the analysis of practical wisdom in the realm of philosophy and theology took us along
through the past millennia, the history of the study of wisdom in psychology is a very short one.
Possibly, it is even this past history of wisdom in philosophy and religion that might explain why
the concept and the subject matter of wisdom has been avoided or neglected since the emergence
of psychology as a research and scholarly subject in the 19th century (Birren & Svensson, 2005:
14). One can state, however, that it was not until the 1980s, that wisdom research in psychology
really started (Brugman, 2000: 95). Therefore, as opposed to the chronological structure of the
24

previous two parts of our cross-disciplinary analysis this section follows a content-oriented struc-
ture. Moreover, this analysis is surely not a definitive review of wisdom since that has been per-
fectly done by previous authors (e.g. Baltes & Staudinger, 2000; Birren & Fischer, 1990; Birren
& Svensson, 2005; Staudinger, 2008). Rather, it is a brief overview of the core issues of the con-
cept of wisdom which have been identified and exposed over the last decades in psychological
research.
In general, the psychological research focuses on the term “wisdom” rather than “practical
wisdom” addressing, however, a lot of issues which are quite similar to the traditional concept of
practical wisdom. The overall aim of psychological wisdom research could be summarized as the
attempt to find scientific criteria for control, replication, and prediction regarding the nature and
development of wisdom. Mostly, this includes both the realm of knowledge as well as the pro-
cess of decision making.
Within the numerous and diverse approaches pursuing this goal, two broad strands of the
psychological research can be distinguished. The first group of approaches is called “implicit
(subjective) theories of wisdom” (Staudinger, 2008). The researcher of these theories focus on
lay conceptions of wisdom by examining everyday beliefs and folk understandings. The aim of
these studies is mainly to elaborate the characteristics of a wise person and the definition of wis-
dom. For that reason, either in a multistage procedure samples of lay persons are ask to create a
list of wisdom-created attributes or to answer questions linked to the topic of wisdom (e.g. Clay-
ton & Birren, 1980) or autobiographical memories, narratives or interviews are evaluated (e.g.
Bluck & Glück, 2005). From these sort of studies four dimensions characterizing a prototypical
wise person could be derived over the last decades: First, the affective dimension describing at-
tributes such as empathy and compassion, second the reflective dimension describing attributes
25

such as intuition and introspection, third, the cognitive dimension describing capacities such as
experience and intelligence, and fourth, a moral dimension describing factors such as religiosity
and environmental awareness (Staudinger, 2008: 109-10). Recently, within the research area of
implicit theories of wisdom the topic of interculturality emerged. While between the different
cultures divergent weightings of particular characteristics of wisdom are observable, on a general
level three intercultural findings can be derived: an immediate connection between wisdom and
wise people as a sort of its ‘carriers’, a strong link between mind and character as an act of bal-
ancing, and a social and interpersonal dimension as a process of application (Takahashi & Bor-
dia, 2000).
The second strand of psychological wisdom research is called “explicit theories of wisdom”.
Here, the main focus lies on the measurement of wisdom in individuals. It was, however, already
evident at the very beginning of this sort of research that it is very difficult to capture ‘wisdom’
empirically (Baltes & Smith, 1990). Nevertheless, over the last decades there could be developed
some rather different concepts to measure wisdom. Under the various lines of research in this
field, two major models stand out which – despite some overlap between them – have established
their own theoretical slant. On the one hand, there is Sternberg’s “balance theory of wisdom”
(Sternberg, 1998). According to the central tenet of this theory, being wise is mainly about the
application of “tactic knowledge” by balancing someone’s own interests with those of other peo-
ple and those of lager entities such as family, community or society (p. 353). To assess some-
one’s wisdom he or she could get confronted with a hypothetical problem situation which in-
volves solutions that maximize not just one's own self-interest, but a variety of intrapersonal, in-
terpersonal, and extrapersonal interests (p. 360).
26

On the other hand, there is the so called “Berlin wisdom paradigm” (Baltes & Staudinger,
2000). According to this theory, wisdom is defined as expert knowledge that involves “judgment
about important, difficult and uncertain questions associated with the meaning and conduct of
life” (Baltes & Kunzmann, 2003: 131). The nature of a so defined wisdom model can be cap-
tured by using five criteria developed by Baltes and colleagues: factual knowledge, procedural
knowledge, life-span contextualism, relativism of values and tolerance, and recognition and
management of uncertainty. To measure wisdom related knowledge, people are trying to tackle
difficult life dilemmas. Then, their think-aloud responses can be collected and evaluated accord-
ing the five criteria of the Berlin wisdom paradigm (Staudinger, 2008: 113-4).
Beside the two major psychological paradigms of explicit theories of wisdom, several other
conceptualizations and criteria of wisdom were developed in the recent years (see an overview:
Birren & Svensson, 2005). Most of them, however, revolve around the aspects of reflexivity,
judgment, knowledge, and interpersonal competences. In view of the limited space, the authors
abstain from exploring them in greater detail.
able to identify from a psychological perspective:
Table 3. Practical Wisdom from a Psychological Perspective
Core Issue Concept Source / Author / Reference

Affective dimension Wisdom as affective and emotional characteristic Implicit theories of wisdom
such as empathy or compassion
Reflective dimension Wisdom as reflective attributes such as intuition and Implicit theories of wisdom
introspection
Cognitive dimension Wisdom as cognitive capacities such as experience Implicit theories of wisdom
and intelligence
Moral dimension Wisdom as guidance and adhering to moral principles Implicit theories of wisdom
or religious values
Balancing feature Wisdom as an act of balancing between mind and Intercultural implicit theories
character of wisdom
27

Wisdom as the process of balancing someone’s own Balance theory of wisdom

interests with those of other people and those of lager
entities such as family, community or society
Expert knowledge Wisdom as judgement about important, difficult and Berlin wisdom paradigm
uncertain questions associated with the meaning and
conduct of life
Practical Wisdom from a Managerial Perspective
Although attention to practical wisdom and its relation to management its relative new, how-
ever addressing this issue is not an easy task. The first difficulty regards the wording used, in the
literature is possible to find research using: wisdom, practical wisdom, managerial wisdom,
phronesis, prudence and even practical reason to refer to close interrelated concepts. The second
difficulty refers the heterogeneous ways in which these concepts have been applied to manage-
ment, and the different management functions that have been analyzed. The third difficulty and
probably the most challenging is the plurality in the cultural traditions behind the understanding
of wisdom and how these have been applied to management.
As in the previous section the analysis here follows a content-oriented structure and do not
pretend to be a definitive review of practical wisdom for management; there are other contribu-
tions that have tried to do so in the past, whether as a part of an article (e.g. Gibson 2008, Row-
ley 2006) or as standalone contribution aimed to overview the literature (e.g. Kessler & Bailey,
2007). Moreover, several special issues in different journals were dedicated to practical wisdom
in general (McKenna, Rooney & Ten Bos, 2007) or to the relation of wisdom and a particular
management area (Lenssen et al., 2010), even the Academy of Management Learning & Educa-
tion Journal recently dedicated all its Book & Resource Reviews section to materials related to
wisdom and management (McKenna, Rooney & Kenworthy, 2013).
28

Our analysis of practical wisdom from the philosophical, theological and psychological per-
spectives, however, also revealed the existence of rather different and contradictiong approaches.
For example Deslandes (2012) uses Ricoeurs political philosophy to criticize and the more main-
streamed Aristotelian approach towards practical wisdom in management (Moberg, 2007), as
well as the contributions that emphasize the virtue ethics approach on practical wisdom (e.g. Be-
about, 2012; Bragues, 2006; Schwarzt & Sharpe 2006, ). Diversity also prevails in the theologi-
cal literature as emphasized, for example, in the discussion about the religious nature of practical
reason (Krueger, 1986; De George, 1986) or more recently in several contributions published
within the ABIS-Yale initiative that explicitly address different spiritual and religious traditions
as sources of practical wisdom; others suggest a consideration of wisdom as a universal value
applicable to workplace research (Roe & Ester, 1999; Ros, Schwartz & Surkiss, 1999).
Practical Wisdom at the Individual Level
Besides that, practical wisdom in management can be considered on an individual and an or-
ganizational level. At the individual level we focus on two managerial functions that have been
recurrently addressed in the literature on practical wisdom: leadership, and decision-making.
Practical Wisdom in Leadership. There is an increasing literature addressing the role of wis-
dom for leadership. First and foremost, there is a meta-consensus about the managerial effective-
ness of wise leadership (e.g. Biloslavo & McKenna, 2013; Yang, 2011). However, very different
aspects of the theme are emphasized in the literature. On the one side wisdom in leadership is
considered to be an integrating activity. This requires the capacity to integrate and balance dif-
29

ferent roles in the organization and different rationalities even in different cultural settings (Bai
& Roberts, 2011; Ben-Hur & Jonsen, 2012; Thompson, 2011). Moreover, it calls for the capacity
to integrate ethical considerations into instrumental knowledge (Beekun, 2012; Przuan & Pruzan,
2007; McDonald, 2012; Cheng, 2011, Zheng et al., 2011; Khan & Sheikh, 2012; Meynhardt,
2010; Molteni & Pedrini, 2010; Grassl, 2010; Melé, 2010), the advice of others (Beekun, 2012;
Gottlieb 2012; Gibson, 2008), or even aesthetic sensibility (Waddock, 2010; Waddock, 2014).
The integrative role of practical wisdom therefore can be summarized in the capacity of wise
leaders to embrace complexity or in the necessary role of a holistic approach for leadership (Al-
ford, 2010; Clark, 2010; Colas & Langecir, 2012; Pruzan & Pruzan Mikkelsen, 2007).
Beyond the integrative role of leadership, literature presents also how wisdom plays a role in
the identification envisioning goals and inspiring others to follow that goal (Cheng, 2011; Nona-
ka & Toyama, 2007). Similarly, others emphasize the impact of wisdom in leader’s actions
(McKenna, Rooney & Boal, 2009) and more recently the impact of leader’s personal wisdom in
their followers (Zacher, Pearce, Rooney & McKenna, 2014). Other researchers have linked par-
ticular leadership styles such as ‘servant leadership’ or ‘steward leader’ with the wisdom discus-
sion (Mostovicz & Kakabadse, 2012; Opdebeeck & Habisch, 2011).
Wisdom in leadership has also been related to the right identification of limits. Therefore, a
self-discipline role (van den Muyzenberg, in print), identifying the limits of its own reason (Kai-
pa, 2013), searching for the advice of others (Beekun, 2012), and identifying and preparing suc-
cessor (Cheng, 2011) are considered as practically wise capacities.
Although, there is a significant corpus of literature addressing wisdom and practical wisdom
in management reduced empirical research on wisdom has been done. A first attempt is the study
30

of Zacher et al. (2014) that develops a measure of practical wisdom to study leader-member ex-
change quality.
Practical Wisdom in Decision-making. The decision-making literature also addresses practical
wisdom. For Melé (2010) for example “practical wisdom introduces ethics in decision making by
considering both the end […] pursued and the means to achieve such an end from the perspective
of the human good” (p. 642). This approach is therefore also integrative – Melé’s proposal of
integrating ethics into decision-making relates not only to the decision itself but to the act of de-
ciding.
Another stream of research in the context of decision-making emphasizes practical wisdom
as a virtue, more precisely as the main virtue (Melé, 2012: 135) or as prudence (Bartunek &
Trullen, 2007: 96-106). The study of Yuengert (2012) considers the role of prudence in decision
making in a wider sense. the economic concept of risk with the Aristotelian concept of contin-
gency and shows why practical wisdom was excluded in economic models of risk analysis and
decision making (chap. 5).
Finally, there is an original contribution on the right decision about how to communicate ide-
as: Based on case studies Bamford (forthcoming) presents how practical wisdom from the Bud-
dhist tradition influences the way in which managers decide which speech to use in which mo-
ment.
Practical Wisdom at the Organizational Level
31

At the organizational level, the literature tackles issues related to strategy, organizational studies,
Human resource management, and to knowledge management.
Practical Wisdom in Strategy and Strategic Management. Introducing practical wisdom into
the strategic management discussion results in reconsidering the notion of organizational suc-
cess. As seen in the previous section, one characteristic of practical wisdom regards the capacity
to identify the right goals. Applied to the field of strategic management this means an “organiza-
tion having a meaningful purpose for its existence beyond just maximizing profits--having a last-
ing impact on society” (Bierly & Kolodinsky, 2007: 83). Strategy development is considered as a
process of discovery and learning. Rooney & McKenna (2007) emphasize the heuristic feature of
strategy crafting in opposition to a linear planning process. They see the role of practical wisdom
as an instrument that helps to create a “more organic or naturalistic discovery process” (p. 129)
making use of scientific and transcendent elements to create strategies.
While these contributions center their attention more in the wisdom component of practical
wisdom, other authors emphasize the practical component. According to Nonaka and Zhu (2012)
a particular interpretation of the Aristotelian practical wisdom leads to a hierarchical polarizing
approach towards strategy (p. 404). For them a wise strategy presupposes a pragmatic turn (p.
406), which means to consider human intelligence not as a mental faculty, “but [as] a way of in-
teracting with emerging situations” (p.376).
A different stream of research emphasizes another feature of practical wisdom applied to stra-
tegic management. Taking into consideration that strategy crafting takes place in circumstances
of complexity and uncertainty outside and inside organizations, strategists have to deal with the
challenge of preparedness (Statler & Oppegaard, 2007; Statler & Roos, 2006; Statler & Roos,
32

2007; Statler, Roos & Bart, 2007). These authors see practical wisdom as the term to answer this
challenge of “balancing ethical demands with demands for practical effectiveness” (Statler and
Roos, 2007: 135). In this sense, Freeman, Dunham & McVea (2007) have suggested that stake-
holder management can be also interpreted as “a third way between science an expedience” (p.
174) in other words as an exercise in practical wisdom.
Practical wisdom in organizational studies. Some scholars have linked practical wisdom to
organizational studies. Even more, there is a handbook especially dedicated to Organizational
and Managerial Wisdom (Kessler & Bailey, 2007) with contributions related to five different
philosophical branches: metaphysics, logic, ethics, aesthetics and epistemology. The editors of
this handbook offer a definition:
“Organizational and managerial wisdom is the application to professional pursuits of a
deep understanding and fundamental capacity for living well. This includes the visioning,
integration, and implementation of multifarious dimensions (within logical, ethical, aes-
thetic, epistemological, and metaphysical domains) as well as the development and en-
actment of multifarious elements (across individual, interpersonal, organizational and
strategic levels) to lead the good life and enable it for others.” (Kessler & Bailey, 2007:
lxvii)
Oliver, Statler and Roos (2010) apply practical wisdom in organizational identity. They use
Stenrberg’s (see psychological theories) balance theory of practical wisdom as reference to de-
scribe “how the ethical dimension of organizational identity plays out in practice” (p. 430).
Other studies focus on organizational culture and how cultural commonalities permit the cre-
ation of communities of work. A practical wisdom approach to corporate culture will not intend
33

to secularize it, rather it should be shaped taking in consideration elements of the cultural tradi-
tion in which corporate culture relies in a more explicit war (Almog-Bareket & Kletz, 2012; Kay,
2012; Tredget, 2010).
Finally, the study of Earley and Offermann (2007) examines empirical evidence about wis-
dom at the organizational level from a cross-cultural perspective. Their findings suggest a more
careful treatment of the wisdom concept in intercultural research because of its culture-specific
feature.
Practical Wisdom in Knowledge Management. In a similar way, there are some studies that
relate knowledge management to practical wisdom at an organizational level. For Kessler (2006)
organizational wisdom implies to use knowledge in efficient ways, particularly through the “col-
lection, transference, and integration of individual’s wisdom and the use of institutional and so-
cial processes for strategic action” (p.297). Rowley (2006) defines organizational wisdom as “the
capacity to put into action the most appropriate behavior for an organization, taking into account
what is known and the legitimate concerns of its various stakeholders” (p. 262). Later on, Row-
ley and Gibbs (2008) relate the concept of learning organization to the practical wisdom discus-
sion. They propose the concept of a practically wise organization that is based on seven pillars:
“[U]nderstanding dynamic complexity, developing personal wisdom competency, deliberating
towards ethical models, refreshing shared sustainable vision, group wisdom dynamics, deliber-
ated praxis and embodied learning” (p. 367).
Practical Wisdom in Human Resource Management. There are also contributions that can be
grouped as belonging to the field of human resource management. In general, practical wisdom
34

is proposed as a capability that make possible to connect broad moral principles to concrete mor-
al judgments and actions. (Cornuel, Habisch, & Kletz, 2010; Halverson, 2004; Maines & Naugh-
ton, 2010). This moral principles rooted in a religious ethos can promote innovation (Kahane,
2012) and compliance behaviors (Habisch, 2012).
Other authors focus on the holistic feature of practical wisdom proposing that training and
development should integrate cultural and religious values in order to reach congruence between
values and behaviors (Fontaine, Oziev, & Hassan-Hussein, 2012; Hassi, 2012; Khan & Sheikh,
2012).
able to identify from a managerial perspective:
Table 4. Practical Wisdom from a Managerial Perspective
Core Issue Concept Source / Author / Reference

Integration of the Wisdom as the interaction of moral imagination Waddock 2010; Waddock 2014;
good, the true and the (the good), system understanding (the true) and
beautiful (areté) aesthetics sensibility (the beautiful)
Ethical decision mak- Practical wisdom as the decision making process Ip 2011, Melé 2010
ing considering the economic and the ethical elements
Managing creative Practical wisdom of leaders as the capability to Ben-Hur & Jonsen 2012:968-
tensions integrate different leadership roles and balance 969, Thompson 2011; Bai &
tensions between them as well as tensions be- Roberts 2011,
tween cultural values and economic rationality
Integrating descriptive Wise leaders as capable to integrate descriptive Ben-Hur & Jonsen 2012,
and prescriptive knowledge with the prescriptive knowledge of Gottlieb 2012, Beekun 2012,
knowledge some cultural, spiritual and religious tradition Pruzan & Pruzan Mikkelsen
2007,McDonald 2012, Cheng
2011, Zheng et al. 2011, Bai &
Roberts 2011; Khan & Sheikh
2012; Meynhardt 2010, Molteni
& Pedrini 2010; Mele 2010;
Grassl 2010
Embracing complexity Practical wisdom for leadership as the capacity to McDonald 2012:642-643
embrace paradoxical situations, contradictory Pruzan & Pruzan Mikkelsen
arguments and discontinuous developments; re- 2007, Statler et al. 2007, Cornu-
jecting “one size fits all” solutions el et al. 2010
Practical wisdom for leaders as the capability to Pruzan & Pruzan Mikkelsen
35

transcend a unitary way of thinking / specialized 2007, Colas & Languecir 2012;
rationality and to embrace the complexity of reali- Clark 2010; Alford 2010,
ty Nonaka & Zhu 2012
Holistic approach to Practical wisdom as an integrating way of balanc- Alford 2010
human nature ing individuality (ego-centred and self-interested)
and personality (intrinsically related to others and
self-giving) directed at human action
Self-discipline Practical wisdom as the capability to control the Van den Muyzenberg (forthcom-
own desires and to liberate leadership from ego. ing)
Cultural/spiritual tradi- Practical wisdom as the capacity to believe in the Ben-Hur & Jonsen 2012, Zheng
tions own tradition and culture and to make use of it et al. 2011, Pruzan & Pruzan
while making decisions Mikkelsen 2007, Gerstner 2011,
Ip 2011, Vemander 2011, Bai &
Roberts 2011; Brinkmann&
O’Brien 2010
Right, credible, and Practical wisdom as the ability to identify the Cheng 2011, Nonaka & Toyama
inspiring goals right goals and to inspire others that envisioning a 2007
particular goal is correct.
Renouncing to his own Practical wisdom by identifying the right succes- Cheng 2011
power sor and giving a step back or even retiring in the
right moment.
Learning from experi- Practical wisdom as the capacity to learn from Ben-Hur & Jonsen 2012; Hoebe-
ence experience every time in a renewed way, i.e. ke 2010, Gibson 2008;
through reflective attention to the meaning of
experiences
Reluctance to be leader Practical wisdom as a certain reluctance to be- Ben-Hur & Jonsen 2012
but assuming respon- come a leader but the acceptance of the leadership
sibility role with high responsibility
Dream or vision Wise leaders follow a dream, or envision some- Ben-Hur & Jonsen 2012, Gott-
thing that drives the own behaviour lieb 2012; Gibson 2008
Social benevolence Practical wisdom as the benevolence with the Opdebeeck & Habisch 2011,
others expressed by compassionate management, Mostovicz & Kakabadse 2012
servant leadership, steward leader
Corporate culture and Practical wisdom as an approach to explore cul- Almog-Bareket & Kletz 2012;
cultural background tural elements to enrich corporate culture; versus Kay 2012; Tredget 2010
secularization of corporate culture
Pragmatic strategy Practical Wisdom as the purposeful accomplish- Nonaka & Zhu 2012
ment of idealistic, informed, disciplined experi-
mentations
Religious ethos as Wise organizations embrace religious ethos and Kahane 2012
driver of innovation by doing so they promote innovation and an en-
trepreneurial thinking
Holistic approach to- Practical wisdom as the integration of cultural and Hassi 2012; Fontaine et al. 2012
wards training and religious values into training programs to reach
development congruence between values and behaviour
Middle level thinking Practical wisdom as a capability to connect broad Maines & Naughton 2010, Cor-
moral principles to concrete moral judgements nuel et al. 2010, Halverson 2004:
and actions, thereby leading to specific practices 92
36

THE THREE-PILLAR MODEL OF PRACTICAL WISDOM
Our analysis of the concept of practical wisdom goes beyond the obvious limitations of disci-
plines, theories, and contexts and provides a multi-layered collection of core issues of practical
wisdom including both empirical data and theoretical ideas. By way of contrast with mainstream
management studies, which pigeonhole themselves into narrowly confined areas adding ever
more incremental research (cf. Alvesson & Sandberg, 2013), we do not propose to simply add
practical wisdom as another variety of literature or theory. . Rather, we present our collection –
consisting of the core issues of practical wisdom – as a new approach to a holistic renewal of
management education.
In order to attain this goal, we have spread out on the table all core issues identified in each
of the disciplinary analysis segments above, and we have looked for interdisciplinary connec-
tions, similarities, or clusters. In this way, we spotted three main areas which the core issues of
practical wisdom can be assigned to – even if we allow for some overlap between them. The first
area embraces the integrative dimension and is best represented in each section of the analysis. It
includes deliberation, the passing of judgment, balancing, and integration directed at action and
practice. The second area concerns the normative dimension and includes all sorts of knowledge
about or orientation towards a normative guidance concerning the full life and what comes be-
yond. The third area, finally, is about cultural heritage that is being transmitted from generation
to generation through various kinds of traditions.
We are convinced that, from these three areas, we can construct a model of practical wisdom
for which cf. the following figure:
37

Figure 2. The Three-Pillar Model of Practical Wisdom
These areas, however, are not mutually exclusive but intertwined in a multiple ways. One
cannot deliberate, judge, or balance with practical wisdom while leaving aside the traditional
pieces of advice and without having a clear purpose in mind. Concurrently, one cannot make use
of normative guidance in a practically wise without paying attention to the cultural heritage nor
without deliberating or balancing directed at practice. Finally, in order to learn or adapt practical
wisdom from earlier generations one needs both normative guidance and an integrative capacity
to make traditions accessible. That shows how all three parts of practical wisdom can only be
realized simultaneously. For this reason, we are speaking of ‘three pillars of practical wisdom’
38

suggesting that all three pillars have to be build up. Meanwhile, each of these pillars deserves
closer inspection insofar as they each contain various specific features.
The Integrative Pillar of Practical Wisdom
The first pillar of practical wisdom embraces the integrative dimension. As the most repre-
sented area in each section of the analysis, the integrative pillar consists of six features and in-
cludes all sorts of deliberation, passing judgment, balancing, and integration directed at action
and practice.
First and foremost, the integrative pillar of practical wisdom implicates a feature providing
recommendations towards action. Practical wisdom is never geared only towards intellectual
recognition but it always targets, from the outset, realization in practice. This practically orien-
tated feature is not only discernible in the term ‘practical wisdom’ itself. It also crops up in Aris-
totle’s intellectual virtue prescribing how to contemplate variable things (Aristotle), it reappears
in the Christian moral-theological description of practical wisdom as ‘foremost of the virtues’
guiding the others towards action (Occidental moral philosophy), it can be found in Flyvberg’s
call for a pragmatic paradigm within his phronetic social sciences (Flyvberg, 2001), pervades the
adaption by Nonaka and colleagues for their pragmatic strategy approach (Nonaka & Zhu, 2012)
and is also visible in Cooper’s recent attempt to propose the Aristotelian wisdom as a concrete
way of life (Cooper, 2012). Apparently, practical wisdom implies the competency to transform
every manifestation of knowledge, belief, and decision into action.
The second feature closely related to the above concerns a fundamental link to reality, mainly
to a particular situation. In this sense, practical wisdom is seen as dependent on the context
39

(Flyvberg, 2001) and is described as the total insight into a matter or situation through under-
standing cause and effect phenomena (Islamic traditions). Moreover, the reality-related feature
leads to deliberative judgment on any given situation and to the ability to choose the right means
(Aristotle), as well as to the capacity to transcend a unitary way of thinking (Alford, 2010; Clark,
2010; Colas & Languecir, 2012; Nonaka & Zhu, 2012). Finally, it rejects ‘one size fits all’ solu-
tions (McDonald 2012:642-643; Pruzan & Pruzan Mikkelsen 2007, Statler et al., 2007, Cornuel
et al., 2010). In this sense, practical wisdom requires the competency to open-mindedly receive
and understand the complex reality in its multi-layered facets.
The third feature of the integrative pillar of practical wisdom establishes a strong link with
the indispensable sociality of every human being. This characteristic of practical wisdom is suc-
cinctly described by Sternberg in his Balance Theory of Wisdom as the necessity to coordinate
one’s own interest with other people’s interests and those of lager entities such as family, com-
munity, or society. Montaigne who flourished in the 16th century tackles the issue as well, defin-
ing practical wisdom as a life lived in accordance with nature, self-knowledge, and knowledge of
the world. Finally, some of today’s management scientists have taken over this feature by intro-
ducing social benevolence into business practice in the form of compassionate management,
servant leadership, and steward leaders (Mostovicz & Kakabadse, 2012; Opdebeeck & Habisch,
2011). Consequently, practical wisdom includes social competencies.
The fourth feature concerns the central aspect of establishing a balance between divergent
poles. The tensions between “poles” are manifold and concern mainly mind and character (cf.
intercultural implicit theories of wisdom), economic and ethical elements (Ip, 2011; Melé, 2010),
cognitive and emotional elements (Taoist philosophy), affective, reflective, and cognitive dimen-
sions (implicit theories of wisdom), moral imagination, system understanding, and sensibility
40

towards aesthetics (Waddock, 2010; Waddock, 2014), individuality and personality (Alford,
2010), and integrative and prescriptive knowledge (e.g. Bai & Roberts, 2011; Beekun, 2012;
Ben-Hur & Jonsen, 2012; Cheng, 2011; Gottlieb, 2012; Grassl, 2010;Khan & Sheikh, 2012;
McDonald, 2012; Molteni & Pedrini, 2010; Zheng et al., 2011). In this sense, practical wisdom
requires the competency to balance different types of tensions and divergent poles in practice.
The fifth feature of the integrative pillar of practical wisdom implies a pluralistic dimension
the importance of which has increased since the emergence of modern and globalized societies.
While, at the times of Aristotle and Thomas Aquinas, there was no great difference in the way in
which the world was viewed and the fundamental questions of life were considered, today we are
faced with highly diverse, sometimes even controversial cultures, religions, beliefs, attitudes etc.
In this sense, different worldviews and beliefs (Habisch & Loza Adaui, 2010; Lenssen et al.,
2012), the diversity of ultimate ends in a post-enlightenment context (Ellett, 2012), and different
conception of leadership and cultural values (Bai & Roberts, 2011; Ben-Hur & Jonsen, 2012:
968-69; Thompson, 2011) have to be taken into account. Therefore, practical wisdom requires
the competency to deal with a broad diversity perceptible in different parts of life and society.
The sixth feature, finally, underlies the importance of knowing the limitations imposed on the
human being and of acting sensibly in general as well as particular situations. Already Socrates’
and Plato’s understanding of wisdom includes the awareness of one’s own intellectual limita-
tions. In management practice, this awareness is reflected by being reluctant to become a leader
under certain circumstances (Ben-Hur & Jonsen, 2012) or by retiring at the right moment
(Cheng, 2011). Thus, practical wisdom includes the competency to be aware of one’s own limi-
tations, which leads to being wisely cautious and circumspect should the situation require it.
41

The Normative Pillar of Practical Wisdom
The normative pillar of practical wisdom consists of two features and includes all sorts of
knowledge about or orientation towards a normative guidance concerning the full life and what
comes beyond. Thus it is fair to say that practical wisdom pairs with excellence in character.
The first feature of the normative pillar of practical wisdom refers to the metaphysical realm.
Addressing different types of Weltanschauung, it tackles the question of what ultimately drives
someone’s actions. Socrates and Plato approached this question by interpreting wisdom as know-
ing the rightness of a given action under all circumstances and within any contextual framework.
Aristotle and in his wake Aquinas identified practical wisdom with moral virtue driving us to do
what is good, because it is good. According to the psychological studies based on lay concep-
tions of wisdom, one should adhere to and be guided by moral principles or religious values in
order to act wisely. And recent research in management studies outlines the necessity of a moral
foundation of innovative and effective strategies to be introduced to the organizational level
(Nonaka & Zhu, 2012). The same holds true of individual dreams and visions for wise leadership
(Ben-Hur & Jonsen, 2012, Gibson, 2008; Gottlieb, 2012). According to the metaphysical feature,
practical wisdom needs the competency of a motivational driver in order to understand and in-
corporate moral and visionary guidance into one’s actions.
The second feature of the normative pillar of practical wisdom concerns attributes related to
personality that are guiding someone’s behavior. In this sense, it raises the question of how one
should behave. Referring to a dualistic world view, ancient Western philosophers like Socrates
and Plato as well as early Christian thinkers like Aquinas adopted the position that the principle
of self-control and the ability to subordinate passion and desire to the authority of reason is es-
42

sential to wise behaviour. Nor has self-discipline today lost its relevance when it comes to acting
in a practically wise manner. To the contrary, being able to control one’s own desires and to lib-
erate leadership from showmanship is seen as a central challenge in managerial wise behaviour
(Van den Muyzenberg, forthcoming). Finally, some authors suggest that practical wisdom de-
pends on the ability to not only identify the right goals, but also convince others that these goals
are correct and desirable (Cheng, 2011; Nonaka & Toyama, 2007). Practical wisdom, therefore,
requires the competency to behave authentically in order to aspire after right, credible, and in-
spiring goals.
The Cultural Heritage Pillar of Practical Wisdom
The third pillar of practical wisdom is about every kind of cultural heritage that is transmitted
from generation to generation through various kinds of traditions. Roughly speaking, it consists
of two specific features.
The first feature connects practical wisdom with the sort of knowledge, experience, belief,
and good example that has been accumulated within the different cultures and been transmitted
for centuries. Such wisdom has been established in nearly all old and ancient cultures (as can be
seen in the Hebraic, Greek, Egyptian, Sumerian, Patristic, Hindu, Buddhist, and Islamic tradi-
tions) and has recently been rediscovered by many management scholars (e.g. Malloch, 2010;
Pruzan & Pruzan Mikkelsen, 2007; ABIS-Yale Initiative). Within this branch of research, multi-
ple ways were established of how to make use of the cultural heritage. In this sense, practical
wisdom is regarded (a) as the capacity to involve one’s own tradition and culture in decision
making processes (Bai & Roberts, 2011; Ben-Hur & Jonsen, 2012; Brinkmann & O’Brien, 2010;
43

Gerstner, 2011; Ip, 2011; Vemander, 2011; Zheng et al., 2011), (b) as an approach to enrich cor-
porate culture by integrating cultural and religious values (Almog-Bareket & Kletz, 2012; Kay,
2012; Tredget, 2010), (c) as the driving force behind innovative and entrepreneurial thinking by
implementing religious ethos in organizations (Kahane 2012), (d) as a holistic approach in train-
ing and development programs that aim at reaching congruence between theoretical values and
practical behavior (Fontaine et al., 2012; Hassi, 2012). Simultaneously, traditional and cultural
heritage – having emerged and consolidated in highly different contexts ages ago – has to be
adapted, through reflective attention, to modern-day experiences (Ben-Hur & Jonsen, 2012; Gib-
son, 2008; Hoebeke, 2010). Therefore, practical wisdom requires the competency of reintegrat-
ing openness towards cultural heritage with the ability to adapt it to a new context.
The second feature of the cultural heritage pillar emphasizes the divine character of wisdom.
Many of the old traditions exhibit a double meaning: on the one hand, they illustrate the remark-
able excellence of wisdom which should always be aimed at by humans but is hard to attain; on
the other hand, they show an understanding of wisdom as a divine gift rather than a human
achievement. In this sense, practical wisdom includes the competency of being humble even in
the face of one’s own achievements, one’s knowledge, and capabilities while keeping in mind
the limitations set to us as human beings.
OPERATIONALIZATION OF PRACTICAL WISDOM IN BUSINESS SCHOOLS
Our interest in understanding and conceptualizing practical wisdom was aroused by a Ger-
man-Arab research project launched in March 2013 in order to investigate, within an intercultur-
al setting, the nature and development of practical wisdom and, last but not least, how to imple-
44

ment it into management education. As a way to tackle these issues, we have come up with sev-
eral events, initiatives, and experiments. At almost every opportunity, however, the discussion
emerged of whether “practical wisdom can be taught”. This echoes the fact that – although re-
surgent attention has been paid to the concept of practical wisdom by the economic community
in academia – little guidance is given on how universities or business schools might implement
this concept into their curricula or educational offerings. To remedy these shortcomings, we at-
tempt to illustrate how our three-pillar model of practical wisdom fits into a holistic approach of
management education and how it contributes to a renewal of leadership alignment. For that, we
also incorporate some experiences made in the context of our project. Due to the limited space,
however, this attempt remains tentative. We want to highlight exemplarily the educational means
by which practical wisdom can be induced and to provide inspiration and suggestions for further
research and practice in this field.
In this way, we seek to provide an answer to the above criticism directed at business schools.
We refer to the three main categories developed above asking how each pillar of practical wis-
dom can contribute to an improvement and a redesign of management education in business
schools.
Practical Wisdom versus an Inadequate Intrasystem Logic in Business Schools
As was summarized above, many scholars have suggested that today’s business schools con-
struct and impart an intrasystem logic which has been shown to be inadequate or even damaging
to society. It was said that their general way of thinking is one-dimensional, i.e. pecuniary and
short-term oriented, that their normative orientation can damage not only the character of the
45

graduates but also the society as a whole, and that their guiding principles are based on unrealis-
tic and reductionist assumptions. In contrast, applying the integrative pillar of practical wisdom
to business schools’ intrasystem logic means that a pluralistic way of thinking is being intro-
duced in order to bring to light the many facets of reality. This requires considering principles
that go beyond rational maximization towards those ultimate goals worthy to live for (Giacalone,
2004); this includes reflecting on questions beyond the mathematical calculus of ‘more’ and
‘less’ towards multifarious considerations on ‘better’ and ‘worse’ (Dierksmeier, 2011); and this
implies a shift from an instrumental rationality towards a phronetic rationality that takes into ac-
count the complexity of a global world (Flyvberg, 2001) and extends responsibility to issues that
are of concern to society (Muff, 2013). This can be expressed via principles and guidelines open-
ly communicated on homepages or in brochures, via normative directives imparted by teaching,
and via role models, i.e. seeing the way members of university staff live. More concretely, the
conception of a business school itself could be extended to mean not only a one-dimensional
teaching-learning situation but also an opportunity to guide the development of personalities with
a multiple set of learning offerings such as student initiatives, public discussions, exhibitions,
concerts, sports events, and much more.
According to the normative pillar of practical wisdom we suggest that the ‘motivational
drive’ represented in business schools should not be reduced to becoming a business case as suc-
cessful as possible, to maximizing the number of high ranking journal publications, or to pump-
ing out the best-paid graduates. Rather, business teachers should be guided by the desire to edu-
cate well-prepared managers and to support the students’ personal development. On the other
side, business schools should enable their students to reflect on their own moral standing, their
46

dreams, and their visions to foster not only excellence in knowledge but also in character (Cros-
san et al., 2013; Khurana, 2007).
The cultural heritage pillar suggests to not exclude traditional and religious wisdom from
business schools’ curricula. To the contrary, scholars should be aware of their own cultural herit-
age including the embodied wisdom traditions. Reflecting on underlying assumptions of man-
agement “may help towards the construction of a more solid foundation for management theory
and practice“(Alford, 2010: 698). On the other side, they should avoid the suggestion that per-
sonal beliefs and values are unprofessional and relevant in private settings only but should rather
make sure that people can discuss and live out their different cultures and religions.
Regarding the macro-design of business schools, practical wisdom requires normative direc-
tives and guiding principles taking into account the complexity of modern societies and the many
features of human reality, providing moral guidance to their students, and meeting their own so-
cial responsibility.
Practical Wisdom versus an Inappropriate or Insufficient Teaching Content
The inadequate intrasystem logic of business schools, however, also corresponds to a toolbox
taught to the students that has been perceived as inappropriate or insufficient. It has often been
remarked that, by focusing mainly on analytic and mathematical models and technique-based
methods and by reducing or rejecting any reference to social, cultural, moral, and metaphysical
thinking, management education often fails to properly prepare the students for the multifaceted
reality with which they will be confronted.
47

According to the integrative pillar, however, technical knowledge or analytical remain neces-
sary tools in the search for practical wisdom. At the same time, however, practically wise educa-
tion underlines the necessity of complementary competencies that enable business students to
handle concrete situations and challenges within the context of a global and intercultural busi-
ness world. Due to the complexity and unpredictability of how individuals, communities, and
societies will behave, methods and strategies are required that go beyond rather mechanical or
computational techniques following a blueprint or a checklist to bring about success (e.g. Grassl,
2010: 710; Intezari & Pauleen, 2013: 157; McDonald, 2012: 642-643; Nonaka & Zhu, 2012;
Waddock & Lozano, 2013: 281). Therefore, introducing practical wisdom is not a case of either-
or. In contrast, it suggests a highly diverse set of competencies and methods equally referring to
theoretical and interpersonal skills, analytical and phronetical methods, mathematical calcula-
tions and social concerns. Therefore, to foster a balancing competence should be a central ele-
ment of business schools’ curricula (Euler & Seufert, 2011; Intezari & Pauleen, 2013: 158-164;
Roca, 2008: 613-615). Moreover, the contemporary or future changes of global society have the
former dichotomy between the private and the public sector become blurred and requires educa-
tional contents which provide a realistic scenario for future business decisions including situa-
tions of public-private dialogues and social responsibilities (Escudero, 2011; Muff, 2013). Final-
ly, business schools’ teaching should aim at raising the awareness of the limits of one’s own
knowledge and capabilities (Intezari & Pauleen 2013. 161) as well as the competency which
leads to being wisely cautious and circumspect (Ben-Hur & Jonsen, 2012; Cheng, 2011).
Regarding the normative pillar of practical wisdom questions such as “What can guide and
drive modern managers and leaders in day-to-day business?” should be incorporated into man-
agement programs. Moreover, assistance should be provided of how to find and deal with dreams
48

and values not only in private settings but also in today’s business world. "In other words, mana-
gerial decision-makers have to consider both efficiency and ethics, not as an extrinsic judgment
but as inherent aspects of the action“ (Melé, 2010: 642-3). In terms of the normative pillar, prac-
tically wise tools and skills transcend those that make it possible to act in a clever and successful
way: A mafia boss can be as effective and smart but not as practically wise as Mother Theresa
(Baltes & Kunzmann, 2003: 133; Kaipa & Radjou, 2013).
The cultural heritage pillar then emphasises the need to rely on traditional wisdom and expe-
rience accumulated over the centuries and transmitted from generation to generation. "[W]e can-
not continue ignoring resources from the world's religions if they can help us come up with the
best answers of which we are capable“ (Alford, 2010: 704). Therefore, business school programs
should also promote sensitivity for foreign cultures, norms, and behavior (Datar et al., 2010: 8;
327).
To sum up, practically wise leaders “are not the classroom's or the boardroom's masters of
logismus, but self-possessed individuals, possessed of humanity, principles, vision and the craft
to make them real“ (Jeannot, 2007: 35). On the meso-level, the idea of implementing practical
wisdom into business schools consists of providing management education improving both mor-
al and analytical skills, tools, and content.
Practical Wisdom versus Unfitting Educational Environment and Methods
Finally, as we have seen, critics of management education collectively argue that business
schools at the moment are doing a poor job regarding the educational environment and their
teaching methods. Following the reductionist logic revealed above, business schools make use
49

mainly of one-dimensional teaching strategies and techniques. Those are preliminary focusing on
the preparation towards a successful business career, higher salaries, and financial achievement.
Therefore, we want to suggest as our last point some pedagogies and learning approaches which
could contribute to impart practical wisdom into the micro-design of business schools. The pro-
posed elements of practical wisdom oriented teaching strategies, taken in isolation, are neither
unique nor new, some of them already put into practice somewhere. However, we are convinced
that these elements used in combination can facilitate implementing the concept of practical wis-
dom.
Bringing the Integrative Pillar of Practical Wisdom into Business Schools’ Micro-Design
As shown above, the integrative pillar of practical wisdom embraces six features that require
particular competencies which can be promoted in many different ways. First and foremost, to
act in a practically wise manner implies the competency to transform every manifestation of
knowledge, belief, and decision into action. As a way to integrate this feature of practical wis-
dom into business programs we propose to draw on classical action learning approaches. There-
by, provided knowledge will be applied to a real problem scenario by a group in order to find a
solution that guides to action. The whole process is promoted and facilitated by a supervisor (Da-
tar et al., 2010: 331; Eulert & Seufert, 2011: 222; Reynolds & Vince 2004). Other scholars pro-
pose to introduce practice and fieldwork such as internships and project work to link manage-
ment education closely to action (Mintzberg & Gosling, 2002: 64; Muff, 2013: 499-50). Most
recently, Wittmer (2013) explored a way to foster practical wisdom skills by adapting a flight
simulator program for business ethics education. In this way, he attempts to “simulate decision-
50

making situations by providing experimental situations that allow students to practice applying
decision-making skills” (p. 175; see also: Colby, Ehrlich, Sullivan & Dolle, 2011: 99-102). With-
in the context of our own project, we enable MA business students to get in touch with family-
owned companies or entrepreneurs who are willing to share their knowledge and their experi-
ence. In this way, the students experience business not only in the classroom but also in reality.
However, simply introducing field work or practical experience is not sufficient to promote
students’ understanding of complex business processes as required by the second feature of the
integrative pillar of practical wisdom (Colby et al., 2011: 94; Muff, 2013: 292). Therefore,
scholars emphasize the need to support reflection skills as a way that leads to deliberative judg-
ments in complex situations as well as to the capacity to transcend a unitary way of thinking (Eu-
lert & Seufert, 2011: 223; Kinsella & Pitman, 2013: 169). Dialogues and discussions have been
proposed as effective techniques for facilitating reflective thinking (Murphy, Sharma & Moon,
2012: 321). Additionally, Bennis and O’Tool (2005) recommend to draw “on works of imagina-
tive literature to exemplify and explain the behavior of people in business organizations in a way
that [is] richer and more realistic than any journal article or textbook” (p.104). Moreover, issue
centered learning – a teaching strategy that focus on issues rather than on subjects and therefore
requires multidisciplinary, systemic approaches – can bring back the complex reality into the
classroom. Recently, Muff and her management education initiative “Vision 50 + 20” established
this way of learning as the so called “collaborator” method where students, educators, and re-
searchers personally get in touch with all facets of society to discuss current dilemmas (Muff,
2013: 493-4; Muff et al., 2013).
The social feature of the integrative pillar of practical wisdom requires the competency of be-
ing aware of society and stakeholder interests, values, and beliefs. This can be raised via audio-
51

visual media, field trips, or group discussions as well as via the incorporation of social engage-
ment in the students' curricula.
In order to foster the competency to balance different types of tensions and divergent poles,
students can be involved in multifaceted judgment situations and encouraged to consider all rele-
vant aspects (Intezari & Pauleen, 2013: 168). This can be realized via teaching interventions such
as role-plays, collaborative learning techniques, service-learning opportunities, and self-
reflection exercises (Crossan et al., 2013: 290; Waddock & Lozano, 2013: 267-8).
The pluralistic dimension of practical wisdom can be realized by taking a cross-cultural ap-
proach, for example via invitations of guest lecturers from other cultures. Additionally, students
can be encouraged to tackle complex issues from various perspectives. Then, they are asked to
evaluate the diverse solutions based on different cultures, beliefs, and traditions as well as on in-
dividual and communal interests (Intezari & Pauleen, 2013: 168). In the context of our own re-
search project, we successfully established field trips for MA business students to Germany or to
an Arab country. In this way we enable personal contact not only to the students of a foreign cul-
ture but also to local companies, organizations, and political agents.
Finally, in order to promote the competency to be aware of one’s own limitations, which may
lead to being wisely cautious and circumspect should the situation require it, case studies that
represent business failures due to hubris or exorbitance can be used (Malloch, 2013).
As we have seen, integrative capacities ”are more difficult to teach than most disciplinary
topics because instructors need to take different and more engaged roles than in typical lecture-
case approaches“ (Waddock & Lozano, 2013: 267). Therefore, the business lecturers’ conception
of themselves as conveyors of knowledge has to shift towards an understanding as facilitators of
learning processes.
52

Bringing the Normative Pillar of Practical Wisdom into Business Schools’ Micro-Design
According to the normative pillar, practical wisdom needs the competency of an intrinsic mo-
tivational drive in order to understand and incorporate moral and visionary guidance into one’s
actions. In this sense, one can say that “a switch in emphasis toward the moral purpose of the
work, rather than on ethics of practice as simply representing compliance with codes of proper
conduct” is being asked for (Kinsella & Pitman, 2013: 168). It is the task of the educator to de-
scribe the virtues that the recipients should emulate (Malloch, 2010: 758). Additionally, other
authors call for a transformative learning approach that develops not only the mind but also the
heart and the soul (Muff, 2013: 491; Waddock & Lozano, 2013: 267).
In order to support the students’ competency to behave authentically aspiring to appropriate,
credible, and inspiring goals, the responsibility of the lecturers has to be broadened, to act not
only as collectors of facts or transmitters of knowledge but also as role models that behave in an
authentically ethical way themselves.
Bringing the Cultural Heritage Pillar of Practical Wisdom into Business Schools’ Micro-
Desgin
Already Aristotle stated that practical wisdom is gained from experience (NE 1142a12-15).
And it is obvious that practical wisdom is effectively learned through transmitted experience
(Jeannot, 2007: 16; Kinsella & Pitman, 2013: 169). To enable the students to participate in this
wisdom accumulated by experience, the power of stories and narratives can be provided via au-
53

diovisual media as well as real-life settings (Eulert & Seufert, 2013: 223; Roca, 2007: 616). Fol-
lowing along these lines, our project approaches, in many different formats and intercultural set-
tings, and in collaboration with students, lecturers, and practitioners, the question of how tradi-
tional virtues and directives can be applied to particular situations of today’s global economy as
well as whether this centuries-old wisdom can (still) contribute to take on modern challenges.
CONCLUSION
As a point of departure of our paper we dealt with the issue ‘Why should the question of
practical wisdom be asked in business schools?’. Our objective herein was to argue for a holistic
approach to a renewal of management education that tackles the multifaceted failures of business
schools to educate well-prepared managers – a deficit that was pointed out by a wide branch of
articles and books over the last decades.
However, among the numerous voices that criticize the mainstream business school model
and demand a renewal of management education one can observe a broad diversity of approach-
es and attempts depending on the respective research focus or interest. Therefore, the paper ini-
tially provides a systematic overview of the criticism of business schools and outlines the main
aspects within the international discourse in secondary literature. This way, we concluded that
the still on-going process of coming to terms with it is primarily focused on three categories:
First of all, business schools construct and impart an intrasystem logic which has been shown to
be inadequate or even society damaging; secondly, business schools are offering an inappropriate
or, at least, insufficient toolbox to their students; thirdly, business schools have been accused of
doing a poor job regarding the educational environment and the methods employed by them.
54

This state of affairs has triggered several attempts to explore how a reorientation of manage-
ment education could be conceptualized. Along these lines, resurgent attention has been paid to
the ancient topos of practical wisdom and its implications. We are also convinced that the con-
cept of practical wisdom has much potential to improve business schools’ performance. Never-
theless, these attempts have remained either on a rather explorative-descriptive level using a
vague and more general conception of practical wisdom or were focused on a very specific as-
pect while lacking a well-reasoned philosophical base. Therefore, as a second step this paper
provides an analysis of the concept of practical wisdom, which traverses the relevant disciplines
and looks behind the disciplinary borders. By asking what other disciplines, which have already
developed or adapted the idea of practical wisdom, might contribute to an holistic approach of
management education we are looking from a philosophical, a theological, a psychological, and a
managerial perspective on the topic ‘practical wisdom’. Every part of this analysis concludes
with a summarizing evaluation that outlines the identified core issues of practical wisdom in an
overview table.
Thirdly, we attempt to apply our collection of data – consisting of the core issues of practical
wisdom spanning several disciplines – in a path-setting mode that suggests a new approach to a
holistic renewal of management education. After having spread out on the table all core issues
we have been able to identify in each of the disciplinary analysis segments above, we have
looked for interdisciplinary connections, similarities, or clusters. This way, we spotted three
main areas to which the core issues of practical wisdom can be assigned and from which we de-
rived our three-pillar model of practical wisdom. In this model, the first pillar represents the in-
tegrative dimension and includes deliberation, the passing of judgment, balancing, and integra-
tion directed at action and practice. The second pillar is concerned with the normative dimension
55

and includes all sorts of knowing about or orientation towards a normative guidance concerning
the full life and what comes beyond. The third pillar signifies the dimension that consists in the
cultural heritage that is being transmitted from generation to generation through various kinds of
traditions. These pillars, however, are intertwined in various ways and contain further specific
features which cannot be explored in detail here.
Finally, the paper illustrates how the three-pillar model of practical wisdom fits into a holistic
approach of management education and how exactly it contributes to a renewal of leadership
alignment. In order to do that, we referred to the three categories of business school criticism
discussed above and proposed ideas, methods, and strategies for tackling it. Thereby, we also
incorporate some experiences forged and tested in the context of our international research pro-
ject.
Due to the limited space, however, this attempt remains tentative. We want to highlight ex-
emplarily the educational means by which practical wisdom can be induced and to provide inspi-
ration and suggestions for further research and practice in this field.
Which role does practical wisdom play within the context of educating a new generation of
managers in economics? We consider this to be a question of utmost importance, not only for the
business schools themselves, but also for society as a whole. In this sense, this paper is written as
an invitation to contribute to putting the path of practical wisdom in research and practice for-
ward.
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HUMANISTIC MANAGEMENT NETWORK

RESEARCH PAPER NO. 2460665

Why the Question of Practical Wisdom

Towards a Holistic Approach to a Renewal of Management Education

Cristian R. Loza Adaui

Holistic Approach to a Renewal of Management Education

inadequate intra-system logic, an insufficient toolbox, and unfitting educational environments

wisdom’. Therefore, we conduct a cross-disciplinary analysis of the concept considering on phil-

osophical, theological, psychological, and managerial perspectives. Based on this, we propose a

ness schools and in management education programs.

Keywords: Practical wisdom, management development, management education, managerial

MAPPING BUSINESS SCHOOL CRITICISM

the international literature discourse irrespective of whether the argumentation is structured in a

First Category of Criticism: Inadequate and Damaging Intrasystem Logic

Electronic copy available at: https://ssrn.com/abstract=2460665

(technical) calculus of ‘more’ over ‘less’” (Dierksmeier, 2011: 21).

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Therefore, management scholars demand a multidisciplinary mind-set and systems thinking in

Second Category of Criticism: Inappropriate or Insufficient Teaching Content

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ic The Pretence of Knowledge harshly criticizing economists’ “propensity to imitate as closely as

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the long run (e.g. Frey & Jegen, 2001).

than about practice-oriented management tools and skills.

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of economics and – subsequently – in an inadequate management of economic reality. In this

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“reflective executives” (Euler & Seufert, 2011: 214).

Third Category of Criticism: Unfitting Educational Environment and Methods

revealed above, management programs do not have a multidisciplinary but a one-dimensional

Conclusively, many business professors’ conception of themselves as transmitters of knowledge

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(Waddock & Lozano, 2013: 267).

Mapping Business School Criticism

the very diverse business school critiques (cf. figure 1):

Figure 1. Mapping Business School Criticism

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pendencies between these levels.

PRACTICAL WISDOM – A CROSS-DISCIPLINARY ANALYSIS

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contribute to an holistic approach of management education we are looking from a philosophical,

a theological, a psychological, and a managerial perspective on the topic ‘practical wisdom’.

identified core issues of practical wisdom in an overview table.

Practical Wisdom from a Philosophical Perspective

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linking wise human behavior to a Divine order (Assmann, 1994).

systematically reflecting on the nature of wisdom by distinguishing it clearly from ‘knowledge’

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the awareness of one’s own intellectual limitations.

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character to define the right ends.

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Electronic copy available at: https://ssrn.com/abstract=2460665

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able to identify from a philosophical perspective:

Table 1. Practical Wisdom from a Philosophical Perspective

Source / Author / Refer-

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Practical Wisdom From a Theological Perspective

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through understanding cause and effect phenomena” (Burhan, 2014).

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Electronic copy available at: https://ssrn.com/abstract=2460665