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Received: 1 October 2020 | Accepted: 1 October 2020

DOI: 10.1111/beer.12321

SPECIAL ISSUE

Practicing management wisely

Matthias P. Hühn1 | André Habisch2 | Edwin M. Hartman3 | Alejo José G. Sison4


1
Alex G. McKenna School of Business, Economics and Government, Saint Vincent College, Latrobe, PA, USA
2
Business and Economic Department, Catholic University Eichstaett-Ingolstadt, Ingolstadt, Germany
3
NYU Stern School of Business, New York, NY, USA
4
School of Economics and Business Administration, University of Navarre, Pamplona, Spain

Correspondence: Matthias P. Hühn, Saint Vincent College, 300 Fraser Purchase Road, Latrobe, PA 15650-2667, USA.
Email: matthias.huehn@stvincent.edu

The main goal of this special issue in Business Ethics: A European and rationality specifically. We do not see them as precisely defin-
Review is to show how practical wisdom research can further, and able, or as explaining behavior by reference to “covering” causal laws
indeed has furthered, the theory and practice of management. (Hartman, 2013, p. 16).
Although the papers in this special issue employ different methodol- Management as a concept has been diluted to comprise all sorts
ogies and have different foci, there seems to be a common theme of of phenomena: engineering knows engine management, biologists
going “back to the roots,” that is, an interest in the original meaning say that membranes manage borders and in the business literature
of practical wisdom. Practical wisdom (phronesis) is one of the cen- the term has essentially also lost its contours. This special issue
tral concepts of the oldest of the three most widely taught ethics returns to the original ideas and conceptualizes management as a
theories, virtue ethics. However, similar concepts can be found in purposeful human activity in an organizational setting. In that re-
other philosophical traditions (Bachmann et al., 2018). In Aristotelian spect, management became distinct from business administration
virtue ethics, a person who has phronesis is an embodiment of the when Mayo (1933/2004) argued that relative group efficiency de-
12 original virtues that are needed to flourish or, put differently, to pends on three factors: (a) the feeling among members of the or-
have a genuinely good life. Reaching the state of being a phronimos is ganization of being in control, (b) that organization members feel
only possible through reflective action; wisdom is practical because that they are part of a group, and (c) the perception that manage-
it is the result of an individual practicing/learning how to be wise. It ment favors these two factors. While business administration sees
is also practical because being virtuous does not merely imply know- the organization as an open system with one-dimensional homines
ing what is ethical—but also requires the ability to practice the virtue oeconomici (Hartman, 2015) that must be manipulated to achieve ef-
(Meyer & Hühn, 2020). Thus, wisdom is created individually through ficiency, management acknowledges that the organization consists
habitual action—a widely shared core tenet of management theory. of free, learning, feeling individuals whose creative power must be
As such, it is not too big a leap of faith to assume that conducting harnessed in order to have effective organizations (Hühn, 2008).
one's own affairs well is a precondition to having a good effect on In other words, humans, as individuals, have creative resources.
other people's affairs as well. Management thus implies a certain view of humanity and an un-
It should therefore not come as a surprise that early management derstanding that knowledge is created constantly, and that good
theory already made use of virtue ethics theory. Fayol (1918/1949), scholarship begins with careful observation. And yet, driven by the
arguably the first management scholar, saw good management as same anti-ethical and anti-philosophical forces as its sister science
the proportionate application of principles through constantly re- economics, mainstream management was merged with business ad-
flected experience with the common good in mind. He remarks (19): ministration (Hartman, 2015; Hühn, 2008, 2015) and adopted the
“Seldom do we have to apply the same principle twice in identical engineering approach put forward by Frederick Taylor: technical
conditions; allowance must be made for different changing circum- efficiency rather than human flourishing and creativity became the
stances, for men just as different and changing and for many other focus of business theory; systems and rules replaced the wise indi-
variable elements.” Especially when considering “principles” such vidual; knowing and predicting replaced questioning and learning.
as discipline, subordination of individual interest, equity, esprit de Yet, albeit often outside the mainstream, practical wisdom
corps, and others, one can see that they are based on something was kept alive as a theme by some of the most important manage-
much like Aristotle's notion of character, which involves freedom ment scholars. Drucker (1954), like Fayol, stressed that managing

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2 | HÜHN et al.

is a practice aimed at effectiveness and that systems are only as MacIntyre. On the contrary, scholarship on phronesis done between
good as the individuals that make them real (Drucker 1967). Henry Aristotle and Nonaka seems to have been largely ignored as Aquinas
Mintzberg's enormous opus is difficult to summarize, but it is the- and Anscombe get only four and nine mentions, respectively, and
matically centered around “wisdom and respect” (2009); moreover, Kant's Critique of Practical Reason is completely ignored. Ames et al.
it constantly stresses that management is a practice that must be also organize research into micro, meso, and macro levels and in-
driven by reflection in order to be effective and wise: “[r]eflecting clude methodology (theoretical vs. empirical) as a second dimension.
goes beyond sheer intelligence, to a deeper wisdom that enables They offer a matrix that shows little theoretical and no empirical re-
managers to see insightfully” Mintzberg, 2009, p. 209). In a similar search at the macro level. Filling this research gap will be challenging,
vein, Pfeffer (2018) wants well-being to be the focus of management at least for empiricists. The contributions in this special issue also
theory. In addition to these major scholars, more recent, albeit scat- mostly take a classical perspective—Aristotelian or MacIntyrean—
tered, management scholarship also makes use of practical wisdom. but they attend to the meso and macro levels of analysis.
Bachmann et al. (2018) found examples of scholars using practical Garrett Potts, in the second paper of this special issue, is one
wisdom in most areas of management. Some of that scholarship is of the scholars who base their ideas on Alasdair MacIntyre's con-
within an Aristotelian framework, while other authors draw on dif- tribution to our understanding of phronesis, and he explores a rich
ferent intellectual traditions. seam: its potential for developing a professional managerial ethic.
Virtue ethics has experienced a comeback in moral philosophy Apart from calls by major figures like Harvard deans Rakesh Khurana
since G.E.M. Anscombe (1958) criticized modern moral philosophy and Nitin Nohria to create "a rigorous code of ethics" (Khurana &
for having a conversation about values without any clear notion of Nohria, 2008, p. 70) for management, nothing much has happened
what values are. It took a while for this increased interest in vir- along those lines. Potts suggests that this is because positive social
tue ethics to reach first business ethics, and then the management scientists that have used the concept have gone about it the wrong
mainstream. Today, however, it is a vibrant research stream in busi- way. Potts uses what has been called the "Anscombe Argument"
ness ethics and a topic that is attracting interest in management, as (Hühn, 2018, p. 284): positive social science prioritizes the empirical
Ignacio Ferrero and Sison (2014) have shown. over values and is thus caught in a Catch-22 sort of argument. He
The first paper in this special issue connects with Ferrero and suggests that we switch to an entirely different mode of inquiry: “[a]
Sison's research and maps the treatment of practical wisdom in MacIntyrean narrative approach [that] can investigate the extent to
the management-related literature. Maria Clara Ames, Maurizio which managers support (a) good work, (b) good individual lives, and
Serafim and Marcello Zappellini add to our knowledge about the (c) the common good of particular communities. In these respects a
role of practical wisdom in business by focusing on journal arti- MacIntyrean narrative approach can gauge how managers act po-
cles and book chapters that specifically use the term phronesis, litically to ‘shepherd’ the institution in its social context.” At least
in contrast to the more general meta-studies on virtue ethics in a Western perspective, that social context is the neo-Aristotelian
and practical wisdom by Ferrero and Sison (2014) and Bachmann polis (not the city, but the organizational level below it). In that sense,
et al. (2018). This narrower focus gives us an understanding of how the dictum that "the polis is the cradle of virtue" (Hartman, 2013, p.
Aristotelian ideas have concretely impacted business theory. The 40) suggests that organizational culture is important. The virtuous
authors discuss phronesis and point out that the basic concept was manager acts for the good of the community––the organization––
already in use before Aristotle and has been "a term translated and must always "subordinate external goods to internal goods.”
over time as providence, prudence, practical wisdom, or practi- (MacIntyre, 2007, p. 217).
cal intelligence.” But they also argue that before phronesis made How does the virtuous manager identify the internal goods that
its debut in the business literature, it also played a role in schol- the organization should pursue? Potts argues that every individual is
arship that is largely antithetical to virtue ethics: they mention embedded in a social context and that this context includes a culture
Heidegger, Gadamer, and Ricoeur. rooted in history: “the virtuous manager's narrative understanding
Ames et al. find that three-quarters of the articles on phronesis of work needs to be deliberated about with fellow workers and it
in the literature are exploratory or non-empirical, and that surpris- needs to draw upon the history that a shared and still-living tradi-
ingly few studies delved into the connection between phronesis and tion passes on.” To be virtuous, a manager need not accept the goals
virtues. The first major theme they identify is that papers either see in her narrow job description, nor must she heroically decide what
phronesis residing within the individual (these approaches usually the goals should be. Rather, what is required is a deliberative and
take a traditional virtue ethical view) or as "a collective capacity to creative practice that is conscious of culture and individuals. This
act collaboratively, an ability in synthesizing knowledge from the view of strategy mirrors James Brian Quinn's (1980) ideas of strat-
context.” Ames et al. count citations with surprising results: "Adding egy-making as a political process and Prahalad and Hamel's (1990)
all citations, the authors that appear the most cited (at least 100 notion of core competencies as the collective learning of an organi-
times) are Aristotle (620), Nonaka (469), MacIntyre (231), Tsoukas zation. Hence, Potts's account seamlessly connects the operational
(149), Gadamer (145), Toyama (143), and Flyvbjerg (121)." The social with the strategic and normative levels in an organization—not a
science perspective—in effect, the collective perspective—seems small feat in an environment that encourages the compartmentaliza-
to be as strong as the classical view represented by Aristotle and tion of organizations.
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HÜHN et al. | 3

At the center of his paper is the MacIntyrean concept of a “call- that the modern paradigm sees an “autonomous self” (AS) and “that
ing”: "when work is viewed as a ‘calling’ managerial intentions are a sharp and unbridgeable dualism or antithesis separates the self's
subjected to ‘disciplined practice’ via a tutoring in the virtues for the cognitive-rationalistic mental aspects from its affective ones.” As a
betterment of the individual lives and communities that their organi- consequence, the AS itself is fragmented and the unity of emotio
zation reaches (Bellah et al., 1996, p. 66)." The concept reunites what and ratio that practical reason presupposes is impossible. The inter-
modern business administration has decoupled: the personal telos personal self (IPS) understands that there are no hard boundaries
(goal, purpose) and professional and organizational goals. As Potts between self and other: “being-related is ontologically core to our
explains, a managers’ calling is viewed as a part of their personal being itself (Alford, 2018, p. 700).”
story, and it is critical to the pursuit of their telos, which leads to their This elevates our responsibility toward both our own and oth-
flourishing. Moreover, managers' pursuit of excellence within ers' growth and happiness. One consequence is that “[f]or IPS, the
their calling contributes to the cultivation of virtues that transcend self is a complicated (integrated) unity beyond what consciousness
their craft and impact their character formation in life more broadly. can scientifically grasp: My person is not the consciousness… of it”
The “deeply held spiritual and ethical connections” of the individual (Mounier, 1936, p. 51)." This differs, they claim, from the Aristotelian
and of the organization come together. Potts's ideas are reflections understanding of phronesis: “IPS's notion of practical wisdom inte-
of Edgar Schein's (2004) seminal contribution to how organizational grates relational/affective aspects of the self into an intelligent use
cultures work and how they are structured. According to Potts, of reason and as a dimension of action.” How would this affect our
phronesis is the “shepherd virtue.” Sheep may safely graze not be- understanding of managing? “[I]nstead of a set of contracts that pro-
cause the manager catches stray sheep and forces them back into motes technocratic, value-neutral and rationalistic management […]
the herd, but because practical wisdom is based on reflection, which IPS offers a theoretical framework to approach management based
depends on self-awareness. Hence, it allows for recognizing and cor- on interpersonal virtues in business, including trust, cooperation,
recting one's own straying. gratitude, forgiveness, and even charity, helping to enrich a common
Another paper focused on the individual-community relationship good theory of the firm.” For leadership, the consequences of mov-
is that of Marta Rocchi, Ignacio Ferrero, Massimiliano Pellegrini, and ing toward the IPS paradigm would be similar to what Rocchi et al.
Elizabeth Reichert. They adopt a Thomist perspective in which they propose, as leadership would not “aim to influence others through
argue that phronesis/prudence is unique among the virtues in that managerial-positional power or compliance” but by “considering the
it is a moral and an intellectual virtue at the same time. This feature firm as a community of work that aims to achieve unity.” Generally,
allows us to apply reason to our natural moral virtues and inject our “practically wise decision-making requires from decision makers
reasoning with morality. Practical wisdom is not only shepherding us deeper engagement with reality and with the identity of all who are
when we stray but rather, points us in the right direction when we involved and directly affected.”
reason about all other virtues. Hereby, the authors remind us that Mai Trinh and Elizabeth Castillo, in the fifth paper of this special
practical wisdom grows from reflected experience. issue, also start from a socially embedded self as the seat of practi-
In the Thomist tradition, phronesis is the most difficult virtue to cal wisdom and propose to view practical wisdom as an algorithm
attain because it is made up of eight sub-virtues. Correspondingly, that allows the self “to maintain fit with the operating environment
the principal goal of Rocchi et al.’s article is to enrich the concept while generating ongoing novelty.” Like Potts, they stress that prac-
of authentic leadership with Thomist ideas. To that end, they ex- tical wisdom includes the ability of the system to question its own
plain the four characteristics of an authentic leader—self-aware- structures and parameters and thereby to connect with the liter-
ness, relational transparency, balanced processing, and internalized ature on management cybernetics (Hühn, 2012). They argue with
moral perspective—in terms of the sub-virtues of practical wisdom. Kohlberg et al. (1983) that practical wisdom is the third and last
“The relationship between the internalized moral perspective and stage of a person's moral development. Moreover, they propose that
self-awareness, relational transparency, and balanced processing is both Western (Aristotle) and Eastern (Confucius, Mencius, Laozi,
mediated by practical wisdom's act of command.” The virtues are Zhuangzi) philosophers “were mainly concerned with describing the
dispositions and moral skills that are the result of a learning process. self-cultivation process of how a person becomes virtuous rather
Consequently, in order to become authentic leaders we must learn than prescribing what is good or right,” and that “practical wisdom
how to habituate the necessary sub-virtues. Correspondingly, we is not only a highly regarded virtue, but also the essence of moral
need a training regimen to acquire practical wisdom and translate behaviors.” For that purpose, the authors identify the many common
it into situations in which these skills make us good leaders. Rocchi ideas and corresponding formulations among Eastern and Western
et al. also point out the most common obstacles to becoming au- virtue ethicists, but also include areas of disagreement. Overall, they
thentic leaders and note that the goal is not the perfect life, but the find four important common threads: man is social; practical wisdom
good life, which differs somewhat from one person to the next. is learned; practical wisdom integrates cognitive, affective, and be-
Germán Scalzo and Kleio Akrivou, in the fourth paper of this spe- havioral aspects; and context, as opposed to rules, matters.
cial issue, have a very ambitious goal: they want to flesh out a moral Trinh and Castillo introduce the reader to Complex Adaptive
psychology for virtue ethics which, they claim, has been left under- Systems (CAS) theory, which is part of closed systems theory and
developed by Aristotle and all who have followed him. They argue has a long tradition in management (Beer, 1966) and social science.
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4 | HÜHN et al.

CAS are complex systems operating in complex environments. by managers. Managers rather face epistemic limits that constrain
Human beings are complex and operate in a complex environment, their ability to deliberate thoroughly to bring about a large menu of
so there is constant flux but also meta-systemic stability. Character diverse and desired outcomes. As a consequence, it is often neces-
is an example on the individual level and culture on the social level of sary to apply rules that artificially limit deliberative processes and
this duality. Individuals who have practical wisdom have a character thus permit managers to make timely decisions. Wolcott argues that
(or a self) that is at once stable and adaptive, even creative. Maturana it “is the market, through the price system, that coordinates action
and Varela (1987) have called this autopoiesis: the ability of a com- despite uncertainty and despite incomplete knowledge.”
plex system to create both, flexible responses and the structure that Trinh and Castillo present a partial counter-argument: markets
creates this flexibility. are not always “out there” to be “discovered” but are created by peo-
Practical wisdom is the algorithm that allows individuals to flour- ple in exchange relationships—something that was also mentioned
ish in complex moral environments, such as multinational organiza- by Adam Smith (Hühn, 2019). But strategic decisions made under
tions. The authors show “that the qualities [of practical wisdom] of uncertainty concerning existing and stable markets could bene-
generativity, emergence, recursion, adaptation, interdependence, fit from standardized logic, as the prescriptive schools in strategy
self-organization, and self-similarity may be global principles that have argued since the 1960s (Mintzberg et al., 2005). Nevertheless,
undergird varying expressions of practical wisdom across cultural Wolcott's second proposition is that the virtue of practical wisdom
contexts, space, and time.” Hence, through practical wisdom we can is still valuable for guiding an ethical life. Transferred to a managerial
dissolve many paradoxes central to life both within and outside or- context, this means that phronesis is better applied to higher-order
ganizations. Virtue ethical perspectives do not suggest that cultural decision making. That is, one should cultivate practical wisdom to
differences should be overcome by imposing rules and homogeniz- guide broader, second-order decisions about one's projects, educa-
ing outcomes, as this stifles creativity and individual flourishing. tion, family life, and careers, including managerial roles in business.
Instead, they suggest that morally and practically good management Wolcott echoes Moldoveanu and Martin (2008), who lament that
promotes conversations about the virtues and the common good. MBAs lack the ability to even understand the need to ask these
Like in other contributions to this special issue and the virtue ethical higher-order questions. Thus Wolcott proposes that insofar as
management literature in general, organizational culture plays an im- normal day-to-day business decisions are made within the context
portant role in their concept. Uncertainty and diversity are no longer of a morally defensible market order, it is possible to relieve prac-
problems. On the contrary, practical wisdom transforms them into tical wisdom of the burden of justifying first-order decisions and to
resources for achieving flourishing organizations. recover its proper place in ethical deliberation.
The last contribution in this special issue asks whether it is not Hence, in a comprehensive management approach, practical
unrealistic to expect a manager to be a phronimos all day every day. wisdom never claims to totally substitute thoroughly rational disci-
Gregory Wolcott's paper seems to be a good way to end the special plinary analyses; rather it calls for complementing and embedding
issue, as it injects some of that shepherd's virtue when he critically their (probably diverse) results in an overarching normative and epis-
examines the telos of the discussion of practical wisdom in business temic reflection: nothing more––but nothing less!––than that.
ethics. In contrast to Trinh and Castillo, who propose self-manage- The contributions to this special issue not only focus on a very
ment, Wolcott believes that modern bureaucratic organizations basic concept, practical wisdom, but they all do so taking a classical
need a considerable amount of rules and standardization that “re- Aristotelian/Thomist perspective. However, the papers use this lens
strict the capacity of managers to make day-to-day decisions, guided to look into very different corners of management: strategic plan-
by practical wisdom.” Wolcott infers that in many situations, being ning, organizational learning, leading, structuring, decision making,
practically wise is not an option for a manager. management cybernetics, and so forth. This shows that there is a
He is not alone in this skepticism. Alasdair MacIntyre, Adam plethora of scholarly opportunities to connect virtue ethical con-
Smith, and Edwin Hartman (in decreasing order of pessimism) have cepts with many topical areas in management. This vast research
all pointed to Aristotle's opinion that becoming a phronimos is a full- gap is even more interesting as practical wisdom represents what
time pursuit for which not all people are suited, and thus, is not at- philosophers refer to as a “thick concept”: one with a high degree
tainable by the average manager. Wolcott is, as Aristotle's doctrine of descriptive content that marries fact and value (Blomberg, 2007).
of the mean may suggest, neither in the optimistic nor the pessimistic This thickness of ancient philosophical thought offers an opportu-
camp. Instead, he stakes out a middle position between proponents nity to enrich, widen, and deepen our understanding of management
of practical wisdom in managerial business ethics and proponents theory largely driven by modern academic disciplines (psychology,
of rule-based, formulaic managerial decision making. He does this sociology, and political science). We hope this special issue will gen-
by defending two major claims. First, he diagnoses what he sees as erate interest among scholars from outside virtue ethics for consid-
the misapplication of the virtue of practical wisdom in the manage- ering how wisdom might inform their management research.
rial business ethics literature by its advocates. Because markets are
irreducibly complex, and because they generate consequences and ORCID
states of affairs outside anyone's control, it is a category mistake to Matthias P. Hühn https://orcid.org/0000-0001-9403-1438
appeal to the use of practical wisdom for first-order decision making André Habisch https://orcid.org/0000-0002-7188-1357
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HÜHN et al. | 5

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