Wisdom in Organizations: Whence and Whither
David Rooney & Bernard McKenna
Abstract
We trace the genealogy of wisdom to show that its status in epistemological and
management discourse has gradually declined since the Scientific Revolution. As the
status of wisdom has declined, so the status of rational science has grown. We argue
that the effects on the practice of management of the decline of wisdom may impede
management practice by clouding judgment, degrading decision making, and
compromising ethical standards. We show that wisdom combines transcendent
intellection and rational process with ethics to provide a balanced and integrated way
of knowing, deciding, and acting for managers in a complex and uncertain business
environment. Finally, we discuss the role and value of wisdom across a range of
business functions including knowledge management, strategic management,
leadership and international business.
Keywords: practical wisdom, genealogy, management, knowledge, epistemology,
ethics
David Rooney is Senior Lecturer in Knowledge Management in the UQ Business
School, University of Queensland, Brisbane, Australia. His recent books are The
Handbook on the Knowledge Economy (Cheltenham: Edward Elgar, 2005) and Public
Policy in Knowledge-Based Economies: Foundations and Frameworks (Cheltenham:
Edward Elgar, 2003). David can be contacted at d.rooney@business.uq.edu.au
Bernard McKenna is Senior Lecturer in Business Communication at the UQ Business
School, University of Queensland, Brisbane, Australia. His diverse research
publications deal with critical discourse theory and analysis, communication theory
and practice, as well as wisdom. He is on the Advisory Board of the Journal of
Technical Writing and Communication and Critical Discourse Studies. Bernard can
be contacted at b.mckenna@uq.edu.au.
1
Knowledge and Wisdom, far from being one, Have ofttimes no connexion
(Cowper 1784).
Illumination of the intellect, together with charity inflaming the heart,
constitute the gift of wisdom (Manning 1875).
In the twenty first century there are more knowledge, technology,
technologists and experts than at any time in human history. It has also been reported
that average IQ continues to increase (Sternberg 2003). From a global perspective, it
is difficult to argue that this accumulation of intelligence, knowledge, expertise and
technology has put the world in an unambiguously better position than it was 50 or
100 years ago. Political and economic forces have contributed to the proliferation of
weapons of mass destruction, and also to massive environmental degradation. Apart
from these global issues, business, public services, and individuals seem to
continually produce crises. Business enterprises continue to produce stories of
corporate collapses due to greed, limited vision, and poor judgement. Public services
are often represented in the media as inefficient bureaucracies despite their
contribution to the common weal, especially in education, health, and transport. At the
individual level, social anomie and issues of work-life balance contribute to stressed
and alienated people. Of course, every age has its doomsayers, and it is not the
purpose of this paper to contribute to a pessimistic world view. Rather, it is to make
the point that increased knowledge does not necessarily beget enhanced lifestyle and
human happiness.
There is little doubt that the world is increasingly beset with a moral,
ontological and epistemological malaise. This post-modern condition is characterised
by moral, ontological, and epistemological relativism that prevail at the expense of
certainty, stability, and truth. In a sense, this is the price that complex societies pay for
2
diversity, democratized relations, tolerance, and the acceptance, even encouragement,
of change.
The rise of knowledge-based economies is seen by some as a response to the
‘risk society’. For example, van Loon (2000) claims that the imperative for generating
more and more (technological) knowledge and expertise is a response to over
sensitivity in perceiving risk. Paradoxically, this risk society view can mean that the
more knowledge we call on to deal with risk the more risks we create, which in turn
leads us to call for more knowledge in an infinite regress. This knowledge-based
approach is a path to entropy so long as answers to the world’s problems are
considered only in terms of developing increasingly complex epistemic structures of
knowledge. We argue that although maintaining, processing, and building declarative
knowledge is important, doing so in the absence of sufficient wisdom can be
ineffective, even dangerous. This paper argues that wisdom can help address the
problems of postmodernity outlined above and seeks to stimulate a change in
discourse so that wisdom can be more readily spoken of in management by
highlighting its practicality.
So what is Wisdom?
What is wisdom comprised of and what is a robust conceptual framework that
clearly defines wisdom and identifies what processes are involved in it? We present
five wisdom principles that have been distilled largely from the Aristotelian
philosophical tradition (for a detailed discussion see Rooney and McKenna
forthcoming) but is also informed by contemporary research.
The five principles are that wisdom is:
1. Based on reason and observation
3
1a. It makes careful observations to establish facts and logical deductive
explanations.
1b. It evaluates the salience and truth-value of logical propositions when applying
reason to decision-making using clear understandings of ontological categories
that theoretically describe substance, process and quality to demonstrate,
through logical argument, correct conclusions.
2. Inclusive of non-rational and subjective aspects of human experience
2a. It acknowledges the sensory and visceral as important components of decisionmaking and judgment.
2b. Wisdom has a metaphysical, even spiritual, quality that does not bind it
absolutely to the rules of reason.
2c. It respects and draws upon experience and tradition as a means of apprehending
who and what we are through personal insight.
2d. Because wisdom understands the contingency of life and circumstance, and the
constructedness of phenomena in a spatio-temporal location, it is not reducible
to method.
2e. Wisdom is visionary because it can ‘see’ possibilities in the future, and is
cognizant of long-term and of strategic conditions.
3. Directed to humane and virtuous outcomes
3a. Because it is humane, wisdom is virtuous and tolerant through empathy and
interpersonal insight.
4. Practical
4a. It is prudent and practical, displaying a sensible worldliness.
5. Articulate, aesthetic and intrinsically rewarding, and incorporates emotion
4
5a. It is able to articulate judgments aesthetically and acknowledge the intrinsic
rewards and pleasures of knowledge and contemplation for their own sakes and
brings about harmony and happiness.
5b. Emotions (feelings) and their corresponding passions (commitments and drives
to act) are significant in wisdom. Anger at injustice and passion or love for
humanity, for example, can guide and motivate one to speak and act for the
good.
These philosophically derived principles are largely confirmed by
contemporary psychological research that, briefly stated, says wisdom is that which
coordinates, integrates, weighs and balances knowledge and judgments about the
‘fundamental pragmatics of life’ (Baltes & Staudinger 2000: 132). In particular, the
psychological work of the Berlin School (e.g., Baltes & Dickson 2001; Baltes and
Kunzmann 2003; Baltes and Staudinger 2000; Baltes, Staudinger, Maercker, and
Smith 1995; Staudinger, Lopez and Baltes 1997; Staudinger and Pasupathi, 2003) and
of Sternberg (1990, 1998, 2003) support the principles. These contemporary
researchers shed light on wisdom in the context of personal development as people
move through the human life cycle and in terms of methods for conducting empirical
research on wisdom.
Our principles have four major implications for management. Firstly, wise
people have ‘insight into the social nature and incompleteness of human existence, the
variability of life goals, knowledge about oneself and the limits of one’s knowledge,
and insight into how knowledge is translated into behaviour’ (Staudinger and
Pasupathi, 2003: 240). Secondly, a salient predictor of being wise, according to
psychological research, is being able to move ‘beyond existing rules and being
tolerant of ambiguous situations’ (Sternberg 1996). Thirdly, wisdom is a way of
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being rather than an accumulation of knowledge, an elevated IQ, or simply an
application of technical rationality. Fourthly, the transcendent or imaginative
intellection that goes beyond rational and systematic intellection (science broadly
defined), must be founded on ethics. Wisdom strikes the difficult balance along these
dimensions for the good of the individual and society: not an easy task.
For some, the notion that wise people must loosen their hold on ‘objective
facts’, established routines, and rationality in order to better adapt to our complex
environment will be difficult to accept. Yet, few would argue with the proposition that
we cannot possibly apprehend, intellectually, the full extent of reality, even a small
part of reality such as managing a business in a particular industry. As well, the notion
that humans are boundedly rational, as Simon (1955) has argued, is well accepted.
This is what helps to define our humanity. In fact, evolutionary epistemologist,
Donald Campbell (1974), claims that while these epistemic, cognitive and ontological
limits have been a feature of human evolution, evolution has been kind to us in
enabling humans to develop capacities to transcend limited facticity and rationality.
Imagination, creativity, and insight are what we have evolved within us to make the
best of these limits. These transcendent capabilities are also part of the core of
wisdom. In a profound study of human consciousness, Gebser (1985) lends support to
the Campbell thesis claiming that the core of human consciousness, the very engine of
human knowing, is a highly tacit mental capacity that is founded on a non-verbal,
instinctive, felt way of knowing rather than explicit knowledge and rational cognition.
These are vital components of what we call wisdom. Furthermore, although it may
seem odd to modern civilization, rationality has been seen as problematic for wisdom
because it can act as the basis for the savant and the fool.
The Savant, the Fool, and the Ignoramus
6
The practical perils of knowledge in the absence of wisdom and the underestimation of the transcendent engine of the human mind have been known for a long
time. Giambattista Vico, an eighteenth century Aristotelian, provides an effective and
timeless taxonomy of four managerial types that can be applied just as well to
commercial, governmental and institutional managers, and professionals dealing with
the technical, economic, legal and administrative complexities of contemporary life.
These four intellectual types are the imprudent savant, the fool, the astute ignoramus,
and the wise person.
The imprudent savant (doctus imprudentis) lacks nuance and empathy
approaching ‘ethics as though it were a manual of propositions to be memorized;
makes decisions slowly, is arrogant; and has a lack of persuasive communication’.
The savant moves ‘in a straight line from general to particular truths’ in order to
‘burst through the tortuous curves of life’ (Miner 1998: 57). Sometimes successful,
they more often fail. The fool (stultus) ‘lacks knowledge of either the general or the
particular’, and so ‘constantly pays for his [or her] rashness’ (Miner 1998: 56).
Although the astute ignoramus (illiterates astutus) knows how to succeed in worldly
affairs, s/he lacks phronesis [reflexive humane wisdom]. Thus ignorance of the most
important things, as evidenced by constantly preferring utility over what is right,
ensures failure in the most important matters (Miner 1998: 56). Because wise people
(sapientes) have practical and theoretical wisdom, ‘through all the obliquities and
uncertainties of human actions, [they] aim for eternal truth, follow roundabout ways
… and execute plans which in the long run are for the best, as far as the nature of
things allows’ (Miner 1998: 56).
Many will recognize a patina of familiarity in these four types. They may have
worked with people who fit one or more of these descriptions. Readers will also
7
recognize that the first three types are all unwise and undesirable in managing a
complex business in a complex environment. Vico was responding in the eighteenth
century to what Benedict (2001: 27) characterises as the ‘New Science’ and its lack of
regard for Aristotelian logic, and its unbalanced esteem for experiment and
demonstration at the expense of insight and judgement. The lineage of this New
Science, which Maxwell (1984) has so thoroughly critiqued, is manifest in the
technocratic rationality found in much of today’s business and government procedures
— although by no means all (Sturdy: 2004) — and in the utilitarian credentialism that
characterises much university training for management. This technocratic rationality
is supplemented by and infused with neo-classical economic rationalism (McKenna
and Graham 2000). As well, isomorphic tendencies in organizations working in
shared environments (Di Maggio and Powell 1983; Newman and Nollen 1996; Dacin
1997) produce coercive, mimetic, and normative forces that limit the capacity for
these organizations to respond effectively and intelligently to changing circumstances
(McKenna, Rooney and Liesch 2006). We argue that these tendencies — technocratic
rationality, economic ideology, and isomorphism — unfortunately produce the right
environment for managers who fit Vico’s description of the imprudent savant and the
astute ignoramus to flourish. It is easy to say that we want to encourage the wise
manager or leader (see Kotterman 2006 for discussion of management versus
leadership), but it begs the question of the nature of wisdom. While wisdom has been
acknowledged as critical to management (Boal and Hooijberg 2001; Bigelow 1992;
Kriger and Malan 1993; Malan and Kriger 1998; Ludema, Wilmot and Srivastva
1997), it is an alternative to the modernist or technocratic management orthodoxy, one
that has not yet been seriously pursued by management researchers. Indeed, despite its
obvious value, wisdom, as a concrete concept, is largely missing in business and
8
knowledge discourses (cf. Rooney 2005). It is therefore a way of being or conducting
oneself, rather than a set of abstract concepts, that is undervalued and poorly
understood (McKenna 2005).
Where did Wisdom Go?
Why has the word ‘wisdom’ gone missing from mainstream organizational
discourse for so long? Pleasingly, the word is now increasingly used in leadership and
organizational literature (Bierly, Kessler and Christensen 2000; Boal and Hooijberg
2000; Brown and Starkey 2000; Korac-Kakabadse, Korac-Kakabadse and Kouzmin
2001; Ludema, Wilmot and Srivastva 1997; Srivastva and Cooperrider 1998; Vaill
1998; Weick 2004; Whittington, Pitts, Kageler and Goodwin 2005). This fact
notwithstanding, it has been observed that wisdom as we have described it has over a
long period declined in discourse generally (Osbeck and Robinson 2005). Historical
forces have intervened between the classical age of ancient Greece and the present to
construct an inadvisably narrow understanding of the application of wisdom that
regards it to be confined to religion, art, and folklore (Freeman 2003), and in
opposition to knowledge, science and rationalism. Robinson (1990) suggests that this
is a less than optimal situation because science in coming adrift from wisdom, has led
to wisdom being seen as a corrupting influence from an archaic metaphysics. This
shift is relevant to contemporary intellectual practices in highly complex
environments because, although highly specialized scientific approaches might bring
clarity, this specialized clarity can be deceptive. That is because the separate branches
of knowledge are not designed to reveal a larger, coherent reality, whereas wisdom is
holistic, thoughtfully and sensibly connecting the different branches
(Csikszentmihalyi and Rathunde 1990). Re-incorporating wisdom into managerial and
9
organizational discourse will yield important insights about how to do things
differently in the future and about how to re-invigorate our assessment of what we do
and how we work at the ideational level of business practice. Of course, we are not
saying that wisdom has not been present in managers and entrepreneurs: people in all
walks of life are able to and do exhibit the characteristics of wise practice. Instead, we
argue that wisdom has lost credibility and prestige relative to science, rationalism and
method in modern times. In other words, the story of the social life of wisdom in
history highlights its value and the costs of passively or actively disregarding it.
Genealogy of Modern Technocratic Organization
Modernity is the outcome of several convergent historical developments,
particularly in science, economics, administration, and industrialisation. It borders on
conceit to attempt to portray these economic, philosophical, technical, and business
developments in Europe and the USA in a few paragraphs. However, we need to
briefly outline the genealogy of the context within which contemporary management
practice has been shaped to better understand the absence of wisdom from the
discourses of contemporary organizations. By genealogy, we mean ‘the union of
erudite knowledge and local memories which allows us to establish a historical
knowledge of struggles’ (Foucault 1980: 83). As Lemke (1995: 30) states,
interdiscursive relations ‘determine what sorts of discursive objects (entities, topics,
processes) the discourse can construct or talk about,’ and, as a result, ‘tell us what the
alternative kinds of discourses are that can be formed in these ways and how they can
be related to each other as being considered equivalent, incompatible, antithetical,
etc.’.
Essentially, in this section we put the case that the historical conditions
occluding wisdom from both scientific and organizational discourse were the outcome
10
of a confluence of factors, each with differing origin points and evolutions. From the
Enlightenment came ‘value free’ empirical science; from Protestantism came social
utilitarianism; from the secular liberalism of J.S. Mill and, ironically, Adam Smith
came an incipient economic rationalism and a view of humans as homo economicus;
from mercantilism came the need for increasingly complex government and business
administration developing into modern bureaucracy; from the new capitalist order
came the need for a calculable legal system and risk minimization strategies; and from
the Industrial Revolution came the normalization of disciplined regularity and order in
the production process; and, of course, such management practices were reinforced
through business education and the orthodoxy of scientific management. The
combined effects of the Renaissance, Scientific and Industrial Revolutions, we claim,
produced epistemological and axiological changes that facilitated contemporary
business discourse and practice. In short, the rationalist principles of the modern
scientific tradition valorised the rational processes of the mind, and distrusted the role
of the body’s instincts and feelings, which we identify as crucial to wise practice.
To better understand this genealogy we discuss, first, science epistemology
discourse and the interplay between it and the liberal discourses of trade, economics
and administration, and, finally, the discourses of twentieth century corporate
administrative epistemology.
Science, representing secular ‘truth’ from the sixteenth century, valorised
detail and value-free empiricism (Burke 2000: 204-6) to sensibly distinguish it from
theistic ‘truth’ based on faith and revelation. Knowledge came under increasingly
empiricist and objectivist epistemic and ontological influences from the time of
Bacon, who opposed speculative philosophy. From then on, as empiricism began to
grow, Aristotelian intellectual balance and wholeness was increasingly undermined.
11
Thus, while Descartes’s rationalism allowed for intuition it was, nevertheless,
sceptical of the efficacy of sensory knowledge. Going further, Hobbes and James
Harrington, who condemned what they disparagingly called ‘priestcraft’ (Burke 2000:
211), contested the epistemic efficacy of the metaphysical realm, mostly dominated
by doctrinal faith, with empirical world-views, in the context of an uneasy, sometimes
violent, rivalry for intellectual legitimacy between church and science. As this rivalry
abated, the positivist foundations of science nonetheless remained intact. Advocates
of rationalist science had an important (even if unintended) role to play in the reduced
status of wisdom. John Stuart Mill argued that these transcendent modes of knowing
were not to be trusted at all, and that there could be no a priori knowledge (Robinson
1990). Nineteenth century positivism, particularly influenced by Comte in both
natural and social sciences and Ernst Mach, the instrumentalism advocated by
Poincaré, and – according to Oldroyd (1986) – even American pragmatism (e.g.,
Charles Peirce), all contributed to an orthodoxy about appropriate knowledge and
methodology that were antithetical to Aristotelian wisdom principles.
Suffice it to say, despite the rationalist genealogy in which both Mill and
Aristotle are unambiguously embedded, Aristotle would not have accorded Mill’s
narrow epistemic claims, and in particular his denial of intuition, any credence. By
excluding wisdom, Millian epistemology blurred the boundary of knowledge and
information. In Aristotelian terms, it radically impoverished thought in important
domains of human activity. However, in the twentieth century, science retreated from
the Millian extreme at some levels. Indeed, Einstein re-aligned himself in 1934 with
the Aristotelian tradition when he stated that ‘the creative principle resides in
mathematics. In a sense, therefore, I hold that pure thought can grasp reality, as the
ancients dreamed’ (Oldroyd 1986). Einstein’s New Physics of relativity, and the work
12
of Popper and Kuhn, admittedly intellectual opponents, significantly altered orthodox
scientific methodology and the philosophy of knowledge in the twentieth century.
However, this change was not uniform. During the twentieth century two areas
showing some reluctance to embrace these changes were psychology and scientific
management, characterised by rationalist methodology and its concomitant
assumptions about knowledge, and instrumental positivism. Of course, in psychology,
the behaviourists, Frederic Skinner and Clark L. Hull, were the most forceful
representatives of such an approach, which was quick to ‘objectively’ operationalize
and measure1. We now know that the outcome of such scientific conceit was often a
deeply inhumane treatment of those who were psychologically or intellectually
vulnerable. Twentieth century scientific management, and its sub branches such as
operations management, also adopted positivist and instrumentalist methodologies,
although it must be acknowledged that the intentions in many cases were not
inhumane, as is seen in the work of Henry Gantt, Mary Parker Follett, and even F.W.
Taylor.
Capitalism and modern business administration methods and their attendant
epistemologies cannot be understood without acknowledging the influence of
changing religious doctrine and political axiology. Aquinas, in the Catholic tradition,
drawing on Aristotle, saw trade as almost a necessary evil, and a practice that must be
guided by a ‘just price’ (Roll 1992: 33-34), although this position was contested
within the Church (e.g. Eck). Clearly such principles were going to become obsolete
in the changing circumstances from the Age of Discovery. Protestantism, particularly
Calvinism, was a more appropriate ethic for an emergent merchant class (Weber
1958) from the age of mercantilism to the Classical era (Roll 1992)2. Calvin
‘repudiated the Aristotelian doctrine that money was infertile’ (Roll 1992: 38;
13
Tawney 1947). The Protestant merchant class came to measure virtue by utility and
efficiency in achieving material ends (performed while invoking the name of God). In
practice, virtuous acts were determined by their predicted and calculated
consequences in the here-and-now (Harrison 2003). In this way, a Puritan social
utilitarianism began to manifest in, among other things, diligence and industry, as
well as a profitable education founded on an applied, utilitarian, functionalist
curriculum that did not waste time on art and philosophy to promote material
wellbeing and improve man’s ‘dominion over nature’ (Merton 1938: 55-73). In the
secular realm, it might be argued that Machiavelli, a contemporary of Calvin,
contributed to an emerging confluent philosophy. That is, if conceived as perhaps the
original managerialist, he replaced the transcendental, deontological ethic with a
secular consequentialism, raising technical knowledge above metaphysics to
determine worldly affairs in public administration. This modernist and expedient
ideology asserted: ‘it is necessary for a prince, who wishes to maintain himself, to
learn how not to be good, and to use this knowledge and not use it, according to the
necessity of the case’ (Machiavelli 1950: 56). Rational utility had been elevated to a
political philosophy by Machiavelli. This confluence of rational epistemology and
utilitarian administrative practice became ideology once liberals such as Locke, von
Humboldt and Mill applied their minds to it.
Of course, J.S. Mill was as much a liberal as a rationalist. Secular liberalism
was originally characterised by the three articles of faith, ‘life, liberty, and property’,
(Locke 1947). Liberty is the natural and most productive political state, Locke argues.
By exercising our liberty, we produce property, which is the basis of a growing,
wealthy, and productive community. Mill’s (1968) On Liberty advocates ‘the free
development of individuality’, arguing that it is ‘one of the leading essentials of well-
14
being’ (Mill 1968). In making this case, Mill asserts that there is not only a ‘freedom
from’ tyranny, but also a ‘freedom for’ spontaneity and originality. Thus, there is a
paradoxical dissonance between the aesthetic individualism needed by societies to
progress and develop, according to Mill, and the stifling conformity that his
rationality imposed on scientific work. Today we see this paradoxical dissonance in
the parallel managerial discourse claims that represent entrepreneurs as those who
‘commence new practices, and set the example of more enlightened conduct’ (Mill
1968), but place them within the strictures of scientific managerialism. Sennett (1997)
refers to this as Smith’s Paradox.
With the liberty to pursue life, liberals argue, those who are most purposeful
will want to better their condition thereby enhancing prosperity (or ‘property’). This
was most forcefully proposed before Mill in Bentham’s utility theory:
By the principle of utility is meant that principle which approves or
disapproves of every action whatsoever, according to the tendency which it
appears to have to augment or diminish the happiness of the party … . I say
of every action whatsoever; and therefore not only of every action of a
private individual, but of every measure of government.
(Bramsted and Melhuish 1978: 295)
As nineteenth century liberalism wrote the justification for capitalism in the emerging
industrial age, it did so from an increasingly utilitarian perspective (Merquior 1991),
based more on Bentham’s writings (and James Mill to a lesser degree) to the extent
Adam Smith’s ‘invisible hand’ metaphor was divested of its moral fabric (Smith
1776/1986: Vol 1, 400; cf Evensky 2001) until in the twentieth century his ethical
ideal was lost to a values-free, ‘let the faceless market decide’ political economy that
occluded wisdom from economic decision-making.
15
Importantly for the possibility of wisdom in market economics discourse,
Smith, contrary to popular opinion, believed that, as humankind moved from a ‘rude’
state to a ‘mature’ state, we moved closer to the ideal, governed by humane principles
as outlined in his Theory of Moral Sentiments (Smith 1761/2002). However, Smith’s
concern to locate and articulate the ‘moral sentiments’ to justify an economic system
based on individualistic self-interest — was lost or ignored. Veblen (1899: 411)
asserts that ‘After Adam Smith’s day, economics fell into profane hands, because
‘[a]part from Malthus the next generation do not approach their subject from the point
of view of a divinely instituted order’. Veblen concludes that, ‘while Malthus may
well be accounted the truest continuer of Adam Smith, it was the undevout utilitarians
that became the spokesmen of the science after Adam Smith’s time’. By the late
nineteenth century, economic theory is based on rationalist assumptions about homo
economicus, eschewing questions of morality and humanity generally to create a
mathematical science of wealth and ownership. Veblen (1899) describes the path that
led from classical to neo-classical economics, or from economics as moral philosophy
to economics as a decontextualized mathematical science with implied liberal
assumptions that was said to be value-free.
In summary then, classical nineteenth-century liberalism supplanted the
Calvinist tradition by maintaining the individualist ethic, but establishing a utilitarian
functionalism to govern the increasingly managed industrial age, reaching its
apotheosis in Fordism and Taylorism. Orthodox business and economic capitalist
thought centred on self-regulating market mechanisms, and using a Newtonian
mechanical metaphor, replaced a humanistic system largely founded on reciprocal
community relations (Polanyi 1944). The effect of this economic thought and practice
16
was to move virtue away from being transcendent and unworldly towards being
individualistic, materialistic, mechanistic, functionalist, and utilitarian.
An Administrative Epistemology
Finally, we need to consider in more detail how the functional and mechanistic
aspects of this logic were transported to the realm of government and business
administration. There was an increasing need to impose order on an unprecedented
dynamic and complex society where a growing population, nationhood, and a
mercantilist-based economic growth led to the need for higher orders of organization
(Crosby 1997). Courtesans and courtly officials were being replaced by a definable
bureaucracy that, says Weber (1978), controlled information and knowledge through
regulation and formal process. This early bureaucratic tendency is seen, for example,
in the administration of the Catholic Philip II of Spain, who became known as ‘the
king of paper’ because of his propensity for generating paperwork to better run the
state (Burke 2000: 119). Although capitalism is associated with enterprise and
individualism, Weber points out that modern rational capitalism also has a need ‘not
only for the technical means of production, but of a calculable legal system and of
administration in terms of formal rules’ (Marshall 1982: 25). These calculable and
technical elements of law and administration contributed strongly to the necessary
conditions of modernity; they also helped to shape business behaviour into the
normative patterns evident in late-industrial capitalism. In such conditions, wisdom
discourse that allowed for intuition and non-rational practices was incommensurate
with the administrative and managerial discourses that privileged empiricism and
ordered workplace behaviour (as Weber described). Because bureaucratic and
technocratic managerialism regarded the enigmatic side of intellection as lacking
17
reason, it was considered undesirable, unreliable, and unproductive (Weber 1958).
Consequently, as technique rather than transcendence was to be the mark of good
administration, the essential tension between the worldly and the practical versus the
intuitive and the transcendent so valued in the Aristotelian tradition was denied.
As the distance, volume, complexity, and size of financial transactions
increased, one of the understandable goals was to hedge against the risk attached to
long distance and international trading3. Bills of exchange and promissory notes were
developed as risk management techniques (Crosby 1997). The double entry
bookkeeping system, which began in 1494, changed the ‘abstraction’ of profit into a
definite form, thereby diminishing the subsistence mentality of medieval business
(Nussbaum 1937: 160). This growing concern for certainty and clarity to diminish
risk in an increasingly complex economy was dealt with by an incipient form of
rational scientific business management method.
By the nineteenth century when industrial capitalism was developing in
Britain and the U.S.A., industrial practice established the ‘moral primacy’ of work in
American discourse (Rodgers 1974: xii), underpinned by an unshakable belief in the
virtues of regularity, order and discipline that had been valued in European industry
since the Industrial Revolution (Rodgers 1974: 14). The inflexibility of such order
was not particularly accommodating of the creative and speculative mind (Rodgers
1974: 77). Indeed, Bendix (1956) observed that the typically hierarchical authority
relations and bureaucratization seen since the industrial revolution, threatened
individual initiative and were still at the core of management ideology during the
1950s.
The epistemological and axiological assumptions that underlay the emergence of
contemporary capitalism also infused its management practices. We do not argue that
18
these practices are homogenous or that they do not vary over time: Barley and Kunda
(1992), for example, provide an excellent historical account of the undulations of
American managerial discourse from the 1870s to the late twentieth century. Instead,
we propose that rationalist technocratic discourses continue to strongly infuse our
managerial practices. This discourse has a technocratic, functionalist and
instrumentalist view of knowledge (Fuller 1988; Graham and Rooney: 2001), and of
science and technology (Fuller 1988; Saul 1992). Thus, knowledge management
practice is based on an inadequate theorization of knowledge (Blackler 1995; Stacey
2001) as it is based on a need to measure knowledge, exploit intellectual capital, and
use computer-based knowledge management systems. The primary function of
modern technocratic discourse has been to ‘rationally’ organize an aspect of the
universe according to an institutionalized and formalized knowledge, which is highly
privileged within the social heteroglossia (Lemke 1995: 76) of managerial theory and
practice. This discourse orients us to seeing the world in particular ways, rationally,
epistemologically, and normatively (Beyer and Niño 1998; Trice and Beyer 1993). It
does this primarily by divesting certain forms of social practice of their social, ethical,
political, and moral values, thus rendering their discourses as ‘objective’, value-free
truth (Saul 1997). In such conditions, wisdom discourse is marginalized.
In other words, the discourse of management theory almost always
incorporated the ‘objective’ discourse of science. This discourse coincided with the
emergence of managerial capitalism and the managerial class (Chandler 1977). By
World War I, this new class of professional, technically-oriented specialists engaged
in scientific management were primarily concerned with control, coordination,
routinizing business processes, and designing organizational structures. The epistemic
and axiological narrowness of these modern management practices, we argue, left
19
little or no room for Aristotelian wisdom and transcendence. Furthermore, managed
capitalism became increasingly detached from a sense of reciprocal community
(Polanyi 1944) because, says Sombart (1916: 37), ‘depersonalization’ of property and
labour relations ‘was [thought to be] necessary before these actions could be geared
solely to profit’. Two applications of this management approach are evident in
twentieth century Human Resource Management, or worker relations, and business
education.
The role of the worker in management theory provides an insight into the
limits of wisdom in twentieth century organizations. In the early twentieth century,
the mental hygiene and human relations movements saw the ‘human being as a
productive force that should be utilized efficiently in the light of a knowledge of its
modes of activity, its capacities and its aptitudes’ (Miller and Rose 1995: 431). It used
‘psychotechnics to optimize the utility of the worker as a psycho-physiological
entity’. At this point, the worker became ‘the object of a scientific knowledge and
[was] subordinated to a logic of efficiency. Both Taylorism and humane approaches
sought to advance national efficiency through the application of science and rational
technique’.
There were, of course, humanist approaches to management of the workforce.
For example, the human relations movement in the 1930s led by Elton Mayo
encouraged management to see the ‘worker’s innate need for belonging to be met
through the active construction of a strong sense of work-group identification’
(DuGay 1996: 9). Later, British industrial social scientists, such as J.A.C. Brown and
G.R. Taylor, who incorporated the American social psychology of Gordon Allport,
Kurt Lewin, and the Chicago School of sociology linked productivity with
democracy, ‘recognizing the democratic citizenship of the individual worker’ (Miller
20
and Rose 1995: 437). However, in the UK during the 1950s, calls for workplace
democratisation were abandoned when the worker was reconceptualized as ‘a rational
economic actor, not looking for pleasure or social values in work, but merely seeking
to maximise the financial returns provided by employment in order to satisfy desires
located in the work of leisure, family, and home’ (Miller and Rose 1995: 438).
Similarly, the ‘industrial democracy’ project that began during the 1960s in Norway
and developed in the West through the work of the Tavistock Institute (See Miller and
O’Leary 1994; Emery and Thorsrud 1976), and which encouraged job enrichment,
autonomy and self management (Miller and Rose 1995: 444; see also Herrick and
Maccoby 1975), gradually disappeared from industrial relations practice, particularly
as cost-cutting layoffs and transfers to low-wage economies became standard from the
late 1970s onward. In its place, a new calculus linking the ‘enterprise’ of the
individual and the organization emerged (Rose 1988; DuGay 1996).
While American business schools had only marginal impact on business
practice for the first half of the twentieth century, two contemporaneous assessments
of U.S. business education in the early twentieth century help track the demise of
wisdom from the pedagogy of commerce and industry. Jones (1913) in an important
report on business education paid little more than lip service to the benefits of liberal
study and espoused a highly functionalist and utilitarian curriculum for American
business schools. For Jones, business education should focus on knowledge about
authority and responsibility, rules of co-ordination and division of labour, standards,
schedules and sequence, rewards and punishments, accounting and precision, and
methodology for investigation. In the same year, Kendall (1913: 593), argued that
management in manufacturing should be utilitarian, being concerned with accounting
21
and costs; purchasing; storage of materials; execution of the work; and worker
efficiency.
These calls for instrumental bases to management education were critiqued by
Marshall (1917) and Thompson (1914) in America, while Fehling (1926: 560) and
Longobardi (1927) produced similar European critiques. Each of these commentaries
noted the functionalist slant and questioned the wisdom of eschewing a humanistic
foundation to business education. An uneasy tension between the values of a liberal
Arts education and vocational training was becoming more evident in the U.S.A. (and
elsewhere) by the mid twentieth century. For example, James C. Worthy (1955: 76)
lamented the loss of this humanities foundation in America. Reflecting on his
experience recruiting business school graduates at Sears Roebuck, he thought that
business schools had poorly equipped graduates for business: ‘One reason for this is
an undue amount of specialization and an undue emphasis on techniques’ resulting in
a good supply of experts but not of ‘statesmen’. Worthy explained this partly by
pointing out that it is easier to teach technical courses than it is to teach about ‘modern
society’ and also because the demand for graduates by business is, regrettably, biased
towards technical experts. Notably, he also argued that business schools failed to
show the kind of intellectual leadership and courage required to make wise curriculum
choices (Worthy 1955: 77). This tension is also evident in Gordon and Howell’s
(1959) report on US Business Schools that extensively considers the right balance of
technical, vocational, and humanities education. They identified a decided bias
towards the scientific paradigm, and report that half of the business schools failed to
meet the Association to Advance Collegiate Schools of Business (AACSB)
requirement of offering 40 percent non business courses (Gordon and Howell 1959:
46). More recently, Conry and Nelson’s (1989) study found that business school
22
students became less ethical through the course of their studies. Going further,
Jacques (1996: 12) argues that:
Professional knowledge, certified by the university and legitimized by
association with scientific objectivity, was the key social power relation
through which the US was restructured after the demise of nineteenth century
Federalist social institutions.
While acknowledging that today there are many critical voices and notable
processes in management practice that challenge the intellectual orthodoxy, the
objectivist discourse has ‘sedimented into an extremely powerful form of authority’
because it ‘has assumed the status of being self-evidently good and necessary’
(Jacques 1996: 12). Thus while a values-based discourse has been re-emerging in
business, wisdom is undeniably still under valued.
Our genealogy of contemporary management practice has recounted the effect
of the scientific tradition, the emergence of social utilitarianism, the development of
economic rationalism, and the normalization of bureaucracy, regularity and order,
including in production management processes. As a result, we argue, the required
non-technical attributes of wisdom—the capacity for, and habits of, reflexivity, virtue,
intuition and imagination—have been minimized in the dominant discourse and
practice of contemporary mainstream management. This account highlights the
decline in the social status of wisdom. The consequences of this decline include a
failure of social and environmental vision, a failure to integrate knowledges, and a
failure to remain open-minded as a society and as individuals. We argue that business
needs to be wiser not simply for intellectual or commercial reasons, but also for
ethical reasons, because business is a key mediator between the economic sphere and
23
the social, environmental and technological spheres. Business’s role in shaping our
futures is significant and therefore it should be a positive ethical force in constructing
the future. This may be the highest level at which business strategy can operate.
Applying Wisdom to Contemporary Times
Having now outlined a theory of wisdom and provided a genealogy of
contextual aspects of modern business practice, we now move to contemporary times.
We identify nine areas of contemporary business practice in which wisdom principles
are relevant: change; knowledge, innovation and creativity; HRM; public
administration; business strategy; international business; communication
management; intellectual leadership; and management education and research. Rather
than bemoan the human incapacity to deal with rapid change, or, worse still, attempt
to build even bigger and more arcane rationalist knowledge systems, a wisdom
approach acknowledges not only human cognitive limitations, but also the relativity
of knowledge, perception, and truth that can assist managers to judge, decide and act.
In covering these nine areas we provide brief discussion that might be considered as
triggers that promote deeper thinking and action in more specific contexts in which
wisdom and management connect.
Change, Ephemerality, and Fads
Change is pervasive in post-modern and post-industrial social and economic
systems (Tsoukas and Chia 2002), and wisdom is an excellent resource for navigating
this terrain (McKenna 2005). Managing change is widely regarded as a great
challenge, but one that is not well handled in business (Greenwood and Hinnings
1996; Seo and Creed 2002). Furthermore, faddish practices such as Business Process
Re-engineering that glibly promise cure-alls or easily digested, but ephemeral, ideas
24
for busy managers in the ‘real world’ are now notorious, even if they are still
irresistible to many. We have argued elsewhere for the benefits of socially intelligent
change (Rooney et al. 2003; Rooney and McKenna 2005), and suggest that business
people seek wise change by applying the wisdom criteria developed above to
organizational change. In particular, we argue that wisdom provides managers with
the capacity to distinguish between change as fad, frenetic rearrangement, or
management power game (Zorn, Page and Cheney 2000), and that change that is
necessary to adapt to changing circumstance or as innovation. In particular, we
suggest that a wise person asks fundamental questions about the nature of change by
considering the changing ontologies and frames of understanding upon which such
changes are predicated.
Knowledge, Innovation and Creativity
Central to the problems we raise at the start of this article is the implicit
accumulative model of knowledge that underpins much of the rhetoric of knowledge
management and knowledge-based economies. We question the logic that problems
are best solved by accumulating more and more knowledge or gaining access to more
knowledge. Instead, we assert that wise use of knowledge incorporates the ability to
question the ontological basis of knowledge, as well as allowing for insight, intuition,
imagination, and creativity to have a role. We are concerned particularly about the
puzzling gaps between what should be the overlapping fields of knowledge
management, innovation management, and creativity management. Research has
shown that managers put themselves at odds with much of the rest of society in
regarding creativity as antithetical to wisdom (Sternberg 2003). There is the
suggestion here that managers, influenced by command and control modes of work
25
and by a positivist, accumulative philosophy of knowledge outlined above, are
threatened by creativity or at least unsettled by its unpredictability. The wisdom
criteria above suggest that the transcendent faculties are interdependent with more
rational and fact-based ones, and must work in unison to produce wise practice. We
argue that a wisely knowledgeable, innovative, and creative organization is more
achievable if the key intellectual activities in them are not fragmented and instead are
seen as an integral whole.
Human Resource Management
A wise organization can be wise only because of its people. HRM is therefore
a critical element in bringing wisdom to businesses and retaining it. The loss of
‘corporate memory’ was acknowledged after workforces were ‘rationalised’ in the
1980s and 1990s (Lahaie 2005). Now the loss of ‘corporate wisdom’ has been
acknowledged by practitioners (see Hammer 2002). But what can be done in terms of
HR policy to inculcate and preserve organizational wisdom? Critical here is the place
of older workers who are frequently seen in a negative light. Hammer (2002) is one
practitioner who is concerned about the loss of older and wiser senior employees. He
shows that good senior Canadian public servants are wise enough to understand that
the antisocial conditions of work under which senior employees operate are simply
not worth it, compelling them to take early retirement. This situation suggests the
need to reform ways of thinking about these and other workers, their needs, and their
value to an organization. Unfavourable conditions of work/life balance, as Hammer
points out, may encourage wiser senior members to leave organizations, thus
rendering organizations more vulnerable to unwise management. This focus is not to
discount the value of younger workers who might also contribute to wisdom as
research shows that wisdom is not necessarily the preserve of the old (Baltes and
26
Staudinger 2000). Furthermore, we argue that wisdom in organizations is distributed
or virtual, and that different aspects of it can be found in different parts of an
organization and in different individuals who can be brought together.
Public Administration
In any economy, one of the largest, most complex, most knowledge-intensive
and important ‘businesses’ is public administration. However, it is notable that the
only major wisdom management initiative (in the public or private sectors) we are
aware of has been undertaken by the Canadian Public Service Commission and is
expressed in the report, The Getting and Keeping of Wisdom (Hammer 2002). The
report, as suggested above, explores the need for responses by the public service to
the loss of its wisest employees. Further complicating good public administration is
the inappropriate infusion of public service discourse by discourses more appropriate
to the private sector, thereby abrogating the critical role of assuring the quality of life
intended for a nation’s citizens (Wiig 2002; Brooks 2003). This is now an important
issue in public administration, as was evident when the Australian Journal of Public
Administration (2004) recently devoted a whole issue to the problems associated with
knowledge and rationality in constructing policy. In that issue, Parsons (2004), while
not directly discussing wisdom, draws on philosophical literature (e.g., Plato and
Aristotle) in ways similar to our research, invoking notions of steering, craft and
judgement, rather than science (and New Public Management). He shows how to
break free from the dominant paradigm that he describes as enforcing a restrictive
epistemology. Interestingly, Parsons questions the efficacy of relying on the ‘central
minds’ of a few experts ‘at the helm of government’. This suggests, as we do, that
wisdom should be explored not only as an individual attribute but also as a distributed
or group phenomenon. This is an important insight and it is clear that there is no more
27
important place for collective wisdom than in democratic public administration
(Korac-Kakabadse, Korac-Kakabadse and Kouzmin 2001).
Strategy and Business Policy
Although popular thought probably regards wisdom as impractical, unworldly,
and remote or esoteric, this would not have been the view of Aristotle, nor is this
perception anywhere in our characterisation of wisdom. Wisdom must be practical:
Baltes and Staudinger (2000) refer to it as a ‘pragmatic metaheuristic’. Nonetheless,
wisdom is also useful in dealing pragmatically with remote and speculative problems
such as what the future holds. In general, it could be argued that businesses are caught
between the tendencies of isomorphism (Newman and Nollen 1996) and a desire to
reduce uncertainty and transaction costs (Peng 2006; Dacin 1997). This places
intolerable burdens on management, particularly line management who are often
faced with schizophrenic demands produced by lines of management operating under
different imperatives (e.g., reducing costs by sacking staff, but also claiming to
maintain high levels of client responsiveness and care or workplace safety). Business
strategy can use wisdom principles to help achieve foresight, prescience and insight. It
can also draw on both systematic and methodically rational processes as well as
transcendent processes like creativity and imagination (cf. Stacey 1996). We argue
that strategy development can be seen as simply a process of discovery and learning.
This discovery process can be conducted according to our principles of wisdom to
create a more organic or naturalistic discovery process that values the scientific
elements of research, but equally values the transcendent to create a strategy
epistemology resembling a craft rather than simply a science (cf. Mills 1959).
International Business
28
An important area of business strategy is international business, which is
perhaps a site where the features of the post-industrial economy and post-modern
conditions operate most intensely in business. It is highly complex with great
epistemic, cultural, governance, linguistic and attitudinal variety (Newman and Nollen
1996). Yet, its own theorists acknowledge that the dominant international business
literature operates within tired paradigms (Buckley 2002). A wisdom approach, we
have argued (McKenna, Rooney and Liesch 2006), can break the mimesis of
institutional isomorphism that has been acknowledged in the practice and scholarship
of orthodox international business management. The principles of wisdom set out
above are applicable to examine specific problems in a highly complex and uncertain
international business environment (cf. Toyne and Nigh 1998). While rational
judgment is necessary, wise management also requires a capacity for ‘counterintuition’, vision, and humanity. In other words, wise practice can opportunistically
and ethically circumvent the discursive limitations imposed by current orthodoxy in
the turbulent, ephemeral conditions of international business and its management
(McKenna, Rooney and Liesch 2006).
Communication Management
Although it is not always given due regard, we have known about the
centrality of communication to management for some time (Barnard 1938). The
capacity to communicate effectively is an important aspect of wisdom. The vital links
between language, thought and knowledge have long been recognised (Gebser 1985;
Vygotsky 1978). Central to diffusion and application of knowledge at inter-personal
and inter-group levels is communication (Choo 1998; Heracleous and Barrett 2001;
Rooney and Schneider 2005;Van der Hooff and de Ridder 2004). Going further, we
29
argue that for knowledge and wisdom to be effectively used in an organization, the
capacity to communicate complex and abstract ideas must be excellent.
In organizations, knowledge is less a product of individuals and more a
product of interaction within and among groups (Barge and Little 2002). We argue
that wise organizations will develop effective, persuasive and ethical communication
in external (marketing, advertising and PR), inter-organizational, and internal
communication to promote and generate collective wisdom, diffuse tacit and explicit
knowledge through sense-making dialogue, and increase creativity. We also suggest
that questions of aesthetics and art in the communication of abstract thought in
management need to be considered because aesthetics is part of wisdom. This is
important because as knowledge work has become increasingly abstract in a
knowledge society (Tsoukas 2005), it is more difficult to communicate and
understand. Furthermore, in considering affective non-verbal communication, we are
forced to consider aesthetics in relation a broad affective spectrum of mood and
emotion (Ashkanasy 2003), including pleasure, joy, motivations, and so on that are all
aspects of wise judgement.
Intellectual Leadership and the Wise Leader
What is the role of senior management in creating wise practice? Intellectual
leadership is one role that has been ignored in the leadership and knowledge
management literatures (McKenna, Rooney and Boal forthcoming). The best ways of
thinking, for the best reasons, for the best outcomes are needed in a wise organization.
It is crucial that senior managers set the best example in their own work and actively
advocate for wise practice. Central to this line of thinking are Aristotle’s intellectual
and moral virtues (Aristotle 1984; Eflin 2003), which highlight the critical role of
ethics in wisdom and good leadership and statesmanship. We therefore highlight the
30
need for ethics and, in particular, the need for leaders (and others) to strongly commit
themselves to appropriate ethical standards. This consideration is therefore as much
about the intellect as it is about character (cf. Srivastva and Cooperrider 1998).
Intelligent, creative, and ethical activity signifies organizational maturity, which has
no place for brash and rash managerial heroics. In this regard, it is significant that
Collins (2001) criteria in Good to Great for Level Five leadership, the highest,
included humility and people-orientation. If wisdom is to be an organizationally
distributed phenomenon, wise leadership is essential. Such leadership would eschew
unchallenged ideology that produces poor outcomes and abuse of power by leaders,
such as occurred during the ‘downsizing’ phenomenon epitomised by Al Dunlap, and
which normalized corporate greed as epitomized by Enron and WorldCom executives.
We argue that wisdom allows people to get above contemporary ideologies, placing
them in perspective, to select that which is useful, and to reject that which depreciates
humanity and ultimately imperils optimal organizational outcomes.
Management Education & Research
Can wisdom be taught? Essentially it cannot: however, people can be
inculcated into processes that are likely to promote wisdom. Following Sternberg
(2003), who discusses wisdom in school education, we argue that while it may not be
possible to teach people to be wise, it is possible to construct management education
curricula aimed at ‘teaching for wisdom’ at undergraduate and postgraduate business
education levels. In distilling essential characteristics of wise managers from the
wisdom framework presented above and from research on educating children for
wisdom, we identify specific educational activities linked to ethics, creativity,
epistemology and ontology, citizenship, perspicacity, and communication. Consistent
with our understanding of wisdom as processual, integrating, and coordinating, we
31
suggest that a pedagogy should enhance managers’ capacities to create the most
propitious environment in which wise practices can flourish. Importantly, wisdombuilding capacity is notably absent from the attributes ascribed to business school
graduates even though the leadership literature is moving strongly this way.
Avoiding Hubris
So far, we have painted a positive picture of wisdom. However, caution is also
needed in making claims about wisdom based on the assumption that it is intrinsically
good and therefore unquestionable. Equally, one has to be careful of arrogant or
patronising claims to wisdom effectively silencing alternative views by implicitly or
explicitly labelling them as unwise. Csikszentmihalyi and Rathunde (1990: 44) argue
that a disorienting grandiosity and remoteness are dangers that might be associated
with the pursuit of wisdom. These possible tendencies can lead to complacency and a
lack of humility. Nevertheless, as Csikszentmihalyi and Rathunde (1990: 44) also
argue:
What this suggests to our contemporary way of thinking is that, even under the
best conditions, knowledge is dangerous. But then so is ignorance. The point is to
understand what are the dangers peculiar to wisdom so that we can reap its
benefits while avoiding as much as possible of its negative effects.
According to Aristotelian philosophy, wisdom is, by definition, a finely balanced,
difficult, and uncertain thing in itself, and it suggests that to wisely deal with difficult
and uncertain aspects of life, we need to relax our modern urges to make rationality
claims and to seek control. In other words, paradoxically, we might be more in control
if we are prepared to accept less of it. While this might be a wise way of engaging
32
with the world, it is a way that will be hard for many to embrace. It requires faith,
confidence, humility and courage; without these it is unworkable, and this too is part
of the downside. People and groups lacking in these virtues will still make wisdom
claims, to the detriment of humanity, but getting it right will require considerable
determination and resolve that may be at odds with the values that shape management
practice today.
Wisdom also needs to be cognizant of the potential for nostalgic conservatism,
for ways of doing things from former times. We cannot turn the clock back: that is,
conditions, contexts, knowledge, and relations all change over time. To simply wish
things to be as they once were is unreflexive and simplistic. A wiser approach to the
past is to understand what underlying values, conditions, understandings, relationships
and the like produced the conditions to which we fondly look back. On the other
hand, wise people are sceptical about radical panaceas. But again, this does not mean
that a continuous ‘wait and see’ or ‘cautious’ approach is necessarily wise. Typical of
such an unwise ‘cautious’ approach is the Australian Government’s sceptical
approach to global warming since 1996, which led to its refusal (along with the
U.S.A.) to sign the Kyoto Agreement. However, now that the scientific evidence is so
overwhelming and, more recently, that the Stern Review4 presented by a former
World Bank chief economist, has re-cast it as an economic problem, the Australian
Government has rapidly changed its stance, appearing to many as capricious and
populist. In other words, wise actions are those that are appropriate regardless of
whether they appear cautious or radical. Consequently, dissent and breaking with
tradition must be as permissible as caution if the potential for wise practice is not to
be greatly reduced.
Retaining Wisdom
33
Wise people are hard to find, and if the Canadian Public Service Commission
report about wisdom management (Hammer 2002) is any guide, wise managers may
not even want to work in today’s managerialist environment, accompanied by poor
work/life balance as well as ethical, environmental, citizenship, and philanthropic
compromises. Given the disincentives that wise people face, organizations need to
consider how to help people to become wiser and how to create the organizational
conditions for wise practice. Business schools need to consider how best to teach for
wisdom. These approaches may be more feasible and beneficial in the long run than
seeking to recruit one of these rare individuals. Our central observation in this regard
is that, while most of us will never reach higher states of wisdom, we can all become
wiser than we presently are. In other words, wisdom is part of a continuum and it is
segmented: there is a scale of wisdom, and people can be wise or unwise in various
life or organizational situations. Nevertheless, if sufficient numbers of people take this
‘small wisdom’ route or are enabled to do so, great benefits might accrue. Mentors
and emeritus positions are common in universities, so why shouldn’t this model be
applied to profit and non-profit organizations? This point is important because
intellectual labour in organizations is in large degree a collective process.
Nonetheless, wisdom in individuals is vital, especially for those in leadership
positions. Linking wisdom to education, culture, knowledge management,
communication, and leadership is therefore important and likely to be necessary for
successful development of managerial wisdom.
Conclusion
Wisdom presents a major resource for management. Although many of us will
not become fully wise, the components for wisdom reside in all of us to one degree or
another. We, therefore, take an optimistic view that a better future is possible if we
34
can look beyond the accumulative assumptions about knowledge (and technology) to
wisdom. Wisdom requires knowledge, but not necessarily a great accumulation of it.
Wisdom is critically dependent on ethics, judgement, insight, intuition, creativity, and
other transcendent forms of human intellection. Wisdom is concerned less with how
much we know and more with what we do and how we act. Wisdom is a
fundamentally practical way of being in a complex and uncertain world.
Endnotes
2
3
4
For a good review of positivist psychology, see Green (1992) and other articles in that issue of
Theory and Psychology.
Of course, it is silly to assume that eras neatly separate at particular times. Furthermore, the
characterization of an era always understates the complex diversity of such times. Consequently,
we are indebted to Matt Statler for drawing attention to the diversity of pre-Calvinist Europe, in
particular the work of Marcel Henaff, whose 2002 work, Le Prix de la vérité : Le Don, l'argent,
la philosophie, distinguishes between Weber’s Protestant capitalism and Catholic capitalism in
the Mediterranean.
For a full coverage of the emergence of business and accounting systems, see de Roover
(Kirshner 1974).
http://www.hm-treasury.gov.uk/independent_reviews/stern_review_economics_climate_
change/stern_review_report.cfm
35
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