Practical Wisdom for Sustainable Management and Knowledge Sharing

Natàlia Cugueró-Escofet and Josep M. Rosanas
Additional contact information
Natàlia Cugueró-Escofet: Faculty of Economics and Business Studies, Universitat Oberta de Catalunya, Rambla del Poblenou, 156, 08018 Barcelona, Spain
Josep M. Rosanas: IESE Business School, Management Control Department, Universidad de Navarra, Avinguda Pearson, 21, 08034 Barcelona, Spain

Sustainability, 2020, vol. 12, issue 10, 1-17

Abstract: Practical wisdom (“phron?sis”) is an Aristotelian concept that has been incorporated into management research to a considerable extent in the last 20–30 years. This paper attempts to show how practical wisdom is necessary as a type of situational knowledge that is required for most management decisions to be sustainable. We start reviewing the types of knowledge necessary in decision-making, and we emphasize “practical wisdom” as the kind of knowledge that is particular and subjective, is acquired through practice, and is transmitted by example. We relate the concept of practical wisdom with the Hayek concept of knowledge of time and place, the Polanyi concept of tacit knowledge, and Nonaka’s knowledge management. We conclude that in most management decisions, phron?sis is required and, thus, is necessary to increase sustainability in terms of effectively sharing knowledge and acquiring virtues to improve managerial decision-making. Not considering phron?sis has bad implications for management as it can lead to unsustainable and poor decisions, for instance, in main areas of management control such as pricing policies, budgeting, balanced scorecards, transfer pricing, and goal setting. Along with the intellectual virtue of practical wisdom we conclude that moral virtues, specifically justice, should be the complement that guides organizational objectives.

Keywords: practical wisdom; management control systems; decision-making; performance evaluation; sustainable management (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.mdpi.com/2071-1050/12/10/4173/pdf (application/pdf)
https://www.mdpi.com/2071-1050/12/10/4173/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:10:p:4173-:d:360527

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().