The ancient virtue of practical wisdom has lately been enjoying a remarkable renaissance in management literature. The purpose of this article is to add clarity and bring synergy to the interdisciplinary debate. In a review of the wide-ranging field of the existing literature from a philosophical, theological, psychological, and managerial perspective, we show that, although different in terms of approach, methodologies, and justification, the distinct traditions of research on practical wisdom can indeed complement one another. We suggest a conciliatory conception (...) of the various features of practical wisdom in management. This we take as a point of departure for a discussion of the significant implications of the subject for the theory and practice of management and for the direction of further research in the field. (shrink)

This paper extends previous discussions of corporate character and corporate virtues. By drawing particularly on the work of Alasdair MacIntyre, it offers a perspective on context-dependent categories of the virtues. It then provides a philosophically grounded framework which enables a discussion of which virtues are required for business organizations to qualify as virtuous. It offers a preliminary taxonomy of such corporate virtues and provides a revised definition of corporate character.

ABSTRACT:Neuroethics, the study of the cognitive and neural mechanisms underlying ethical decision-making, is a growing field of study. In this review, we identify and discuss four themes emerging from neuroethics research. First, ethical decision-making appears to be distinct from other types of decision-making processes. Second, ethical decision-making entails more than just conscious reasoning. Third, emotion plays a critical role in ethical decision-making, at least under certain circumstances. Lastly, normative approaches to morality have distinct, underlying neural mechanisms. On the basis of (...) these themes, we draw implications for research in business ethics and the practice of ethics training. (shrink)

This paper aims to integrate insights from psychoanalytic theory into business ethics research on the sources of ethical failures within organizations. We particularly draw from the analysis of sources and outcomes of neurotic processes that are part of human development, as described by the psychoanalyst Karen Horney and more recently by Manfred Kets de Vries; we interpret their insights from a stakeholder theory perspective. Business ethics research seems to have overlooked how “neurotic management styles” could be the antecedents of unethical (...) behavior within organizations. After showing the connection between five managerial neuroses and the corresponding potential ethical failures within organizations that have been already identified within business ethics research, we suggest three organizational strategies to counteract these failures. First, we argue that managers should pay greater attention at the complexity of human motivation, avoiding the simplistic view of compliance‐based approaches. Second, we discuss the importance of developing a conversation around values within organizations, enabling healthy individual growth and limiting the emergence of neurotic processes. Finally, we discuss the role of the business ethicist in facilitating such a process, suggesting a parallel between the role of the business ethicist and that of the psychoanalytic therapist. (shrink)

This paper aims to integrate insights from psychoanalytic theory into business ethics research on the sources of ethical failures within organizations. We particularly draw from the analysis of sources and outcomes of neurotic processes that are part of human development, as described by the psychoanalyst Karen Horney and more recently by Manfred Kets de Vries; we interpret their insights from a stakeholder theory perspective. Business ethics research seems to have overlooked how “neurotic management styles” could be the antecedents of unethical (...) behavior within organizations. After showing the connection between five managerial neuroses and the corresponding potential ethical failures within organizations that have been already identified within business ethics research, we suggest three organizational strategies to counteract these failures. First, we argue that managers should pay greater attention at the complexity of human motivation, avoiding the simplistic view of compliance‐based approaches. Second, we discuss the importance of developing a conversation around values within organizations, enabling healthy individual growth and limiting the emergence of neurotic processes. Finally, we discuss the role of the business ethicist in facilitating such a process, suggesting a parallel between the role of the business ethicist and that of the psychoanalytic therapist. (shrink)

As a transitional economy, Vietnam has undergone tremendous changes over recent decades within a ‘fusion’ context that blends both traditional and modern values from its complex history. However, few studies have explored how contemporary issues in the context of Vietnam have brought both obstacles and skillful initiatives to managerial approaches to doing business. We draw on the concepts of social trust and institutional theory to explore how informal institutions such as religious forces can contribute to the development of individual trust (...) and whether individuals are willing to extend trust beyond familial networks. We contribute to the notion of a moral conception of trust by exploring how Buddhism in particular has initiated distinctive managerial approaches in the context of Vietnam, in response to dilemmas of social trust. Our findings highlight that as an informal institution, engaged Buddhism yields significant impact on the formation of social trust. We carried out in-depth interviews in Vietnam with 33 organizational leaders who were Buddhist practitioners, using thematic analysis to elucidate our findings and arguments. The study reveals how the incorporation of Buddhist principles has fostered context-sensitive, non-extreme, and reflexive managerial approaches to enhance morality as a response to social trust issues. (shrink)

People think that making quick decisions is important for leadership in the digital age. Business ethics experts, on the other hand, say that smart managers take their time, stay calm, and think things through before making choices. There is a long history of moral study in business ethics that both approaches can draw on. This piece uses real numbers to show how much leaders in the information age trust the skills and drive of the people they work with. Dual process (...) theories of cognition have added to the field of research on making good decisions by combining moral traditions from business ethics research. On a conceptual level, though, both intuitive and deliberate thought have been linked to more moral behavior. To find out how different types of cognitive processes affect differences, 5578 people filled out the Decision-Making Profiles, the Big Five Personality Questionnaire, and a survey about how much they trust others. Because personality plays a part, the data showed that the different ways people make decisions depend on how much they trust others. People who are more "extroverted," "open," or "agreeable" are more likely to trust others. Personality type doesn't have a big effect on trusting people in the wise decision-making description. People with the deliberative profile trust people the least, people with the smarter profile trust people about the same amount, and people with the intuitive profile trust people the most. For the most part, the smarter profiles believe people, no matter what kind of person they are. These results add to what is known about how dual process models of cognition relate to personality differences, trusting others, and personality differences. It looks like the leadership skill of phronesis is very important for building trust in groups and nations. (shrink)

Business scholars have recently proposed that the virtue of personal wisdom may predict leadership behaviors and the quality of leader–follower relationships. This study investigated relationships among leaders’ personal wisdom—defined as the integration of advanced cognitive, reflective, and affective personality characteristics (Ardelt, Hum Dev 47:257–285, 2004)—transformational leadership behaviors, and leader–member exchange (LMX) quality. It was hypothesized that leaders’ personal wisdom positively predicts LMX quality and that intellectual stimulation and individualized consideration, two dimensions of transformational leadership, mediate this relationship. Data came from (...) 75 religious leaders and 1–3 employees of each leader (N = 158). Results showed that leaders’ personal wisdom had a positive indirect effect on follower ratings of LMX quality through individualized consideration, even after controlling for Big Five personality traits, emotional intelligence, and narcissism. In contrast, intellectual stimulation and the other two dimensions of transformational leadership (idealized influence and inspirational motivation) did not mediate the positive relationship between leaders’ personal wisdom and LMX quality. Implications for future research on personal wisdom and leadership are discussed, and some tentative suggestions for leadership development are outlined. (shrink)

Business Ethics: A European Review, EarlyView.

While business as a social activity has involved communities of persons embedded in dense relational networks and practices for thousands of years, the modern legal, theoretical psychological, and moral foundations of business have progressively narrowed our understanding of practical wisdom. Although practical wisdom has recently regained ground in business ethics and management studies, thanks mainly to Anscombe's recovery of virtue ethics, Anscombe herself once observed that it lacks, and has even neglected, a moral psychology that genuinely complements the nuanced philosophical (...) perspective of a virtue‐centered moral philosophy. Herein, we offer one way to fill this gap by suggesting two opposing psychological paradigms, namely the inter‐processual self and the autonomous self, which are classified according to the assumptions they make about the self, human agency and action more broadly, as well as how they relate to practical wisdom. Upon presenting these moral psychologies, we will bring this proposal into conversation with business ethics to show how the IPS paradigm can enable and support virtuous management. (shrink)

The revival of virtue ethics in contemporary moral philosophy had a major impact on business ethicists, among whom the virtues have become a staple subject of inquiry. Aristotle’s phronēsis is one of those virtues, and a number of texts have examined it in some detail. But analyses of phronēsis in business ethics have neglected some of its most significant and interesting elements. In this paper, I dissect two neglected components of practical wisdom as outlined in Book VI of the Nicomachean (...) Ethics: sunesis, a capacity to perceptively evaluate testimony, and gnomē, a capacity to rightly discern exceptions to ‘universal’ moral rules. Practical wisdom is a product of experience, so I examine the role that experience plays in the development of these deliberative capacities, asking what it is that the practically wise will have taken away from their experiences. It is, in particular, everyday, ‘mundane’ experience that begets these excellences, so I concentrate specifically on that kind of experience in the domains of sunesis and gnomē as I search for insights about how we develop phronēsis and how we might better do what is right. (shrink)

The renewed engagement with Aristotle’s concept of practical wisdom in management and organization studies is reflective of the wider turn towards practice sweeping across many disciplines. In this sense, it constitutes a welcome move away from the traditional rationalist, abstract, and mechanistic modes of approaching ethical decision-making. Within the current engagement, practical wisdom is generally conceptualized, interpreted or read as a form of deliberation or deliberative judgement that is also cognizant of context, situatedness, particularity, lived experience, and so on. We (...) argue that while this way of conceptualizing practical wisdom moves closer to practice in accounting for the concrete and particular reality within which individuals enact ethics, it does not adequately account for practice in the ontological and relational sense posited in practice theories. Practical wisdom conceptualized on the _deliberative_ dimension still retains a higher emphasis on distinct entities (individuals/institutions), reflexive agency, conscious mental states, goal-directed action, and intentionality. In other words, it puts a higher stress on individual _wisdom_, as opposed to _practice_ or the relational interaction of the individual and social inhering in practice. We offer an alternative conceptualization of practical wisdom based on the _dispositional_ mode of being in the world which is rarely deliberate, intentional, or reflective. Our conceptualization integrates Aristotle’s original ethical framework, which is already embedded in a practice-based ontology, with insights from practice theories to show how practical wisdom is intuitively channelled in the _dispositional_ mode in a given social configuration of virtues/ends. (shrink)

Business Ethics: A European Review, EarlyView.

Integrated approaches in the ethical decision-making (EDM) and practically wise decision-making literature are emerging as alternative perspectives to management theories that conceptualize decision-making in a rationalist and value-free manner. However, more dialogue between both perspectives and qualitative research that applies them is required. In addition, there is a need for empirical analysis on business engagement in the face of grand challenges in developing countries. This paper proposes an integrated practically wise EDM framework to study how Colombian councilors who, in 2013, (...) voted for or against the merger between the Colombian state-owned company UNE and the Swedish multinational Millicom interpret this decision and its public impact. Qualitative semi-structured interviews were conducted with a voluntary sample of 18 of 21 councilors. Supporters of the UNE-Millicom merger expressed open-mindedness, seeing the merger as a means to achieve justice. On the contrary, the merger’s opponents expressed circumspection, doubting that Millicom’s intentions really leaned toward justice. We conclude that practical wisdom—embodied by both supporters and detractors—fosters an understanding of EDM beyond what leaders should not do. It also includes a democratic and balanced deliberation on what leaders think they should do to promote the common good. (shrink)

Despite increasing the presence of ‘ethics talk’ in business and management curricula, the ability of business ethics educators to question the system and support the development of morally responsible agents is debatable. This is not because of a lack of care or competence; rather, this situation points towards a more general tendency of education to become focused on economic growth, as Nussbaum claims. Revisiting the nature of ethics education, I argue that much moral learning occurs through the imagination, and not (...) solely through the rational mind. Individuals are complex, and a great part of what we are lies below the threshold of consciousness. In this respect, ethics education must take into account the psyche and its influence on conscious behaviour, which can best be apprehended through the imagination. Echoing Jung’s concerns about unconscious and indiscriminate masses, I thus explore how imagination and creative material contribute to enhancing both self-knowledge and ethical reflection in the context of organisational life and business education. I especially consider how moral development and social awareness are tied up with individual psychological understanding, and argue that Jung’s analytical psychology offers insightful tools to explore our individuality. (shrink)

This paper re-frames business ethical codes as narrative processes by reflecting critically on key ontological assumptions underpinning the existing research, and introducing new and relevant concepts based on alternative assumptions. The first section draws on recent decision-making research to develop a theoretical account of BCEs as complex, socially embedded sensemaking processes. The second section addresses the content of codes, and differentiates between narrative and logico-scientific modes of reasoning. The third section focuses on the quality of code communication and identifies several (...) distinct types of narrative process. We provide research directions for how this new understanding of BCEs may be further developed, as well as implications for practitioners. In response to the call for new conceptual models, the paper provides organizational researchers with a more nuanced understanding of how BCEs enable or constrain ethical behavior in organizations. (shrink)

The gap between economic rationality, as embedded in utility maximization, and ethical rationality, identified with a set of rules that prescribe the right course of action, has been a challenging issue for economists, philosophers, and business ethicists. Despite the difference and the noncompetition between a scientific economic approach of economics and business ethics, and a behavioral and philosophical one, we highlight the importance of the Aristotelian concept of prudence or phronesis applied to business activity. Phronesis allows for a conceptualization of (...) rationality that can be simultaneously applied to economics and ethics. It also allows conceiving the intrinsically ethical nature of economic rationality. This relationship requires an appropriate education and the intervention of the state. (shrink)

Mentoring is a natural setting for senior employees to render ethics advice and consultation to junior employees. Two studies examined the question of whether those who mentor are more practically wise than those who do not. Although four different measures of practical wisdom were used, no differences were detected. However, mentors were shown to be more politically skilled than non-mentors.

Every academic endeavour rests ultimately on a particular assumption of human nature. Two views of human nature are compared and contrasted: (1) a utilitarian naturalistic humanism which holds essentially the view that human nature is materialistic, and (2) an Aristotelian-Thomistic natural law/virtue ethics humanism which holds the view that human nature is both materialistic and spiritualistic. This paper argues that the latter view better captures and explains the metaphysical realities of human nature. In addition, the role of virtues and its (...) applications in management practice are presented. Organisational policy mechanisms and managerial implications will depend on which view of human nature one adopts. The failure to integrate the virtues and natural law ethical principles into management practice threatens the stability and survival of the firm since they are required to correct the dysfunctional aspects and ethical deficits of the current business philosophy. (shrink)

In view of the ethical crises that have proliferated over the last decade, scholars have reflected critically on the ideal of management as a value-neutral, objective science. The alternative conceptualization of management as a craft has been introduced but not yet sufficiently elaborated. In particular, although authors such as Mintzberg and MacIntyre suggest craft as an appropriate alternative to science, neither of them systematically describes what “craft” is, and thus how it could inform an ethical managerial orientation. In this paper, (...) we draw from the literature to elaborate three caring orientations associated with craft practices: caring for materials, caring for process, and caring for end-users. We suggest that conceptualizing management as a craft in these terms offers an approach to business ethics that goes beyond the “ethics of compliance” and toward a more embodied and embedded form of ethical enactment within organizations. (shrink)

The premise of this paper is that the fear of foolishness is essential to wisdom. Unfortunately, leaders are often conditioned to suppress fear in favor of confidence. However, wise leaders fear foolishness while foolish leaders are fearless. Leaders fall into traps and hit walls that result in fallacies. It is the recognition of these fallacies and the fear of their consequences that compel leaders to seek wisdom. This paper relies on protection motivation theory, the balance theory of wisdom, the imbalance (...) theory of foolishness, and the WICS model of leadership to caution leaders of foolishness so that wisdom can be developed. Specifically, the fear of foolishness is proposed as the motivating factor for the pursuit of wisdom. In doing so, the literatures of wisdom and fear are reviewed and the appraisal process of the fear of foolishness and the coping mechanisms to address foolishness are elaborated on. The protection motivation of the fear of foolishness can fundamentally change leader behaviors and attitudes for the sake of wisdom and individual, organizational, and societal well-being. (shrink)

Human service managers are called on to make a variety of difficult decisions that often involve fundamental conflicts in values. Such conflicts constitute ethical dilemmas. This qualitative exploratory study examines how human service managers (N = 40), from the United States, identify and resolve ethical dilemmas. The dilemmas identified by the managers tended to result in the restriction of missions, programs, services and practice methods. The resolution of these ethical problems often rested on following the very rules that created the (...) dilemmas. Additional strategies included consultations and reliance on abstract principles, specifically those of one's spiritual faith. Missing, however, were systematic or evidence-based procedures for resolving challenges that often threatened the very goals of the human service agencies. The need for more careful training in the area of ethical problem solving that maintains the vision of human services is presented. (shrink)

In management literature, practical wisdom is increasingly perceived as a necessary resource for excellence in judgment. However, so far, little effort has been devoted to provide substantive guidance on how to apply practical wisdom into day-to-day managerial decision-making processes. In order to close this gap, we develop an item-based guideline for self-guided decision-making, which explores the specific aspects a practically wise decision-making process inherently entails. To do so, we introduce the concept of practical wisdom, highlight its recent adaptions in management, (...) and draw a link to self-guided decision-making. Then, we explain our methodological framework and procedure. Based on these considerations, we develop the particular items by transdisciplinary unfolding and synthesizing the main dimensions and features of practical wisdom. Finally, we discuss suggestions of application, theoretical implications, limitations, and propose avenues for further research. (shrink)

Moral imagination and moral courage are vital themes in business ethics education, yet their intimate relationship has been a subject of little conceptual study. This paper argues, following Kant as well as the insights of social psychology, that moral courage provides the key constitutive condition for moral imagination to work, particularly in business settings. On the other hand, while thinkers of moral imagination such as Patricia Werhane write admiringly of moral courage from time to time, they spend little time on (...) developing the latter concept in its intimate and constitutive relationship with moral imagination. This paper proposes that the pedagogical approaches of moral imagination and moral courage should be integrated with special reference to Mary Gentile’s Giving Voice to Values Approach, a pedagogical method which provides the crucial tools to build the ‘moral muscle’ for exercising ethical action in hierarchically organized firms. (shrink)

We consider the problem of moral disjunction in professional and business activities from a virtue-ethical perspective. Moral disjunction arises when the behavioral demands of a role conflict with personal morality; it is an important problem because most people in modern societies occupy several complex roles that can cause this clash to occur. We argue that moral disjunction, and the psychological mechanisms that people use to cope with it, are problematic because they make it hard to pursue virtue and to live (...) with integrity. We present role coadunation as a process with epistemic and behavioral aspects that people can use to resolve moral disjunction with integrity. When role coadunation is successful, it enables people to live virtuous lives of appropriate narrative disunity and to honor their identity-conferring commitments. We show how role coadunation can be facilitated by interpretive communities and discuss the emergence and ideal features of those communities. (shrink)

On August Business Roundtable, the Business Roundtable redefined the purpose and social responsibility of the corporation. Yet, this statement must be followed by substantial changes in the business models of corporations for it to avoid becoming empty rhetoric. We believe that the figure of the independent director may be one of the catalysts needed for this change of paradigm for corporations. In spite of the positive correlation between Corporate Social Responsibility and board independence, the development of the independence of boards (...) during the last decade has not lead to the expected CSR results. Academics and regulators point to a weak definition and the non-standardized measurement of both independence and board independence as one possible explanation, and agree that a broader definition is needed. This paper aims to contribute to this debate. We develop a second-generation definition of independence based on a positive approximation to the concept by integrating an Aristotelian perspective of virtue ethics with the best practices of corporate governance. Thus, we define independence as a virtue guided by practical wisdom, that implies autonomy and autarky and which enables a person to act with integrity, fairness and truthfulness. In the context of corporate governance, independence is associated with an honest disposition to serve. Our proposal has political implications for supervisors that make decisions relating to the suitability of board members. (shrink)

Alasdair MacIntyre´s criticism of Modernity essentially refers to the problem of compartmentalization, which restricts the possibility of achieving excellence in an integral lifestyle. Among other reasons, compartmentalization is especially derived from an insular valorization of the workplace based on a reductionist understanding of productivity in terms of mere efficiency. Aimed at overcoming the moral confusion derived from the overestimation of technical, skilled productivity and individualistic cooperation in private corporations, this article offers a thicker explanation of MacIntyre’s theory of productive work (...) in light of a narrative approach that opens up the possibility of achieving standards of excellence in modern production. To do so, it follows MacIntyre’s understanding of productivity in terms of craftsmanship by explaining what excellence in production is and the role it plays in achieving unity of life and excellence in modern corporations based on two criteria derived from a historical definition of production, namely, craftsmanship and collegiality. (shrink)

This article analyzes in detail the virtue of practical wisdom as described by Thomas Aquinas, and on this basis it develops a comprehensive framework to enrich Authentic Leadership theory, establishing the virtue of practical wisdom as foundational for the authentic leader’s behavior and character development, and highlighting shortfalls that may stem from vices opposed to it. The goal of the article is twofold: First, it seeks to fill a void on the role of virtues –and in particular practical wisdom– in (...) leadership studies; second, it aims to show how cultivating the virtue of practical wisdom as described by Aquinas promotes the development of exactly those traits that are characteristic of an authentic leader, offering a set of propositions delineating these correlations. (shrink)

Banks have a central role and importance in all commerce and hence in all societies. This thesis investigates the ethical basis of banking practice with the aim of developing an account of the virtues appropriate to bankers and banking. One central issue concerns a conflict between the interests of banks and their customers, and how this conflict plays out in relation to the lending policies and fee structure of banks. Such lending policies can have a significant effect on banks, their (...) customers and a range of stakeholders. This research project investigated empirical evidence through qualitative interviews with senior bankers in two locations, Australia and Hong Kong, to elicit their thoughts on banking areas that involve customer interaction, namely, deposit-taking, credit cards, home mortgage loans, corporate finance, and foreign exchange. The institutions selected hold a substantial segment of banking business in their respective countries and are thus representative of bankers’ perspectives. The dissertation also entailed a case study of the causes and consequences of the American sub-prime crisis that was precipitated by the financial sector. The interviews revealed an assertion of good ethical conduct based on adherence to peer-determined codes of conduct and compliance with regulations. There was also a common predisposition to claims of corporate social responsibility and reputation preservation but these have tended to mask the powerful underlying sales thrust. A key finding of the study points to a lapse in ethical values in banks due to excessive reliance on self-interest. Although self-interest is not in itself wrong, there has been a lack of moderation vis-à-vis the interests of less powerful customers. A related finding is a prevailing resistance to regulation that is necessary to curtail selfish and irresponsible behaviour by banks. The interview subjects prefer industry self-regulation to government supervision. However, the banks in Australia and Hong Kong, which have been subjected to tighter regulation, have survived the global financial crisis better than their American counterparts despite complaints about the severity of their regulatory climate. There is a strong case to ascribe ethical failure to American practices that triggered the sub-prime calamities, which have devastated homeowners and the global economy. American banks and regulators both operated on the erroneous supposition that the quest after extreme profits would be restrained by free market forces. The conclusions allude to virtues that are necessary for banks to espouse moral conduct. These virtues can be embedded through leadership and cultural change. (shrink)