Professional Documents
Culture Documents
Volume 49 Number 2
April 2018
David J. Pauleen
School of Management, Massey University, Auckland, New Zealand,
e-mail: d.pauleen@massey.ac.nz
ABSTRACT
This article investigates the role of wisdom in management decision-making. In one of
the first empirical studies investigating wisdom and management, 37 CEOs, top man-
agers, and senior executives were interviewed about their perspectives on the concept of
wisdom in the business context and its role in management decision-making; the data
were analyzed using grounded theory methodology. The findings introduce a grounded
construct of Wise Management Decision-making, in which wise decision-making is un-
derstood as an integrated cogni-emotional, reflective process that accounts for internal
and external conditions related to the decision, which is made with the well-being of
the greatest number of stakeholders in mind. The findings both confirm and challenge
previous conceptual studies of wisdom and provide a practical approach to wise man-
agement decision-making. The implications of this study are significant as they broaden
the view of the practicability of wisdom in management and add greater understanding
of the complex nature of decision-making in the business context. For managers, de-
veloping wise decision-making abilities in situ should be considered an integrated and
multidimensional practice, one that can be learned. [Submitted: November 14, 2014.
Revised: December 26, 2016. Accepted: December 31, 2016.]
INTRODUCTION
The quality of management decisions significantly influences organizational per-
formance. The rapid development of technology and growing access to information
and knowledge is generally understood to benefit managerial decision-making;
however, the recent financial crises and environmental disasters (e.g., BP oil spill
† Corresponding author.
335
336 Conceptualizing Wise Management Decision-Making
in the Gulf of Mexico) give reason for pause as, in spite of large amounts of infor-
mation being available, consistently poor decision-making was evident (Intezari
& Pauleen, 2014). Much of the blame for organizational misconduct and ethi-
cal scandals lay with CEOs, boards of directors, top managers, and other leaders
(Verschoor, 2007). Global awareness of corporate responsibility is growing, and
managers face increasing complexity and ethical challenges. According to Pantzar
(2000, p. 236) “[t]oday’s world, known as the information society, unquestionably
has a greater need for wisdom than knowledge” and given the turbulence and com-
plexity of the world, certainty and truth are not guaranteed solely by knowledge
(Hearn, Rooney, & Mandeville, 2003). Similarly, Small (2004, p. 752) emphasizes
that “[w]ithin the context of management development programs, [ . . . ] there is
now an urgent need to understand completely the nature of wisdom and its more
recent offshoot managerial wisdom.”
When studying wisdom, what first emerges is its diverse, yet paradoxically
integrated nature. Wisdom is a multifaceted quality engaging human cognition,
conation (Birren & Fisher, 1990), and affect (Ardelt, 2004), unifying subjectiv-
ity and objectivity (McKenna, Rooney, & Kenworthy, 2013), and interweaving
individuality and communality (Küpers, 2007). It displays itself in action (the
Nicomachean Ethics, 1146a 5) by contextualizing various interests, values and
beliefs, as well as judging the means to pursue good ends: qualities that are of-
ten neglected in knowledge-based decisions and actions. “The cause of action is
choice” (the Nicomachean Ethics, 1139a 31), and wisdom critically engages one’s
abilities of judgment and choice: two qualities that underpin decision-making
(Cornell, 1980). Consistently effective decision-making is an important competi-
tive advantage, and a deep understanding of decision-making is vital in handling
the dynamics of organizations (Nutt & Wilson, 2010).
Scholars (Melé, 2010; Intezari & Pauleen, 2014) have called for empirical
research into the role of wisdom in management decision-making, arguing that
wisdom helps managers to use sound judgment when making decisions. How-
ever, despite the recent emphasis that has been placed on the vital role of wis-
dom in business, existing studies examining wisdom in business contexts do not
provide organizations and management researchers with adequate guidelines nor
the theoretical premise for understanding how wisdom relates to business prac-
tices, including management decision-making (Melé, 2010; Rooney, McKenna, &
Liesch, 2010; McKenna et al., 2013; Greaves, Zacher, McKenna, & Rooney, 2014;
Intezari & Pauleen, 2014; Calleja & Melé, 2016). This led to the research ques-
tion guiding this study: “What is the role of wisdom in management decision-
making?”
The article is organized into five sections. The first provides the background to
the study, which specifically looks at the role of wisdom in management decision-
making. This is followed by a thorough description of the grounded theory method-
ology (GTM) used in this study. The findings section includes a rich description of
the inductive process used in conceptualizing the subject matter as suggested by
grounded theory, as well as a discussion of the findings and the step by step emer-
gence of the construct of Wise Management Decision-making and its place in the
wisdom and decision-making literatures. The study concludes with implications
for practitioners and researchers.
Intezari and Pauleen 337
Wisdom
Classically, wisdom was defined as a quality concerned with making sound
judgments to stay out of trouble and live the good life (Small, 2004; Tredget,
2010) for oneself and, moreover, to exert a positive influence on others (Yang,
2011a). Wisdom in the Western tradition—associated with sound judgment
and applying knowledge in life—is conceptualized in two ways: sophia (pure
or theoretical wisdom) and phronesis (prudence, or practical wisdom). While
theoretical wisdom is concerned with eternal truth, practical wisdom is concerned
with action (the Nicomachean Ethics, 1143b 15–20) and refers to the right conduct
in a given situation and at a given time. Theoretical wisdom is (just) knowing
what is the right thing to do, while practical wisdom requires an ability to act
(LeBon, 2001). For the sake of clarity and simplicity, we use the term “wisdom”
in this article to connote judgment-based action in a specific context.
The ancient concept of wisdom has attracted much attention from different
disciplines in contemporary academic studies. Originally discussed in philosophy,
more recently psychology (Thomas, Bangen, Ardelt, & Jeste, 2015), leadership
(Sternberg, 2013), organization studies (McKenna, 2013; Intezari, 2016),
management (McKenna et al., 2013), education (Rooney, 2013; Intezari, Pauleen,
& Rooney, 2016) and other fields have sought to conceptualize and contextualize
wisdom.
In early psychological studies of wisdom, Baltes and his colleagues’ work,
known as the Berlin School, theorized wisdom as “expert knowledge” (Baltes &
Smith, 1990) and “an expertise” (Baltes & Staudinger, 2000) that is developed
from knowledge and judgment dealing with the fundamental pragmatics, complex
and uncertain matters of life (Baltes & Smith, 1990; Baltes, 1995). Contrary to
the Berlin School, Ardelt (2004, 2010) and Bergsma and Ardelt (2012) stress that
wisdom, being an integration of cognitive and reflective characteristics, does not
exist independently of wise individuals and should not be limited to expertise.
Rather, wisdom must be reserved for wise people, and that wisdom should be
characterized as a personal quality. Another criticism of the Berlin School is that
wisdom-related knowledge might not necessarily result in wise actions (Richardson
& Pasupathi, 2005). Sternberg (2004b) contributed to the debate by arguing that
people who are wise in one situation may or may not be wise in another.
Sternberg’s balance theory suggests that wisdom is a value-mediated use of
intelligence and experience to achieve the common good through a balance among
intra-, inter-, and extra-personal interests over both the short and long term, to reach
a balance among adapting to, shaping of the existing, or selecting a new environ-
ment (Sternberg, 1998, 2004a). The balance theory considers wisdom as embedded
in the individual’s interaction with the situational context (Sternberg, 1998).
338 Conceptualizing Wise Management Decision-Making
Management Decision-Making
Decision-making refers to a set of mental activities that occur when the decision-
maker is trying to generate and choose among different alternatives (Galotti, 2002;
Schraagen, Klein, & Hoffman, 2008). Mintzberg, Raisinghani, and Théorêt (1976),
however, take this further by assigning “action” as an aspect of decision-making,
asserting that a decision is “a specific commitment to action (usually a commitment
of resources)” (p. 246).
Simon (1987, 1960) considers decision-making and the whole process of
management as synonymous. Decision-making is central to what managers do
(Michel, 2007), and is integrated in every sort of management (Harrison, 1999).
Porter (1985) emphasizes that the success or failure of a firm relies mainly on the
managers’ ability to make strategic decisions.
In organizational and management studies, decision-making is mainly ap-
proached as a process (Langley, Mintzberg, Pitcher, Posada, & Saint-Macary,
1995), through which different alternatives are developed, compared, and chosen
from, to achieve desired goals (Keast & Michael, 2009). Scholars, such as Drucker
(1967) and Maddalena and Canada (2007), characterize the process as a sequential
or linear one, while others such as Mintzberg and Westley (2001) and McKenna
and Martin-Smith (2005) emphasize that, in practice, decisions are not always the
outcome of a predefined set of sequential activities, rather they are often made
through a non-sequential/non-linear process.
Consistent with Harrison (1999), we consider decision-making as an on-
going process of identifying and evaluating various alternatives for achieving one
or more objectives, in which expectations and preferences about a particular course
of action lead the decision-maker to select the course of action that is most likely
to result in achieving the objectives. We also agree with Sharp (2007, p. 303) that
the decision-maker “is uniquely herself in a specific context, at a specific time and
in a specific place.” The grounded theory method and the interviews conducted
in this study primarily follow the naturalistic approach as we aim to investigate
the role of wisdom in management decision-making, via a better understanding of
professional decision-makers’ cognitive and behavioral processes as they engage
in decision-making in their natural work environments (Beach & Connolly, 2005).
The natural decision-making holds that decision-making is about “the way people
use their experience to make decisions in field settings” (Zsambok, 1997, p. 4).
While the rational approaches are focused on normative models of optimization,
Intezari and Pauleen 339
METHODOLOGY
Given the scarcity of research on the role of wisdom in management decision-
making, our research objective was to conceptualize the construct linking the two
fields. To answer the research question: “What is the role of wisdom in man-
agement decision-making?” we framed an interpretative exploratory study using
GTM (Glaser & Strauss, 1967; Glaser, 1978, 1992, 1998; Glaser, 2002). GTM
was deemed appropriate for three reasons: the novelty of the subject matter and
the paucity of research and theories concerning the role of wisdom in manage-
ment decision-making, the value-laden nature of the concepts of “wisdom” and
“decision-making” (Pasupathi & Staudinger, 2001), and the prioritization of theory
development in the management field (Pratt, 2008). GTM allows us to establish
a critical link between the subject matter and subsequent hypothesis testing and
formal theorizing (Treviño, den Nieuwenboer, Kreiner, & Bishop, 2014).
Guided by classic grounded theory (Glaser & Strauss, 1967; Glaser, 1992),
we initiated the data collection-analysis recursive process by holding an inductive
theoretical intent. In later phases of the research process, particularly following
the emergence of the core category, we went back to the literature to try to gain
some understanding of the developing concepts and categories. We employed
literature as a comparison and conceptual mapping to facilitate the emergence of
340 Conceptualizing Wise Management Decision-Making
the core category (Giske & Artinian, 2007). However, we were careful to use the
literature to clarify the data and not to use it to define or limit our understanding of
the data, thus remaining true to the intent of classic grounded theory (Glaser, 1992).
Informants
We prepared a list of criteria to guide our selection of potential informants. The
criteria included (i) serving or having served as a senior manager in their or-
ganization; (ii) either in the private or public sectors; (iii) regardless of gender,
education, experience, and age; and (iv) New Zealand-based to facilitate the use
of face-to-face interviews. Senior managers were selected to focus on their pivotal
role in leadership and strategic decision-making: strategic in the sense that the de-
cisions made by senior managers tend to have important and fundamental impacts
on the success and failure of the organization, as well as the lives of employees,
stakeholders, and the rest of society.
To assess informants’ eligibility, we read potential informants’ biographies in
online social networks, including LinkedIn. Over five data collection and analysis
phases, we sent more than 200 invitational emails to senior managers in New
Zealand. We selected a variety of informants, that is, informants were chosen with
different demographic characteristics, including gender, age, education, experience
and field of business. This was done to achieve theoretical sampling (Glaser &
Strauss, 1967), which means that the emergent questions during the interviews and
analysis directed the research to different people and contexts (Goulding & Saren,
2010). Collecting data from diverse groups (e.g., varying in age, gender, work
experience, and education) should result in (1) dense development of properties
of categories, (2) integrating of categories and properties, and (3) delimiting the
scope of the theory (Glaser & Strauss, 1967, p. 58).
In all, 37 CEOs, senior managers, and senior executives from the public and
private sectors in New Zealand were interviewed. The practitioners’ professional
fields covered a diverse range, including education, banking, food and beverage,
health, medical devices, environmental services, paper and forest products, com-
munication and graphic design, utilities, distribution, design and construction,
airlines and aviation, consultation and business growth, and IT and technology.
The practitioners’ organizations varied in size from a small local company with
less than 10 staff members to a large multinational enterprise with over 100,000
employees. Twenty-five interviews were conducted face-to-face, eleven by phone
or SkypeTM , and one via email. Interviews were audio-recorded and transcribed.
interview guideline, and more thorough explanation of the coding process, see
Appendices A and B). In the very beginning of the research process, interviews
were generally unstructured, although in the later phases of the research process,
as concepts started to emerge and theoretical sensitivity increased, we used semi-
structured interviews (see Appendix A). This helped to minimize the influence of
bias from literature-based theories during data collection (Glaser & Strauss, 1967;
Glaser, 1978). The researcher’s theoretical sensitivity increases as specific codes,
categories, and themes emerge during data collection and analysis.
Once each interview was conducted, the audio records were transcribed
and the transcripts were sent to interviewees for checking. After checking, we
analyzed the transcripts using substantive coding (Glaser, 1978) (Appendices
B–F). Substantive coding was done in a line-by-line, sentence and/or paragraph
analysis as appropriate (Glaser & Holton, 2004), and QSR NVivoTM software was
used to manage the process. While coding an incident for a category, we constantly
compared it with other incidents previously coded either in the same or different
categories (Glaser & Strauss, 1967). We checked the fit and refit of incidents
and categories. We compared the concepts identified from each interview with the
concepts identified in other interviews of the same round. The analysis of each
round was then compared with the analysis of the previous round of interviews
as well. Using constant comparison we continuously inspected for new concepts,
developed and compared categories, and decided whether the existing categories
were adequate or changes were required (Wastell, 2001).
While the data were being analyzed, more data were gathered simultaneously
in an iterative fashion (constant comparative method) (Glaser & Strauss, 1967).
This is characterized by theoretical sampling (Glaser, 1978), whereby we collected,
coded and analyzed the data, and decided what data to collect next and where
we could find it (Glaser, 1978). In theoretical sampling, further data collection
is not planned in advance of analysis. Rather, it is the emergence of the core
category that directs data gathering and analysis. The iterations of data gathering,
coding and analyzing were carried out throughout the five phases of the data
collection-analysis, to elaborate the emerging explanation of the core category
(Glaser, 1978).
We began the process of data gathering and analysis with the guidance of the
research question, “What is the role of wisdom in management decision-making?”
Then relevant data were collected and through forming provisional categories
and abstraction of the data, a tentative explanation for the research question was
provided (constant comparison). Following this comparison, we went back to
redefine properties of the initial concepts and categories, and/or to get more data and
analysis. We moved back and forth between collecting, coding and interpreting data
(analytic induction) until the emerging construct was tightly woven and grounded
in the data (Binder & Edwards, 2010). Through constant comparison we kept
track of the emergence and development of our ideas, to prevent our bias from
influencing the emergence of the construct (Glaser & Strauss, 1967).
Once conceptual codes began to accumulate, we compared the coded seg-
ments to each other, and we began to categorize them by grouping them under more
conceptual terms: that is, conceptual categories (Glaser, 1992) (Appendix G). The
conceptual codes as well as the main conceptual categories that were developed
342 Conceptualizing Wise Management Decision-Making
primarily during the first three phases of data collection and analysis are illustrated
in Table 1.
Sub-core categories and the core category were developed during selective
coding (beginning in phase 3 and developed in and confirmed during phases
four and five) (Table 1). The coding process was iterative and the categories
were (repeatedly) refined, elaborated, and integrated as an increasingly conceptual
theoretical understanding of the data emerged. Throughout the analysis, the lead
researcher used memo writing and mapping to record any emerging ideas, possible
codes, categories, and relationships between categories and subcategories. When
the core category and sub-core categories emerged, and prior to finalizing the
construct of Wise Management Decision-making, we sent the preliminary findings
to all informants and asked them to comment and recommend changes. During
this process of member checking (Goulding, 2002), 13 informants responded and
some suggested minor changes leading to minor amendments to the construct.
The data analysis ultimately led to the “basic social process” (core cate-
gory) (Glaser, 1978, p. 94), wise management decision-making. The basic social
process explains the cognitive processes and behavioral patterns that are relevant
and problematic for those involved (Glaser, 1978). The core category is an in-
tegrating process that engages a recursive reflection underlying multiple critical
intra- and inter-personal capabilities: an evolving Multi-Perspective Considera-
tion, Cognitive-Emotional Mastery, and Self-Other Awareness. Methodologically,
the core category began to emerge during the third round of data collection and
analysis. Hence, in the fourth and fifth rounds of data collection and analysis,
coding was delimited by focusing on the variables that were more related to the
core category.
In the following section, we present the theoretical findings, which will
be followed by the discussion about the development of the construct of Wise
Management Decision-making.
THEORETICAL FINDINGS
No conclusive (empirically-derived) predeveloped list of wise managers’ distinc-
tive characteristics exists. Nor is it reasonably possible to identify and restrict all
the wisdom-associated traits to a certain set of characteristics with neat boundaries
delineating the wise from the unwise. Nevertheless the findings from this research
show that the informants in this study do, in fact, recognize the “quality” of wis-
dom and can characterize the characteristics and attributes of the management
decisions and managers they consider wise. When informants were asked “Have
you ever seen a management decision, made either by yourself or others, that you
call (un)wise?” or “Has there been a manager in your business community whom
you consider as being wise? If so, why do you regard them as wise?”, almost all of
them could describe the characteristics of the decisions and the personality traits
of those they believed to be wise.
In this section we present the findings, specifically discussing the conceptual
and sub-core categories in light of the wisdom and decision-making literature as
we progressively explain both the emergence and the development of the construct
of Wise Management Decision-Making. As illustrated in Table 1, four sub-core
Table 1: Developing conceptual categories.
Conceptual
Core Category Sub-core Categories Categories Conceptual Codes
Wise Management Multi-Perspective Consequence- Analyzing outcomes and ramifications, Short-term and long-term thinking
Decision-making Consideration anticipating
Intezari and Pauleen
Multi-Perspective Consideration
According to the informants, in wise management decisions consequences are
anticipated, various perspectives are taken into account, and ethical codes are
considered. In the following comment, an informant notes that unwise decisions
do not consider long-term consequences:
“Potentially an unwise business decision is something that just has a short term
view on the world. So an unwise decision to me would be one that just doesn’t
look very far into the future, and just is dealing with something immediate.”
Ethics and morality were considered important in wise decisions. For infor-
mants the decisions that are made that ignore ethical and moral codes and which
do not respect the values that society respects would not be considered wise. This
comment emphasizes the importance of ethics in wise management decisions:
“I don’t say that morality and ethics are necessary in wise managerial deci-
sions; I would say they are essential if you want to make a wise decision. [ . . . ]
I don’t believe that businesses can be successful or very successful without
being ethical. You have to respect the values that society is respecting.”
alternative points of view are presented, both individual and communal interests
are reconciled, and moral and ethical codes are considered (for more quotes and
memos, see Appendix C).
Informants reported that wise management decision-making is based on a
consideration of multiple perspectives of consequence-anticipating, perspective-
taking, and ethics. That is, having a true understanding of the bigger picture,
alternative points of view, and respected values and beliefs of the decision-
maker, the organization, and the wider community are critical in wise management
decisions.
Wise management decision-making based on shared values and a consider-
ation of the decision’s possible social consequences leads to enhanced well-being
of those affected by the decision. In this sense, wisdom, as Blasi (2006) explains,
“means to choose one’s behaviour based on knowledge and shared values, in order
to enhance the well-being of all and awareness that personal actions have social
consequences” (p. 407). Wisdom is the ability to see beyond the horizon and to
consider long-term and far-reaching consequences, so the future is not forgotten
at the moment of decision-making (Hays, 2007). These definitions help concep-
tualize wisdom by identifying several key aspects of wisdom such as being a
choice-based practice, engaging knowledge, drawing on awareness and values,
considering short- and long-term consequences, and transcending individuals.
The extant literature provides some theoretical explanation of this empirically
derived quality of Multi-Perspective Consideration. According to Kitchener and
Brenner (1990), in solving difficult problems, wise people recognize multiple
perspectives, evaluate alternative interpretations, find the shared meaning, and
develop a synthetic view that offers a solution for the problem. This finding is
consistent with Intezari and Pauleen (2013), that wisdom harmonizes short- and
long-term interests and various perspectives at both individual and communal
levels.
This finding also provides empirical evidence of Maddalena and Canada’s
(2007) understanding of ethical decisions, that good decisions are “grounded in
accepted values and management practice” (p. 72). Decisions are actions based on
judgments (Cornell, 1980), and judgments must be guided by ethics and values, as
without a foundation of values, the decision-maker is unable to decide what is good
or bad (Nonaka & Takeuchi, 2011). Values, those of the decision-maker as well as
those affected by the decision and the community as a whole, are all arguably part
of the decision-making process. This means that understanding others’ actions and
reactions in relation to the decision-maker’s decision is critical to making the right
decision (Bazerman & Moore, 2009).
In addition to an integrative multi-perspective approach, in making wise
management decisions, the informants also perceived that the decision-maker’s
awareness of self and her surrounding environment was critical. This quality,
entitled Self-Other Awareness, is discussed in the following section.
Self-Other Awareness
One quality that informants ascribed to wise managers and perceived to be associ-
ated with making wise management decisions is the development of the wise
346 Conceptualizing Wise Management Decision-Making
manager’s awareness. The quality is divided into two main categories: self-
awareness, corresponding to one’s understanding of personal attitudes, abilities,
skills, characteristics, interests and values; and other-awareness or awareness of
the surrounding environment representing the extent to which one is aware of what
is going on around them.
Self-awareness and other-awareness enable managers to effectively act in
a given context, interact empathically with others, and make sound judgments
and decisions by bearing in mind and unifying different points of view, as this
informant explains:
“I think awareness is quite significant in considering a manager as being wise.
If you are not aware of yourself, your strengths, your weaknesses, then if you
consider only your strengths, you’re only going to get part of the job done. So,
if you have weaknesses, which we all have, then you prop up your management
with those areas of expertise . . . with greater expertise from someone else. And
it is not a bad thing or wrong thing. It is all about piecing together what you
can to make your team under your management direction strong.”
Self-awareness
Awareness is one of the fundamental personal qualities of wise people. For a wise
manager it is important to be well aware of their own strengths and weaknesses,
knowledge, and that which they do not know. As noted by one informant:
“Wise managers are very, very self-aware. I think to a large degree, self-
awareness gives them the ability to see how their behaviours impact other
people, and how they can use their behaviour in a positive way to inform
decisions, or to judge before making a decision. And then that helps in the
communication of their decisions.”
Self-awareness enables the wise manager not only to develop a true picture
of self, thus more effectively incorporating one’s own abilities and strengths into
decision-making, but also to better understand the interrelationship between the
manager and the wider environment, as this comment reflects:
“I suppose wisdom is about understanding of self, and understanding of oneself
in the scheme of all the things around them. So, I suppose wisdom is a high
level of self-awareness, and understanding of our character and of what drives
us, and by extension, having that deeper understanding of other people and
what drives them. [ . . . ] They are aware of what’s going on around them.”
In making wise management decisions, the wise manager’s awareness is not
restricted to self-awareness. Rather, informants suggested that both self-awareness
and other-awareness are critical for the manager to be able to make wise decisions.
Wise managers have a good understanding of the people around them. They
are well aware of peoples’ abilities, strengths and weaknesses. This helps them to
better manage others and know who to approach to get advice when needed. As
one informant notes:
“Understanding the environment is also really important because, there are
places where the people around them excel and do well, and there are places
where a person and the people around them don’t. And that is actually under-
standing the environment, what the people need in order to excel, and providing
that environment.”
Cognitive-Emotional Mastery
Informants emphasized that wise management decisions are based on both logic
(rationality) and emotion (non-rationality). Possessing appropriate knowledge and
348 Conceptualizing Wise Management Decision-Making
the ability to use that knowledge are examples of the cognitive qualities that in-
formants associated with making wise management decisions. We identified these
two conceptual categories as Cognitive mastery and Emotional mastery, which
correspond to the involvement of knowledge and experience as well as emotions
in wise management decision-making. Cognitive mastery and emotional mastery
were categorized into one sub-core category in selective coding: the Cognitive-
Emotional Mastery category. We did so to make the sub-category better reflect
the balance that informants perceived between cognition/logic and emotion when
making wise management decisions. As one informant asserts:
“Emotion and logic are 50/50 in wise decision-making process. Everyone has
emotions, but some know how to use it when making decision and some do not
know.”
Cognitive mastery
The cognition-related qualities that informants associated with wise management
decisions revolve around knowledge, experience and the ability to implement the
two when making decisions. Informants believed that managers who do not have
(or are not able to acquire and implement) the relevant knowledge or experience in
a particular field would be unable to make wise decisions. As one informant points
out:
“If the wise person is put in a business position where he or she does not have
experience, they might ultimately be unsuccessful.”
Thinking outside the square was another cognitive quality identified by in-
formants as a distinctive characteristic of being wise. When facing a problem,
wise managers are able to come up with creative alternatives and new solutions.
This informant’s comment characterizes wise managers as being able to go beyond
conventional ways of thinking:
“They may come with new ideas and new perspectives, looking at something in
different ways that you hadn’t thought is possible. [ . . . ] Wisdom is an ability
to think outside the square: to be innovative in thinking.”
Emotional mastery
Although making wise management decisions requires reliable and relevant knowl-
edge and experience and the ability to implement this knowledge and experience,
emotions and emotion-related qualities such as empathy are also important.
Intuition was identified as the quality through which emotion manifests in
management decision-making. For example, one informant asserts that although
logic would be the main foundation of wise management decisions, emotion
through intuition plays a role in decision-making as well:
Intezari and Pauleen 349
“The wise decisions are mainly based on logic. And a degree of perhaps
emotion comes into it in terms of intuition.”
the informants was more than just accumulated knowledge. Informants expressed
that having knowledge per se does not lead one to make wise decisions, and that
wisdom is about applying knowledge (LeBon, 2001).
Cognitive Mastery refers to the extent to which one has appropriate knowl-
edge and experience, and the ability to implement these in decision-making situa-
tions. Emotional Mastery complements Cognitive Mastery by allowing the person
to look at the world through the lens of emotions (Appendix E). Emotional Mastery
is concerned with considering, yet not being overwhelmed by, emotion when mak-
ing decisions (Birren & Fisher, 1990). It must be noted that Emotional Mastery is
different from Emotional Intelligence. Emotional intelligence is described in terms
of abilities (Salovey & Grewal, 2005), traits (Petrides, Pita, & Kokkinaki, 2007),
or a mixture of abilities and traits (Goleman, 1995). In this article, “mastery” is
referred to as a continual learning process, not an end state (Senge, 1990).
In wise management decision-making, Cognitive Mastery and Emotional
Mastery are integrated with each other and with awareness of self and others. As
Matthews (1998) states: “A wise person weighs the knowns and the unknowns,
resists overwhelming emotion while maintaining interest, and carefully chooses
when and where to take action” (p. 211). This is in accord with Aristotle’s doctrine
of the mean (the Nicomachean Ethics, 1107a 1–10). As Intezari and Pauleen (2014)
argue, wise responses and actions in the business world require an appropriate
balance between certainty and doubt.
Informants believed that the integration of cognition and emotion, as well as
Multi-Perspective Consideration and Self-Other Awareness, is enhanced through
two types of reflection, Internal and External, which, when fully and consciously
integrated, can provide an overarching means to underpin the interconnectedness
of the internal and external world.
Internal-External Reflection
Internal reflection
Wise managers, the informants believed, show a high level of flexibility in terms of
learning and developing their competencies. They are decisive in decision-making
and resolute in practice. Being well aware of self (and of others), wise managers
constantly develop their knowledge, skills and abilities and further themselves
through life-long learning. They actively reflect on their own thoughts and behavior
and always learn from mistakes as this informant explains:
“Learning from your mistakes [helps with making wise decisions]. I think it’s
about looking back to see what’s happened. [ . . . ] I think the unwise man is
the person who makes some mistakes and never looks at what they did. And
they make the same mistakes again. And they make it again, and they make
it again. For me being wise is making mistakes, being aware that you’ve just
made a mistake, looking at what’s occurred and learning from it to ensure that
you don’t make the same one again.”
rather what is learnt from that experience is what is important. This sentiment is
expressed in the following comment:
“Those whom I consider as being wise, I think they are wise because they have
not just experience, but they also delve down to the real causes and effects of
what they have learned from that experience.”
External reflection
Informants believed that wise managers constantly reflect on the dominant societal
values and beliefs, consider stakeholders’ interests, and make decisions for the
greater good. The following comment underlines the importance of considering
the community and society’s dominant values and beliefs in making wise decisions:
“You [need] to be outward-looking and understanding what is important to the
community around you, their values and beliefs, [ . . . ] and being aware that
in five years those things would be different. So you have to continuously ask
the question, have to be continually seeking information, trying to understand
and then change the way you are doing things.”
As with internal reflection, given the dynamic and evolving nature of cultures
and societal value systems, wise managers constantly reflect on their surrounding
environment (external world). As noted by an informant, wisdom is driven by the
current values of society, so making wise management decisions requires constant
external reflection:
“If you look at history, there are decisions and approaches taken at that time
in history that would have been considered very wise. But as our society values
change over time, we look back and would say perhaps they weren’t ethical
by today’s values, by today’s standards. So [wisdom] is very much driven
or shaped by the current contemporary values of a society within which we
operate.”
Cognition/Rationality
Cognitive Mastery
Emotional Mastery
Emotion/
Non-rationality
greater pervasive positive effect, which according to Yang (2011b), helps others
and more people to live a good life.
In sum, making wise management decisions requires constant reflection, both
internal and external. It is the conscious use of Internal and External Reflection as
well as their interaction with Self-Other Awareness, Cognitive-Emotional Mastery,
and Multi-Perspective Consideration that allows a manager to make wiser decisions
and to manifest a wiser course of action over time. These four sub-core categories
are formally integrated in the construct, Wise Management Decision-making.
the possible role of wisdom in decision-making, but also has only addressed the
sub-core categories, as discussed above, in an ad hoc fashion if at all. The Wise
Management Decision-making construct has now brought together a character-
oriented conceptualization of wisdom, a broadly accepted approach in leadership
(Bierly III et al., 2000; Gibson, 2008), with an action-oriented approach toward a
specific management practice, decision-making, as called for by Melé (2010), so
providing a unified practical understanding of wisdom as applied to business and
management.
Moreover, the construct of Wise Management Decision-making and its com-
ponents (Multi-Perspective Consideration, Self- and Other-awareness, Cognitive-
Emotional Mastery, and Internal-External Reflection) confirm and expand on other
recent developments including the integration of emotions and cognition in making
appropriate decisions (Dijksterhuis, Bos, Nordgren, & van Baaren, 2006; Elqayam
& Over, 2012; Rooney, 2013). When considering the diverse range of factors
involved in handling the current social, environmental, economic, and political
complexities in the business world, the decisions that are made and the actions that
are taken solely based on reason and fact are characterized as being too limited
(Pauleen, Rooney, & Holden, 2010).
This study offers an understanding of the relationship between wisdom and
management decision-making that can bridge and integrate the rational prescrip-
tive and naturalistic descriptive perspectives into the management decision-making
process. While rational decision-making is based on a clearly defined and ratio-
nal process of defining, diagnosing, designing, and finally deciding (Mintzberg &
Westley, 2001), natural decision-making is a nonlinear experience-based process
that depends on the field settings (Zsambok, 1997). Wise Management Decision-
making conforms to the dual process theories of human reasoning (Elqayam &
Over, 2012). That is, management decision-making is more than just rational
thought. Dual process thinking is based on intuitive and reflective thinking (Evans,
2012). While intuitive thinking is typically characterized as holistic, automatic,
implicit, often unconscious or preconscious, relatively fast, parallel, and linked
with emotion and other feelings, and less correlated with intelligence, reflective
thinking is more rational, and characterized as being deliberate, demanding, an-
alytic, controlled, explicit, often with conscious awareness, relatively slow and
prolonged, sequential, and highly correlated with intelligence (Evans, 2012).
According to the findings of this study, wise management decision-making
does not rely simply on the application of one particular type of knowledge (e.g.,
tacit or explicit knowledge), rather it is the integration of knowledge, both explicit
(e.g., data, information, logic) and tacit (which may manifest as intuition). This
understanding provides insight into how wise decision-making can be a practical
and practiced form of management wisdom. The study extends the understanding
of the DIKW (Data-Information-Knowledge-Wisdom) hierarchy which is widely
accepted in the Information Systems field (Ackoff, 1989; Davenport & Prusak,
1998). The construct can inform contemporary and future design and implemen-
tation of information systems such as Decision Support Systems (DSS), Strategic
Decision Support Systems (SDSS) and Knowledge Management (KM) systems.
Incorporating wisdom in management education is gaining traction and re-
spectability in the most recent literature (Küpers & Pauleen, 2013; Prusak, 2013;
Intezari and Pauleen 355
Rooney, 2013; Intezari & Pauleen, 2014). Ethics has always been a staple of man-
agement education, and recently corporate sustainability, transformational learn-
ing, and governance (Mezirow, 2000; Küpers, 2011; Hays, 2013) have become
increasingly important components of management education. There have also
been calls to facilitate thoughtful reflection on experience for managers in man-
agement classrooms (Mintzberg & Gosling, 2002). Mintzberg (2005) argued for
the need for radical redesign in management programs and business schools, em-
phasizing that what matters in management education is a connection between
learning and practice, and amplifying the necessity of teaching managers to learn
from their own experiences (and not just others’ experiences).
Academic interest in wisdom is growing and this study explicitly links wisdom
concepts with management practice. This study adds to current wisdom and man-
agement research and helps build the case for further research and industry support
in this field. The Wise Management Decision-making construct also expands the
range of the reflective practitioner literature by highlighting the interaction of the
practitioner with the wider environment (Miettinen, 2000; Beard & Wilson, 2006),
the role of emotions (Vince, 1998) and intuition (Michelson, 1996) in learning,
and the possibility of going beyond (merely learning more) knowledge to the
development of wisdom.
While interest in wisdom theory is growing, the incorporation of wisdom
into business practices, and management decision-making in particular, is still
obscure. This is to a great degree due to the lack of an explicit and empirical
understanding of the relationship between wisdom and management. Many stud-
ies have pointed out the need for a more in-depth understanding about the role
of wisdom in the organizations and management context (Küpers, 2007; Rooney
& McKenna, 2008; Pauleen et al., 2010; McKenna et al., 2013). This study pro-
vides an explicit and empirically-based explanation of wise management decision-
making as a construct. This development now makes it possible for scholars to
be able to empirically test and formally theorize the relationship between wise
decision-making and other constructs, for example individual and organizational
performance.
One limitation of the study is that it is not specific in terms of demographic
information. As the Wise Decision-making construct is grounded in the field data
following the rigorous methodology of Classic GT, it will tend to transcend the
diversity inherent in the informants, such as gender, culture, age, education, etc.
Therefore, another avenue of future research may look at how specific charac-
teristics such as demographics may adjust the wise decision-making construct.
Similarly, research into the differences between individual and collective decision-
making may yield adjustments to the construct. To generalize the results of this
study, researchers interested in studying decision-making through the lens of the
emerging field of wisdom theory can replicate this study and seek to confirm it
through surveys.
We hope this study goes some way in answering the call of scholars for
empirical research into the role of wisdom in management practice. This study
sheds light on how CEOs and practitioners can improve their decision-making
through the integration of wisdom practice with more traditional data, information
and knowledge based practices.
In sum, the current study, with its limitations, was an endeavor toward
broadening both scholarly and practical perspectives on the contribution of
wisdom to organizational studies and management practices. With practition-
ers’ interpretations as the starting point, this study has taken an approach
that firmly grounds the conceptualization of wisdom in practice, thus adding
a real-life understanding of the concept of wisdom to contemporary studies.
This practically driven and theoretically supported understanding of wisdom
can, we hope, make a worthwhile contribution to management as it reck-
ons with a turbulent crises-driven business world that desperately calls out for
wisdom.
358 Conceptualizing Wise Management Decision-Making
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Intezari and Pauleen 365
(Continued)
Intezari and Pauleen 367
(Continued)
368 Conceptualizing Wise Management Decision-Making
Phase 3 In this phase the following questions were added to the previous
questions.
Rationale: what is the informants’ perception of the categories and
concepts that have emerged during the analysis of the data collected
in Phase 1 and Phase 2? The main concentration in this phase was
on the interrelationship and development of the previously emerged
concepts and categories. The contribution of the qualities to wise
management decision-making was further investigated.
Theoretical
coding
High
Selective coding
Core-
category
Conceptualization, Abstraction,
Substantive coding
Theoretical Focus
Sub-core categories
Conceptual categories
Open coding
Conceptual codes
(Comparing incidents to each other)
(Line-by-line coding)
Low
transcriptions. At this stage we did not do coding either, as the first readings were
also just for gaining an initial familiarity with the collected data. However, we
made memo notes at this stage and throughout the analysis process in order to
record any emerging ideas, codes, and possible relationships between and among
codes, categories and subcategories. For instance, the following comments are two
examples of the memos that we (one of the researchers) wrote after he listened to
the interviews with Informants 4 and 10, respectively:
After initial familiarization, we began to code the data in “every way possi-
ble”; that is, “running the data open” (Glaser, 1978, p. 56). We did so to get “out
of the data and off the descriptive level to conceptualization” (Glaser, 2011, p. 2).
In the beginning, the line-by-line analysis dominated. An example of this type of
coding is illustrated in Table B1.
In substantive coding, as suggested by Glaser (1978), in order to maximize
“allowing the best fit, the most workable ones and the core relevancies to emerge
on their own” (p. 56), we even coded the incidents that had not been obviously
370 Conceptualizing Wise Management Decision-Making
Consideration(MP
Multi-Perspective
Short-term and long-term thinking anticipating
C)
openness to others’ ideas) Perspective-
Reconciling individual and communal (different stakeholders’) taking
interests
Cognitive-Emotional
Ability to apply knowledge Cognitive
Using experience Mastery
Mastery
(CEM)
Thinking outside the square
Internal
(re)Evaluating one’s own interests & goals
Reflection
Reflection
than to ethics as considering ethical and moral codes. The following comment was
coded as Trusting intuition in making decisions, which at a higher conceptual level
was incorporated into the sub-core category of Cognitive-Emotional Mastery:
“I think ethics is important, for me. In the decisions that I make, I’ve learnt
that through experience that if your gut is telling you something and you act
against that, your instinct, then the result would be a bad one, it won’t work.
So, whatever decision is that I make, I measure them against my gut reaction
or my instincts” (Informant 31).
“Self-awareness is the ability to question yourself and say: ‘was I wrong? Yes
I was. I made a bad decision’” (Informant 18).
Code names were created from both the informants’ actual words (in-vivo
coding) and the researcher’s knowledge. We compared informants’ comments at-
tached to a specific code to determine any possible mismatched quotes. New codes
were created for the quotations that did not fit. The codes were then compared
and sorted into higher-level codes, that is, conceptual codes. For instance, the
transcripts that had mentioned “considering the impact of the decision on oth-
ers,” “understanding others’ concerns and their emotions,” “not hurting people,”
“understanding how others feel about the impacts of the decision,” “caring about
the surrounding environment,” and “having empathy in dealing with people” were
coded empathy (contributed to Emotional mastery).
The number of the conceptual codes changed over the process of data gather-
ing and analysis, as categories were merged into each other, and/or new categories
came up. For example, “impartiality (openness to others’ ideas)” and “taking into
account others perspectives” were merged into one category, “Representing alter-
native points of view.” This was done as the incidents applicable to the categories
were referring to the same thing. The comments that were attached to a specific
quote were compared to identify the quotes that were possibly mismatched, and
then the mismatched quotes were assigned to a new code.
Some of the codes were removed as they did not appear to be a concern for all
other informants. For example, “naturally talented” and “ability to simplify issues”
were each mentioned by one informant and did not appear in the preceding and
following data and analysis. The codes were not incorporated into the development
of the conceptual categories and the core category.
Once conceptual codes began to accumulate, we began to categorize them
by grouping them under “more abstract explanatory terms: that is, conceptual cat-
egories” (Strauss & Corbin, 1998, p. 114). We coded different incidents into as
many categories as possible (substantive coding) (Glaser, 1978). Nine conceptual
categories were identified: Consequence-anticipating, Perspective-taking, Ethics,
Cognitive mastery, Emotional mastery, Self-awareness, Other-awareness, Inter-
nal reflection, and External reflection. Table B3 demonstrates the full list of the
conceptual codes and the conceptual categories.
Intezari and Pauleen 373
Once the potential core categories and variables were identified, Selective
coding began. The original list of concepts was, therefore, cut down and coding and
analyzing the data become more selective and focused (Glaser & Strauss, 1967).
We delimited subsequent data collection and coding to the data and incidents
which were relevant to the emerging core and sub-core categories. We continued
selective data collection and coding until the core category and its theoretical con-
nections with other relevant categories were sufficiently elaborated and integrated
(Theoretical coding).
Similarly, another informant points out that having a holistic approach that
brings a wide range of different elements into consideration is critical for a decision
to be made wisely:
“When decisions are made based on a wider more holistic context, I think they
are more likely to be wise decisions. Because, wise decisions are ones that
can accommodate a wide range of different things that need to be considered,
versus an expedited decision that only looks at one thing [ . . . ]. A holistic
point of view is critical in wise decision-making” (Informant 23).
Another informant asserts the same point by linking wisdom with what s/he
calls “holistic thinking.” Wisdom is associated with the consideration of different
aspects in decision-making. That is, not just thinking, for example, of financial
success, but also the social and environmental implications.
“I think in a business context, for me, wisdom is around being able to connect
a kind of values, personal values, potentially spiritual beliefs, alongside and
merged in with business practice, dealing with people, by making decisions
that their outcomes are not just focused on money, but also focused on social
applications, understanding social implications, environmental implications.
So, I guess, that is around more about holistic approach. So, wisdom is holistic
thinking” (Informant 19).
Consequence-Anticipating
Wise managerial decisions, according to the informants, are made based on a
preevaluation of the possible consequences of a decision:
“I am unwise when I make decisions without considering all ideas, and not
considering consequences, and ideas of others” (Informant 35).
374 Conceptualizing Wise Management Decision-Making
Perspective-Taking
According to the informants, different perspectives, alternative points of view, and
individual and communal interests are taken into account and integrated in wise
decisions. In this sense, wise managers overcome the inclination that may lead
them to limit their view to the consideration of only personal interests or just a few
aspects in decision-making. According to the informants, wise decisions are made
based on a deeper understanding and non-biased view of the subject matter.
“Wise managers are prepared to listen not just to themselves, but they will take
counsel from really wise counsellors” (Informant 10).
Similarly, another informant explicitly asserts that in order to solve problems
wisely, the wise manager needs to go beyond his or her own biased position:
“I think if you want to be a wise manager, you need to be able to look at
problems from a point beyond your position. You should be able to go beyond
your personal-biased position” (Informant 36).
In the comment below, one informant gives an example of an unwise man-
agerial decision, and in explaining why she considered the decision unwise, she
asserts that the decision-makers had not looked at the broader picture:
“They didn’t take into account the stakeholders. And so they didn’t make a
wise decision. It is a sort of like that they did it in a vacuum ‘Okay! this makes
sense’. But they didn’t a sort of look at the broader picture. And they sort of
made that decision based on one sort of criteria. So, in some ways it might be
a good decision in terms of helping [that group of people], but it didn’t end up
to be a wise decision” (Informant 13).
One of the key aspects of wise decisions is that they represent alternative
points of view and reconcile individual and communal interests. Individual refers to
the decision-makers, and communal interests comprise the opinions, ideas, values
and beliefs of all stakeholders other than the decision-makers. Wise decisions,
in other words, are not made based on narrow-minded thinking, or neglecting
the ramifications of the decisions. This sentiment is reflected by the following
comments:
“If more priority is given to wisdom and infusing wisdom through culture,
through organizational culture, we are going to have much more responsible
industries. Industry and commerce, they are the driving force behind most of
our decisions that we make our mess today. And they are largely responsible
for the issues that we are dealing with the environmental issues, the social
issues, and energy, and health and all that sort of stuff. And I think that lot of
the problems have been caused, has been as result of narrow-minded thinking.
Have been focused in and not looking at the other impacts of what you are
doing” (Informant 22).
“A wise decision is a decision where you can see the big picture, and you
can see the ramification of the decision. Often people make decisions without
376 Conceptualizing Wise Management Decision-Making
going: ‘but this happens next, and that happens after that’. So, I think it is
important” (Informant 30).
One informant gives two examples of the ethical characteristics that are
important for making wise decisions. She explains that it may not always be
possible to please all people; however, it does not imply being immoral or unethical.
“To me ethics and morality are absolutely totally critical for making wise
managerial decisions. I don’t believe in anything other than transparency,
honesty. I think ethics should inform every decision: ethics, morality and
understanding of the impacts of the decision. How it might play out for other
people? I don’t necessarily think that you can always please all the people all
the time. There are situations where you have to be quite tough and ruthless.
But I think that’s different from being unethical or immoral” (Informant 24).
Wise management decisions respect the values of the society. The decisions
do not go against the ethical and moral codes that are broadly respected in the
organization, the wider business community and society. In the following comment,
the informant puts extra emphasis on considering morality and ethics in making
wise management decisions.
“I don’t say that morals and ethics are necessary in wise managerial decisions;
I would say they are essential if you want to make a wise decision. I don’t think
I’d put myself in a position to act unethically or without morals. Morals I
think are related to people component, whereas ethics is a way of going about
business, in the way that you conduct your business, the way that you interrelate
with other businesses. To me that is critical. I don’t believe that businesses can
be successful or very successful without being ethical. You have to respect the
values that society is respecting” (Informant 20).
Informant 34 mentions that being ethical is more important than being finan-
cially successful, for a management decision to be the wise one. The informant
also asserts that considering ethical codes is reciprocal between the manager and
others. That is, the manager should not expect others to be ethical if the manager
him/herself does not respect ethics and morality.
“I think ethics is incredibly important in wisdom. You end up living by your
own morals. And if you don’t have your own standards and ethics, so you
can’t expect others to have any either. So, I wouldn’t think that it was a wise
378 Conceptualizing Wise Management Decision-Making
One informant asserts that ignoring ethical codes would certainly have neg-
ative impacts on the manager and the business in the long term. He emphasizes
that the impacts of the ignorance of ethics on the decision-maker and the business
would be considerable, if ethics are disregarded:
“Wise decisions come back to ethics. [ . . . ] I need to operate ethically, because
society is looking at how I am behaving from their ethical point of view. [ . . . ]
If you throw out ethics, if you throw that out, it’s going to come back and haunt
you. It may take a long time before it does, but always comes back to haunt
you; and then where are you at, you know what I mean? The higher you go,
the further and faster you’re going to fall” (Informant 4).
In the comments below, one informant, highlighting the critical role of ethics
in association with wisdom, links the “consideration of moral and ethical codes”
with the “conscious and external awareness” category. The wise person needs to
first be truly aware of the value system of the community and then to be able to
consider those moral codes in their decisions. The comment also conveys that for
informants, ethical considerations refer to not breaking the law.
“A wise decision would be not to do anything that breaches the law. [ . . . ] I
think they are important, because if you are unethical or immoral, these days
you are about to be caught out. [ . . . ] I think it is really a part of wisdom:
understanding the relationship between morality and society and ethics. And
that’s all a part of a good business person” (Informant 7).
Intezari and Pauleen 379
Self-Awareness
Self-awareness is perceived by informants as one of the fundamentally important
personal qualities of wise managers. Awareness of one’s knowledge (both what one
knows and what one does not know), strengths and weaknesses, abilities and inabil-
ities, values and beliefs, and personal attributes and behavioral characteristics, was
pointed out by informants as associated with wise management decision-making.
For example, in the following comment, one informant says that self-awareness and
awareness of one’s limitations is an important feature in making wise decisions.
In one case, one informant, in answer to the question “what do you think
is the most important element to make a wise management decision?” considers
self-awareness as the most important element in making wise decisions:
Similarly:
“I think very closely attached to wisdom is ‘knowing yourself’” (Informant
28).
“Knowing where you are strong or weak and trying to improve on those certain
areas, to say ‘Hang on! Actually I can’t ever be improved in those areas. I
should be making decisions in those. But I might not be good in human resource
management; I am a great business development manager. Therefore, I should
be focusing my efforts in that area.’ Therefore you will make the best decisions
in that area. And not go ahead and make a poor decision in human resources.
So, that is a kind of self-awareness, knowing what you are really strong at,
what you are really weak at, and the understanding that ‘can I improve it? Yes
or no?’. If yes, then you go ahead and work on it. If no, you don’t do it. You
focus on what you are good at” (Informant 18).
The informant then goes on to explain why she says self-awareness is critical.
For the informant, self-awareness is not limited to just “understanding,” but rather
to being willing to overcome the weaknesses by getting help from others. The
informant links self-awareness to the success of the organization, asserting that
lack of self-awareness would ultimately lead the organization to collapse.
“‘Cause that is really important, and then being willing to find somebody to
fill those gaps. Because if you can admit that you are not perfect, that there
are gaps in your experience and knowledge, then that means that you can
bring someone in to fill those. But if you say ‘No, I am going to do that all,
because I am so good, and I am perfect’ then you are going to fall over. And
the organization will fall over. And the dreams will fall over, if you are building
382 Conceptualizing Wise Management Decision-Making
Similarly, Informant 27 states that both Self- and Other-Awareness are es-
sential for making wise decisions, as the awareness takes wise decision-making
beyond being self-centric:
“Self-awareness and awareness of your business environment are essential for
wise decision-making. A decision cannot be wise if it’s self-centric, it needs to
take a broader context, including one’s own” (Informant 27).
weaknesses of all those with whom the manager works, or interacts. This aware-
ness, informants believed, helps managers to better manage others, work with
them, and also know who to approach to get advice, when needed. This is pictured
in an analogy offered by an informant:
“The conductor doesn’t need to know how to play the trumpet and drums,
and the guitar and the violin; but he does need to know how to listen [and]
bring those together in harmony to deliver some product better than any of
the individuals alone. That is the conductor’s skill and that to me is the [wise]
manager’s skill” (Informant 10).
Similarly, another informant states:
“Wise decision is actually recognizing that you don’t have the full set of tools
and to go and seek support from somebody else to inform your decision that
you make” (Informant 2).
The comment above is similar to what Informant 31 mentioned about self-
awareness (provided in the previous section). Informant 31 also asserts that un-
derstanding of the surrounding environment and people is important in order to
excel:
“Understanding the environment is also really important because, there are
places where the people around them excel and do well, and there are places
where a person and the people around them don’t. And that is actually under-
standing the environment, what the people need in order to excel, and providing
that environment” (Informant 31).
The awareness is not limited to only knowing others or the social values
and beliefs. Businesses follow their own objectives, and their survival strongly
depends on the achievement of their business goals. Whether the goals are selling
384 Conceptualizing Wise Management Decision-Making
Cognitive Mastery
The conceptual category of Cognitive mastery encompasses the codes and con-
ceptual codes that represent the knowledge- and experience-related qualities that
informants interpreted as being associated with wisdom and wise management
Intezari and Pauleen 385
Similarly, another informant asserts that even the wise person may fail if
their experience does not fit the business position they are in:
“If the wise person is put in a business position where he or she does not have
experience, they might ultimately be unsuccessful” (Informant 1).
Being knowledgeable and experienced does not mean that the knowledge
or experience, in and of itself, leads to wise decisions. Wisdom is, as informants
perceived, associated with one’s ability to apply what one knows. So, although
knowledge and experience are important, and they were referred to by informants
as important elements for one to be able to make wise decisions, the informants
also identified the ability to put the knowledge and experience into action as one
of the characteristics of wise managers. This sentiment was expressed by one
informant:
“Just because you have knowledge and experience doesn’t mean you are going
to use it wisely” (Informant 4).
Likewise, another informant uses the same criteria to characterize the person
whom he regards as being wise:
“One of the CEOs I worked with, where I was the chair of the board [ . . . ],
I would consider him to be a wise manager because he has the confidence in
his own experience as collective experience, and he was able to apply that in a
practical way. So, to try to explain that better, he is able to make a quite number
of decisions quickly and efficiently, based on his own practical experience. So,
to me in a sense that was wisdom” (Informant 16).
perceptions of wise managers convey that wise managers when making decisions
do not make their decisions based on a superficial analysis of the problem, rather
they consider details. Wise managers are perceived to be able to see the possi-
ble relationships between apparently unrelated events and phenomena. They are
insightful as opposed to being superficial.
“I guess wise managers couldn’t have been considered very wise if everything
is very superficial. Some managers just skim really at the surface of the issues,
and have no ability to delve into detail of anything. [ . . . ] Wise managers have
that ability to go into detail of the things that matter, and of course to not do
that on everything” (Informant 5).
Informants also identified that wise managers are able to think differently
and to develop new ideas. Informants pointed out that wise managers are creative
in terms of proposing new alternatives or resolutions for problems. For example in
the following comments the informants link wisdom to the ability to think outside
the square:
“They may come with new ideas, new perspectives, looking at something in
different ways that you hadn’t thought is possible. [ . . . ] Wisdom is an ability
to be able to think outside the square: to be innovative in thinking” (Informant
12).
“For me wisdom is the balance of factual information: what you get out of the
computer, measurements, trends, those sort of things. [Mr. X] goes through the
qualities just in broad. He knows how to combine in sense of creativity; so he
can think outside the square. He always comes up with new ideas” (Informant
10).
In the feedback that was received following phase five from informants on
the first findings of the data analysis, one of the informants offered an explanation
and clarification on the quality of thinking outside the square by suggesting that
wise people:
“can think both critically and creatively to generate unorthodox yet effective
solutions” (Informant 8).
Emotional Mastery
Emotional mastery is a sub-core category that emerged by the end of substantive
coding. As mentioned at the beginning of the previous section, Emotional mas-
tery is categorized along with Cognitive mastery into a higher level of category,
Cognitive-Emotional Mastery to signify the balance that informants perceived as
388 Conceptualizing Wise Management Decision-Making
Intuition was also expressed by informants as the way emotion comes through
in management decisions. In the following comment, one informant mentions that
emotion contributes to wise decisions in the form of intuition. For the informant
the degree to which either logic or emotion appears in the decisions varies from
one person to another. Some decision-makers make their decisions with more
consideration of logic (compared to emotion) than others. And some others rely
more on their intuition and gut-feeling, and they assess their decision against logic.
“The wise decisions are mainly based on logic. And a degree of perhaps
emotion comes into it in terms of intuition. Wise managers I think have gut-
feeling about what decisions are appropriate. Some people just run with their
gut-feeling. Other people have a gut-feeling and they challenge it, with perhaps
logic and fact and test as a gut-feeling still correct” (Informant 17).
The difference between the levels of emotions or logic which are involved in
wise management decisions is also reflected in the following comment. While the
previous informant placed more emphasis on logic than emotion, the informant
below puts the emphasis on intuition, and regards logic just as a checking tool. What
is reflected by the comments in both cases is that informants do not interpret wise
management decisions as made based on only one of the two, logic or intuition,
in the absence of the other. The following comment also suggests “empathy” as
another key quality for wise decision-making. The comment suggests that intuition
without empathy would lead to wrong decisions:
“I think, very closely attached to wisdom, is ‘knowing yourself’ and ‘listening
to your intuition and your gut-feelings’. Intuition and feelings are important
as long as you are empathetic. If you just make gut-feelings and you have no
390 Conceptualizing Wise Management Decision-Making
empathy for people, then you make the wrong decision. I think logic is more
for confirming that you’ve got the right answer. So, it is for checking: ‘Okay!
This, this, and this all add up to this. So, it is okay’. I think it is a good check”
(Informant 28).
One point that informants mentioned is that wise managers do not make
rash decisions. Informants characterized wise managers as being calm and taking
time before making decisions. For example, one informant characterizes unwise
managers as making very quick decisions based on a quick assessment of a problem.
“There are a lot of managers and business people that don’t have the ex-
perience of wisdom, all see a problem, make very quick assessment of what
the problem is, and jump straight into solving it. And because of the process
problem, solution doesn’t fit. But wise managers stop and completely analyse
the problem: ‘what is it?’, ‘what is the problem?’, ‘what are the resources at
hand in this case?’ and etc.” (Informant 16).
Taking a reasonable amount of time before making decisions, according to
informants, allows the manager to bring into consideration the relevant factors that
are more likely to be ignored when the decision is made in haste. This statement
is reflected in the following comment with the informant saying that the haste
does not let the decision-maker see the “entire picture.” Informant 13 refers to
making decisions in haste as the reason that some managers are considered as
being unwise:
“I think, decisions being made in haste, that they haven’t focused on the sort
of entire picture available to them. They’ve focused on a number of opinions
that they’ve got only. And a sort of like, you listen to those but actually a
vast majority. So, I think that’s unwise, to do with sort of rush and haste.
And decisions that don’t look like this . . . that there has been thinking and
consideration and consultation involved” (Informant 13).
The same point is mentioned by another informant. He asserts that wise
managers are slower than others in making decisions, and that it is because a
deeper thought process is involved when making decisions.
“You tend to see the wise managers as being thinkers potentially slower to
respond but . . . you know? . . . that’s because they are in a far deeper thought
process than other people” (Informant 14).
Informant 34, when asked “what would be your recommendation for a man-
ager to be able to make a decision that is critical and must be wise?”, similarly
asserts that taking time prior to the decision is important for the decision-maker, in
order to be able to think through different aspects and their impacts on the decision
and its consequences.
“Take a time and do your research to understand the issue you are being asked
to make a decision on. Don’t make a rash decision. You must also consider
the impacts of delay in making decisions, and the opportunities that might be
passed up. And probably think your actions well in advance for whole series
of different decisions that you might be faced to make” (Informant 34).
Another quality that informants asserted to be associated with wisdom was
confidence. Wise managers are identified by informants as being confident about
Intezari and Pauleen 391
dealing with issues at hand. Wise managers are confident about the decisions that
they make.
“I think wise managers are typically just by confidence and knowledge; people
that are confident. They can sit back and deal with issues, projects, or whatever
they may be” (Informant 20).
Informants linked confidence to the ability to apply knowledge. That is, wise
managers’ confidence is rooted in their understanding that they can implement
their knowledge and experience to make a decision. This sentiment is reflected in
the following comments. For example, one of the informants notes that in order to
make a wise decision he would first assess his experience and knowledge to see if
he has the confidence to make the decision.
“An indication of wise managers is that whether they make use of their knowl-
edge that instils confidence, which contributes to a sense of wisdom” (Infor-
mant 8).
“To make a wise decision I look at a problem and ask myself ‘Is this a problem
I actually have experience or the knowledge or the confidence to make a call
on it? Or should I go somewhere else?” (Informant 6).
actions. This sentiment is reflected in the following comments. In the second com-
ment, the importance of empathy in a wise management decision is taken further
by the informant by linking wisdom to the decisions in which “difficult people
issues” are involved:
“I think having an emotional understanding of your business is important to
make wise managerial decisions. Because you need to think how your decisions
would influence both the people inside your business and external to it. And
if you think of it as a machine, it is still a logical thought process. You need
to have a level of emotional intelligence to figure that out. Because, if you
make a decision that affects the emotional well-being of your business, or your
customers, that would lead to a negative outcome” (Informant 18).
“I would say wisdom has come into my decision-making would be when it
really gets down to difficult people issues. So, rather than what the decisions is
specifically about, it’s more to do with people management side” (Informant
13).
Informant 22 points out the same concern, that when it comes to making
decisions that are more likely to lead to affecting others, empathy plays a more
critical role in wise decision-making. So, wisdom, according to the informants, is
accompanied by empathy as wise decisions are those that do not harm others.
“A wise decision is one, where there is going to be somebody is likely to going
to get hurt somehow, one way or the other. It is not like a necessarily a win-
win. They are difficult decisions, and so that’s when wisdom comes in. Wisdom
really comes in where you can say: ‘mmm . . . somebody is going to lose this.
Somebody is going to have a negative impact out of this. How do I make sure
that I’ve made the right decision? Because we don’t want the wrong person to
be affected or the wrong outcome to achieve’” (Informant 22).
“Sometimes you need to make a wise decision, but it is particularly difficult
matter as sometimes the consequences of the decision may have great effects,
and therefore you are going to make a wise decision, because you are not
going to hurt people” (Informant 11).
“There need to be an empathetic quality to people in order for managers to be
wise. They struggle with empathy” (Informant 24).
Unlike the previous comments, Informant 28 does not limit the role of “em-
pathy” in wise decision-making to the concern about “people.” Rather, he expands
the meaning of empathy to understanding “the important things beyond personal
well-being,” which includes “people” as well as the “physical,” “social,” “physi-
ological,” and “situational” concerns.
“The most important thing is to be able to empathize with the physical, social,
physiological, situational, and the people, and to understand their value, and
then to be able to understand the important things beyond personal well-
being. Often I see managers who are actually all about themselves. So, they
are only managing for their own well-being. They are not managing for the
best possible outcome. So, it is a wise decision, because they recognize the
value of the people and the role they play, and the other one that is poor
decision, is the one that do not value the people” (Informant 28).
The same point is made by another informant, that unwise managers make
selfish decisions, with no concern about the possible impacts that their decisions
Intezari and Pauleen 393
may have on the wider community and the surrounding environment. The informant
characterizes unwise managers as not caring about the surrounding environment
and society:
“I suppose those with lack of preparation, lack of understanding, lack of care
about their surrounding environment. So, those people that would make selfish
decisions, decisions that more fitted or they had a self-mandate. And that they
would try to fill that self-mandate so selfish without really caring about the
surrounding environmental impact on that. Environment I mean in a greater
sense of environment. Society, profitability of the company, or profitability on
the organization you representing, human impacts, environmental impacts,
social impacts, and all of those sort of things as well. As well as competitors
and market impacts in the greater environment” (Informant 15).
The same point is also mentioned by another informant, who explains the
situation that he was in, when he had to make a wise decision. He asserts that in
order to make a wise decision he would consider what those who are affected by
his decisions feel:
“I am in that situation right now. I am making decisions for the business,
because we’ve come through a particular period, a five year period, where
we’ve been looking at our sustainability. So, we had a five year plan in place.
That plan comes to the end at the end of this month. And I’m advising the
business on next plan. And obviously I have to make the wise decision. And
the way I’ve done it is I’ve basically consulted stakeholders, people who could
be impacted by this decision. So, I want to understand, how they feel about
those impacts of the decision. So, I can come up with a decision that is wise”
(Informant 14).
Cognition/Rationality
Cognitive Mastery
External world/
Internal world/
Environmental
Internal attributes
context
Emotional Mastery
Emotion/
Non-rationality
feel like I am invading his space; I never feel like I am a problem walking
through the door. When I talk to him about a situation, an idea, or a concept,
he just gets the pins on the white board and starts writing all down and putting
it into boxes and squares and stuff, and then you start to see a picture emerge”
(Informant 31).
“I think courage is an important element for making wise decision: the courage
to represent the needs of others. When operating within a hierarchy, sometimes
there is a lot of pressure to not rock the boat. But those who are considered wise,
I guess, are prepared to stand up and say ‘NO’, in appropriate occasions”
(Informant 8).
“He respects other’s opinion. But he would challenge any ideas that he thinks
do not work. Doesn’t matter who and how many people believe that the idea
is the best idea, or that it works” (Informant 31).
Internal Reflection
Informants believed that Internal reflection can enhance the person’s self-awareness
by learning from their own experiences and by (re)evaluating their own values,
interests, knowledge and abilities. Wise managers, the informants believed, show
a high level of inclination toward learning and developing their abilities and com-
petencies. They actively reflect on their own thoughts and behavior and always
learn from mistakes as this informant explains:
“Learning from your mistakes [helps with making wise decisions]. I think it’s
about looking back to see what’s happened. [ . . . ] I think the unwise man is
the person who makes some mistakes and never looks at what they did. And
they make the same mistakes again. And they make it again, and they make it
again. For me, being wise is making mistakes, being aware that you’ve just
made a mistake, looking at what’s occurred and learning from it to ensure that
you don’t make the same one again” (Informant 5).
One informant states that although values and beliefs are involved in wisdom,
checking those values and beliefs is also associated with wisdom. The sentiment
that “challenging one’s own values and beliefs is a part of wisdom” is described
by the comment below:
“Wisdom could involve applying one’s own values and beliefs to a complex
situation, but it could also mean checking and challenging one’s own values
and beliefs and coming to a different view – and knowing the difference is part
of the wisdom dimension” (Informant 27).
Similarly, another informant asserts that being wise requires the wise man-
ager to always reflect on their own actions and direction:
“Being wise is not always assumed to correct that they themselves in their own
life. I think they do always evaluate on the whole . . . that they always sit back
and say ‘What is going on with us?’ or ‘Where are we going?’” (Informant
30).
today what happens, you want to think about tomorrow: ‘What am I doing
today? What’s the impact on that tomorrow, on myself, my organization, the
people who are working for me, the community around me, the environmental
situation, the environment?’, all of those sort of things” (Informant 15).
It must be noted that learning from experience does not necessarily happen,
based on personal experience. The following comment illustrates that learning
from experience refers also to the lessons that are learned from others’ mistakes.
This brings up another type of reflection that is called, as discussed in the next
section, external reflection.
“Wisdom I mean would almost go without saying that it comes from experience.
Um, and that can be either personal experience or watching others in decision-
making position” (Informant 4).
External Reflection
Wise managers, according to the informants’ perceptions, not only (re)evaluate
their own decisions, practice, knowledge, abilities, values and beliefs, but they
also constantly reflect on the dominant societal values and beliefs. They consider
stakeholders’ concerns and interests and make decisions for the greater good. It is
important for a wise manager to know how others, who are somehow involved in
the process of decision-making, or affect or are affected by the process, react to
the decision and the possible consequences of that decision.
“When you have made the decision, how your team or your customers, or
whoever is part of that process is going to respond. What they are thinking
about what is happening” (Informant 16).
The importance of considering society and the wider business community’s
perspectives and dominant values and beliefs is underlined by the following infor-
mant’s comments:
“You need to be outward-looking and understanding what is important to the
community around you, their values and beliefs, [ . . . ] and being aware that
in five years those things would be different. So, you have to continuously ask
the question, have to be continually seeking information, trying to understand
and then change the way you are doing things” (Informant 5).
Due to the dynamic nature of cultures, and because of the continuous changes
in societies’ values and beliefs over time, wise managers engage in external reflec-
tion constantly. They need to always be well aware of the contemporary values of
the society within which they are operating.
“If you look at history, there are decisions and approaches taken at that time
in history that would have been considered very wise. But as our society values
change over time, we look back and would say perhaps they weren’t ethical
by today’s values, by today’s standards. So, [wisdom] is very much driven
or shaped by the current contemporary values of a society within which we
operate” (Informant 8).
Another aspect of external reflection is learning from others’ mistakes. In-
formants considered wise managers as being able to learn from others. For them,
wise managers not only learn from their own mistakes, they also try not to make
398 Conceptualizing Wise Management Decision-Making
the same mistakes as others. Informant 18 explicitly highlights that learning from
experiences is not restricted to one’s own mistakes and successes. He asserts:
“Wisdom is not just based on your experience, but also your ability to forward
things through ramifications. [ . . . ] Wise managers need to have the ability
to learn from other people’s mistakes and successes. So, not just your own
personal experiences, but others as well. To look to others and see what they’ve
done well and what they’ve done poorly, and to learn from those mistakes or
successes. And to think how does that apply to me?” (Informant 18).
Similarly, another informant mentions that the development of wisdom re-
quires reflection through which the person would be able to learn from others:
“I think wise managers learn from others, from others’ mistakes. Because by
nature being wise would suggest that you have a degree of humbleness and
openness. You didn’t get that wisdom when you are born, you got it from being
open and exposing yourself to others. If you don’t invest in your wisdom, it’ll
go away” (Informant 30).
Multi-Perspective Consequence-anticipating, This theme refers to the extent to which different perspectives are integrated in making a
Consideration Perspective-taking, decision. Consequences of the decision are anticipated, various perspectives are taken into
Intezari and Pauleen
Ethics account, and ethical codes are considered. That is, having a true understanding of the bigger
picture, alternative points of view, and respected values and beliefs of the decision-maker,
the organization, and the wider community are critical in wise management decisions.
Self-Other Awareness Self-awareness, One quality that informants ascribed to wise managers and perceived to be associated with
Other-awareness making wise management decisions is the development of the wise manager’s awareness.
The quality is divided into two main categories: self-awareness, which corresponds to one’s
understanding of his own personal attitudes, abilities, skills, characteristics, interests and
values; and other-awareness or awareness of the surrounding environment that represents the
extent to which one is aware of what is going on around them.
Cognitive-Emotional Cognitive mastery, This theme refers to the extent to which the decision-maker integrates his cognitive abilities
Mastery Emotional mastery with his emotional qualities. Informants emphasized that wise management decisions are
based on both logic (rationality) and emotion (non-rationality). Informants believed that a
manager who does not have (or is not able to acquire and implement) the relevant
knowledge or experience in a particular field would not be able to make wise decisions.
Moreover, informants mentioned that emotions and emotion-related qualities such as
empathy are not neglected in wise management decisions.
Internal-External Internal reflection, This theme refers to the integration of both Internal and External Reflection. Questioning of
Reflection External reflection one’s underlying assumptions, attitudes, thought processes, and habitual actions, in relation
to both one’s own way of being and doing, and to others. Internal and External reflections
seem to be linked to the other themes. The informants explain that wisdom is also about how
to avoid repeating the same mistakes by actively reflecting on and constantly learning from
experience and mistakes. If the manager wants to be able to have an awareness of the
external world, a constant reflection on the surrounding environment including stakeholders’
interests may enhance the awareness.
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400 Conceptualizing Wise Management Decision-Making