To read this content please select one of the options below:

Practical wisdom in managerial decision making

Domènec Melé (IESE Business School, University of Navarra, Barcelona, Spain)

Journal of Management Development

ISSN: 0262-1711

Article publication date: 20 July 2010

5960

Abstract

Purpose

The aim of this paper is to present the necessity for practical wisdom in the managerial decision making process and its role in such a process. The paper seeks to contrast the position with two conventional approaches based on maximizing and satisficing behaviors respectively.

Design/methodology/approach

Following Aristotle and Thomas Aquinas it is argued that a correct decision should consider an “integral rationality” which includes not only “instrumental rationality” but also “practical rationality”. The latter permits the evaluation of both means and ends from the perspective of human good. Practical wisdom helps the decision maker to determine how a decision will contribute to the human good in each particular situation.

Findings

Maximizing and satisficing behaviors are based on the facts‐values dichotomy, which separates business and ethics and presents a rationalistic and incomplete view of the reality. The alternative presented here sees the decision as a whole, and this is a more comprehensive understanding of the reality. Ethics is better integrated into the decision making process, since it is an intrinsic part of such a process, not an extrinsic addition.

Practical implications

Every decision has an ethical dimension, which should be considered by managers for making good decisions. Practical wisdom is essential in perceiving such a dimension and in making sound moral judgments in the making of decisions. Managers do not need only skills for making correct decisions, but practical wisdom and moral virtues, too.

Originality/value

The approach presented in the paper defeats the conventional but narrow views of managerial decision making based on maximizing behavior or on satisficing behavior and introduces the categories of good and evil as the main driver for managerial decision making.

Keywords

Citation

Melé, D. (2010), "Practical wisdom in managerial decision making", Journal of Management Development, Vol. 29 No. 7/8, pp. 637-645. https://doi.org/10.1108/02621711011059068

Publisher

:

Emerald Group Publishing Limited

Copyright © 2010, Emerald Group Publishing Limited

Related articles