To date the practice of health sector management has not been sufficiently theorised. An adequate theory should be able to answer the pre‐eminent critique of managerial rationality and ethics mounted by Alasdair MacIntyre in After Virtue and should also offer robust analytical and ethical resources to identify and engage with the social, political, economic and moral issues underlying health sector management. Critical realism with its ontology of generative mechanisms, agency‐structure relationships, valorisation of activity and ideology critique offers such resources in an empirically orientated but adequately theorised realist framework. Rather than negate MacIntyre, critical realism incorporates and transcends his key arguments regarding the rationality and ethics of management. This article introduces the main elements of critical realism and clears a conceptual space for the cumulation of critical realist case‐studies and managerial craft knowledge.
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