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The purpose of this Real Impact Research Article is to empirically explore one of the most controversial and elusive concepts in knowledge management research – practical wisdom. It develops a 10-dimensional practical wisdom construct and tests it within the nomological network of counterproductive and productive knowledge behavior.

A survey instrument was created based on the extant literature. A model was developed and tested by means of Partial Least Squares with data obtained from 200 experienced employees recruited from CloudResearch Connect crowdsourcing platform.

Practical wisdom is a multidimensional construct that may be operationalized and measured like other well-established knowledge management concepts. Practical wisdom guides employee counterproductive and productive knowledge behavior: it suppresses knowledge sabotage and knowledge hiding (whether general, evasive, playing dumb, rationalized or bullying) and promotes knowledge sharing. While all proposed dimensions contribute to employee practical wisdom, particularly salient are subject matter expertise, moral purpose in decision-making, self-reflection in the workplace and external reflection in the workplace. Unexpectedly, practical wisdom facilitates knowledge hoarding instead of reducing it.

Managers should realize that possessing practical wisdom is not limited to a group of select, high-level executives. Organizations may administer the practical wisdom questionnaire presented in this study to their workers to identify those who score the lowest, and invest in employee training programs that focus on the development of those attributes pertaining to the practical wisdom dimensions.

The concept of practical wisdom is a controversial topic that has both detractors and supporters. To the best of the author’s knowledge, this is the first large-scale empirical study of practical wisdom in the knowledge management domain.