Wisdom and Management in the Knowledge Economy by Rooney David;McKenna Bernard;Liesch Peter; & Bernard McKenna & Peter Liesch

Author:Rooney, David;McKenna, Bernard;Liesch, Peter; & Bernard McKenna & Peter Liesch
Language: eng
Format: epub
Tags: Economics, Finance, Business & Industry
Publisher: Taylor & Francis Group
Published: 2010-03-24T00:00:00+00:00

8

Strategy and Business Policy

Popular thought often regards wisdom as impractical, unworldly, and remote or esoteric. This was certainly not the view of Aristotle, nor is this perception in our characterization of wisdom. Wisdom must be tactically and strategically practical. Baltes and Staudinger (2000) refer to it as a pragmatic metaheuristic, which echoes Aristotle’s distinction between esoteric wisdom and practical wisdom. Although our focus is not on esoteric wisdom, practical wisdom is nevertheless useful in dealing with remote and esoteric management problems like those that might occur in the future and so are the targets of business strategy. In fact, wisdom is particularly effective in uncertain and ambiguous situations.

In general, businesses display tendencies to isomorphism (Newman and Nollen 1996) and seek to reduce uncertainty and ambiguities (Dacin 1997; Peng 2006), yet also quest for novelty, creativity, and adventure, placing often incommensurate burdens on management. That is, whereas norms of practice are established over time in most industries and sectors as managers hit upon winning formulae that become recipes within the business community, competitive advantages and leading status come from doing things differently and far better than others. Even line managers are often faced with schizophrenic demands in their attempts to resolve difficult tensions. Wisdom is therefore useful because it helps to deal with the unknown, the unclear, and the out of reach. Thus strategic thinking and wisdom should be inseparable.

Strategy and wisdom need foresight, prescience, and insight, and should draw on systematic or methodically rational process. But they also need transcendent processes like creativity and imagination. But how can strategic management be understood to occur through the lens of our wisdom framework rather than a more orthodox one? We set out a view of strategy development that assumes it is to be a process of discovery. This both deliberate and emergent discovery process, we argue, can be understood according to our principles of wisdom, to create a picture of a more organic or naturalistic discovery process that values the more scientific elements of research, but equally values the transcendent, to create a strategy ontology and epistemology resembling a craft rather than simply a science (cf. Mills 1959).

More precisely, we see strategic management occurring at the intersection of art and science to create a craft. In this respect, it is important to recall that Chester Barnard, writing in the 1930s and reflecting on his experience in senior management, noted that strategic management has to go beyond the rational because strategy development must be non-routinized to deal with the unknown. Judgment, feeling, and balance are, according to Barnard (1938), the greater parts of the art of strategic management. In saying this, however, we do not discount the role of abstract knowledge in formal analytico-predictive processes, which we have discussed earlier as an important and powerful element of knowledge economies.

Quoted in Harvard Business Review, the CEO of a major multinational corporation says:

Very often, people will do a brilliant job up through the middle management level, where it’s heavily quantitative in terms of the decision-making.

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