Wisdom and decision making : grounding theory in management practice : a dissertation presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Management at Massey University, Albany, Auckland, New Zealand
Wisdom has been an important subject in philosophy for ages, and numerous books and articles have been written about it. Although it is originally rooted in philosophy, other scientific fields such as psychology and management have also examined wisdom. Of the important managerial tasks, decision making is crucial, as the success and failure of an organisation to a considerable extent depends on management decisions. Despite the vital role of decision making, and the increasingly growing attention in management on wisdom, the literature of management is still lacking empirical research that provides a clear understanding of how management decision making can benefit from wisdom (Melé, 2010). This research aims to address this issue by answering the question: What is the relationship between wisdom and management decision making? Accordingly, the research objective is to investigate the role of wisdom in management decision making and to find out how wisdom can help with making better quality management decisions and taking ‘wise actions’.
To address the research question, an interpretive exploratory study using classic Grounded Theory (Glaser, 1978, 1998, 1999, 2007) was conducted. A semi-structured interview format was used as the data collecting method. Through five phases and selective sampling, 37 CEOs and senior managers from both the public and private sectors in New Zealand were interviewed. The informants were asked about their understanding of the concept of wisdom and its relationship with management decision making. They were asked about how they identified wise managers and wise management decisions in their business community, and about how a management decision can be made so that it is considered as being wise and leading to wise outcomes.
The findings indicated that wise management decision making is an integrated process of multiple qualities. Based on the findings, a theory was developed that offers an explanation of the relationship between wisdom and management decision making; the Emergent Theory of Praxio-Reflexive Integrated Decision Making (PRIDM). The theory suggests that wisdom in management decision making is achieved through an integration of Multi-Perspective Consideration
(MPC), Self-Other Awareness (SOA), and Cognitive-Emotional Mastery (CEM), and that the integration is fostered by Reflexivity and Praxis. PRIDM also suggests that the wisdom of the decision maker is developed through and manifests in reflexivity and praxis.