PRACTICAL WISDOM AND BUSINESS ETHICS
Presidential Address to the Society for Business Ethics
Atlanta, August 2006


Dennis J. Moberg


ASstrad: Practical wisdom has received scant attention in business ethics. 
Defined as a disposition toward cleverness in crafting morally excellent 
responses to, or in anticipation of, challenging particularities, practical 
wisdom has four psychological components: knowledge, emotion, thinking, 
and motivation. People's experience, reflection, and inspiration 
are theorized to determine their capacity for practical wisdom-related 
performance. Enhanced by their abilities to engage in moral imagination, 
systems thinking, and ethical reframing, this capacity is realized in 
the form of wisdom-related performance. This can be manifested either 
in wise business decisions or through their performance as mentors, 
advice givers, or dispute handlers. 

People are naturally curious about wisdom. Philosophers love it. Native peoples 
revere it. Seekers devote their lives to it. And old people savor it. Wisdom's 
allure is its elusive quality. One may never completely attain wisdom, although 
everyone has had the experience of seeing wisdom in another person, if only for a 
moment. There is also an undeniably moral facet to wisdom. It appears in virtually 
every religious text ever written, and wisdom is among those special human qualities 
that serve both individual and collective good ends. 

Commercial affairs appear much too down-to-earth for such a lofty idea. The 
dmdgery, compeddon, and time pressure so common in modem work life encourage 
foolishness not wisdom. Yet, as Aristode reminds us, wisdom has two faces—one 
concemed with understanding the profound tmths of life and the other with the 
pracdcal judgments that all of us must make every day. And it is this practical side 
of wisdom that is so relevant to contemporary business. In fact, most modem companies 
accord special esteem to leaders by virtue of their practical-wisdom-related 
talents of "experience" and "good judgment." 

Over the past fifteen years, I have become fascinated with the topic of wisdom, 
more particularly with pracdcal wisdom as a key to understanding ethical behavior 
in business. I have found myself writing on the outskirts of the subject, grappling 
with topics like moral imagination, mentoring and advice-giving, and with the 
general question of why otherwise clever businesspeople do foolish (i.e., unwise) 
things. Unfortunately, the amount of work in these areas remains thin. 

© 2007. Business Ethics Quarterly, Volume 17, Issue 3. ISSN 1052-150X. pp. 535-561 


BUSINESS ETHICS QUARTERLY 

A couple of factors account for the stunted development of work on pracfical 
wisdom in business ethics. First, the subject has not been adequately anchored by 
contemporary work in its two parent disciplines: philosophy and psychology. While 
we have a great tome like Rawls's A Theory of Justice, no one has yet produced a 
work of equal stature on wisdom (cf. Kekes, 1995). Similarly, Maclntyre's After 
Virtue is known more for reclaiming virtue ethics than for situafing pracdcal wisdom 
at its core. In addidon, while research on the psychology of wisdom has exploded 
in the last decade, work there has been devoid of any substantive consideration of 
morality (cf. Stemberg, 1998). As such, the psychology of wisdom looks more like 
the psychology of everyday pmdence than that of practical wisdom as classically 
understood. Without the scaffolding from philosophy and psychology, there has 
been little work by business ethicists on the subject of practical wisdom (cf. Jones, 
2005; Moberg, 2002b). I find myself in total agreement with Gary Weaver who 
wrote recendy that "more attendon . . . needs to be paid to the nodon of pracdcal 
wisdom" (Weaver, 2006: 358). 

The other factor that accounts for the lack of attendon to pracdcal wisdom in 
business ethics is the practitioner world. What executives want from business ethics 
are systems that prevent ethical misbehavior not ones thatpromote ethically excellent 
behavior (Higgins, 2000). Within this frame, business ethics has naturally become 
more oriented to the etiology of abuse than it has to the modes of encouraging 
morally exemplary behavior. 

Practical Wisdom Defined and Described 

One impediment to the development of scholarly work on pracdcal wisdom in 
business ethics is the lack of a standard definition. The Oxford English Dictionary 
defines wisdom as "the ability to judge rightly in matters relating to life and 
conduct," and that is a reasonable starting point. However, that definidon gives 
inadequate emphasis to the moral dimension of the term. Inspired mostly by the 
work of Aristotle, I define practical wisdom as a disposition toward cleverness in 
crafting morally excellent responses to, or in anticipation of challenging particularities. 
As such, practical wisdom differs from a disposition toward clevemess in 
non-moral realms like in the solving of crossword puzzles. It also differs from a 
disposidon toward clevemess in craffing morally excellent acdons in the face of 
unchallenging particularities like helping a lost child find his parents at a Disney 
amusement park. The verb craffing in the definidon reminds us that there is more 
than one morally excellent response to a given set of pardcularides, and that persons 
may have their own individual "wisdom response style." The phrase morally excellent 
in the definition is somewhat problematic in that it implies a universal standard 
of moral excellence which obviously does not exist for all people at all times. For 
Aristotle, it was enough for communities to determine these standards if such communities 
were themselves moral and comprised of persons who reflected on the 
relationship between moral excellence and human flourishing. While Aristotle's 


PRACTICAL WISDOM AND BUSINESS ETHICS

requirements may not be sadsfactory in every case, determining what consdtutes 
moral excellence may not be as big a problem as determining what constitutes the 
moral minimums. Psychologists tell us that when diverse juries are asked to come 
up with morally exemplary traits, their list is virtually idendcal to the cardinal 
virtues celebrated for millennia (Dahlsgaard, Peterson, & Seligman, 2005; Walker 
& Pitts, 1998). Finally, the phrase in the definition responses to or in anticipation 
of was chosen deliberately to convey the proacdve as well as reactive attribute of 
pracdcal wisdom. Practical wisdom occasionally involves acting before a challenging 
situation has actually materialized. Indeed, the wisdom of some acdons is 
appreciated only after it is clear that they pre-empted a problemadc situadon. The 
pracdcal wisdom of Mardn Luther King and George Marshall is celebrated not only 
for what these honorable men accomplished, but for what would have occurred if 
they had not taken the acdon they did. 

Generic Business Contexts for Practical Wisdom 

Challenging particularides come in several general forms. Some are common to 
different business functions (accounting, markedng, etc.), and some are associated 
with different business issues (mergers and acquisidons, intemadonal trade). Many of 
these fall into four broad categories if one considers their essential stmcture relative 
to the existence of ethical norms (Moberg, in press; cf. Krebs and Denton, 2005). 

Information Uncertainties and Ambiguities 

One often needs more information than is available to consciendously apply 
ethical norms to business situations. In order to advance justice one needs a keen 
sense of intendons. Acdng to bring about a good outcome requires predicdons about 
tbe future. And decisions often have to be made without the benefit of knowing 
historical precedents that morally bear on a pardcular case. Making this even more 
challenging is that in a work organization almost all of a person's informadon is 
socially transmitted and much of it (e.g., the intendons of the actors) is unknowable. 
Add to this the complexities of organizadonal context which make responsibility 
difficult to ascertain, and it is clear that one must often make moral decisions under 
condidons of uncertainty and ambiguity (Green, 2004). 

Let's say that you own a ten-million dollar electrical component reselling business. 
One of your suppliers (a company owned by a woman you know only slighdy) 
is a firm facing dire financial difficuldes. Credible mmors are that the employees 
of thefirm have not been paid for weeks and that the company's president has been 
selling her personal assets to meet loan payments. You are approached by two of 
the supplier's employees who promise that if you hire them, they will provide you 
with inside information that will benefit your firm. From their perspecdve, the 
non-disclosure agreements they have signed were nullified when the supplier did 
not meet its payroll. 

What is the morally excellent thing to do? At one level, you are considering a 
predatory human resource maneuver promisingfinancial advantage based on inside. 


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and potentially tainted, information. On the other hand, you may be providing a 
moral solufion to the supplier's wronged employees and a cost-saving way for the 
failing supplier's existing customers to have an unintermpted supply of product. 

A business friend of mine faced exactly this situation. Key to his approach was a 
great deal more informadon gathering. He tried to contact the owner of the supplier, 
but she was apparently "hiding out" to avoid creditors. Under the press of time, he 
drew three company names from the list of the supplier's customers (provided by 
the employees as a sample of those they might provide). He contacted an official 
from each to discem how much harm each would experience with the demise of 
the supplier. In the final analysis, he decided to back away from the deal with the 
disgmntled employees on the basis that it was too contaminated by bad business 
judgment. His assessment proved prescient as the supplier's financial demise was 
so prolonged that no business advantage could have been gained and the supplier's 
customers adjusted nicely. Uldmately, the supplier's employees proved no "bargain" 
as industry mmors revealed that their lack of business acumen was a big factor in 
the supplier's downfall. 

Execution Binds 

These present themselves as choices in which one altemadve is more ethical 
than others but also significandy costly to oneself or to one's close associates. Here 
the challenging particularides are not so much in idendfying the best opdon but 
in executing it so it is directed at the right person at the right dme in the right way 
and for the right purpose. Different execudon binds concem the temptafion to cut 
comers, to cover up for afiiend or authorityfigure, or to join in an ongoing pracdce 
that is ethically defecdve (cf. Mobley, Humphreys, Brown, Frank, Narayandas, & 
Rousseau, 2006). Again, the challenge is not in picking the right move; it is implementing 
that selecdon well. 

For example, let's say a Mabel has a poor reladonship with her boss Fred, a 
vain and absent-minded man who takes little interest in Mabel and never gives her 
credit or support. One aftemoon, Mabel tells you how she "really put one over 
on Fred." Immediately before a meedng in which he was to make a complicated 
presentadon to the execudve staff, Mabel took his briefing notes off his desk and 
threw them in the trash when he wasn't looking. Mabel heard later that Fred had 
stumbled and stammered through the presentation, and that he was consequently 
quite embarrassed. In talking with Mabel about the problems he had in the presentation, 
Fred attributed his not having his notes to absent-mindedness, and Mabel 
said nothing to the contrary. What is the morally excellent thing you should do 
about this situation? 

There are, of course, many possible answers to this quandary, but pracdcal 
wisdom demands that whatever is done is morally excellent. Imagine some possibilides. 
You could take the posidon of a strict moralist and immediately report the 
breach to Fred. Altemadvely, you could try to convince Mabel to come clean with 
Fred about her evil deed and about the resentment that she is harboring. You could 


PRACTICAL WISDOM AND BUSINESS ETHICS

encourage Fred to be more supportive. A friend of mine who faced this situation 
adopted a two-prong approach that impressed me a great deal. First, he purloined 
Mabel's copy card so she couldn't use the departmental machine to make copies, 
and then he asked her to drop everything she was doing and make copies of a 
document right away. My friend then intermpted her panic by producing the card 
and linking her panic with Fred's. His second approach was with Fred. During a 
conversadonal opening, my friend asked him pointedly what level of social capital 
he thought he had in the workplace. And, when Fred indicated self-satisfaction, 
my friend merely stated that he thought Fred had a problem in this area. He went 
on to say that he had observed that unnamed others were not inclined to give Fred 
their full support. 

Moral Dilemmas 

A third broad context for pracdcal wisdom is a moral dilemma, a choice required 
from among two or more morally valued altematives such that all cannot be chosen 
(Badaracco, 1997). Often the trade-off is between jusdce and mercy, short- and 
long-term consequences, self and community, or tmth and loyalty (Kidder, 1995). 
Practically wise responses to such dilemmas often go beyond a simple weighing 
procedure although uldmately it may seem to come down to that. 

You face a moral dilemma with Allen, one of your subordinates in a fast-paced 
high-technologyfirm.A newly widowed father of two children in pre-school, Allen 
has recently developed a serious attendance problem. As a result, his co-workers 
begmdgingly cover for him to maintain your department's performance levels. Your 
dilemma is defined in part by your sense of being pulled in three direcdons. You 
know you have a responsibility to your employer to maintain satisfactory departmental 
performance because falling behind is simply not an opdon in the business. 
However, you feel that you should treat Allen with compassion and that you should 
do something to shield Allen's co-workers from having to cover for him. 

What would a morally excellent response be to this situadon? Again, much 
depends on addidonal pardcularides in die situadon (Moberg, 1990). However, a 
particularly sage manager I know approached a similar situadon by calling a team 
meeting and doing an inventory of all the resources each member had that they were 
willing to commit to a soludon to this problem without feeling pressure or guilt. 
From this list, a soludon was designed that drew mosdy on the manager's resources, 
but also on some of the group's as well. In the end, a soludon resulted that, from 
my perspecdve, was both just and merciful. In addition, this approach enabled the 
manager to discem what level of solidarity existed in the team itself—an important 
benchmark for future leadership. 

Ethical Leadership Predicaments 

Afinal context requiring pracdcal wisdom occurs when people act to better align 

others' acdons with their moral commitments. Most dramadc of these are situa


dons of principled dissent in which an employee objects to official organizational 

pracdces or the behaviors of people in authority (Graham, 1986). In extreme cases. 


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this may lead to whisde-blowing (Miceli & Near, 2002), but this is by no means 
a pracdcally wise choice in all instances. More common are ethical leadership 
predicaments involving advancing aright rather than correcting a wrong (Trevirio, 
Hartman, & Brown, 2000). Thus, ethical leadership includes acdons by leaders 
to guide an organizational community toward action consistent with moral norms 
and outcomes. 

You are the director for a community theater company that presents contemporary 
plays in a summer resort location where many socially conservative people vacadon. 
Off-season you teach theater at a local college and in that latter role you see 
countless young people who suffer vocationally because there are so few roles that 
fit their physical appearance. For example, if a young actor is African-American, 
there are but a handful of parts available in a standard Shakespearian play. The 
situadon is even gloomier if the young actor is Asian, physically handicapped, or 
has an unusual appearance. Accordingly, you decide to change the casdng policy 
so that greater consideradon is given to actors that do not fit physical type. 

The difficult quesdons here include not only what that new policy should be but 
how it should be implemented. At some point, many others need to be convinced 
of the pmdence of whatever policy is chosen, and the conservadve-leaning community 
will also have to be included in this since audience tastes and confinued 
community financial support and sponsorship are cridcal. One theater director I 
know took an incremental approach to this problem, tesdng community sensifivifies 
with plays that included unfamiliar roles where he could insert actors that did not fit 
type. Simultaneously, he began experimenting with make-up and scenic design to 
disguise the "doublesome" physical features of certain cast members. Uldmately, 
he was able to accommodate virtually all of the actors in his company in spite of 
their appearance and without any significant objecfion by audience members. 

Conceivably, he might have taken a bolder approach. He could have merely 
declared his resolve to cast actors regardless of their appearance and urged the 
community to support the virtue of that policy. However, when ethics leadership is 
necessary in the face of expected polidcal resistance, a more deliberate system of 
action may generally be more pmdent (Meyerson, 2003). 

Structure of Practically Wise Responses 

Morally excellent action requires doing the right things in the right way to the 
right extent addressed to theright person at theright dme for theright reason. It also 
includes inacdon as acdon, that is, it may be that circumstances are such that the 
wisest acdon is no acfion at all (Tykocinski & Pittman, 1998; Tykocinski, Pittman, 
& Tutde, 1995). For example, there may be certain moral dilemmas that age well in 
the sense that the passing of time reveals which of the conflicdng options is best. 


PRACTICAL WISDOM AND BUSINESS ETHICS

The Psychological Components of Practical Wisdom 

Idendfying clever and morally exemplary responses within an array of challenging 
pardcularities is daundng, and doing it well requires four psychological 
processes.' Together, these determine a person's capacity for pracdcal wisdom. I 
describe each below. 

Knowledge Component of Practical Wisdom 

Arriving at a pracdcally wise response requires three types of knowledge. First, 
one must be familiar with the normadve standards and paradigms that are applicable 
to the situadon. In most instances, this involves some facility widi formal ethical 
analysis although it seems possible to master this type of knowledge in tacit form 
without formal schooling. In any event, this is the only knowledge base associated 
with pracdcal wisdom that can be formally taught; the other two are leamed principally 
through experience. The second type is knowledge concems an appreciadon 
of the pardcularides in a specific context of the issue or problem. If one is making 
decisions about a possible reducdon in workforce, one needs to know, among other 
things, something about how altemadve schemes might affect costs, employee 
sadsfaction, compeddveness, and other contextually relevant consequences and 
consideradons. Aristode recognized both these requisite knowledge bases: The 
person of "practical wisdom . . . requires not only knowledge of universals [i.e., 
ethical norms], but also familiarity with pardculars, which only become familiar 
from experience" (Aristode, 1985: 126). The third type of knowledge implicated 
in pracdcal wisdom is procedural. It is made up of what might be called ethical 
know-how, and it includes how to craft responses, to whom to address them and 
when to act them out. In other words, this base of knowledge provides the necessary 
elements in the stmcture of pracdcally wise action. This procedural knowledge 
reminds us that knowing ethics and doing ethics are quite different, and like knowledge 
of pardcularides, procedural knowledge is best developed through experience 
(Leonard & Swap, 2005). 

The conceptual scheme that bestfits this procedural component of pracdcal wisdom 
is one developed by a group of developmental psychologists in Germany. Defining 
wisdom as a form of experdse in the pragmadcs of life, these scholars have developed a 
rich set of instmments and associated empirical work resuldng in two majorfindings to 
be reported later (Baltes & Staudinger, 2000). Like one's knowledge of pardcularides, 
this procedural knowledge element is tacit, meaning that it is acquired primarily through 
experience (Polanyi, 1966; Stemberg, Wagner, Williams, & Horvath, 1995). 

Thinking Component of Practical Wisdom 

Supplementing the knowledge component of practical wisdom is a thinking element. 
In this respect, practical wisdom requires a tentative or provisional thinking 
style best described as a middle ground between knowing and doubdng (Meacham, 
1983; 1990). Thus, the pracdcally wise person steers a course between confidence 


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and cautiousness, not unlike the wise demeanor of Socrates. When exposed to the 
beliefs, values, knowledge and informadon that describe a situadon, the pracdcally 
wise person's tendencies are to quesdon if these are necessarily tme and to doubt 
if these are exhaustive of all the important features that could be tme. 

Wisdom is an attitude taken by persons toward the beliefs, values, knowledge, 

information, abilides, and skills that are held, a tendency to doubt that these 

are necessarily true or valid and to doubt that they are an exhaustive set of 

those things that could be known. (Meacham, 1990) 

Emotional Component of Practical Wisdom 

To some, pracdcal wisdom connotes a kind of cool detachment in which the 
person maintains emodonal distance in order to be free from the temptadons of senfimentaUsm. 
However, pracfically wise persons must have well-schooled emodons 
that enable them to take in all the available information in a situation and to help 
diem gauge a fully human reacfion to diem (Kunzmann & Baltes, 2003). Pracdcal 
wisdom requires the accurate discemment of the emodonal climate on a pardcular 
matter and the ability to draw from a complete spectmm of emotional responses to 
craft one that both brings about good outcomes and is good itself. 

Psychologists have repeatedly demonstrated that our emofions play a large role 
in ethical decision-making (e.g., Haidt, 2001). Stunningly, life's most important 
decisions are apparendy best made within an intemal state in which one's deliberative 
powers are suppressed allowing one's emodons to determine the choice. 
That includes major financial investment decisions and decisions about one's love 
partner (Dijkstemis, Bos, Nordgren, & Van Baaren, 2006; Wilson & Kraft, 1993). 
With emodons playing such a strong guiding force in acfion, die pracfically wise 
person must be able to accurately perceive emotions in others and to express them 
in comprehensible ways. This may be particularly so with the so-called moral 
emodons like shame, embarrassment, pride, and guilt and also awe, love, sympathy, 
and gradtude. Perhaps the psychological constmct of emodonal intelligence 
is a significant component of pracfical wisdom (Dmskat, Sala & Mount, 2006, cf. 
Kristjansson, 2006). 

Motivational Component of Practical Wisdom 

The modvadonal component of pracdcal wisdom has a firm foundation—the 
desire for moral excellence. The pracdcally wise person must be singled-minded 
in counting moral considerations above all others in decision making. One way of 
conceiving of such modvadon is that the person has a strong moral self, i.e., the 
person highly values integrity as a self constmal (Aquino & Reed, 2002; Blasi & 
Globis, 1995). Beyond this foundafion, practical wisdom demands a disposition to 
take responsibility for the good in situadons. Together, the knowledge, thinking, 
emotional and motivadonal components of pracdcal wisdom all work to produce a 
disposition toward moral excellence that is both rare and challenging to master. 


PRACTICAL WISDOM AND BUSINESS ETHICS

Major Findings about Practical Wisdom 

Philosophers and psychologists view virtues like pracdcal wisdom quite differendy. 
As early as the 1920s, psychologists began quesdoning the existence of 
character traits (Hartshome & May, 1928). Drawing upon largely experimental 
evidence, others have argued diat there is litde evidence that supports the existence 
of moral virtues (Doris, 1998; Harman, 2000). These conclusions have been effecdvely 
challenged (e.g., Sreenivasan, 2002), and today psychologists condnue 
to look for intersecdons between behavior and the virtues (e.g., Peterson & Seligman, 
2004). 

One reason behind the lack of support for the existence of the virtues in social 
psychological experiments is the assumpdon that traces of the virtues will show up 
in the behavior of ordinary people. However, when placed in demanding (strong) 
situadons, such people's virtuous dispositions become dormant. One way around 
this is to disdnguish between virtuous character and virtue-related performance. 
This approach has been adopted by psychologists studying wisdom. In order to 
capture how normal people manifest their virtue of wisdom, these researchers make 
the useful disdncdon between wisdom and wisdom-related performance (Baltes, 
Staudinger, Maercker, & Smidi, 1995; Staudinger & Baltes, 1994). Indeed, if we 
were to conceive of the virtue of wisdom at one end of a scale and the vice of foolishness 
on the other, most people would fall between these extremes (see Figure 
1). Their responses to the cases I described earlier would be less than clever or 
inconsistently clever from a moral standpoint. Such an approach would enable us to 
study how pracdcal wisdom is distributed in an organizadon and how it develops. 

Vice of Virtue 
Foolishness of Wisdom 

Low and Consistent Average High and Consistent 

Wisdom-Related Performance 

Figure 1. Virtue and Behavior 

On the other hand, if the focus is on ordinary wisdom-related performance, some 
of our expectadons from virtue ethics may not necessarily hold. For example, virtue 
theory holds that being virtuous will enable one to live the good life. Yet, longitudinal 
studies which have followed women over decades show that those whose lives 
demonstrate wisdom-related performance experience less life sadsfacdon measured 
broadly than more conventional women (Helson & Srivastava, 2001). Although 
people who have attained the virtue of pracdcal wisdom may flourish, the same cannot 
be said for those striving for it. A similar contradicdon between the predicdons 
of virtue theory and empirical findings on wisdom-related performance concems 
the predicdon that the virtuous person has a vision of the good life and lives it. In 


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condast, evidence suggests that some persons with wisdom-related performance 
are better able to give good advice than follow it themselves (Brown, 2000). 

A person can be wise with regard to tbe life and problems of other people 
and can be sought out for advice from others because of her wisdom but the 
very same person does not necessarily have to be wise about her own life and 
problems. (Staudinger & Kunzmann, 2005: 324) 

Finally, while an element of virtue theory known as "the unity of the virtues" requires 
that pracdcally wise persons are uniformly virtuous in other ways; this has 
not been found in research into wisdom-related performance (Stemberg, 2002). 
While on a dajectory toward virtuous pracdcal wisdom, persons may morally fall 
short in all the ways various psychological experiments have detected (e.g., Darley 
& Batson, 1973). Clearly, just because a person once fails to help to a disdessed 
person while mshing to a class does not mean he or she will never attain the virtue 
to stop and give him succor. It merely means that such a person's character has not 
yet attained the status of a genuine virtue. 

The Measurement of Practical Wisdom-Related Performance 

There are two ways one might measure practical wisdom. One is to measure it as 
a process by aggregadng the four components (knowledge, emodon, thinking, and 
modvation). Scales of all these components are readily available although some may 
have to be modified slighdy to correspond to a business or organizafional context. 
Starting with these scales, a measure of pracdcal wisdom could be constmcted and 
validated (cf. Ardelt, 2000). A second approach would be to measure the constmct 
as an outcome by directly assessing people's handhng of challenging cases. This 
approach has been used in tesdng pracdcal intelligence (Sternberg et al., 1995; 
Stemberg & Wagner, 1986). Basically, it involves idendfying people thought to be 
pracdcally wise and then looking to see what they do about challenging pardcularides. 
Then, one would use their responses as benchmarks in assessing others' 
approaches to the same situadons. This is quite consistent with Aristode who resorted 
to what virtuous people do as the standard of virtuous action. 

Most of the empirical research on pracdcal wisdom to date has focused on 
the knowledge component of wisdom. Taken together with what is known about 
wisdom's other components, existing evidence supports several conclusions. 

Finding I. Practical Wisdom Does Not Decline with Age in Adulthood 

In several studies focusing on the knowledge component of practical wisdom, 
wisdom-related performance showed no reladonship with age (Baltes & Staudinger, 
1993; Staudinger & Baltes, 1994). This makes pracdcal wisdom quite a remarkable 
biological attribute. Most all mental talents decay after the age of about twenty-five, 
so pracdcal wisdom's resistance to decline is extraordinary (Colonia-Willner, 1999). 
In fact, some of the highest scores ever obtained on wisdom-related performance 
have been among die very old (Baltes et al., 1995; Smith & Baltes, 1990). This 


PRACTICAL WISDOM AND BUSINESS ETHICS

is echoed by research into the thinking-component of pracdcal wisdom. Unlike 
young adults, older people show a greater tendency than the young to deny their 
own wisdom, signifying a balance between doubt and confidence (Clayton & Birren, 
1980). Similarly, the emodonal component of pracdcal wisdom (emodonal 
intelligence) shows no diminishment with age (e.g.. Van Rooy, Alonso, & Viswesvaran, 
2005). Finally, there is the motivadonal component of practical wisdom. If 
anything, morality becomes a more central feature of the self as adults grow older, 
again indicating that aging brings with it no diminishment in this component of 
wisdom (Moberg, 2001a). 

Wisdom is not the only cognidve skill that is impervious to aging. In fact, older 
people actually outperform younger ones in ways that seem related to wisdom. 
For example, older persons are better at avoiding irradonal preferences (Kim & 
Hasher, 2005; Tentori, Osherson, Hasher, & May, 2001) and are better able to 
accurately attribute the causes of other's behavior (Happe, Winner, & Brownell, 
1998). Moreover, brain acdvity is more complex in older than younger people, so 
even though intellectual acdvity diminishes, the hardware that houses wisdom-
related knowledge apparently does not undergo normal decay (Ardelt, 2000). It is 
not known for certain whether these specific cognidve elements that are enhanced 
by aging consdtute wisdom resources, but they certainly might. 

An associadon between wisdom and aging is consistent with historical and 
cultural archetypes that define wisdomfigures as aged or age-less: as old men with 
flowing white beards, as aging gums who speak in riddles, and as elderly goddesses 
who are the source of all wisdom. Indeed, conventional wisdom holds that 
aging makes people more percepdve and sagacious (Heckhausen, Dixon, & Baltes, 
1989). Psychoanalyst Erik Erikson dieorized that the human life span is divisible 
into periods or epochs and that middle and late adulthood are characterized by 
the centrality of moral concems and the desire to invest their wisdom in the next 
generation (Erikson, Erikson, & Kivnick, 1986). 

Finding 2. The Knowledge Component of Practical Wisdom Is Enhanced through 
Social Interaction 

Empirical work has shown that when people experience fundamental life problems, 
they generally tum to other people for guidance and advice (Staudinger, 1996). 
Rather than thinking about it themselves or consulting books or other media, most 
people prefer consuldng other people. This common pracdce apparendy sdmulates 
the creadon of wisdom, for in a series of studies, when individuals had an opportunity 
to discuss problems with people they knew, the decisions they arrived at revealed 
a wiser knowledge base than when they made such decisions without interacdon 
(Staudinger & Baltes, 1996). Apparently, some types of discussion and interaction 
arouse the retrieval of knowledge and stimulate collective thinking conducive to 
wisdom. This "two heads are better than one" phenomenon is not found in all forms 
of problem-solving, but it is apparently the case with wisdom. Interesdngly, dialogic 


BUSINESS ETHICS QUARTERLY 

interacdon was central to Aristode's notion of practical wisdom as taking place in 
the space between the individual, the household, and the city-state. 

What are the business implications of this "wisdom through interaction" effect? 
First, it is clear that there are many types of social interaction, and some hold more 
promise for the creadon of wisdom-related knowledge than others. Jurgen Habermas 
(1998) has developed theoredcal grounding to support empirical research along these 
lines.^ Second, "wisdom through interaction" does not imply that ethical decisions 
are best made in coUecdves. It means only that morally clever altematives are much 
more likely to surface through interacdon than through solitary reflecdon (Athanassiou 
& Nigh, 1999). If ethical help-lines are staffed with persons good at social 
interaction, wise help is likely to be manufactured through give-and-take. Finally, it 
may be that occupadons that involve a great deal of social interacfion may be better 
incubators for people with wisdom-related knowledge than occupations involving 
solitary work. Along these lines, it is instmcfive that among the professions that 
show the highest level of wisdom-related knowledge are clinical psychologists—a 
field that cannot be pracdced without interacdon (Smith & Baltes, 1990; Smith, 
Staudinger, & Baltes, 1994; Staudinger, Maciel, Smidi, & Baltes, 1998). 

New Propositions about Practical Wisdom 

Based upon exisfing research in both philosophy and psychology, a number 
of proposidons can be put forth that have theoredcal grounding. These are summarized 
in Figure 2. 

Wisdom-Advice Giving 

Communication 
Talents 

Experience 

Moral Imagination Mentoring 

Capacity for
Reflection Wisdom-Related Wisdom-Related


Performance Performance 
Dispute Handling 

Systems Thinking 

Inspiration 

Wise Business 
Decisions 

Ethical Reframing 

Figure 2. Practical Wisdom 


PRACTICAL WISDOM AND BUSINESS ETHICS

Proposition I. One's Capacity for Wisdom-Related Performance Is Developed 
through Experience, Reflection, and Inspiration 

Narradves of practically wise persons often show a distincdve background of 
experience, a reflecdve demeanor, and a biography punctuated by inspiradonal 
events (McAdams, de St. Aubin, & Logan, 1993; Stemberg, 2002). 

Experience 

Experience probably has its strongest effect on the knowledge component of 
pracdcal wisdom. Know-what, know-how, know-when, and know-who all accumulate 
through experience, especially if that experience is representative of the sorts 
of moral problems one is called upon to solve. The ethical issues in the finance 
funcdon of an enterprise are different than the ones found in markedng, and it seems 
unlikely that one accumulates the knowledge necessary to be pracdcally wise in 
each of these funcdons without specific pracdcal experience in them. Similarly, 
there are ethical issues in some industry-specific contexts (e.g., bridge constmcdon) 
requiring experience within that milieu. 

The knowledge component of pracdcal wisdom mentally accumulates in two 
principal forms: behavior-consequence leaming and narradve leaming. People leam 
by seeing the results their acdons produce, and people leam when informadon is 
conveyed in narradve or story forms. In either event, people become pracdcally 
wise much the same as how people progress from novice to expert in any field. 
Pattems are increasingly recognized, more complex mental models of situadons are 
developed, more time is spent represendng problems and planning than execudng, 
and only high-quality altemadves are considered (Ericsson & Lehmann, 1996). 
Esdmates based on studies of experts indicate that it normally takes at least ten 
years of exposure and pracdce to acquire the experience necessary to become an 
expert in afield. While over-leaming (Gabarro, 1985; Langer, Blank, & Chanowitz, 
1978) or unrepresentadve-leaming (Reynolds, 2006) can be a problem, a decade 
of experience may be a useful benchmark for what it takes for someone to attain 
the knowledge necessary to be practically wise in a specific context (Leonard & 
Swap, 2005). 

Reflection 

Reflecdon is a long revered pracdce in the cultivadon of wisdom. The Sage's 

admonidon, "know thyself," and Socrates' contendon that "the unexamined life is 

not worth living" both support die enduring supposidon that reflecdon is an es


sendal process by which wisdom is acquired. In spite of this tradidon, reflecdon 

has received litde attendon in the business literature (Seibert & Daudelin, 1999). 

One reason is that work organizations are settings notoriously hosdle to reflection 

(Comeau-Kirschner & Wah, 2000). At the same dme, more reflecdon goes on than 

most people know, much of it while the work is proceeding (Schon, 1983; 1987). 

The subject of reflection most conducive to the accumuladon of wisdom is prob


ably the reladonship between one's self and one's acdons (Argyris & Schon, 1996). 


BUSINESS ETHICS QUARTERLY 

Such reflecfion confronts the possibility of self-decepfion about the lack of consistency 
between one's espoused values and one's behavior, and it also reveals areas 
for improvement in one's character and behavior. Specifically, effecdve reflecfion 
results in a careful assessment about how one is doing from a moral standpoint. 
Without such feedback-seeking, one may never leam whether one has adained the 
standing of being pracdcally wise. 

To become an expert driver, one should feel fear, not elation, as be or she skids 
around a curve. Likewise, to acquire ethical expertise, one must... bave tbe 
sensibility to experience the socially appropriate sense of satisfaction or regret 
at tbe outcome of one's action. (Dreyfus & Dreyfus, 2004: 254) 

Meaningful reflecdon does not focus only on the self. The pracdcally wise 
person also reflects on what consdtutes human flourishing. Such reflecdon enables 
the individual to appreciate die diversity of lives diat differ from one's own and to 
discover altemadve forms of die good life (e.g., Staudinger, 1997). 

Inspiration 

The word "inspiradon" derives from the Ladn word inspirare, to breathe into, to 
be filled, or to inflame. In an attempt to better understand the process, one psychologist 
studied the inspiration of seventy individuals and came to several conclusions 
(Hart, 1998). First, inspiradon requires some sort of recepdveness; peak experiences 
only pique the prepared mind. Second, inspiradon involves heightened sensory 
awareness and a percepdon of social connectedness. Whether one experiences the 
awe in nature or as the result of a sudden insight, inspiradon often sdmulates a 
msh of clear percepdon and a sense of profound social interdependence. Finally, 
inspiration is an emodonal event, often accompanied by exhilaration and joy. 

The type of inspiradon relevant for our purposes typically begins with a precipitadng 
event and results in a sudden increase in pracdcal wisdom. A number of events 
potendally fit this profile: mysfical transformadons (e.g., epiphanies, near-death 
experiences), role and life-style changes (e.g., redrement, twelve-step programs, 
parenthood), therapeudc and educadonal changes, and post-traumadc growth. The 
typical insights that follow such events reflect the thinking style associated with 
pracdcal wisdom. Namely, inspiradon often results in a more constmctive set of 
priorides. Following inspiradon, individuals spend more dme on their close reladonships 
and find more pleasure in the mundane aspects of life. They are perceived as 
kinder, more empadiedc, and more sensidve (Janoff-Bulman, 1992). Hassles and 
minor fmsdadons no longer derail them. They become more prudent and constmctive 
thinkers when faced with fmsdadng situadons (Miller & C de Baca, 2001). 

Somedmes, the precipitadng event is not a phenomenon but a person. Role 
models can be quite rousing, and some inspire us with their pracdcal wisdom. Most 
of the narrafives of virtuous business people in David Bollier's classic book. Aiming 
Higher (1996), have that effect. All diings considered, people find role models 
most inspiring when they are demographically similar, when the tasks they have 


PRACTICAL WISDOM AND BUSINESS ETHICS

mastered are relevant, and when the role model's level of performance is perceived 
to be attainable (Moberg, 2000). 

Proposition 2: Wisdom-Related Performance Is Enhanced hy Moral Imagination, 
Systems Thinking, and Ethical Reframing. 

Aristotle emphasized the importance of both universals (the standards of moral 
excellence) and particularides (die defining features of the situadon) in pracdcal 
wisdom. Merely knowing the facts of the situadon is insufficient, as is merely 
knowing the ABCs of moral theory. Pracdcal wisdom demands working with this 
raw material in ways that create morally graceful and elegant moves. Two capabilides 
that enhance pracdcal wisdom by working on tbe raw pardcularides are moral 
imaginadon and systems thinking. And, the capability associated with working with 
the raw universals in a situadon is a process I call ediical reframing. These three 
talents enhance wisdom-related performance. 

Moral Imagination 

Defined most simply as "the capacity to empathize with others and to discem 
creadve possibilides for ediical acdon" (McCollough, 1991:16), moral imaginadon 
is the ability to vary the cognidve construction of the pardcularides of the situation 
resuldng in fresh viewpoints of die situadon (Werhane, 1999). This might involve a 
mental reconfiguradon of the details of the situadon according to various kinds of 
cognidve maps or mental models (Johnson, 1993). Altemadvely, it might involve 
imagining the situadon from the oudook of the pardes involved (Moberg «fe Sea-
bright, 2000). What makes moral imaginadon creadve is its divergence from the 
ordinary or convendonal way in which particularities are examined. 

Moral imaginadon is facilitated by features in the immediate work environment 
(Moberg & Seabright, 2000). Ethical work cultures have been found to activate the 
moral imaginadon (Caldwell & Moberg, in press). Moreover, moral imaginadon is 
associated with engaged membership in heterogeneous work groups, particularly 
when led by pardcipadve leaders (Somech, 2006). Bringing diverse groups of people 
together exposes the process to alternative models of the situadon, thus sdmuladng 
the morally imaginadve process (Schneider & Northcraft, 1999). Perhaps this is the 
reason that the knowledge component of pracdcal wisdom is facilitated by social 
interacdon. And finally, exposure to the arts has long been considered to play an 
important role in sdmuladng tbe moral imaginadon (Nussbaum, 1990; Pardales, 
2002). 

Systems Thinking 

"At its broadest level, systems thinking encompasses a large and fairly amorphous 

body of methods, tools, and principles, all oriented to looking at the interrelatedness 

of forces, and seeing them as part of a common process" (Senge, Kleiner, Roberts, 

Ross, & Smidi, 1994: 63). I will define it as die ability to perceive any object as 

influenced by an interrelatedness of forces, arising from within and outside the 


BUSINESS ETHICS QUARTERLY 

object. Here the object is not to discem how the situadon is viewed from altema


dve viewpoints or cognidve schema, but rather how putdng these views together 

systemadcally enables the decision-maker to idenfify creadve opdons. 

System thinking is not simply another cognidve schema that might be considered 
by a morally imaginative person. Instead, it is a creadve mode of inquiry that 
pulls together different views and abstract ideas into a unified whole. In so doing, 
systems thinking results in "(1) an understanding of the relafivisdc, non-absolute 
nature of knowledge; (2) an acceptance of condadicfion as part of reality; and (3) 
an integradve approach to diinking" (Kramer, 1983: 91-92; cf. Rakfeldt, Rybash, 
& Roodin, 1996). 

This makes systems thinking a useful tool to enhance pracdcal wisdom. For 
example, systems thinking refocuses consideradon from stakeholders one at a dme 
to combinadons of stakeholders. Thus, instead of calculadng the effect of an acdon 
on three community groups independently, the pracdcally wise system thinker 
would consider the interacdve effects of the three groups (Werhane, 2002). Such a 
thinker would also prefer improvisadon and in-process adjustments to grand plans 
diat are boldly implemented (Moberg, 2001b). Although work on systems diinking 
is still in its infancy, there have been some attempts to measure it as an acquired 
capacity (Maani & Maaraj, 2004). 

Ethical Reframing 

Frames are well-leamed sets of assumpdons and conceptual associadons that 
focus people's attendon on, interpret, and label some aspects of a situadon to the 
exclusion of odiers (Bateson, 1972; Minsky, 1974; Goffman, 1974). Each major 
ethical theory carries with it its own frame. Ufilitarians focus on consequences. 
Casuists compare cases. Deontologists look at actions. Eeminists consider reladonships. 
And, virtue ethicists inquire into character. Ethical reframing involves the 
ability to mentally shift from one ethical frame to the next to build a composite view 
that incorporates muldple ethical frames. Since any two are incommensurable, the 
resultant view is not only more complete, but it often surprising (Bartunek, 1988; 
Watzlawick, Weakland, & Fisch, 1974).' Essendally, ediical reframing is like viewing 
the heavens through a telescope with muldple lenses, each with a different focal 
length. When the viewer builds a composite as the result of looking through one at 
a dme, an image of the universe emerges that is both inclusive and ingenious. 

Ethical reframing is a capability that probably requires more mental attendon 
when one is unfamiliar with ethical reasoning than when one is an expert. As Dreyfus 
and Dreyfus (2004) assert, "principles and theories serve only for early stages 
of leaming; no principles or theory grounds an expert's ethical response any more 
than being in chess a theory or mle that explains a master-level move" (Dreyfus and 
Dreyfus 2004: 258). Those who have mastered applying ethical models to situafions 
engage in ethical reframing rather intuitively and effortlessly. Only when they 
perceive a situation as novel or intuidvely vexing would experts resort to conscious 
and deliberate ethical refiaming. 


PRACTICAL WISDOM AND BUSINESS ETHICS

Propositions. The Quality ofAdvice-Giving, Mentoring, and Dispute Resolution, 
if Accompanied by Wisdom-Communication Skills, Is Enhanced by Wisdom-
Related Performance. 

As ethical considerations are not restricted to any domain of business decision 
making, pracdcal wisdom is a universally applicable business virtue (Freeman, 
1994). When Stemberg asked business professors to describe how wisdom is manifested 
in business decisions, their list contained several universal elements: 

.. . maturity of judgment, understanding of the limitations of one's actions and 
recommendations, knowing what one does and does not know, possession of 
a long-term perspective on things, knowing when not to act as well as when 
one should act, acceptance of reality, good decision making, the ability to 
distinguish substance from style, and appreciation of the ideologies of others. 
(Stemberg 1985: 624) 

At the same dme, there are certain social business contexts in which pardcularly 
complex ethical cases naturally arise: social situadons calling for advice-giving, 
mentoring, and dispute resoludon. Accordingly, we would expect that if one's 
performance in these contexts was measured, individuals high in pracdcal wisdom-
related performance would perform these tasks particularly well. 

Advice-giving, mentoring, and dispute resoludon are all social processes, and 
as such they capitalize on the positive effects of interacdon on the knowledge component 
of pracdcal wisdom (Finding 2). This implies that through the interacdon 
among advice givers and receivers, mentors, and proteges, and among those who 
handle disputes and the disputants themselves, practical wisdom actually can be 
manufactured (Baltes & Staudinger, 1996). 

In spite of this potendal, pracdcal wisdom is not the only talent necessary to be 
effecdve in these roles. Recall from our earlier discussion that research has shown 
that some people are much more effecdve giving wise advice than internalizing 
wisdom in their own lives. One reason is that there is a knowledge base that is 
independent of that associated with wisdom-related performance that is required 
if one is to communicate wisdom for the benefit of others. I will call this wisdom-
communicadon knowledge. Unless one is addidonally talented within this 
wisdom-communicadon knowledge base, one will not be able to translate one's 
own wisdom-related performance for the benefit of others through advice-giving, 
mentoring, and dispute handling. 

The Wisdom-Communication Knowledge Relevant to Advice Giving 

It is one thing to make a practically wise decision and quite another to offer 
someone else guidance about how they should make one. In organizadons, advice 
giving is a common element in the exercise of supervisory authority, and it is also 
a common feature of a great deal of lateral communicadon (Moberg, 2002a). Yet, if 
one examines uncommonly wise advice, that is, the kind of advice that people say 
transformed their life for the better, the messages themselves are pretty hum-dmm 
(Knapp, Stohl, & Reardon, 1981). Memorable messages are usually the same as 


BUSINESS ETHICS QUARTERLY 

one finds in widely known proverbs and maxims that tout the importance of family, 
the value of educafion, and the importance of self-knowledge (Kastenbaum, 
1997). Clearly, something happens that makes advice wise besides the message 
itself. The message "what's done is done" seems pallid in the absdact, but it may 
be the single most poignantly wise message for a particular person facing a pardcular 
situation. 

According to the research evidence, the wisdom-communicadon knowledge of 
advice-giving has three common features. First, in order to be wise, advice must be 
carefully attuned to the relationship between provider and recipient. For example, 
poorly calibrated advice can be seen as mde "butdng in" by the receiver (Wilson, 
Aleman, & Leatham, 1998). Similarly, unsolicited advice or advice given by an 
individual whose credibihty is limited is likely to be ignored (Brown & Levinson, 
1987; Deelsda, Peeters, Schaufeh, Sdoebe, Zijlsda, & van Doomen, 2003). Second, 
the advice message must be well-suited to the recipient's problem. Some problems 
are conducive to the wise message actually being incomplete, allowing the receiver 
tofill the details (He, 1994). Others require extensive communicadon and dialogue 
for advice to be slipped in by way of a story, a metaphor, or perhaps a parable (Hunt 
& Weindaub, 2002). And third, some research indicates that although there is no 
one message that is transformafive, there is a powerful template for wise advice 
that indicates how it ought to be framed: 

a. advice should be tailored to the advisee's place within the life span; 
b. advice should reflect tolerance of value differences; and 
c. advice should aid the advisee in the management of uncertainty. (Baltes 
& Staudinger, 2000) 

It is possible for someone to master the wisdom-communication knowledge of 
advice-giving and still give foolish advice. Wisdom-communication knowledge 
results in wise advice only if the advisor has the capacity for wisdom-related performance. 


The Wisdom-Communication Knowledge Relevant to Mentoring 

Mentoring is a relationship between a senior and junior member of a community 
that has the purpose of advancing the development of the junior member as a member 
of that community (Kram, 1985). Besides advice-giving, mentoring generally 
involves coaching, tutoring, and providing developmental assignments and support 
(Landau & Scandura, 2002). The superior power of the mentor is a defining feature 
of the reladonship (Auster, 1984). Mentors typically control the process, and they 
are the parties principally and ethically responsible for its outcomes (Moberg & 
Velasquez, 2004). 

At their best, mentoring reladonships involve significant mutuality (Allen & 
Eby, 2003). Proteges and mentors share interests, provide validation and support 
to one another, and find each other's company satisfying (Johnson, 2003). For 
mentoring to achieve this potendal, mentors must assume both a directive role and 


PRACTICAL WISDOM AND BUSINESS ETHICS

supportive communication posture. Mentors should be directive in assuring that 
protege expectadons are aligned with what the mentor can and will provide. And 
mentor suppordveness is among the most important of all determinants of the effectiveness 
of the relationship (Young & Perrewe, 2000). 

Mentors must also assume responsibility for the temporal development of the 
reladonship (Chao, 1997; Furlong and Maynard, 1995). Early on, tmst is the focus 
of communicadon in the relationship. Later, as mutual experiences accrue, communicadon 
typically entails the transformadon of the protege's professional idendty 
from reladve novice to full colleague. Leaming occurs via instrucdons from the 
mentor and also through how the mentor acts as an ideal model for the protege. 
Finally, as the reladonship approaches maturity, communication themes center on 
gratitude and separadon. 

The mentoring process is highly subject to unfulfilled expectadons no matter 
how well wisdom-communication knowledge is mastered. Minor relationship 
problems can easily escalate into mistreatment, and such problems are certainly 
not that unusual. One study of 156 former proteges found that fully 54 percent of 
them had been in at least one negative mentoring relationship (Simon & Eby, 2003; 
cf. Kalbfleisch, 1997). 

Dispute Resoludon 

The story of King Solomon in the Old Testament of the Bible is perhaps the 
Westem World's most venerable tale of pracdcal wisdom (I Kings 3:25-27; Manz, 
Manz, Marx, & Neck, 2001). Solomon's masterful handling of the dispute between 
the two harlots is often held up as a paradigmatic case for how workplace disputes 
should be handled. After all, the issue involved considerable uncertainty, the king's 
actions were indeed clever, and his cleverness seems to have served the interests of 
morality. At the same dme, dispute resoludon is probably the most difficult of all 
challenges to practical wisdom. 

Handling employee conflicts is a regular part of every manager's experience 
(Moberg, 2003). In fact, contemporary managers spend as much as twenty percent 
of their time dealing with such contested issues as employee complaints over a 
coworker's job performance, disagreements over a policy, and alleged discdminadon 
or harassment of one employee by another (Lissak & Sheppard, 1983; McElhaney, 
1996; Thomas & Schmidt, 1976). 

The wisdom-communicadon knowledge associated with handling disputes 
involves three important considerations. First, disputes require an open-minded 
invesdgadon. Pracdcally wise dispute handlers realize that formulaic resoludons 
rarely work and that the pardcularides in the conflict are extremely important (e.g., 
Brady, 1987). Thus, even if a person has an inidal impression of a pracdcally wise 
resoludon to a conflict, he or she should suspend that judgment until the context 
is fully understood. Second, the best mode of intervention depends on the precise 
situadon, the disputant's history, expectadons, likely setdement, and so forth (e.g., 
Elangovan, 1995). Some of the opdons include a judge-centered arbitradon, a 


BUSINESS ETHICS QUARTERLY 

disputant-centered mediadon, or a frank appeal to the parfies to resolve the dispute 
themselves. Clearly, each of these modalides requires their own set of communicadon 
modfs. Andfinally, wise conflict resoludon requires respect for the due process 
rights of the disputants (Moberg, 2003). Statements of certainty must be measured, 
and considerable padence must be employed. In all, the case of Solomon falls short 
as a model for how wisdom should be communicated. His resoludon was obviously 
clever, but he apparendy based it on an incomplete invesdgadon of the facts of the 
situadon. Moreover, if therights of the two disputants were considered, it certainly 
was not evident in Solomon's decisive manner. 

Wise advice-giving, mentoring, and dispute resoludon require much more than 
the applicadon of a series of communicadon principles governing each talent. Each 
requires experience (ten years of advice-giving), reflecdon (e.g., "am I modeling 
what I want my protege to master?"), and inspirafion (e.g., "how would Jusdce 
Marshall handle diis dispute?") to animate the capacity to be wise. 

Conclusion 

Becoming practically wise involves a lengthy process requiring experience, 
reflection and inspiration. It is a process in which one's knowledge, thinking, 
emodon, and modvadon may not develop at the same rate. A person might, at a 
given moment, have the motivadon and emotional make-up of a virtuously wise 
person but be stmggling with insufficient knowledge of a context or with mastering 
the balance between dmidity and temerity that defines a wise thinking style. In 
business ethics, we have too often embraced moral development as though it were 
represented in a stage model anchored by vice-ridden egoists at one extreme and 
people conceptually nimble with absdact norms on the other (Lapsley, 2006). As an 
altemative, I propose that we study the behavioral traces of pre-virtuous character. 
These traces may not come in stage-like bundles, but studying them will enable us 
to gauge progress toward genuine moral excellence. 

Practical wisdom enables people to make tough moral choices from among an 
almost limitless series of possibilides. As the sage noted, one does not attain wisdom 
by mouthing the words of the wise. At the same dme, there is certainly room 
to develop theories of how pracdcal wisdom might be developmentally sfimulated 
and nurtured (Hartman, 2006). Indeed, Ifind the challenge of constmcdng a pracdcal 
wisdom academy invigorating. My sense at the outset is that it would look far 
different than the standard business ethics course, and the ideas in this paper offer 
ample clues about what may be required. 

Whether this address ends up defining the stmcture for a theory of pracdcal 
wisdom in business does not concem me. What does concem me is that we begin 
studying the nascent and fallible forms that pre-virtuous behavior take and that we 
start with pracdcal wisdom. 


PRACTICAL WISDOM AND BUSINESS ETHICS

Notes 

1. These processes are highly interdependent both biologically and functionally. For 
example, emotions can play a vital role in motivation. 
2. For example, Habermas posits a norm for communication that demands intelligibility, 
warrant, ratification, and sincerity. 
3. Recent research in the neurosciences suggests that the application of each of these ethical 
paradigms may involve different biological processes in the brain. See Greene, Sommerville, 
Nystrom, Darley, & Cohen, 2001; and Borg, Hynes, Van Horn, Grafton, & Sinnott-Armstrong, 
2006. 
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