Skip to main content
SpringerLink
Log in

The Three Levels of Wisdom

  • Chapter
  • First Online:
Towards Wise Management

  • 912 Accesses

Abstract

This chapter develops the framework of wisdom that will be applied in the later empirical sections of the book. The framework contains three distinct but interrelated levels of wisdom that are called rational-analytical information, intuitive-experiential knowledge and philosophical wisdom. The first, rational-analytical information, produces knowledge on the basis of a rational decision-making model, often relying on formal techniques such as the cost-benefit analysis in economics. The second, intuitive-experiential understanding, proceeds from a more holistic reflection of the situation that employs intuitive insights to re-evaluate and enrich the outcomes of the rational analytics. Intuition is conceptualised as a set of embodied, emotionally charged and immediate flashes of insight and comprehension that emerge without conscious thinking or deliberate analysis. Noting some shortcomings in the discussions related to the ontology of intuition, the chapter then moves to outline the most wide-ranging level of wisdom, namely the Platonic-Socratic understanding of wisdom, or, sophia. Plato’s view on transcendental universals, or Forms, is used to build a perspective that equates wisdom with knowing and becoming familiar with the unchanging ultimates such as Truth, Beauty, Justice and Good. Plato’s metaphors like the Divided Line and the Cave, as well as the theory of the Philosopher-King are explained as part of the doctrine of philosophical wisdom. A brief discussion on the organisational structures and processes facilitating and inhibiting the pursuit of wisdom is presented, with a focus on bureaucracy, groupthink and new organisational forms. Finally, the chapter discusses the adaptation of the three-level framework for the analysis of empirical cases, arguing for a more Socratic understanding of philosophical wisdom as learned ignorance in the reading of the strategic decision-making examples.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 39.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 54.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Bibliography

  • Abrahamson, E. (1996). Management fashion. Academy of Management Review, 21(1), 254–285.

    Article  Google Scholar 

  • Ackoff, R. L. (1989). From data to wisdom. Journal of Applied Systems Analysis, 16(1), 3–9.

    Google Scholar 

  • Alvesson, M. (2002). Understanding organizational culture. London: Sage.

    Book  Google Scholar 

  • Arendt, H. (1973). The origins of totalitarianism (Vol. 244). New York: Houghton Mifflin Harcourt.

    Google Scholar 

  • Argyris, C., & Schön, D. (1978). Organizational learning: A theory of action perspective. Reading, MA: Addison Wesley.

    Google Scholar 

  • Barker, E. (2012). The political thought of Plato and Aristotle. Mineola, NY: Dover Publications.

    Google Scholar 

  • Belbin, R. M. (2012). Team roles at work. London: Routledge.

    Google Scholar 

  • Bohm, D. (1980). Wholeness and the implicate order. London: Routledge.

    Google Scholar 

  • Cameron, K. S., & Quinn, R. E. (2005). Diagnosing and changing organizational culture: Based on the competing values framework. Hoboken: John Wiley & Sons.

    Google Scholar 

  • Chase, W. G., & Simon, H. A. (1973). Perception in chess. Cognitive Psychology, 4(1), 55–81.

    Article  Google Scholar 

  • Chia, R., & Morgan, S. (1996). Educating the philosopher-manager: De-signing the times. Management Learning, 27(1), 37–64.

    Article  Google Scholar 

  • Collingwood, R. G. (1994). The idea of history. London: Oxford University.

    Google Scholar 

  • Cox, J. W., & Hassard, J. (2007). Ties to the past in organization research: A comparative analysis of retrospective methods. Organization, 14(4), 475–497.

    Article  Google Scholar 

  • Dane, E., & Pratt, M. G. (2007). Exploring intuition and its role in managerial decision making. Academy of Management Review, 32(1), 33–54.

    Article  Google Scholar 

  • De Rus, G. (2010). Introduction to cost-benefit analysis: Looking for reasonable shortcuts. Cheltenham: Edward Elgar Publishing.

    Google Scholar 

  • de Vaus, D. (2001). Research design in social research. Thousand Oaks: Sage.

    Google Scholar 

  • Dean, J. W., & Sharfman, M. P. (1996). Does decision process matter? A study of strategic decision-making effectiveness. Academy of Management Journal, 39(2), 368–392.

    Article  Google Scholar 

  • Derrida, J. (1976). Of grammatology (G. C. Spivak, Trans.). Baltimore, MD: Johns Hopkins Press.

    Google Scholar 

  • Donaldson, L. (2001). The contingency theory of organizations. Thousand Oaks, CA: Sage.

    Book  Google Scholar 

  • Dreyfus, H. L. (1979). What computers can’t do: The limits of artificial intelligence (Vol. 1972). New York: Harper & Row.

    Google Scholar 

  • Dreyfus, H. L., & Dreyfus, S. E. (2005). Peripheral vision: Expertise in real world contexts. Organization Studies, 26(5), 779–792.

    Article  Google Scholar 

  • Eisenhardt, K. M., & Zbaracki, M. J. (1992). Strategic decision making. Strategic Management Journal, 13(S2), 17–37.

    Article  Google Scholar 

  • Ericsson, K. A., Prietula, M. J., & Cokely, E. T. (2007). The making of an expert. Harvard Business Review, 85(7/8), 114.

    Google Scholar 

  • Feldman, M. S., & March, J. G. (1981). Information in organizations as signal and symbol. Administrative Science Quarterly, 26(2), 171–186.

    Article  Google Scholar 

  • Foucault, M. (1972). The archaeology of knowledge: Translated from the French by AM Sheridan Smith. New York: Pantheon Books.

    Google Scholar 

  • Foucault, M. (1983). The subject and power. Afterword. In H. Dreyfus & P. Rabinow (Eds.), Michel Foucault: Beyond structuralism and hermeneutics (pp. 208–228). Chicago, IL: Chicago University Press.

    Google Scholar 

  • Foucault, M. (1997). Ethics: Subjectivity and truth. Essential works of Michel Foucault, 1954–1984 (Vol. 1., P. Rabinow, Ed., & Trans. R. Hurley et al.). London: Allen Lane.

    Google Scholar 

  • Frantz, R. (2003). Herbert Simon. Artificial intelligence as a framework for understanding intuition. Journal of Economic Psychology, 24(2), 265–277.

    Article  Google Scholar 

  • Friedman, H. L., & Hartelius, G. (Eds.). (2015). The Wiley-Blackwell handbook of transpersonal psychology. Chichester: John Wiley & Sons.

    Google Scholar 

  • Gabriel, Y. (2000). Storytelling in organizations: Facts, fictions, and fantasies: Facts, fictions, and fantasies. Oxford: Oxford University Press.

    Google Scholar 

  • Gavetti, G., Levinthal, D., & Ocasio, W. (2007). Perspective—Neo-Carnegie: The carnegie school’s past, present, and reconstructing for the future. Organization Science, 18(3), 523–536.

    Article  Google Scholar 

  • Golden, B. R. (1992). The past is the past—Or is it? The use of retrospective accounts as indicators of past strategy. Academy of Management Journal, 35(4), 848–860.

    Article  Google Scholar 

  • Griffin, E. (1997). Groupthink of Irving Janis. In E. Griffin (Ed.), A first look at communication theory (pp. 235–246). New York: McGraw-Hill.

    Google Scholar 

  • Hadot, P. (1995). Philosophy as a way of life: Spiritual exercises from Socrates to Foucault (M. Chase, Trans., AI Davidson, Intro. & Ed.). London: Blackwell

    Google Scholar 

  • Huber, G. P., & Power, D. J. (1985). Retrospective reports of strategic-level managers: Guidelines for increasing their accuracy. Strategic Management Journal, 6(2), 171–180.

    Article  Google Scholar 

  • Isenberg, D. J. (1984). How senior managers think. Harvard Business Review. November–December 1984, 81–90.

    Google Scholar 

  • Isenberg, D. J. (1986). Thinking and managing: A verbal protocol analysis of managerial problem solving. Academy of Management Journal, 29(4), 775–788.

    Article  Google Scholar 

  • Jackall, R. (1988). Moral mazes: The world of corporate managers. New York: Oxford University Press.

    Google Scholar 

  • Janis, I. L. (1971). Groupthink. Psychology Today, 5(6), 43–46.

    Google Scholar 

  • Janis, I. L. (1972). Victims of groupthink; a psychological study of foreign-policy decisions and fiascoes. Boston: Houghton, Mifflin.

    Google Scholar 

  • Kahneman, D. (2011). Thinking, fast and slow. London: Macmillan.

    Google Scholar 

  • Kahneman, D., & Klein, G. (2009). Conditions for intuitive expertise: A failure to disagree. American Psychologist, 64(6), 515–526.

    Article  Google Scholar 

  • Katzenbach, J. R., & Smith, D. K. (1993). The wisdom of teams: Creating the high-performance organization. Cambridge, MA: Harvard Business School Press.

    Google Scholar 

  • Kokko, H. (2010). Sivistyksen varhaista käsitehistoriaa [Early conceptual history of civilization] (in Finnish). Kasvatus & Aika, 4(4), 7–23.

    Google Scholar 

  • Kuhn, T. (1962). The structure of scientific revolutions. Chicago, IL: University of Chicago Press.

    Google Scholar 

  • Kunda, G., & Ailon-Souday, G. (2005). Managers, markets and ideologies: Design and devotion revisited. In S. Ackroyd, R. Batt, P. Thompson, & P. S. Tolbert (Eds.), The Oxford handbook of work and organization (pp. 200–219). Oxford: Oxford University Press.

    Google Scholar 

  • Langley, A., Mintzberg, H., Pitcher, P., Posada, E., & Saint-Macary, J. (1995). Opening up decision making: The view from the black stool. Organization Science, 6(3), 260–279.

    Article  Google Scholar 

  • Lyotard, J. F. (1984). The postmodern condition: A report on knowledge (G. Bennington & B. Massumi, Trans). Minneapolis, MN: University of Minnesota Press.

    Google Scholar 

  • Malkiel, B. G. (2003). The efficient market hypothesis and its critics. Journal of Economic Perspectives, 17(1), 59–82.

    Article  Google Scholar 

  • Malliaris, A. G., Shaw, L., & Shefrin, H. (Eds.). (2016). The global financial crisis and its aftermath: Hidden factors in the meltdown. New York: Oxford University Press.

    Google Scholar 

  • Manz, C. C., & Neck, C. P. (1995). Teamthink: Beyond the groupthink syndrome in self-managing work teams. Journal of Managerial Psychology, 10(1), 7–15. https://doi.org/10.1108/02683949510075155.

    Article  Google Scholar 

  • Manz, C. C., & Sims, H. P., Jr. (1982). The potential for “groupthink” in autonomous work groups. Human Relations, 35(9), 773–784.

    Article  Google Scholar 

  • March, J. G. (1997). Understanding how decisions happen in organizations. In Z. Shapira (Ed.), Organizational decision making (pp. 9–32). Cambridge, UK: Cambridge University Press.

    Google Scholar 

  • Maslow, A. H. (1954). Personality and motivation (p. 987). Harlow, England: Longman, 1.

    Google Scholar 

  • Maslow, A. H. (1962). Lessons from the peak-experiences. Journal of Humanistic Psychology, 2(1), 9–18.

    Article  Google Scholar 

  • McAfee, A., Brynjolfsson, E., Davenport, T. H., Patil, D. J., & Barton, D. (2012). Big data: The management revolution. Harvard Business Review, 90(10), 60–68.

    Google Scholar 

  • Merton, R. K. (1949). On sociological theories of the middle range. In K. Robert (Ed.), Merton: Social theory and social structure (pp. 39–53). New York, NY: Simon & Schuster/The Free Press.

    Google Scholar 

  • Moorhead, G., Ference, R., & Neck, C. P. (1991). Group decision fiascoes continue: Space shuttle challenger and a revised groupthink framework. Human Relations, 44(6), 539–550.

    Article  Google Scholar 

  • Morgan, G. (2006). Images of organization. London: Sage.

    Google Scholar 

  • Nonaka, I., & Takeuchi, H. (1995). The Knowledge-Creating: How Japanese companies create the dynamics of innovation. Oxford University Press, 3(4–5), 25–27. https://doi.org/10.1016/S0048-7333(97)80234-X.

  • Noro, A. (2000). Aikalaisdiagnoosi sosiologisen teorian kolmantena lajityyppinä [Contemporary diagnosis as a third genre in sociological theory] (in Finnish). Sosiologia, 37(4), 321–329.

    Google Scholar 

  • Nykänen, M. & Salminen, M. (2014). Operaatio Elop. [Operation Elop] (in Finnish). Helsinki: Teos.

    Google Scholar 

  • Ollila, J., & Saukkomaa, H. (2013). Mahdoton menestys: kasvun paikkana Nokia [Impossible success: Nokia as a place for growth]. (in Finnish). Helsinki: Otava.

    Google Scholar 

  • O’reilly, C. A., & Tushman, M. L. (2004). The ambidextrous organisation. Harvard Business Review, 82(4), 74–81.

    Google Scholar 

  • Peltonen, T. (2016). Organization theory: Critical and philosophical engagements. Bingley, UK: Emerald Group Publishing.

    Book  Google Scholar 

  • Peters, T. J., & Waterman, R. H. (1982). In search of excellence: Lessons from America’s best-run companies. New York: Harper & Row.

    Google Scholar 

  • Pettigrew, A. M., & Fenton, E. M. (2000). The innovating organization. London: Sage.

    Book  Google Scholar 

  • Plato. (1993). Republic. Translated with an Introduction and Notes by R. Waterford. Oxford.

    Google Scholar 

  • Powell, W. (1990). Neither market nor hierarchy: Network forms of organization. Research in Organizational Behavior, 12. https://doi.org/10.1590/S1415-65552003000200016.

  • Reinhart, C. M., & Rogoff, K. S. (2009). This time is different eight centuries of financial folly. Princeton, NJ: Princeton University Press.

    Book  Google Scholar 

  • Rooney, D., & McKenna, B. (2007). Wisdom in organizations: Whence and whither. Social Epistemology, 21(2), 113–138.

    Article  Google Scholar 

  • Rowley, J. (2007). The wisdom hierarchy: Representations of the DIKW hierarchy. Journal of Information Science, 33(2), 163–180.

    Article  Google Scholar 

  • Ryan, S. (2014). Wisdom. In E. N. Zalta (Ed.), The Stanford encyclopedia of philosophy (Winter 2014 ed.). URL: https://plato.stanford.edu/archives/win2014/entries/wisdom/ (read 1.4.2018).

  • Sadler-Smith, E., Hodgkinson, G. P., & Sinclair, M. (2008). Chapter 2: A matter of feeling? The role of intuition in entrepreneurial decision-making and behavior. In Emotions, ethics and decision-making (pp. 35–55). Bingley: Emerald Group Publishing Limited.

    Chapter  Google Scholar 

  • Sadler-Smith, E., & Sparrow, P. (2008). Intuition in organizational decision making. In The Oxford handbook of organizational decision making. Oxford: Oxford University Press.

    Google Scholar 

  • Simon, H. A. (1947/1976). Administrative behavior (3rd ed.). New York, NY: Free Press.

    Google Scholar 

  • Simon, H. A. (1987). Making management decisions: The role of intuition and emotion. Academy of Management Perspectives, 1(1), 57–64.

    Article  Google Scholar 

  • Sinclair, M., & Ashkanasy, N. M. (2005). Intuition: Myth or a decision-making tool? Management Learning, 36(3), 353–370.

    Article  Google Scholar 

  • Staw, B. M. (1981). The escalation of commitment to a course of action. Academy of Management Review, 6(4), 577–587.

    Article  Google Scholar 

  • Takala, T. (1998). Plato on leadership. Journal of Business Ethics, 17(7), 785–798.

    Article  Google Scholar 

  • Tsoukas, H., & Knudsen, C. (2003). The Oxford handbook of organization theory: Meta-theoretical perspectives. Oxford: Oxford University Press.

    Google Scholar 

  • Van Buren, H. J. (2003). Boundaryless careers and employability obligations. Business Ethics Quarterly, 13(2), 131–149+263.

    Google Scholar 

  • Weber, M. (1968). The theory of economic and social organization (A. Henderson & T. Parsons, Trans.). New York, NY: Free Press.

    Google Scholar 

  • Whittington, R. (2001). What is strategy-and does it matter? London: Cengage Learning EMEA.

    Google Scholar 

  • Willmott, H. (1993). Strength is ignorance; slavery is freedom: Managing culture in modern organizations. Journal of Management Studies, 30(4), 515–552. https://doi.org/10.1111/j.1467-6486.1993.tb00315.x.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. School of Business, Aalto University, Helsinki, Finland

    Tuomo Peltonen

Authors
  1. Tuomo Peltonen
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

Copyright information

© 2019 The Author(s)

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Peltonen, T. (2019). The Three Levels of Wisdom. In: Towards Wise Management. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-91719-1_2

Download citation

Publish with us

Policies and ethics

Search

Navigation