Sublimating Aristotle's Phronesis: Developing a Scale of Organizational Practical Wisdom

This study develops and validates a scale to measure organizational practical wisdom, addressing a gap in the knowledge-management literature. Using a multi-method approach encompassing (1) a semi-structured literature review of 107 peer-reviewed articles that identified four dimensions of organizational practical wisdom; (2) content analysis of the literature; (3) semi-structured interviews with 14 senior leaders from diverse industries and countries; and (4) a two-round Delphi-based analysis with four academic experts, we developed the Organizational Practical Wisdom scale. The scale-validation process then involved exploratory factor analysis and confirmatory factor analysis using two distinct samples. The resulting unidimensional scale demonstrates strong psychometric properties with high reliability and convergent validity. The measurement-invariance analysis supports the scale’s applicability across Portuguese and English language groups. The study makes valuable contributions: it develops a comprehensive framework for understanding organizational practical wisdom, integrating divergent perspectives. It operationalizes organizational practical wisdom, delineates the dimensions of the construct, and explores their interconnectedness. The scale items address key aspects such as adaptability, ethical considerations, and effective knowledge application. The insights are invaluable for leaders seeking to assess the various dimensions of practical wisdom within their organizations. Understanding and leveraging organizational practical wisdom holds substantial societal implications, particularly for enhancing the creation of shared value, social innovation, the common good, overall performance, and sustainability. This study offers an important step toward addressing the contemporary imperative of fostering organizations that excel economically and ethically, promote sustainable development, and contribute to the greater social good.