Why we need wisdom in knowledge intensive organisations: when theory goes bad

This paper considers why wisdom is important in knowledge-intensive service sector organisations. The paper argues that although wisdom necessarily has links to knowledge, knowledge does not necessarily have links to wisdom. The paper also argues that a distinguishing feature of knowledge economies is the extent to which abstract forms of knowledge, particularly theory, are used for commercial purposes in the service sector. The commercial application of abstract knowledge presents particular challenges for managerial and organisational wisdom. An analysis of Enron’s failure as an abstract knowledge and innovation intensive organisation that lacked wisdom is provided to illustrate this point. Finally, the paper considers particular organisational communication processes that facilitate wise organisational behaviour that will enable better use of abstract knowledge.