The Role of Phronetic Decision-making in Mitigating Cognitive Biases

Abstract

To effectively tackle current environmental and societal challenges we need to improve managerial decision-making according to the principles of sustainable development, which focus on meeting the current needs without jeopardising future generations' ability to do the same. Therefore, phronesis or practical wisdom has been rediscovered. Phronesis is an intellectual virtue that enables managers to determine what is good in specific times and situations and undertake the best actions at those times to serve the common good. However, some cognitive biases potentially stand in the way of such sustainable and phronetic decision-making. The aim of this study is to empirically test if the level of personal phronesis in professional environments mitigates such biases and thus enables sustainable decision-making. One of these biases is anthropocentrism, a tendency for a human-centric view of the world, without considering other living beings and the environment. The research question is “What is the relationship between phronesis and anthropocentrism bias of managers in family and non-family businesses?” According to the literature, individuals with higher levels of personal phronesis act in the interest of common good [1], therefore their tendency to put only the human perspective into consideration should be lower, so the hypothesis is “Phronesis negatively impacts anthropocentrism bias.”

To test that, an online self-assessment survey with managers in different organisations and countries will be conducted, using two standardised instruments: Workplace Individual Phronesis Scale that measures phronesis according to 10 theoretically grounded dimensions [2] and Anthropocentric Beliefs Scale [3]. To explore potential relationships between phronetic decision-making, type of the company, and the manager's role in it, additional questions as control variables will be included in the survey. Analysis will be done with regression and the necessary condition analysis (NCA).

The expectation is that a higher level of phronesis negatively impacts cognitive biases connected with common good, such as anthropocentrism. Phronesis can act as a moderating factor in the relationship between cognitive biases and decision-making effectiveness. The contribution of the study will be to provide groundwork for future recommendations on how to enhance sustainable decision-making skills by aligning them more closely with ethical and environmental considerations. It will combine different disciplines, such as psychology, philosophy, knowledge management and sociology. The findings of the research will be useful for suggesting future research, practices, and decision-making strategies. They will provide help for developing policies and educational programs aimed at addressing cognitive biases by enhancing phronesis and promoting sustainable decision-making, focusing on the common .

References

[1] F. Kragulj, Knowledge Management and Sustainable Value Creation: Needs as a Strategic Focus for Organizations, vol. 11. in Knowledge Management and Organizational Learning, vol. 11. Cham: Springer International Publishing, 2023. doi: 10.1007/978-3-031-12729-8.

[2] A. Serenko, ‘Practical wisdom in the workplace: conceptualization, instrument development, and predictive power’, J. Knowl. Manag., Feb. 2024, doi: 10.1108/JKM-08-2023-0713.

[3] P. Fortuna, Z. Wróblewski, and O. Gorbaniuk, ‘The structure and correlates of anthropocentrism as a psychological construct’, Curr. Psychol., vol. 42, no. 5, pp. 3630–3642, Feb. 2023, doi: 10.1007/s12144-021-01835-z.