Knowledge Dynamics and Phronesis in Performing Family Business

Abstract

The purpose of this paper is to analyze the role of knowledge dynamics and phronesis in performing family business and show that both constructs constitute core competencies for these specific organizations within the Romanian economic environment. Knowledge dynamics have different interpretations depending on the metaphorical thinking used in conceptualizing knowledge. We based our research on the energy metaphor and the theory of knowledge fields, adopting a thermodynamics perspective. Rational, emotional, and spiritual knowledge interact continuously, and each form of knowledge can be transformed into another form, like in thermodynamics. Aristotle introduced Phronesis when he explained that knowledge manifests in one of the following fundamental forms: episteme, techne, and phronesis. Phronesis represents prudence or practical wisdom in making decisions. Aristotle remarks that phronesis is concerned with action about good or bad things for the human being, underlying the spiritual characteristic of this form of knowledge. Today, there is a significant trend in the knowledge management research reflecting the need to better understand the role of knowledge dynamics and phronesis in developing wise organizations (see for instance, the recent book published by Ikujiro Nonaka and Hirotaka Takeuchi, and the works published by Raysa Rocha and Paulo Pinheiro). The present research focuses on the role of knowledge dynamics and phronesis in the family business, considering that relations between the family members differ from employees' relations in a company, from emotional and spiritual points of view. We performed qualitative research based on a series of interviews with members of such a family business. We processed the qualitative data based on the grounded theory. Findings demonstrate that knowledge dynamics and phronesis play a significant role in the process of decision making and achieving a competitive advantage in the business environment.