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THE EPISTEMOLOGICAL STATUS OF MANAGERIAL KNOWLEDGE AND

THE CASE METHOD


Ricardo F. Crespo

Introduction
During last years we have attended a growing interest in knowing the
thought of classical authors on fundamental questions of human life. This
resurgence of the Classics stems, partly, from a certain exhaustion of
current thought, which reveals insufficiency in offering clear answers to
main contemporary challenges. The meditation of our century was centered
in a discussion between rationalism and posmodernism that does not
contribute positive solutions. This is a reason why answers are recently
looked for in a more native and limpid thought in which a fresh truth has
not yet been afected by the winding ways of reason. In philosophical
environments, metaphysics seeks to return to original stadiums of premetaphysical truths. Meanwhile, in social sciences, a wide movement of
rehabilitation of practical Aristotelian philosophy has arisen; this movement
takes the place of the habitual epistemological mechanical outline of
modernity, that has proven inadequacy for the explanation of human action.
In the frame of this look back, it clearly arises that the managerial task is
a political task as conceived by Greek thinkers.i Aristotelian politics focuses
on the study of the conditions, aims and necessary habits for the good life of
human being in its natural environment of proficiency, i.e., society. It is also
a study of the directive or political task in this frame. If, as stated in the
previous sentence, direction is equal to politics, it stems that Aristotle
conceived politics as an activity proper of all members of society, and that he
assigned a wide margin of leading hability to all of them. This and other
characteristics of his conception of Politics rely on his idea of human being.
The former is summarised in the following passage of his Politics (I, 2):
The reason why man is a being meant for political association, in a
higher degree than bees or other gregarious animals can ever
associate, is evident. Nature, according to our theory, makes
nothing in vain; and man alone of the animals is furnished with
the faculty of language. The mere making of sounds serves to
indicate pleasure and pain, and is thus a faculty that belongs to
animals in general: their nature enables them to attain the point at
which they have perceptions of pleasure and pain, and can signify
those perceptions to one another. But language serves to declare
what is advantageous and what is the reverse, and it therefore
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serves to declare what is just and what is unjust. It is the


peculiarity of man, in comparison with the rest of the animal
world, that he alone possesses a perception of good and evil, of the
just and the unjust, and of other similar qualities; and it is
association in [a common perception of] these things which makes
a family and a polis.ii
Community, shared ends and dialogicity appears as three essential
human features that are conditioned among them and nurture each other.
Following a more recent thinker, Charles S. Peirce, three principles of
managerial task that notably coincide with the Aristotelian conception can
be formulated.iii The first of them is creativity, in order to adapt means to
ends according to a rationality that overcomes mere technical procedure.
These former ends are drawn in order to contribute to the second principle,
community. This last, in turn, is oriented toward the completion of the final
end of action and third principle, personal growth. These principles are
subordinated in that same order. Person is the creative pole of community
for its own growth.
Although enterprise is neither a house nor a city, people composing it are
the same. This is the reason why Robert Solomon conceives the firm as a
city in an Aristotelian sense, a community of shared ends. iv
In this context, to know how to direct is to know how to wisely synthesise
or integrate a plurality of ends and data. It is a task oriented toward
searching the truth of the ends -goals of the firms and subjective aims of
their members. It is not a mere alignment of ends, but a dialectic discovery
and development of coincidences.
Workers, which are all directive as soon as all the members of the firm
have at least a minimum of directivity in their task, integrate data of the
most varied kind: technical, psychological, sociological, and ethical. In this
synthetical and interdisciplinary way, he decides and promotes decisions, he
carries out and pushes actions.
They are practical actions or prxis, as these types of comprehensive
conducts were denominated by classical philosophy. In fact, businesses as
practice is the central idea of Solomon. Knowledge about practices is called,
also by philosophy, practical science or practical philosophy. This
knowledge guides and illustrates, fosters and helps sharing the human habit
that arises from good prxis and that, in turn, facilitates it: prudence, or
practical wisdom. Indeed, practical wisdom has a task of synthesis
concluding in action, which is always an integration. In the same vein, Prof.
Carlos Llano sustains that a directive or prudential view is that that could
synthesise the possible tensions between principles and consequences of
actions.v

In this paper I shall first present the Aristotelian conception of practical


science or philosophy. Then, I shall point out its distinctive features. These
will throw light on the condition of managerial tasks. One of the former
characteristics of practical science is its adequate method. For that reason,
once the method exposed, I shall analyse the adequacy for teaching of the
case method. I shall finish with a brief conclusion.

Practical Philosophy
In his Nicomachean Ethics and Politics, Aristotle develops his philosophy
of human affairs.vi (X, 9) For the Philosopher of Estagire, each knowledge
adapts in method, aim and accuracy of conclusions to its subject. Thus, a
science is theoretical when its subject owns the principle of its movement, as
in Physics, and it study the subject for the only sake of knowledge.
On the other hand sciences dealing with objects that are to be made are
practical sciences. The principle of movement of these objects -human
actions- is the election of the one who carries them out. For this reason,
they are subjects of knowledge subjected to unpredictability -for they are
contingent, due to freedom and singularity- and they possess moral
connotations. Thus, in order to achieve a knowledge adapted to human
actions we ought to develop practical sciences.
The conditions of their object originate certain characteristics inherent to
them: they lack accuracy in their knowledge, they aim beyond pure
knowledge invading the field of real action, they greatly depend on
experience, they are moral, and they have their own method. Since they do
not completely possess the essential characteristics of sciences according to
Analitics -Treatise of the Aristotelian Logics (Organon) dealing with science-,
they are only sciences by likeness.
Let us now review each one of those.

Characteristic of practical sciences


a) inexactness:
Aristotle states in the Nicomaquean Ethics:
Now our treatment of this science will be adequate, if it achieves
that amount of precision which belongs to its subject matter. The
same exactness must not be expected in all departments of
philosophy alike, any more than in all the products of arts and
crafts (...) We must therefore be content if, in dealing with subjects
and starting from premises thus uncertain, we succeed in
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presenting a broad outline of the truth: when our subjects and our
premises are merely generalities, it is enough if we arrive at
generally valid conclusions.vii
The more in accordance the principles of theoretical sciences -universality,
sureness, deductive- stick to practical knowledge, the less scientifically
practical practical knowledge becomes. This is the reason why inexactness
is not a defect of this knowledge, but a test of its proximity to concrete
action. Science should not be demanded more than it can say in relation
with the nature of its subject. This limitation is not shameful, since it does
not originate from a weakness of science but, as Aristotle also says, from
the nature of the case: the material of conduct is essentially irregular. viii
In the case of Economics, nothing is more evident than the inexactness of
its conclusions and predictions. Since Mill, Economics has been a science of
no more than tendencies, and this proves to be highly realistic.
A good manager also clearly understand the imperfect condition of his
knowledge. Life has taught it to him. For that reason, he naturally mistrusts
of infallible prescriptions and is flexible in their application. There are many
good ways of carrying out a company: There is not one solution. Moreover,
when agreement is complete it may be that the issue lacked analysis.
b) practical aim:
Aristotle states that the end of this study is not knowledge, but action, ix
and that
the purpose of the present study is not, as it is in other inquiries,
the attainment of theoretical knowledge: we are not conducting this
inquiry in order to know what virtue is, but in order to become
good, else there would be no advantage in studying it. For that
reason, it becomes necessary to examine the problem of actions,
and to ask how they are to be performed. x
These and several more passages indicate the practical aim of the
corresponding science. However, the issue of the aim of practical science
needs further precision, beyond the Aristotelian outline. Indeed, some
sciences are practical as soon as their object is practical, but they study it
theoretically, at least partly. We will frequently meet with the tentative of
dissecting the studied object in order to approach it only from a theoretical
point of view. This is legitimate. But it is not the complete science. Since
although a social science may have a theorical aim, it is always virtually
oriented to action, for the essentially practical character of its subject
defines its epistemological status. Normativeness and prescriptiveness are
the reverse side of the coin of description and explanation. In this way, the
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framework of practical science successfully resolves the dichotomy between


positive and normative science, simultaneously leaving room for a certain
legitimate autonomy of both.
This is the case of the economy. Even the most puristic economists admit
the practical aspect and aim of their science, calling it applied economy,
economic policy, and some, political economy. What is sometimes forgotten is
that, due to the practical aspect of its scientific subject, these are the
branches that, although seemingly secondary, define the epistemological
frame of economics. Applied science is actually a compromising solution in
search of respecting modern prejudices on the concept of science.xi
Meanwhile, the manager never doubts of the eminently practical trait of
his knowledge. He is interested in the usefulness of it in reference to its
concrete application. The teaching of managing is also closely linked with its
practical exercise. This is one of the reasons why the case method is
particularly appropriate for this teaching/learning process.
c) normative-ethical character of practical science:
Every human action is intrinsically moral since it supposes a decision of
achieving an aim. This subjective aim of a concrete action is or not in
agreement with the objective aim of the person, stemming from his nature.
The former constitutes the morality of the action. Since practical science is
the science of human action and this is intrinsically moral, practical science
cannot avoid its moral character.
Thus, according to Aristotle, Politics is essentially moral. Being man a
naturally political animal, he can only achieve its aim, i.e., their Good,
within the polis.
Since this science uses the rest of the [practical] sciences, and
science, moreover, it legislates what people are to do and what they
are not to do, its end seems to embrace the ends of other sciences.
Thus it follows that the end of politics is the good for man.xii
In this way, practical sciences are moral sciences. However, they not only
deal with ethical aspects, but also with technical ones. Morality and
technicity are aspects or dimensions -rationalities- of human action which
are united in real actions.
Rationality is an analogical term. In transitive human actions a triple
rationality may be distinguished, i.e., practical or moral, technical, and
logical. Practical inmanens rationality, however, embed the whole action to
the extent that the existence of a purely technical transiens action cannot be
sustained. Whatever the action, it is always essentially ethical. However,
some sciences need a larger development of technical rationality. GillesGaston Granger states that within the economic area an intertwining
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between the different perspectives of rationality has to take place in order to


reach at a correct knowledge.xiii Charles of Koninck points out the implicit
error involved in trying to subtract the moral end of the social sciences: it
supposes, he says, an erroneous conception of the very nature of role of
experience and hypothesis, of experimental method applied to the study of
human action. The possibility of formulating totally objective hypothesis,
perfectly independent from practical ends, is sign of a wrong intellectualism,
that is not more than a phase of voluntarism. xiv
Applied to the managerial activity this normative character indicates the
essential morality of this task and of the knowledge of it. Therefore, business
ethics has a key and inseparable role in business teaching.
However, let us bear in mind that managing knowledge is not Ethics. It is
a moral science as far as it is a practical science. It is not the moral science,
but a science of a form of human action in which their moral rationality is
considered, next to other theoretical elements of technical rationality. While
Ethics studies the ethical problem in itself, managing studies human action
in the firm -as Politics and Law do with their corresponding subjects-, but
that action cannot be isolated from its ethical aspects.
Consequently, science of managing is also eminently politics. It is the
Politics of the firm, Business Policy, the way in which an academic area of
many Business Schools is called.
d) closeness to experience:
Once the former has been established, another feature follows directly.
Practical sciences must be closely connected with the concrete case.
Now no doubt, Aristotle says, it is proper to start from the
known. But the known has two meanings -what is known to us,
which is one thing, and what is knowable in itself, which is
another. Perhaps then for us at all events it is proper to start from
what is known to us.xv And then he adds: For that reason, a
young man is not equipped to be a student of politics; for he has no
experience in the actions which life demands of him, and these
actions form the basis and subject matter of the discussion. xvi
An adaptation to the special case, considering its cultural and historical
environment is necessary. This way of knowing leaves room for inductive as
well as rhetoric and hermeneutical procedures in business teaching, as will
be analysed in the next Section.
Contact with managers teaches the great value of their experience. This is
why, the new fashion electing younger and younger people for the managerial
tasks is a patent error. A creative person without experience is a dreamer.

Creativity demands realism. Power of observation and realism is linked to


experience and ordinarily (although not necessarily) grows as time goes by.

Methodical particularities of practical sciences


From the former characteristics a great deal of methodical
particularities arise. The bibliography on this topic is abundant. It has been
approached by great Aristotelians such as J. Burnet and W. Hardie. For that
reason a whole book could be written about it. Carlos Massini has
published two articles, picking up diverse opinions and Aristotelian passages
and taking out his own conclusions. We, who are familiarized with the texts
of Aristotle, especially Nicomaquean Ethics and Politics, we believe that his
conclusions are correct and representative of the opinions expressed in the
last studies on the topic. We quote from Massini:
In the case of practical thought and, especially, of practical
philosophy, it is not possible to limit to the use of only one method,
but it is rather necessary to appeal a methodological plurality. This
means that it could not be sustained that the method of ethics is
pure and simply analytic, nor synthetic, dialectic, demonstrative,
or rhetorical, but that is rather necessary to put in play all those
rational procedures in a structured way, making use of each of
them in the appropriate measure and moment.xvii
By that appropriate moment he refers to the level of the practical
knowledge considered. There are three levels: the first principles, the science
and the prudential level. We are interested in the second level, and also in
the third as soon as it provides the necessary experience for the second.
In this levels work both, the synthetic method, that goes from the
experience to the conclusions, and the analytic, from the principles to the
effects. Experience and its induction play the main role. However,
deductions also intervene. It is a constant to go and turn from the particular
to the general and, inversely, from the general to the particular, a continuous
play of induction and deduction.
Now, the most complete methods for teaching this practical matters are
rhetoric -art of persuading people on the practical truth- and topics or
dialectics, the dialogical reasoning on probable or contingent matters.
According to Aristotle, rhetoric aims at rational organisation of human
communities. It seeks to rationally legitimate what is just and appropriate in
practical matters. For that reason, rhetoric persuasion does not denote in its
original sense a pejorative nuance. It tries to convince the audience about
the practical truth, about what is just. This process is achieved through
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syllogisms, induction, paradigms, examples, metaphors, inducting the belief


on what is more probable. (not for this not true, only inexact.) xviii
Dialectic is a dialogue aiming at discovering the truth. It is especially
appropriate in dealing with practical objects. It also appeals to syllogisms
and inductions; it begins in the topoi or common places, opinions more
possible about questions of each discipline sustained by the sages or by the
majority. It also appeals to paradigms, examples, metaphors, and
imagination.
Both, rhetoric and dialectic, are greatly appropriate to practical matters
because discovery of inexact practical truth actually is in a social task. Let
us remind an already cited quotation from Politics (I,2):
The reason why man is a being meant for political association, in a
higher degree than bees or other gregarious animals can ever
associate, is evident. Nature, according to our theory, makes
nothing in vain; and man alone of the animals is furnished with
the faculty of language. (...) language serves to declare what is
advantageous and what is the reverse, and it therefore serves to
declare what is just and what is unjust. It is the peculiarity of man,
in comparison with the rest of the animal world, that he alone
possesses a perception of good and evil, of the just and the unjust,
and of other similar qualities; and it is association in [a common
perception of] these things which makes a family and a polis.
Community entails sharing these values; these can only be invented (in
the sense of discovering) by means of a social interaction, above all at the
level of their more concrete determinations, more than at that of principles.
This methodological plurality is appropriate to the case of economic
science and to the managerial knowledge. The former is why it is better to
mistrust of explanations or generalist recipes. What is practical is objectable
and variable. Such procedures as the drawn by game theory have a very
limited validity, since they belong to an univocal technical rationality lacking
the wealth of a plural method. They are only instruments within a wider
reasoning. G. Vicos criticism is updated. He lived in the turn of two
mentalities : medieval and modern. Thus, he realised and complained about
the transformation in methodology that was being caused by new science in
his time. A setback of the rhetorical-topical formation would drive, according
to Vico, to a loss of capacity to consider a subject in all its complexity.
Moderns could be more learned, he stated, but they are less sage.xix Indeed,
those univocal procedures simplify problems, but in an artificial manner,
and thus they atrophy the capacity of analysis. In the case method, on the
contrary, we find the proper integration of practical sciences. Let us analyse
this method now.
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The practical science and the case method


Once established the characteristics of practical sciences and their
methodical peculiarities, it seems that the case method is especially
appropriate for their transmission. Case method is a methodical dialogue
about a real situation.xx Its character of simulation of reality should be
stressed. Participants in sessions have to argue in a close connection with
real data, explaining why they consider that their views correspond not only
to their opinions or interpretations, but to real situations. Opinion is not
experience, but it stems from it. The truth is to be found on real experience.
We do need managers with a high sensitivity to actual reality, more than
assertive. We should remember as this is one of the perils of the case
method.xxi Cases greatly assimilated to dialectic procedures or topics in an
Aristotelian view, one of the most characteristic of practical science.
Topics, points out Wilhelm Hennis, gives instruction on how it is
necessary to behave in such a situation [a problematic and
inevitable one] not to stay paralised and without solution. This is
why topics is the techne of problematic thinking [quoting Viehweg]
(...) A dialectic investigation always starts by mens dominant
opinions; it presumes that, between these opinions, there are some
which are more experienced and comprehensible; it appeals to
intellection and common sense; its premises are not necessary; it
wants that they were voluntarily recognised; its results are always
provisional and arguable. As well as Socrates in his dialogues,
dialectic only tries to extract of its speakers what they should
already know, if they have well thought.xxii
However, Case is not only topics or dialogue, it also uses rhetoric,
induction, intuition and reasoning: it is a recreation of the methodology of
practical science.
Pupils -managers- are the most appropriate for this method, because, as
Aristotle also posed, each man can judge competently the things he
knows;xxiii this knowledge is easier to whom already practices it.xxiv It is also
the most appropriate method to face what qualify students with more
problems and real decisions. In this way, it increases the capacity of taking
wise and synthetic decisions, by thus acquiring a hypothetical anticipated
experience.
On the other hand, even the professor learns by enriching himself with
the view of the students. Therefore, by means of this procedure, the

legitimate task of the University, community of professors and students in


search of the truth, is performed.
The pertinence of moral considerations is evident because even in the
most technical cases -i.e., finance or production- what are analysed are
concrete actions to be performed, techniques to be used, and, as explained,
human action is always moral.
However, it should be kept in mind Robert Solomons warning about the
transformation of cases in a mere application of principles of management.xxv
Which would probably be the most important in cases is the realistic
description of the peculiar character of people involved in the problem. Let
us remind that businesses are relationships between people, not of people
with objects.
This appraisal of case method does not exclude, of course, the
convenience of delivering some theoretical classes and of prescribing some
readings, with the purpose of transmitting technical and theoretical
knowledge; and also of more sophisticated moral concepts than those
pertaining the pre-scientific natural morality of people present in cases.

Conclusion
Twenty four centuries ago Aristotle developed an epistemological frame
adequate to practical sciences. Within them we find the sciences of
management. In effect, when analysed one by one the characteristics of that
frame, its adaptation to managerial knowledge is inferred.
On the other hand, as long as this paradigm is used, features as morality,
pragmatism and the limitations of the science of management become
consolidated as fundamental basis of it. Moreover, it provides an
epistemological foundation to the case methodology. Finally it helps weigh
realistically the contributions of strategy theories of games and of any
another procedure obeying to a merely technical rationality.
The rationality of managerial tasks is a practical rationality that uses
technical instruments and prudentially esteems their validity and feasibility,
keeping in mind the concrete cultural and historical circumstances and,
above all, the personalities of whom compose the firm. Hence, the case
method appears as an extremely appropriate procedure for their teaching.

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As, for example, in Tom Morris, If Aristotle Ran General Motors (H. Holt & Co., New York, 1997),
Aristotelian approaches by Robert C. Solomon, Oliver F. Williams y Patrick E. Murphy, y S. Klein
with a Platonic perspective.
ii
Trans. Ernest Barker, Oxford University Press, 1958.
iii
Cf. Joan Fontrodona, Ciencia y prctica en la accin directiva, Rialp, Madrid, 1999.
iv
Cf. Ethics and Excellence. Cooperation and Integrity in Business, Oxford University Press, 1992,
chapters 11, 14 and 16.
v
Cf. Dilemas ticos de la empresa contempornea, FCE, Mxico, 1997, 287-9. On the prudential
character of managerial knowledge, also cf. Llano, La enseanza de la direccin y el mtodo del
caso, IPADE, Mxico, 1996 and Santiago Dodero, La gestin empresarial: La toma de decisiones y
su ejecucin, Jornadas de la Facultad de Ciencias Econmicas, UNC, Mendoza, 1998.
vi
Trans. Martin Oswald, MacMillan, London & New York, 1962.
vii
NE, I, 3, 1094b 11-27.
viii
NE, V, 10, 1137b 17-9
ix
NE, I, 2, 1095a 6.
x
NE, II, 2, 1103b 26-30.
xi
Cf. Wolfgang Wieland, La razn y su praxis, Buenos Aires, Biblos, 1996, 18.
xii
EN, I, 2, 1094b 4-7.
xiii
Cf. Gilles-Gaston Granger, Les trois aspects de la rationalit conomique, in Forme di
Razionalit Pratica, a cura di Sergio Galvan, Franco Angeli, Miln, 1992, 80.
xiv
Charles de Koninck, Sciences Sociales et Sciences morales, Laval Thologique et Philosophique,
I/2, 1945, 196-7.
xv
NE, I, 4, 1095b 2-4.
xvi
NE, I, 3, 1095a 2-4.
xvii
C. I. Massini, Mtodo y filosofa prctica, Persona y Derecho, 1995, 247; cf. also C. I. Massini,
Ensayo de Sntesis acerca de la distincin especulativo-prctico y su estructuracin
metodolgica, Sapientia, 200, Buenos Aires, 1996.
xviii
For a thorough analysis of rhetoric, dialectic, and the like, cf., e.g., Hctor Zagal, Retrica,
Induccin y Ciencia en Aristteles, Universidad Panamericana, Mxico, 1993; Enrico Berti, Le vie
della ragione, Il Mulino, Bologna, 1987, especially Retorica, dialectica, filosofia, 77-98.
xix
Cf. De ratione studiorum, VII.
xx
Cf. Llano, o. c,, 1996, 37 ff..
xxi
On these issues, I benefit from a discussion with Jim Platts (University of Cambridge).
xxii
Wilhelm Hennis, Poltica y filosofa prctica, Sur, Buenos Aires, 1973, 116-7, 120.
xxiii
EN, I, 3, 1095a 1.
xxiv
Cf. Margarita Mauri, Cada uno juzga bien aquello que conoce. tica a Nicmaco I, 3, 1094b
28 - 1095a 13, Paper delivered at XXXVIII Reuniones Filosficas, Universidad de Navarra, April
28-30, 1999.
xxv
O. c., 117.
i

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