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Practical wisdom (“phronēsis”) is an Aristotelian concept that has been incorporated into management research to a considerable extent in the last 20–30 years. This paper attempts to show how practical wisdom is necessary as a type of situational knowledge that is required for most management decisions to be sustainable. We start reviewing the types of knowledge necessary in decision-making, and we emphasize “practical wisdom” as the kind of knowledge that is particular and subjective, is acquired through practice, and is transmitted by example. We relate the concept of practical wisdom with the Hayek concept of knowledge of time and place, the Polanyi concept of tacit knowledge, and Nonaka’s knowledge management. We conclude that in most management decisions, phronēsis is required and, thus, is necessary to increase sustainability in terms of effectively sharing knowledge and acquiring virtues to improve managerial decision-making. Not considering phronēsis has bad implications for management as it can lead to unsustainable and poor decisions, for instance, in main areas of management control such as pricing policies, budgeting, balanced scorecards, transfer pricing, and goal setting. Along with the intellectual virtue of practical wisdom we conclude that moral virtues, specifically justice, should be the complement that guides organizational objectives.