Dynamic fractal organizations—A boundaries based‐view of knowledge

Abstract Collective phronesis is the collection of the best‐distributed phronesis of humans and is also integrated phronesis for all management that combines the collective wisdom of individuals within and even between organizations. In a good organization, rather than only certain heroes with phronesis creating new knowledge, phronesis is organized to realize innovation by bringing together the high‐quality wisdom and practical power of various practitioners at all levels of the organization, as well as in its customers and partners. This makes it possible to build dynamic fractal organizations – tough collectives that can respond creatively and with agility in real‐time, no matter what occurs, including rapid changes in the environment. However, little is known from previous studies regarding the formation mechanisms of collective phronesis and dynamic fractal organizations. In this paper, we present a new theoretical model of the formation mechanism of collective phronesis, and dynamic fractal organizations based on inductive research through field surveys and in‐depth case studies, expanding on the concept of boundaries knowledge, which has been explored in existing research.