1. ¹Advanced Institute of Management Research (AIM), Huntsworth Mews, London, NW1 6DD, UK
2. ²London Business School, Regent's Park, London, NW1 4SA, UK
3. ³Templeton College, University of Oxford, Oxford, OX1 5NY, UK

Correspondence: J Nahapiet, London Business School, Regent's Park, London NW1 4SA, UK. Tel: +44 20 7262 5050; Fax: +44 20 7724 7875; E-mail: jnahapiet@london.edu

Abstract

We believe that structural changes in a knowledge economy mean that managers will increasingly seek to make cooperative relationships the norm in their organisations. However, they are hampered in their attempts to do so by organisation designs that institutionalise the dominant assumption about human intentionality, which sees people and their relationships as motivated by self-interest. We argue that the self-interest assumption runs counter to the types of cooperation required to leverage fully the potential of the knowledge-based firm since it provides for relatively restricted forms of social exchange. We propose that the assumption of excellence, as set out by Aristotle in Nicomachean Ethics, provides a valuable alternative. We discuss four tenets of this assumption and find that they suggest important differences in organisation design that are more likely to encourage and institutionalise cooperative relationships. We explore these differences, considering their implications for practice and research.