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Beyond Self-Interest Revisited

  • IAE Business School


We revisit the self-interest view on human behaviour and its critique, and propose a framework, called self-love view, that integrates self-interest and unselfishness and provides different explanations of the relationship between preferences, behaviour, and outcomes. Proponents of self-interest as the only valid behavioural assumption argue for simplified assumptions and clear models in order to propose precise prescriptions, while critics to this self-interest view argue for realistic assumptions and rich descriptions in order to reach better explanations. This debate inhibits theoretical development because it faces the problem of incommensurability of standards for choosing among paradigms. We propose the concept of self-love, or the inclination of human beings to strive for their own good and perfection, to remove the assumption "self-interest vs. unselfishness". Self-love distinguishes between the object and the subject of motivation and therefore creates a bi-dimensional motivational space. This framework replaces the unidimensional continuum "self-interest-unselfishness", specifies eight interrelated motives, and provides different expected relationships between preferences, behaviour, and outcomes. We show that a better understanding of motivational assumptions, their embodiment in theories, and their influence on the very behaviours these theories assume provides managers and policymakers more alternatives for the designing of motivational contexts than in the case of assuming either self-interest or a permanent conflict between self-interest and unselfishness. Copyright Blackwell Publishing Ltd 2006.
Beyond Self-Interest Revisited*
Hector O. Rocha and Sumantra Ghoshal
London Business School
abstract We revisit the self-interest view on human behaviour and its critique, and
propose a framework, called self-love view, that integrates self-interest and unselfishness
and provides different explanations of the relationship between preferences, behaviour,
and outcomes. Proponents of self-interest as the only valid behavioural assumption argue
for simplified assumptions and clear models in order to propose precise prescriptions,
while critics to this self-interest view argue for realistic assumptions and rich descriptions
in order to reach better explanations. This debate inhibits theoretical development
because it faces the problem of incommensurability of standards for choosing among
paradigms. We propose the concept of self-love, or the inclination of human beings to
strive for their own good and perfection, to remove the assumption self-interest vs.
unselfishness. Self-love distinguishes between the object and the subject of motivation and
therefore creates a bi-dimensional motivational space. This framework replaces the
unidimensional continuum self-interest–unselfishness, specifies eight interrelated motives, and
provides different expected relationships between preferences, behaviour, and outcomes.
We show that a better understanding of motivational assumptions, their embodiment in
theories, and their influence on the very behaviours these theories assume provides
managers and policymakers more alternatives for the designing of motivational contexts
than in the case of assuming either self-interest or a permanent conflict between
self-interest and unselfishness.
Is it worth complicating the models in mainstream economics and management by
assuming motives other than self-interest? This is a key question implicit in the
current debate on the behavioural assumption of self-interest (Etzioni, 1988; Mans-
bridge, 1990a).
On the one hand, those who define self-interest as the only behavioural assump-
tion (Friedman, 1953; Mueller, 1986) argue that what matters most is predictive
accuracy. Alternatives to self-interest could be considered only if they show a better
Address for reprints: Hector O. Rocha, London Business School, Sussex Place, Regent’s Park, London
NW1 4SA, UK (
© Blackwell Publishing Ltd 2006. Published by Blackwell Publishing, 9600 Garsington Road, Oxford, OX4 2DQ,
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Journal of Management Studies 43:3 May 2006
predictive power than that of assuming individuals behaving as if they were
This tenet is central in mainstream economics (Mueller, 1986; Sen, 1987, 1990a,
2002; Winship and Rosen, 1988). It is also prominent in those disciplines that take
economics as a reference, such as strategy and management (Rumelt et al., 1994,
p. 24).[1] In the strategy field, for example, many mainstream theories such as
agency theory ( Jensen and Meckling, 1976), transaction costs economics (William-
son, 1975), industrial organization economics (Porter, 1980), and Burt’s version of
the structural approach to social networks (Burt, 1982) take self-interest as a key
assumption upon which they build their models and propose their prescriptions.
For example, transaction costs economics (TCE) combines the assumptions of
self-interest and cost-benefit analysis of opportunistic behaviour and concludes that
organizations are better than markets in controlling potential opportunism (Will-
iamson, 1975). Similarly, agency theory ( Jensen and Meckling, 1976), based on the
assumptions of self-interest and principal-agent conflict (Eisenhardt, 1989) con-
cludes that outcome-based contracts are effective in curbing potential agent oppor-
On the other hand, those who propose going beyond self-interest as the only
valid behavioural assumption (Etzioni, 1988; Mansbridge, 1990a, 1998) argue that
what matters even more than prescription is explanation based on realistic assump-
tions. They argue for assuming motives other than self-interest based on the
increasing number of counter-examples such as people walking away from profit-
able transactions whose terms they believe to be unfair or people helping others
without expecting reciprocity (Elster, 1990; Frank, 1987; Kahneman et al., 1986;
Rabin, 1993).
This view, which we will call the self-interest critique, comes from sociology
(Etzioni, 1988) and political science (Mansbridge, 1990a), although it started from
within economics itself (Sen, 1987, 1990a). In particular, this view is being analysed
within specific frameworks such as ultimatum games (Guth et al., 1982) and social
relations (Fiske, 1992; Granovetter, 1985, 2002), and has been empirically sup-
ported by economists (Rabin, 1993), cognitive psychologists (cf. Kahneman, 2003),
and social psychologists (McClintock and Liebrand, 1988). The self-interest cri-
tique recognizes that self-interest plays a role in individual decisions, but their lines
of enquiry conflict with the generalization of self-interest as the only human
motivation. As Etzioni points out, ‘[the] line of conflict...isbetween moral values
and other sources of valuation, especially pleasure. (These two...arenot neces-
sarily in opposition, but in effect often do pull in divergent directions)’ (Etzioni,
1988, p. 12; cf. also p. 253).[3]
Although further developments have widened the scope of the self-interest view
beyond selfishness and the exclusive search for pleasure and income maximization
(cf. Becker, 1976, 1996; Jensen and Meckling, 1994; Sen, 2002), the central tenet
that all motivations can be reduced to self-interest still holds (cf. Sen, 2002, p. 24).
H. O. Rocha and S. Ghoshal586
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In effect, it is argued that self-interest could include altruistic behaviour (cf. Jensen,
1994, p. 4) because individuals care about everything and are willing to substitute
some amount of a good for some amounts of other goods ( Jensen and Meckling,
1994). Deviations from self-interest are considered non-rational ( Jensen, 1994, p.
4) and new models are proposed to account for non-rational behaviour and
increase the predictive power of the analytical apparatus ( Jensen, 1994, p. 8).
Therefore, self-interest maximization and trade-offs are not only considered posi-
tive descriptions of human behaviour but also important elements of a normative
model that states ‘how humans should behave’ ( Jensen, 1994, p. 7; cf. also Miller,
Clearly the debate on self-interest shows that behavioural assumptions have
economic implications. However, it creates a bipolar (i.e. either/or) type of think-
ing (Bobko, 1985) and falls under the incommensurability of standards for choosing
among theories (cf. Kuhn, 1977), which hinders theoretical progress.
Both an epistemological and a behavioural assumption create the incommen-
surability problem that underlies the self-interest debate. As for the epistemological
assumption, the debate is framed in terms of ‘theory as prescription or a priori
explanation’ vs. ‘description as the way towards explanation’ (cf. Smelser and
Swedberg, 1994). On the one hand, the self-interest view implicitly assumes that
the aim of theory is prescription and that a key feature of a good theory is simplicity
or parsimony, which explains why mainstream economics uses mathematical
models as its main method of inquiry. This approach is usually criticized for
becoming an end in itself, leading to either prescriptions without explanation or
data without theory (cf. Leontief, 1971; Nelson and Winter, 1982; Sen, 1997, 2002;
Solow, 2000). On the other hand, the self-interest critique assumes that the aims of
theory are description and explanation, which is often criticized as description
without theory, description without prescription, or explanation of things after the
fact – i.e. placing the ‘bet after the race is over’ (Singleton and Straits, 1999, p. 25;
cf. Coase, 1983; Etzioni, 1988, p. 12).
As for behavioural assumptions, the debate is framed in terms of the unidimen-
sional continuum self-interest vs. unselfishness, or, for those who identify self-interest
with rational behaviour (cf. Jensen, 1994, p. 4), in terms of self-interest vs. non-
rational behaviour. On the one hand, the self-interest critique identifies self-interest
with selfishness, which implicitly places diverse motives such as sentiments and
duty at the opposite end of the continuum. On the other hand, the self-interest view
identifies self-interest with rational behaviour, focusing on maximizing either own
welfare or, more generally, whatever preference the individual has decided to
pursue. In both cases, the specificity of different preferences is not adequately
considered, either because they are grouped under the category of unselfish behav-
iour or because they are placed under the umbrella of self-interested behaviour.
However, diverse motives such as pleasure, sentiments, duty, and excellence have
different underlying explanations and implications about others’ interests. For
Beyond Self-Interest Revisited 587
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example, alternative responses to why people buy fair trade products could be:
price for value (pleasure in a broad sense, including having more wealth), com-
passion for the poor producers (sentiments), fair trade is the right thing to do (duty),
or it promotes human dignity (excellence). The framing self-interest – unselfishness
leads to the analysis of these different motives using objective functions, indiffer-
ence curves, and ratios (cf. Etzioni, 1988; Jensen, 2002; Mansbridge, 1990a),
assuming that people always trade these motives off as if they were commodities (cf.
Jensen and Meckling, 1994). This line of reasoning is worth exploring in under-
standing human behaviour, but it would be an altogether different matter to claim
that all human beings apply only instrumental reasoning to guide their behaviour
(cf. Sen, 2002, p. 25).
Towards an Integration
We argue that removing the two implicit epistemological and behavioural assump-
tions that underlie the self-interest debate is the first step towards the integration of
the self-interest view and its critique. As for the epistemological assumption, expla-
nation and prediction are inter-dependent theoretical goals aiming at knowledge or
understanding (cf. Aristotle, 1984a; McMullin, 1988; Singleton and Straits, 1999).
Assumptions or the Why component of a theoretical contribution are key for
understanding (cf. Sutton and Staw, 1995; Whetten, 1989), which is confined
neither to models (Sutton and Staw, 1995) nor to challenges to the current main-
stream approach. Typologies and integration of seemingly opposite assumptions
are also valid forms of theory building (cf. Stinchcombe, 1968; Doty and Glick,
1994) even when these research strategies go against parsimony, which is only an
instrumental – i.e. a means to an end – epistemic value rather than a goal of the
scientific enterprise in itself (McMullin, 1993).[4]
As for the behavioural assumption, and based on the insight that two contraries
can be integrated because they belong to the same category (Aristotle, 1984a), we
use the concept of self-love in order to integrate self-interest and unselfishness.
Eschewing the discussion of the goals of science and the appropriate modes of
explanation for the moment, we propose a motivational bi-dimensional frame-
work based on the concept of self-love, defined as the inclination of human beings
to strive for their own good and perfection (Aristotle, 1984b; Aquinas, 1963, Book
I, 60, 3).[5] We argue that every motivation has two dimensions: the objective
dimension is what we consider good for ourselves – i.e. pleasure, sentiments, duty,
or excellence – while the subjective dimension refers to whose interest, whatever it
might be, is taken into account – self-interest, others’ interests, self-interest as end
and others’ interests only as means, or both self-interest and others’ interests as
ends. Therefore, the unidimensional continuum self-interest – unselfishness is trans-
formed into a bi-dimensional object – subject motivational space. The resulting
matrix allows the specification of eight qualitatively different motives and
H. O. Rocha and S. Ghoshal588
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improves the richness of potential analysis (Figure 1). Human nature has the
potential to develop different motivations aided by self-scrutiny and freedom,
which allow human beings to step back from, evaluate, and choose among pref-
erences, including others’ preferences as well as their own (Hirschman, 1984; Sen,
2002). Acknowledging that individuals do make trade-offs ( Jensen and Meckling,
1994, p. 5) aided by a means-end or instrumental rationality logic, we argue that
this is not the most important feature of human nature; seeking good and perfec-
tion, evaluating intrinsically non-substitutable goods aided by self-scrutiny and
freedom is.
Our contribution lies in advancing a complementary articulation (Smelser and
Swedberg, 1994) or a scholarship of integration (Boyer, 1990) approach to theory
building, based on the generic motive of self-love and the epistemic value of
understanding. This integrative approach contributes to a better understanding of
the human potential to develop motives other than self-interest, which are neither
anomalies nor intrinsically conflictive, but part of an integrated motivational
system that guided by self-scrutiny and freedom drives different behaviours and
outcomes. In addition, our contribution is not limited to a richer description of
assumptions on human behaviour. In effect, given that assumptions are embodied
in theories and have the potential to change the very behaviour they assume (cf.
Ferraro et al., 2005; Ghoshal and Moran, 1996), we argue that a more realistic and
integrated vision of behavioural assumptions leads to different theories and prac-
tices that condition the development of human motives.
Two considerations limit the scope of this paper. Firstly, the concept of self-
interest is associated with that of instrumental rationality in most economic and
management models. These models define rationality as internal consistency of
Subject whose interests?
what is
good? Only self Only others'
Self as end
and others'
only as means
Both self and
others' as
Pleasure 1 Narrow
self-interest N/A
2 Instrumental
3 Unselfishness
driven altruism)
4 Instrumental
5 Sentimental
as only
(cells 1, 2,
and 4)
Good in
6 Unselfishness
N/A 7 Duty
as opposed to
(all cells
except cell 8)
Excellence N/A N/A N/A 8 Excellence
Self-love as
the basic
human motive
(all cells)
Figure 1. Breaking down the bipolarity self-interest–unselfishness
Beyond Self-Interest Revisited 589
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choice, self-interest maximization, or maximization in general (Sen, 2002), and
consider as non-rational any departure from self-interest (cf. Jensen, 1994). Non-
rational behaviour is defined as ‘any dysfunctional or counterproductive behavior
that systematically harms the individual’ ( Jensen, 1994, p. 7), and this happens
when the individual does not act in her own self-interest ( Jensen, 1994, p. 6). This
identification of self-interest with rationality begs the question of what is considered
productive or, more generally, good, for the individual. Our argument that people
search for good and perfection, aided by self-scrutiny and freedom, directly relates
to the issue of what are the different goods that motivate individuals. Therefore,
our focus is on understanding different motives and their connection rather than on
rationality. However, given the current association between self-interest and ratio-
nality, this latter concept is analysed when revisiting the current debate on self-
Secondly, there is a vast literature on human motives (cf. Frey, 1997; Herzberg
et al., 1959; Maslow, 1954; McGregor; 1957), social motives (MacCrimmon and
Messick, 1976; McClintock, 1972), and social relations (Fiske, 1992; Granovetter,
1985, 2002) in general and on specific motives such as commitment (Etzioni, 1988;
Frank, 1987) and fairness (Rabin, 1993) in particular. This vast literature starts
with different research questions and, thus, deals with self-interest and alternative
motives from different angles. For example, Granovetter’s approach to economic
sociology focuses on how social relationships affect behaviour and institutions
(Granovetter, 1985, p. 481) and highlights that specific network types and their
resulting impact on, for example, trust and power, drive a wedge between interests
and action (Granovetter, 2002). We will consider the insights provided by these
different literatures in our exposition of the self-interest critique and in the argu-
mentation of our proposed self-love view. However, given that our focus is on the
self-interest debate and on how to overcome the current incommensurability
problem it faces, we take the economists’ (Ben-Ner and Putterman, 1998) and
social-psychologists’ (MacCrimmon and Messick, 1976; McClintock, 1972) classi-
fication of preferences as self-regarding and others – regarding as the starting point
to build our motivational framework.[6] We limit our exposition of motives to the
mapping of the main categories used in the self-interest debate, adding excellence
as an alternative generic motive.[7]
We structure this paper around the proposed bi-dimensional motivational space
(Figure 1) and its impact on the relationship between preferences, behaviour, and
outcomes. Firstly, we analyse the intellectual roots and assumptions of the self-
interest view, its associated motives of narrow and enlightened self-interest
(Figure 1, cells 1, 2, and 4), and its implications for the relationship between
preferences, behaviour, and outcomes. Secondly, we do the same with the self-
interest critique, which includes self-interest (Figure 1, cells 1, 2, and 4) and
advances sentimental love and duty as alternative motives (Figure 1, cells 3, 5, 6,
and 7). Thirdly, we propose the self-love view, which integrates the different
H. O. Rocha and S. Ghoshal590
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motives of the other two views within a bi-dimensional motivational space
(Figure 1, cells 1–7) and includes excellence as an additional motive (Figure 1, cell
8). Finally, we frame the implications in terms of the What, How, and Why criteria
for making theoretical contributions (Whetten, 1989) and the What For criterion for
practical implications (Singleton and Straits, 1999).
The self-interest view states that the ultimate goal of human action is to pursue
self-interest. Expressions such as ‘the only assumption essential to a descriptive and
predictive science of human behaviour is egoism’ (Mueller, 1986) exemplify this
view. The argument is that individuals seek to maximize their own utility, ratio-
nally choosing the best means to serve their goals.
There are two versions of the self-interest view and they differ according to
whether interests other than one’s own are taken into account. We call the first
version the absolutist conception of self-interest, because people are assumed to
pursue only their own interests with no regard for others’ interests. We call the
second version the instrumental conception of self-interest because others’ interests
are viewed only as means to achieve a personal end.
Self-interest – absolutist conception. According to this conception, the only human
motive is the pursuing of self-interest, which is defined as the individuals’ motiva-
tion to do whatever it takes to satisfy their individual desires, being indifferent
about how their actions affect others (Adams and Maine, 1998). The object of
motivation is pleasure in general, defined as a state that results from having health,
material goods, honours, status, power, or any bodily pleasures (Aristotle, 1984b).[8]
Both the lack of regard for the interests of others and the focus on pleasure in
general define a specific motivation, which the literature calls narrow self-interest
(Mansbridge, 1990a) (Figure 1, motive 1).
The absolutist conception is related to what the social-psychology literature
calls own gain maximization, or self-interest social motive (MacCrimmon and
Messick, 1976; McClintock, 1972), defined as the basic orientation to increase
‘one’s own outcomes independent of the outcomes afforded others who are
affected by one’s choices’ (McClintock, 1972, p. 447). In the same vein, the
economics literature identifies self-interest with self-regarding preferences, which
‘concern the individual’s own consumption and other outcomes’ (Ben-Ner and
Putterman, 1998, p. 7). Self-regarding preferences are the essence of the standard
definition of economic man (Ben-Ner and Putterman, 1998, p. 20; McClintock,
1972), a person who is entirely selfish and entirely rational, with complete and
consistent preferences over time. Some researchers argue that economic man has
Beyond Self-Interest Revisited 591
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an additional feature, which is having only one want: money income ( Jensen and
Meckling, 1994, p. 10).
The absolutist version of self-interest, together with the assumptions of stable
preferences and maximizing behaviour, leads to a deterministic relationship
among preferences, choice, and welfare (Figure 2), which we call triple identity
because these terms could be used almost interchangeably. In effect, others’ inter-
ests are not considered because either the pursuing of self-interest automatically
benefits others or self-interest is identified with selfishness. Therefore, personal
preferences are always directed towards personal welfare. In addition, choice is
defined as ‘any attempt to select an alternative that will enhance one’s welfare’
(Mansbridge, 1998, p. 156) based on the assumption of maximizing behaviour, a
core element of the economic approach (Becker, 1976, p. 5). Thus, given that any
action people choose advances their own welfare, choice leads to personal
welfare. Finally, individuals have unambiguous and stable preferences (Becker,
1976, p. 4), an assumption that is called unitary self (Etzioni, 1988, p. 11) or
internal consistency (Sen, 1990a). The rationale of this assumption is ‘based on
the idea that the only way of understanding a person’s real preference is to
examine his actual choices’ (Sen, 1990a, p. 29), which means that personal pref-
erences are observable through personal choices. Summing-up, we get a triple
identity or full circle: self-interest is the only generic preference, which in turn is
revealed through choice, and given that any choice advances individuals’ welfare,
personal welfare is the result of pursuing self-interest. This triple identity is a type
of the ‘definitional fix’ problem that Sen identifies in the analysis of preference
and choice in rational choice theory (Sen, 2002, p. 6), which is unable to differ-
entiate between distinct concepts, which in our case are preferences, choices, and
Self-interest – instrumental conception. This conception shares with the absolutist
version the fact that the ultimate motivation of individuals is self-interest. However,
Identity based
of internal
and revealed
Identity based
on assumption
of self-interest
Identity based on
assumption of
Figure 2. Economic assumptions
H. O. Rocha and S. Ghoshal592
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the instrumental view includes others’ interests as means and motives other than
pleasure ( Jensen and Meckling, 1994). Therefore, any supposed motive seeking the
wellbeing of others can be reduced to self-interest, giving rise to what is called
enlightened self-interest (Figure 1, motives 2 and 4).[9] Some argue that self-interest
includes altruistic behaviour (cf. Jensen, 1994) because individuals are willing to
substitute some amount of a good for some amounts of other goods ( Jensen and
Meckling, 1994). This assertion assumes that any preference is an exchangeable
means. Jensen and Meckling go as far as to include morality as an exchangeable
commodity,[10] but this assertion contradicts the very concept of duty. In effect,
duty is the definitional concept of deontology (i.e. deon =binding duty), a school of
ethics that takes others always as ends and judges the morality of an act according
to the duty it discharges rather than by the consequences it produces (cf. Etzioni,
1988, p. 13; Sen, 1990a, p. 33). For this reason, we do not include self-interest in
those cells of Figure 1 where duty and excellence are the object of motivation and
where others’ interests are considered as ends.
The instrumental conception of self-interest can be traced back to Mandeville,
who considered that whatever praiseworthy action is done to others arises from
vanity – i.e. the desire to be praised – because individuals are naturally much more
interested in their own happiness than in that of others (Smith, 1976, p. 309). A
second explanation for instrumental behaviour is that individuals seek the positive
feeling of doing good and therefore are psychologically dependent on someone
else’s welfare (Sen, 1990a, p. 33). Given that the individual needs the welfare of
the beneficiaries to feel good, this behaviour is basically egoistic. A third explana-
tion is that of rational choice theorists (Coleman, 1990), who include the expec-
tation of reciprocity as the reason for considering others’ interests. Finally,
instrumental self-interest is present when a joint action is necessary to increase
personal welfare.
Considering others’ interests as means does not change the basic structure of the
triple-identity between preferences, behaviour, and welfare created by the abso-
lutist conception, because self-interest is still the ultimate goal. In fact, it reinforces
the ‘definitional fix’ problem replacing the concept of welfare with that of utility,
which is defined as ‘a way to describe preferences’ (Varian, 1999, p. 54; emphasis in
original) or as an index of preference satisfaction. In fact, welfare is identified with
the satisfaction of actual preferences (Hausman and McPherson, 1993). Therefore,
preferences are not only revealed through choices but also described by utilities.
As a consequence, maximizing behaviour is equated to maximization of utilities,
and this latter to maximization of preferences (cf. Sen, 2002, p. 32), because
utilities are simple descriptions of preferences. This definitional twist has led some
researchers to distinguish between economic man and the rational (cf. Mans-
bridge, 1990b, p. 355) or resourceful, evaluative, maximizer model (REMM) of
man ( Jensen and Meckling, 1994). In effect, while economic man is only a money
maximizer and therefore ‘not very interesting as a model of human behaviour’
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( Jensen and Meckling, 1994, p. 10), REMM considers any interest, including
others’ (1994, p. 5). Jensen and Meckling argue that non-economists often use
economic man ‘as a foil to discredit economics’ ( Jensen and Meckling, 1994, p.
10). REMM shares with economic man the assumption that ‘people are resource-
ful, self-interested maximizers, but rejects the notion that they are interested only
in money income or wealth’ ( Jensen and Meckling, 1994, p. 18).
Both the absolutist and instrumental conceptions assume that self-interest is the
only motive, a tenet that is based on a specific conception of both human beings
and human relations. The self-interest view sees human beings as autonomous
individuals, whose interests focus on pleasure in general. Human beings are basi-
cally individual rather than social beings, which explains why they are self-
sufficient and autonomous. In effect, each individual has all the potentialities to
develop his or her own nature. Social bounds and supra-individual laws have no
justification in themselves unless the same individuals create them through the
exercise of their free will in the pursuit of their own interests. As Jensen and
Meckling point out, ‘individuals stand in relation to organizations as the atom is to
mass. From small groups to entire societies, organizations are composed of indi-
viduals’ (1994, p. 7).
This conception of human beings as self-sufficient, autonomous, and self-
interested is associated with a specific conception of human relations – i.e. a
mechanistic and atomistic one, which stresses the priority of free individuals over
societies and governments. In effect, society is an interaction mechanism of self-
sufficient individuals, which are responsible only before themselves and their own
interests. The Hobbessian idea of social contract, the rational choice argument that
macro or system behaviours are abstractions (Coleman, 1990, p. 12), and the idea
of firms as nexus of contracts (Alchian and Demsetz, 1972; Jensen and Meckling,
1976) are just three expressions of the self-interest view on human relations. What
is real is the autonomous individual; societies, intermediate systems or firms are
either abstractions or legal fictions.
The assumption is that the free concurrence of self-interested individuals will
produce automatically the necessary economic, social, and organizational out-
comes. For example, the free concurrence in the market place will yield both
the maximum efficiency and wellbeing through the market mechanism alone.
The underlying assumption is that of the spontaneous harmony of interests or
that the interest of the community is simply the sum of the interests of its
members, assumption that can be traced back to both Adam Smith and Jeremy
Bentham.[11] Any friction between individuals is actively avoided through either
the market mechanism or the removing of the conditions that prevent the
working of the market. One kind of such undesirable friction is the case of exter-
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nalities, which happen whenever the ‘activities of one economic agent affect the
activities of another agent in ways that are not reflected in market transactions’
(Nicholson, 1995, p. 802). Externalities are considered market imperfections
because they interfere with the allocational efficiency of competitive markets.
Another undesirable friction is forming economically significant social ties in the
marketplace (Biggart and Delbridge, 2004). Social relations are considered
harmful because they could result in deviations such as nepotism and insider
trading, which threaten the three coordination tasks of markets – i.e. how to use
resources efficiently, what to produce, and to whom to distribute the products
and services (Baumol and Blinder, 1998, p. 60).[12]
Intellectual Roots[13]
The self-interest conception of human beings and the associated conception of
human relations can be traced back to liberal individualism, which exalts the
individual and her freedom. Individuals are not social by nature; social ties are
the result of agreements to preserve one’s own freedom and the pursuit of self-
Four philosophical streams have contributed to form liberal individualism: the
nominalism of Ockham, the rationalism of Descartes, the utilitarianism of
Bentham, and the social contract proposal of Hobbes, Locke, and Rousseau
(Messner, 1976). Ockham asserts that the only reality is the individual; supra-
individual and universal constructions are only labels without entity, which
explains the name of nominalism given to this philosophical stream. Therefore, any
society lacks reality beyond the will of its individual components and their interests.
Nominalism helps to explain the autonomy and asocial features of human beings
of the self-interest view, and the idea that organizations are pure fiction, legally
recognized only for practical purposes.
Secondly, Descartes argues that reality has a rational structure that can be
discovered through human reason, which is self-sufficient and the source of all
knowledge. Thus, he laid the foundation for the rationalistic approach that
attaches to human reason the ability to discover the complete reality, an important
assumption to understanding the rational way self-interested individuals choose the
best means to achieve their goals.
Thirdly, the utilitarianism of Bentham reinforces the conception of human
beings and human relations that underlie the self-interest view. In effect, as to
human beings, Bentham argues that individuals seek their own happiness, which
consists in seeking pleasure and avoiding pain. This hedonistic conception of
happiness has been now extended to preference satisfaction by current utilitarian
theorists (cf. Hausman and McPherson, 1993; Varian, 1999). As to human rela-
tions, Bentham reinforces the individualistic and atomistic conception of society
when he asserts that the community is a fictitious body.
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Finally, the fourth philosophical root of liberal individualism is the social con-
tract proposal of Hobbes. He denies that human beings are naturally social; on the
contrary, the selfish pursuit of their own interests creates a condition of constant
war. This is the original state of nature, which is deduced from the passions of man.
To change this situation, rational and self-interested individuals agree a social
contract to ensure their own preservation (Messner, 1976; Strauss and Cropsey,
1987).[14] Therefore, rationality is identified with self-interest and agreement with
the mutual advantage that results as the outcome of bargaining (Hausman and
McPherson, 1993).
Theoretical Manifestations
The self-interest view and its assumptions underlie most economic theories
(Winship and Rosen, 1988). The neoclassical paradigm is the best example,
because it advances an undersocialized conception of human beings (Granovetter,
1985, p. 483) given that ‘individuals are assumed to be the effective actors, able to
act independently and to be psychologically complete unto themselves’ (Etzioni,
1988, p. 6).
Both the absolutist and instrumental conceptions of self-interest underlie differ-
ent theories. The absolutist conception is implicit in economics, agency theory
( Jensen and Meckling, 1976) and Williamson’s version of transaction costs eco-
nomics (Williamson, 1975). As for the instrumental conception, it lays the founda-
tions for economics, game theory (Axelrod, 1984, p. 6), rational choice theory
(Coleman, 1990, p. 14), Burt’s version of the structural embeddedness perspective
in social network theory (Burt, 1982), and industrial organization economics
(Porter, 1980).
The self-interest view applies not only to individuals in their quest for utility
maximization but also to firms in their quest for profit maximization. In effect, the
goal of the firm is profit maximization (Friedman, 1962; Grant, 1998) and the
central issue of strategy is to develop valuable and difficult to imitate resources
(Barney, 1986) and to place the firm in a superior market position (Porter, 1980,
1985). The purpose of the firm is therefore given either by the intrinsic nature of
firms (Friedman, 1962) or by instrumental analytical purposes (Grant, 1998, p. 33).
As a result, the central focus of strategic management is on selecting the means to
achieve the assumed profit maximization goal. The origin of the firm is explained
as a response to market imperfections such as the presence of transaction costs
(Coase, 1937; Williamson, 1975). Firms are second-best and, even within the
boundaries of the firm, market mechanisms such as competitive incentives and
outsourcing are proposed to run firms as market-like as possible (Ghoshal and
Moran, 1996). Firms are not considered as cooperative systems (Barnard, 1938) or
institutions (Selznick, 1957), but as either nexus of individual contracts (Alchian
and Demsetz, 1972) or instruments for reducing opportunism (Williamson, 1975).
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The self-interest view contributed to build both a unified theory of human behav-
iour and a strong methodological approach to model it. However, many empirical
studies from across the disciplines are questioning the self-interest assumption since
the late 1970s. Using different empirical methods, researchers have found many
counter-examples even for the case of instrumental self-interest, such as forms of
helping behaviour not reciprocated or done anonymously (Frank, 1987; Kahne-
man et al., 1986).
Based on these empirical results, the self-interest critique (Etzioni, 1988; Mans-
bridge, 1990a) puts forward three main arguments. Firstly, self-interest is not the
universal human motivation. Despite the fact that self-interest plays a role in
individual decisions, other motivations such as duty (Kant, 1993 [1785]) and
sentimental love (Smith, 1976, p. 25 [1790]) are also important. Secondly, these
alternative human motives drive non-stable preferences given the inner conflict
between motives (Etzioni, 1988, p. 12), the role of experience (Ben-Ner and
Putterman, 1998), and the type of network structure and context in which people
operate (Granovetter, 2002). Thirdly, multiple motives and others’ interests con-
sidered as ends make individuals seek a balance between multiple motives rather
than maximize their self-interest.
The breaking down of the self-interest concept into the continuum self-interest
– unselfishness, the acknowledgement of alternative motives to self-interest, and the
quest for balance as opposed to maximizing behaviour eliminate the triple identity
preferences–choice– welfare (cf. Figure 2), as we explain below.
Self-interest – Unselfishness
An important shortcoming of the self-interest view is that it assumes an identity
between preferences and welfare. This reductionism goes against the reality of
alternative human motivations such as sentimental love and duty, which are
supported philosophically (Kant, 1993; Smith, 1976), theoretically (Etzioni, 1988;
Mansbridge, 1998), and empirically across different disciplines (cf. Kahneman,
2003; Kollock, 1998; Liebrand et al., 1986; Mansbridge 1990b, for a review).
Acknowledging motives other than self-interest and their categorization as
unselfishness implies the breaking down of the monolithic concept of self-interest
into the bipolar continuum self-interest – unselfishness ( Jencks, 1990, p. 53; Mans-
bridge, 1998, p. 156). This has four important outcomes. Firstly, it restores the
meaningful distinction selfish–unselfish, which is important for moral praise and
blame. Secondly, it provides a better lens to understanding the reality of human
motivations than the self-interest view. Alternative motives such as commitment
and rules of fairness, which cannot be derived from self-interest (Mansbridge, 1998;
Sen, 1990a), are alternative explanations for deviations from self-interest (Kollock,
1998). Thirdly, it makes human motivation variable. Reducing human motivation
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to only one motive does not allow discrimination between different categories and,
therefore, it loses its theoretical and empirical relevance. In effect, ‘once the
satisfaction of one’s own needs, and self-sacrifice, as well as service to others and to
the community – once all these become ‘satisfaction’, the explanatory hypothesis of
the concept is diluted to the point where it becomes quite meaningless’ (Etzioni,
1988, p. 28). Finally, it gives room to two historical moral systems that, together
with utilitarianism, explain human motivation: sentimentalism (Hutchenson; cf.
Smith, 1976); and deontology (Kant, 1993). These two philosophical systems
provide two additional motives – i.e. sentiments and duty – which consider others’
interests as ends (Figure 1, motives 3, 5, 6, and 7).
Sentimentalism claims that sentiments, especially those that are altruistic or
disinterested, constitute the main rule of behaviour ( Jolivet, 1976). Expressions
such as ‘to feel much for restrain our selfish, and to indulge our
benevolent affections, constitutes the perfection of human nature’ (Smith, 1976, p.
25) exemplify this philosophy, which contrary to the instrumental conception of
self-interest takes others’ interests as ends rather than means (Figure 1, motives 3
and 5). The sentimentalist philosophy is at the root of the altruist man, a person
‘acting with the intention to advance the interests of others at the expense of his
own interests’ (Sesardic, 1995, p. 129) and underlies the motivational categories of
others’ gain maximization (MacCrimmon and Messick, 1976; McClintock, 1972)
in psycho-sociology and other-regarding preferences (Ben-Ner and Putterman,
1998, p. 7) in economics.
Affection, empathy, or sentimental love can be defined as the human capacity to
make another’s good one’s own (Mansbridge, 1998, p. 155), which means that both
others’ interests and self-interest are considered as ends (Figure 1, cell 5). This is the
basic difference between sentimental love and enlightened self-interest, because the
latter considers others’ interests as means. However, independent of the arguments
given to discredit the enlightened self-interest conception (Elster, 1990, p. 44;
Smith, 1976, p. 317) that difference can only be discovered empirically, observing
whether the individual continues to perform the same action independently of the
other person’s response.
The second philosophical approach – i.e. deontology – argues that duty is a key
motive for individual action ( Jolivet, 1976). ‘Deontology uses as the criterion for
judging the morality of an act, not the ends it aspires to achieve, nor the conse-
quences, but the moral duty it discharges...Hence, treat others as you seek to
be treated – as an end, and not as a means’ (Etzioni, 1988, p. 13). Contrary to
sentimentalism, deontologists argue that duty is the only non-egoistic motive
because it involves the possibility of counter-preferential choice – i.e. choices that go
against the individual’s own welfare and sentiments (Sen, 1990a). This means that
committed behaviour cannot be credited to enlightened self-interest, because com-
mitment excludes treating others as means. Therefore, deontology identifies good
with duty and takes others as ends rather than means (Figure 1, cells 6 and 7).[15]
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Non-Stable Preferences and Inconsistent Behaviour
Another important shortcoming of the self-interest view is that it assumes an
identity between preferences and choice, which goes against the reality of non-
stable preferences and inconsistent behaviour.
In effect, ‘choice may reflect a compromise among a variety of considerations of
which personal welfare may be just one’ (Sen, 1990a, p. 30). Another source of
inconsistencies is individuals’ accumulated experience, which leads them to make
different choices even when the situation and options are the same (Ben-Ner and
Putterman, 1998, p. 25). Finally, given the role of social relations in affecting
human behaviour, the specific network type and context in which people operate
also influence the relationship between preferences and choice (cf. Granovetter,
2002). For example, pre-existing networks such as horizontal and vertical relation-
ships may involve trust and power, respectively, which drive a wedge between
interests and action (Granovetter, 2002). The interplay between heterogeneous
motivational structures and specific social contexts contribute to explaining why
people have non-stable preferences in real-life situations.
Thus, internal inconsistencies prevent the revealed-preference theorist from
assigning a preference ordering to the individual and, therefore, restrain the pos-
sibility of stamping a utility function on him (Sen, 1990a), which breaks down the
identity preferences–choice.[16]
Balancing Rather Than Maximizing
The self-interest view states that the only human motive is self-interest, which
means that the problem of evaluating different competing ends is nonsensical.
When deviations from this assumption are found in reality, many ingenious ways
are used to extend the self-interest model to interpret the dissonances between the
standard economic model and actual behaviour (cf. Becker, 1976, 1996). Maxi-
mizing behaviour creates the identity choice–welfare because choice is a matter of
applying instrumental rationality for choosing the best means to achieve the
assumed end.
However, self-interest cannot eliminate the breadth of qualitatively different
motivations such as sentiments and duty (Sen, 2002). People who behave in an
apparently selfless way could in fact be guided by self-interest, but this possibility
does not indicate that all apparently non-selfish behaviour is best explained as
enlightened self-interest (Sen, 2002, p. 24).
The reality of alternative motives to self-interest and the existence of counter-
preferential choices based on commitment (Sen, 1990a) imply that individuals
either choose one motive at a time to maximize it or balance multiple ends. The
self-interest critique supports the latter alternative, arguing that people balance
several goals rather than maximize only one (Etzioni, 1988, p. 84). This latter
alternative breaks-down the identity choice–welfare, because counter-preferential
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choices run against the welfare of the individual. If utility instead of welfare is taken
into account (cf. Becker, 1976, 1996), the identity choice–utility is broken by the
existence of qualitatively different motives. The reason is that despite the fact that
some individuals do trade-off these motives, they are, by their own nature, not
exchangeable commodities. In other words, the very existence of multiple motives
requires a balancing rather than a maximizing approach.
To sum up, the main contribution of the self-interest critique is the breaking
down of the triple identity preferences–choice–welfare. The existence of alternative
motives to self-interest breaks down the identity preferences–welfare; at the same time,
non-stable motives create potential inconsistencies, breaking down the identity
preferences–choice; finally, the presence of multiple ends and counter-preferential
choices breaks down the identity welfare–choice.
Despite its contribution in breaking down the triple identity preferences–welfare–choice,
the self-interest critique faces four interrelated problems. First, it maintains the
identity between self-interest and selfishness. Many authors use the qualification
narrow self-interest to refer to selfishness (Elster, 1990; Jencks, 1990, p. 53; Mans-
bridge, 1998, p. 156), but this leaves self-interest undefined. In other words, they
define the species – i.e. narrow self-interest or selfishness – but not the genus – i.e.
Equating self-interest with selfishness creates a second problem: a bipolar (i.e.
either/or) way of thinking (Bobko, 1985). In effect, the continuum self-interest –
unselfishness rules out the possibility of some integration between these extremes,
which creates paradoxical situations and the consequent impulsive reaction of the
mind to focus on only one aspect of the reality and deny the other. There is nothing
wrong with bipolar thinking (Bobko, 1985, p. 107), but it limits our capacity to
either realistically integrate opposites or explain important constructs hidden
within the continuum.
Bipolar thinking and emphasis on conflicting interests lead to a third problem: the
lack of comprehensive theoretical explanations including the alternatives to self-
interest. Keeping the unidimensional continuum self-interest–unselfishness makes it
difficult to theoretically explain qualitatively different motives such as duty, love, and
excellence along that continuum. Despite the quest for balance between conflicting
motives, a contingency approach to human motivation is preferred when it comes to
explaining how the different motives operate in practice (Etzioni, 1988, p. 12;
Mansbridge, 1990b, p. 254). This approach takes single motives in different contexts
and prevents the explanation of how multiple ends operate at the same time.
A contingency approach for modelling heterogeneous motivational structures
leads to a fourth problem: the use of instrumental rationality logic such as maxi-
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mization procedures to solve practical rationality problems – i.e. the dealing with
multiple ends. Using indifference curves and ratios for modelling multiple ends is
a method-driven rather than theory-driven strategy, because it assumes that dif-
ferent motives could be treated as commodities. This strategy could explain why
the motivational approach to social dilemmas is purely descriptive (Kollock, 1998,
p. 192).
Assuming that two contraries can be integrated because they belong to the same
category (Aristotle, 1984a), we use the concept of self-love to go beyond the
bipolarity self-interest – unselfishness, and solve the problems it creates. What
follows is the definition of self-love and its application to the problems created by
that bipolarity.
Self-love is the inclination of human beings to strive for their own good and
perfection (Aristotle, 1984b; Aquinas, 1963, Book I, 60, 3).[17] As shown in Figure 1,
self-love is the genus that includes not only the contraries selfishness and unself-
ishness but also other motives such as sentimental love, duty, and excellence.
Self-love has been conceptualized since the times of Hume (cf. Holmes, 1990) as
selfishness and, therefore, as something morally bad. This lack of distinction
between self-love and selfishness is one of the reasons why the concept of self-love
has not received much attention in the literature on human and social motives.
However, identifying self-love with selfishness is a partial definition of the concept
of self-love, because selfishness is a special kind of self-love, that referring ‘to people
who assign to themselves the greater share of wealth, honours, and bodily plea-
sures’ (Aristotle, 1984b, Book IX, p. 8).
According to Aristotle, the basic human tendency is toward good (1984b, Book
I, p. 1). Good can be understood in different ways: pleasure, wealth, honour, or
excellence (1984b, Book I, p. 4). However, he argues that the greatest of all the
goods is excellence (1984b, Book I, p. 5) because it helps to develop to their full
potential what is specifically human. Happiness occurs when the human being
develops his excellences (1984b, Book, I, p. 13; Book X, 6–7) (Figure 1, motive
Excellence, which results from intelligent and voluntary efforts rather than nature
(1984b, Book II, p. 1), is a habit that fosters the development of human potentialities.
In other words, an excellence is formed by voluntary acts rather than determined by
genes and reinforces or empowers the basic human capabilities to achieve their
potential or tendency to their specific goods. Compared with animals and plants,
human beings have specific faculties – i.e. intelligence and will – that allow for
intellectual life. Human beings also have inferior faculties they share with animals
and plants, allowing for sensitive and vegetative life, respectively (Aquinas, 1963).
Excellence guides human potentialities toward their fulfilment, empowering human
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capabilities according to what is specifically human: intelligence and will. Good
is related to what is according to nature: that which is good expands human
The self-love view makes three important contributions to the self-interest
debate. Firstly, it breaks down the bipolarity self-interest – unselfishness distin-
guishing two motivational dimensions: object and subject. Secondly, it integrates
the specific human motivations highlighted by the previous two views of self-
interest adding a new motivation – i.e. excellence. Thirdly, it specifies the type of
rationality necessary to address the reality of multiple ends. These contributions
address each one of the problems created by the unidimensional continuum self-
interest–unselfishness, as we explain below.
Distinguishing Self-Interest from Selfishness
The origin of reducing human motivation to self-interest and the consequent
identity self-interest–selfishness is credited to Adam Smith (cf. James and Rassekh
(2000) for a review). For example, Blaug argues that ‘the central theme that inspires
the Wealth of Nations is the notion that selfishness, however morally reprehensible,
may nevertheless provide a powerful fuel to a commercial society’ (Blaug, 1997,
p. 60).
However, Smith refuses the reduction of human motivations to self-interest: ‘the
whole account of human nature...which deduces all sentiments and affections
from self-love...seems to me to have arisen from some confused misapprehension
of the system of sympathy’ (Smith, 1976, p. 317). For Smith, the pursuit of
self-interest is bound by sources of control such as rules of justice ( James and
Rassekh, 2000; Sen, 1987).
Thus, the identity self-interest–selfishness is based on a misinterpretation of Smith’s
work (Sen, 1987; Solomon, 1992). The deepest root of the concept of self-interest
is found in the idea of self-love, which has to be traced back to Aristotle and
Aquinas to understand its proper meaning – i.e. the inclination of human beings to
strive for their own good and perfection.
Beyond the Contingency Approach to Human Motivation
Some authors propose a contingency approach to human motivation, which con-
sists in explaining single motives in different contexts (Mansbridge, 1990b, p.
254).[19] An extreme case, close to the instrumental conception of self-interest,
would be that self-interest is the norm in economic transactions and unselfish
behaviour the norm in non-economic transactions. This proposition echoes Sam-
uelson’s proposal for the division of labour in academia, separating ‘economics
from sociology upon the basis of rational or irrational behaviour’ (Samuelson,
1947, p. 90). In this context, rational behaviour is defined as the pursuit of
self-interest ( Jensen, 1994; Sen, 1990a, p. 42).
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Despite its plausibility, this contingency approach to human motivation is flawed
from a philosophical, theoretical, and empirical standpoint. From a philosophical
standpoint, the dualist motivational approach resembles Buckle’s interpretation of
Adam Smith’s works. Buckle concluded that in Moral Sentiments Smith ascribes
human actions to sympathy while in Wealth of Nations he ascribes them to selfishness
(Raphael and Macfie, 1976, p. 21). However, as noted above, Smith does not
regard self-interest as the only motive guiding market exchanges, but self-interest
moderated by an inner sense of justice. In fact, something inherent to a being
cannot be completely eliminated; it can only diminish by an increase in contrary
dispositions. The readiness can occasionally be diminished but not completely
eliminated since it is rooted in the substance of the subject (Aquinas, 1963, Book
I–II). Thus, if non self-interested motivation is an alternative motivation, even the
strongest structures fostering self-interest would not be able to eradicate human
potential for non-self interested behaviour. Making personal motivation contingent
to the incentive structure is a kind of determinism because it negates human
freedom, which allows a creative space between the stimulus of the environment
and the specific individual behaviour.
Secondly, from the theoretical standpoint, the wide range of disciplines support-
ing alternative motives to self-interest shows that unselfishness is not only present in
familial, social, or philanthropic settings but also in the most typical economic ones
such as markets and inter-firm relations. Especially relevant is the renewed effort of
economists and sociologists to integrate economic and social topics after their sharp
separation a century ago.[20] In effect, a key message of the economic sociology
approach is that economic action is socially situated, which is expressed in the
concept of embeddedness of economic action coined by Polanyi (Polanyi, 1957)
and popularized by Granovetter (Granovetter, 1985). There is an intrinsic con-
nection between any economic action and the social environment in which the
action takes place, and therefore any separation among them is artificial.
Finally, the sharp division self-interest-for-economic settings and unselfishness-
for-non-economic settings, is not supported empirically. In fact, empirical studies
show degrees of self-interest rather than a complete presence of it, even in the most
favourable conditions for pursuing self-interest such as the offering of large pay-offs
for defection. For example, Rabin has shown that not only material pay-offs but
also fairness enter the individual utility function, and ‘even if material incentives in
a situation are so large as to dominate behaviour, fairness still matters’ (Rabin,
1993, p. 1283). In other words, even in economic settings with strong incentives for
pure self-interest behaviour, motivational heterogeneity still exists.
Especially relevant are experiments in extreme situations favouring self-interest,
such as ultimatum games and dictatorship games, characterized by conditions of
complete control over monetary resources, anonymity, and no possibility of group
punishment (Murnighan et al., 2001). Results have shown that 25–50 per cent of
the participants refuse to take self-interested actions (Murnighan et al., 2001). Even
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more revealing than experiments are real-life situations, such as those experienced
by Frankl, not only in concentration camps but also in his experience as a doctor
and observer of thousands of people in extreme psychological situations (Frankl,
1984).[21] Frankl’s experiments in natural settings show that people can transcend
the imperatives of passion and self-interest when they discover a meaning for what
they do, which implies that the context, be it economic or social, does not deter-
mine the motivation for action.
The self-love view goes beyond a contingency approach because excellence is
not a mutually exclusive fourth motivational category competing with pleasure,
sentiments and duty; it is simultaneously present with them. In effect, from the
object standpoint, those motives are interdependent. For example, more excel-
lence may end achieving more wealth, but it is also possible for excellences to go
up while achievement of wealth goes down (Sen, 1990, p. 35); the search for
excellence is also accompanied by good sentiments and pleasure, but it is not
identified with them (Aristotle, 1984b, Book II, p. 5) as in the case of smiling to
a customer by the impulse of excellence when the feelings go in the opposite
direction; finally, excellence, although different from duty, is intrinsically united
to it, because one of the chief excellences is justice (1984b, Book V) or the
constant will of giving to others what is due. From the subject standpoint, excel-
lence is specific to human beings and given their individual and social nature
(1984b, Book 7), excellence is beneficial to both the individuals who possess it and
those who relate to them.
Harmonizing Instead of Pseudo-Balancing
The critique to self-interest proposes balancing several goals rather than maximiz-
ing an assumed end, but ends up proposing a contingency approach that models
single motives in specific contexts. In effect, the self-interest critique points out at
people’s quest for balance, but when it comes to conceptual and methodological
definitions it embraces the idea of instrumental rationality, which assumes that
goals are given (cf. Etzioni, 1988, pp. 135, 151). We argue that modelling single
motives instead of considering the simultaneous presence of different ends priori-
tizes methodological needs over theoretical relevance, because this approach
applies instrumental rationality logic to practical rationality problems – i.e. those
that deal with multiple ends operating at the same time.
The nature of the phenomenon and the theory behind it drive the proper
methods for studying it. The contingency approach to human motivation goes the
other way round: the need for simplicity makes this approach more attractive than
alternative ones because it allows the application of maximization techniques. This
approach does not consider that econometric models do not explain anything by
themselves, only theories underlying the variables used in the models to test
propositions do (Bacharach, 1989; Sutton and Staw, 1995).
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Modelling two motives using indifference curves also reduces everything to a
common denominator: utility – or a meta-utility including several utilities (cf.
García Sánchez, 2004, p. 9), because the very idea of substitution is at the heart of
instrumental rationality ( Jensen and Meckling, 1994). Different ends are dealt as
substitutable means that could be traded-off against each other as if they were
commodities rather than as necessary parts of a whole. Variability is analysed in
only one dimension (i.e. self-interest–unselfishness) instead of in four or more
dimensions (i.e. self-interest, sentiments, duty, excellence, or any combination of
them), because the underlying logic is that of maximization techniques, for which
it is ‘logically impossible to maximize in more than one dimension at the same time’
(cf. Jensen, 2002, p. 238). This resulting loss of qualitative information on motiva-
tions could explain, for example, the lack of theoretical development on motiva-
tional solutions to social dilemmas. In effect, ‘different social value orientations are
theoretically possible, but most work has concentrated on various linear combina-
tions of individuals’ concern for the outcomes for themselves and their partners’
(Kollock, 1998, p. 192; cf. also McClintock, 1972, p. 448).
The nature of human motivation is marked by the existence of simultaneous
ends. The existence of multiple ends is the result of not only having different
qualitatively internal motivations – i.e. pleasure, sentiments, duty, or excellence –
but also considering others’ interests, as Figure 1 shows. Intuition and the natural
and laboratory experiments described above shows that pleasure, sentiments, duty,
and excellence are not exchangeable commodities by their own nature as it is the
case of cars, bananas, or cinemas. The existence of qualitatively different ends
implies that instrumental or means–end logic has to be replaced with part–whole
logic or practical rationality approach.
Practical rationality can be traced back to the Aristotelian concept of practical
wisdom (Aristotle, 1984b, Book II, p. 1; Book VI, p. 5; cf. García Sánchez,
2004), which stresses the idea of holism (Solomon, 1992) or part–whole relation.
In effect, practical rationality focuses on different ends while instrumental ratio-
nality aims at connecting an action with an external end (Aristotle, 1984b, Book
VI, p. 5). Contrary to instrumental rationality, which allows the separation
between given ends and the means to achieve them, practical rationality requires
that each part be present to get the whole (García Sánchez, 2004). Multiple ends
are evaluated rather than selected; the issue is how different ends are connected
and evaluated rather than how to select the best means to maximize an assumed
end. Its reference to ends makes practical rationality be related to the concept of
substantive rationality (Weber, 1968), which is defined as the ‘degree to which
the provisioning of given groups of persons...with goods is shaped by economi-
cally oriented social action under some criterion...ofultimate values, regardless
of the nature of these ends’ (Weber, 1968, p. 85). However, while practical ratio-
nality is concerned with how different ends are interconnected and evaluated,
substantive rationality stresses the idea that behaviour is oriented toward values,
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‘whether they be ethical, political, utilitarian...or whatever’ (Weber, 1968, p.
The existence of multiple motives subject to harmonization rather than maxi-
mization suggests that experimental and simulation rather than optimization tech-
niques are more appropriate to analyse and test the interaction among human
motives and the relation between motives, behaviours, and outcomes. In particu-
lar, simulations provide different scenarios for different assumptions. They are
‘playback of assumptions’ that tell what is already known, show the consequences
of assumptions, and reveal hidden pitfalls (Morecroft, 1999; Simon, 1996). Simu-
lation techniques also allow the inclusion of contextual factors to analyse how
different conditions restrain or foster different motivational sets. For example,
cooperative incentive structures such as an Assurance Game or institutional
arrangements such as local regulation of common property (Kollock, 1998) could
fuel human potential to follow an excellence driven process, while monetary
incentives could foster temporary cooperation that would disappear if those exter-
nal incentives were eliminated.
The current debate on behavioural assumptions is framed in terms of self-interest–
unselfishness because self-interest is identified with selfishness and associated to
instrumental rationality. However, it creates an incommensurability problem
(Kuhn, 1977) because it assumes that self-interest and unselfishness cannot be
integrated, either because self-interest is the only motive or because self-interest
and other motives are inherently conflictive.
In this paper, we have revisited the self-interest debate analysing both the
self-interest view and its critique, and proposed an integrated framework, called
self-love view, to solve the incommensurability problem. Assuming understanding
as a valid epistemic value, we transform the unidimensional continuum self-interest–
unselfishness into a bi-dimensional motivational space based on the concept of
self-love or the inclination of human beings to strive for their own good and
perfection. We distinguish between the motivational object, or what we consider
good for ourselves – i.e. pleasure, sentiments, duty, or excellence – and the moti-
vational subject, or whose interest, whatever it might be, is taken into account –
self-interest, others’ interests, self-interest as end and others’ interests only as
means, or both self-interest and others’ interests as ends – which determines eight
motivational types (Figure 1).
Our integrated framework, in turn, widens the assumptions on the relation
between human motivations, behaviour, and outcomes. For example, some indi-
viduals choose a self-interest driven process where personal preferences are based
on self-interest, choice on pleasure and calculative reason, and welfare on the
attainment of pleasure – i.e. a state that results from having health, material goods,
H. O. Rocha and S. Ghoshal606
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honours, status, power, or any bodily pleasure. However, this is only part of the
reality, given that other individuals could choose an excellence driven process
where personal preferences are based on excellence, choice on intelligence and free
will, and welfare on a progressively attainment of a virtuous life. The real existence
of both types of individuals show that human potentialities allow for a variety of
motivations, behaviours, and outcomes that go beyond self-interest (Figure 3).
The self-love view provides an integrated paradigm aimed at solving the incom-
mensurability problem of the self-interest debate. In effect, the self-interest critique
breaks down the triple identity preferences–choice–welfare that underlies the self-
interest paradigm. However, the self-interest critique identifies self-interest with
selfishness, which results in bipolar thinking, a contingency approach to human
motivation, and the application of instrumental logic to problems of practical
rationality. The self-love view breaks down the identity self-interest–selfishness and
provides a framework to analyse the interaction of different motives and the
required rationality to harmonize them. Figure 4 extends Figure 1, summarizing
the main constructs underlying the three conceptions of human motivation.
The contributions of this paper are twofold. Firstly, based on the epistemological
goal of understanding, it embraces a complementary articulation (Smelser and
Swedberg, 1994) or a scholarship of integration (Boyer, 1990) approach to theory
building. We aim at integrating the insights of the current two views on self-interest
Motivations Behaviour Consequences
Excellence driven process
(intelligence and
free will
Human Freedom
(conditioned, not
determined) Self-interest
driven process
(pleasure and
Self-interest Personal
Welfare (truth,
good, beauty,
and pleasure)
Figure 3. Economic assumptions and human reality – self-interest and excellence explanations
Beyond Self-Interest Revisited 607
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and resolving their apparent inherent conflict instead of enlarging the current list
of human preferences. In other words, our contribution does not lie in presenting
an alternative competing paradigm but in integrating what seem to be incommen-
surable views on human motivation.
Secondly, this integration is not limited to a richer description of assumptions
on human behaviour. Given that assumptions are embodied in theories and have
the potential to change the very behaviour they assume (cf. Ferraro et al., 2005;
Ghoshal and Moran, 1996), we argue that a more realistic and integrated vision
of behavioural assumptions provides better explanations and offer more respon-
sible prescriptions. A richer vision of behavioural assumptions leads to under-
standing deviations from self-interest as neither anomalies (self-interest view) nor
opposite extremes to self-interest (critique to the self-interest view) but as mani-
festations of potential human motives. Different assumptions, in turn, lead to
different theories and practices that condition the development of those motives.
For example, a theory prescribing outcome-based contracts could promote
human potential to behave in a self-interested way while a theory prescribing
purpose-based incentives might foster human potential to behave in an
excellence-based way. As another example, Rabin (1993) shows that people’s
concern for fairness is reduced when monetary pay-offs dominate behaviour. This
finding can be interpreted in at least two different ways: first, all rational people
have their price and are willing to trade-off everything (self-interest dominates
behaviour; Jensen and Mecking, 1994). In this case, no concern for fairness would
be expected if the pay-off is high enough. Alternatively, people’s concern for
fairness is crowded-out by external incentives, but no-price, regardless how high,
could completely extinguish the concern for fairness of at least some people. In
this case, a result opposite to that shown by Rabin may be expected when an
incentive structure targeting fairness is put in place (cf. Frey and Jegen, 2001;
Subject whose interests?
what is
good? Only self Only others
Self as end
others as
only means
Both self
and others
as ends
Main human
Pleasure Narrow self-
interest N/A
pleasure and
No Maximization
Basic human
impulse =
Good in
general (self-
Obey the
No Absolute reason
Excellence N/A N/A Excellence
Live a
virtuous life
No Harmonization
of several ends
(relation part
Figure 4. Beyond the bipolarity self-interest–unselfishness – summary
H. O. Rocha and S. Ghoshal608
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Kollock, 1998). In short, business and public policies based on different behav-
ioural assumptions are likely to foster the very behaviour that those policies
These contributions confirm that assumptions are the starting point of research
programmes and illuminate the adequate methods to be used, as acknowledged by
not only management scholars (Argyris, 1973; Herzberg et al., 1959; McGregor,
1957) but also Nobel-laureates (Sen, 1990a; Simon, 1985; Hayek, 1974). Assump-
tions embodied in theories, in turn, influence practice through the process of
double hermeneutic (Giddens, 1984). Therefore, given that the way we see
(assumptions) drives what we do (theories and management policies), and, what we
do in turn impacts on what we get (results), our holistic motivational framework has
implications at both the theoretical and practical levels. We conclude with impli-
cations for theory building, theory testing, and practice.
Implications for Theory Building
Theory building relates to concepts (the What), the relation among them (the How),
the assumptions and rationale behind the concepts and their relationship (the Why),
and the conditions under which those relationships hold (the Who, Where, and
When) (Whetten, 1989). Our framework has implications for each one of these four
elements of theory development.
The What. Defining the concepts that are the building blocks of a theory is a first
step in theory building. This is especially relevant when a concept such as self-
interest is central to a theory. The paper shows that a misinterpretation of
Smith’s work has led to equating self-interest with selfishness. The qualification
‘narrow’ self-interest shows that self-interest is different from selfishness, but
leaves the former undefined. To this end, some authors propose a rehabilitation
of the concept of self-love (Holmes, 1990, p. 281). However, this suggestion is
based on a misreading of Aristotle and Aquinas, because self-love was originally
understood as the human tendency towards own good and perfection rather than
as selfishness.
This paper also shows that understanding the very nature of each motive widens
assumptions such as that of treating duty and excellence as exchangeable means,
and fosters theory building. Our bi-dimensional motivational space allows defining
preferences and their relationships with behaviours and outcomes in an integrative
way, thus contributing to theory through a better understanding of human
The How. This paper shows how the interaction between the object – i.e. what is
considered as good – and the subject – i.e. whose interests – of motivation
defines a bi-dimensional motivational space that integrates eight potential human
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motivations. This framework breaks down the unidimensional continuum self-
interest–unselfishness and allows discovering the internal relation between different
types of motives. In particular, we show that excellence is not a mutually exclu-
sive category competing with pleasure, sentiments, and duty. These are interde-
pendent and not necessarily conflicting motivations.
The richer vision of human preferences leads to the break down of the triple-
identity between preferences, behaviours, and outcomes. Given the interconnection
between these phenomena (Figure 3), our framework also yields different relations
between preferences, behaviours, and outcomes and different explanations on why
these relations occur.
The Why. The Why of a theory is the rationale underlying the selection of concepts
and the proposed causal mechanisms among them, which constitutes the theory’s
assumptions (Whetten, 1989, p. 491).
Given the powerful role of assumptions as rationale justifying theoretical argu-
ments, theories, especially those that are normative (Ghoshal and Moran, 1996),
should make explicit the set of assumptions on which they are based (Bacharach,
1989; Whetten, 1989) to allow their critical scrutiny and public discussion (Sen,
1997). This paper shows that the self-interest view and its critique are rooted in
some philosophical systems that provide a specific view on human nature and
human relations. Making explicit these intellectual roots contributes to a richer
vision of reality, more unbiased judgement, and more comprehensive theories.
It could be argued that the goal of scientific enterprise is prediction (Friedman,
1962) and therefore assumptions on human nature are irrelevant; the only requisite
is that an assumption such as self-interest should allow the building of a model for
making accurate predictions. Although not discussed in our paper, we have argued
that this argument should be evaluated using the proper perspective – i.e. that of
philosophy of science or epistemology. There are plenty of debates among phi-
losophers of science, but at least one thing is clear to them: the basic goal of
scientific inquiry is the search for explanation – i.e. ‘[The] success of a theory is
measured, in part, by its capacity to explain known events’ (Rothbart, 1998, p.
117). Disagreements exist on what the constitutive elements of a genuine explana-
tion in science are, not on whether explanation is one of the defining missions of
science. Even more, proposals have been made which imply a return to the original
goal of knowledge or understanding (Artigas, 2000; McMullin, 1988), integrating
the interdependent goals of explaining and prescribing.
The What,How, and Why provide the essential elements of a theory (Whetten, 1989).
Our framework provides different content for each one of these questions and opens
the horizon for new theories and propositions. For example, the interaction of
self-interest, stable preferences, and maximization behaviour justifies propositions
such as ‘outcome-based contracts curb agent opportunism’. However, the interac-
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tion of self-love, human freedom, and harmonization behaviour could yield different
propositions. For example, from an excellence standpoint, the alternative proposi-
tion ‘purpose-based incentives develop the full potential of excellence-motivated
agents’ makes as much sense as a proposition based on self-interest.
The Who, Where, When. We integrate the basic human motivations and show that
they are human potentialities waiting to be fully explored and developed. A
particular motive or combination of motives would be the result of the interaction
of the human potential for self-scrutiny and freedom, personal history, and con-
textual conditions such as culture, accountability, institutional arrangements
(Ferraro et al., 2005), systems of exchange (Biggart and Delbridge, 2004), embed-
deness in structures of social relations (Granovetter, 1985), and horizontal and
vertical relationships (Granovetter, 2002).
Given that the alternative motives are rooted in human nature, we argue that
contextual factors only moderate human motivation, given that even the most
powerful external incentives are not able to eradicate the reality of individuals’
heterogeneous motivations. Therefore, identifying conditions that restrain or foster
different motivational sets is a main avenue to test propositions derived from our
motivational framework.
Implications for Theory Testing
The immediate reason for the widespread diffusion of the self-interest assumption
is the egoism attached to human nature. However, a more fundamental reason is
that of the pretence of knowledge (Hayek, 1974) and its consequent requirement of
simple models for explaining much with little. Assuming self-interest eliminates the
problem of heterogeneous motivational structures and, thus, allows for tractable
models, a key constraint in economic analysis (Kahneman, 2003).
The self-interest critique seems to apply a similar logic when it comes to theory
testing. In effect, its proposed contingency approach implies applying instrumental
rationality with its maximization logic to practical rationality problems. In other
words, in a phenomenon like heterogeneous motivational structures, each motive
is a part rather than a means and therefore it cannot be separated from the whole.
Multiple ends pose a problem to maximization techniques, because it is not
possible to maximize in more than one dimension ( Jensen, 2002). Some could
argue that multi-objective or multi-criteria optimization techniques (Eschenauer
et al., 1986) would solve the problem, providing a set of possible answers rather
than one optimal solution. However, optimization methods implicitly assume
substitution and therefore different ends are dealt as substitutable means rather
necessary parts of a whole. In addition, motivational heterogeneity coupled with
human freedom and experience challenge the assumption of internal consistency,
restating the problem of creating a utility function for an individual.
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We have argued that the nature of the phenomenon should drive the appropri-
ate method of investigation. Given that human motivation is intrinsically hetero-
geneous, this suggests that multiple motives should be subjected to harmonization
rather than maximization techniques. We have suggested that experimental and
simulation techniques rather than optimization techniques are more appropriate
for analysing and testing the interaction among human motives and the relation
between motives, behaviours, and outcomes. In effect, these relationships and
interactions make analytical approaches infeasible, given not only the number of
parameters to be estimated (Kahneman, 2003) but also the feedback loops that
results from experience (Ben-Ner and Puterman, 1998), choices (Larrick, 1993),
and the impact of context (cf. Kollock, 1998). Therefore, the self-love view we
propose is another interesting avenue for empirical research using new method-
ological developments in experimental and behavioural economics (cf. Kahneman,
2003; Smith, 1992), and system dynamics (cf. Lane, 2000; Morecroft, 1999).
Implications for Practice
Positive theories in social science are also normative theories (Ghoshal and Moran,
1996) because they give prescriptions to change behaviour. This process of double
hermeneutic in social sciences relates to the scientific goal of control or change
(Whetten, 1989, p. 494).
How assumptions embodied in theories influence management practice has
been forcefully shown by Ghoshal and Moran (1996) in their critique to TCE.
More recently, Ferraro et al. have generalized this idea, arguing that a self-fulfilling
prophecy process shows ‘how the behavioral assumptions and language that char-
acterize economics influence theories and expectations about human behaviour’
(2005, p. 3).
The limitations of this paper are given by its scope and, therefore, constitute lines
for future research. A first important limitation is that our framework includes only
the main generic motives according to the literature, without analysing in more
detail its connections with the literature on extrinsic and intrinsic motivations in
general (cf. Frey, 1997; McGregor, 1966; Perez Lopez, 1993) and the literature on
rules of fairness (Rabin, 1993) in particular. A second important limitation is that
our focus on integrating assumptions has precluded a more detailed analysis of
both potential interactions between motives, and potential relationships between
motives, behaviour, and outcomes (cf. Figure 4). Finally, both our focus on motives
rather than on rationality, and our analysis of instrumental and practical rationality
have led us to conclude that non self-interested behaviour is not necessarily irra-
tional behaviour. However, this paper does not analyse what constitutes rational
behaviour per se. Given that the economic literature equates self-interest to ratio-
nal action (cf. Jensen, 1994), more research on the relationship between different
motives and rationality is needed.
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This paper shows that both the self-interest view and its critique are based on
specific philosophical systems that describe partial aspects of human potential. By
proposing the self-love view, which integrates rather than dissociates different
motives, and by making explicit the intellectual roots of each motivation, we
provide the conditions for a richer vision of reality and more informed managers
and policymakers. Richer knowledge, in turn, results in more freedom to design
organizational and societal contexts than those resulting from assuming either
self-interest as the only human motive or a permanent conflict between self-interest
and unselfishness. We hope that knowing this motivational potential and the role
of theory in modifying concrete behaviours will encourage dialogue among aca-
demics to develop richer theoretical frameworks and prescriptions. This coopera-
tive effort would aid managers and policy makers in their judgements to create
better organizations and societies.
*A previous version of this paper was presented at the All Academy Symposium ‘Making Organi-
zational Knowledge Actionable: New Organizational Designs for Knowledge Driven Innovation’,
Academy of Management Conference, New Orleans, 6–11 August 2004. This paper was work in
progress when Sumantra Ghoshal passed away on 3 March 2004. At that time a detailed outline of
the Conclusion section of the paper had been agreed between the authors but completed by the first
author only after March 2004. The original title was shortened and the Introduction was substantially
re-framed in response to the excellent critiques, comments, and suggestions of many scholars who
read the initial draft. The core of the paper has been left intact, except for editing and clarifications,
acknowledging that there is room for improvement. This decision has been made in order to
contribute to the effort of other scholars in motivating future work on the new management agenda
Sumantra Ghoshal was developing at the time of his death. The first author is especially grateful to
Ananda Ghoshal and his family for their consent to publish this paper. He also thanks Peter Moran
for his sharp critiques, key questions, time, and encouragement. The first author also thanks Editor
Julian Birkinshaw for his many reviews of the manuscript and encouragement for finishing it. Michael
Jensen, Fabrizio Ferraro, Martin Kilduff, Lynda Gratton, Raymond Miles, Javier García Sánchez,
Ricardo Crespo, Janine Nahapiet, Miguel Alfonso Martinez-Echevarria, Martin Kunc, and anony-
mous reviewers at the Journal of Management Studies have also provided very helpful comments and an
example of excellent scholarship. Financial support from the Society for the Advancement of Man-
agement Studies – Geoff Lockett and Tom Lupton Doctoral Scholarship, and IAE – Management
and Business School, is gratefully acknowledged. The usual disclaimers apply.
[1] Other examples are rational choice theory in political science (Downs, 1957) and sociology
(Coleman, 1990); adversary democracy (Schumpeter, 1950; cf. Mansbridge, 1990a, p. 8), game
theory (Axelrod, 1984, p. 6), and public choice theory in political science; and the theory of
economic law (Posner, 1986) in Law.
[2] These two examples are based on a specific case of self-interest, that of potential seeking of
self-interest with guile or opportunism. For a discussion in the context of TCE, see Ghoshal and
Moran (1996).
[3] Similarly, Mansbridge states that ‘(the) essays in this book constitute a manifesto. They reject the
increasingly prevalent notion that human behaviour is based on self-interest, narrowly con-
ceived’ (Mansbridge, 1990a, p. ix). We articulate the self-interest critique around the contribu-
tions of Etzioni and Mansbridge given that their research questions and focus have targeted the
self-interest assumption in itself instead of taking it as part of a research programme with a more
specific theoretical and empirical focus. However, we also draw on scholars from psychology,
economics, social-psychology, and economic-sociology not only for our exposition of the self-
interest critique but also for our elaboration of the self-love view.
Beyond Self-Interest Revisited 613
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[4] As Sen has pointed out, ‘Even when precisely capturing an ambiguity proves to be a difficult
exercise, that is not an argument for forgetting the complex nature of the concept and seeking
a spuriously narrow exactness. In social investigation and measurement, it is undoubtedly more
important to be vaguely right than to be precisely wrong’ (Sen, 1990b, p. 45).
[5] As it will be analysed in the following sections, self-love is a natural tendency shared by all
human beings. Self-love has to be distinguished from selfishness, which is a special kind of
self-love, and narcissism, which is a pathological pathology.
[6] Many connections between our framework and the current motivational literature can be
made. For example, self-interest can be associated to extrinsic motivation – i.e. motivation based
on external factors – while sentiments, duty, and virtue can be categorized as different types of
intrinsic motivations – i.e. motivation based on internal factors – and transcendental or tran-
sitive motivations – i.e. motivation based on internal factors and the impact of the actions
on others (cf. Frey, 1997; Llano, 1997; McGregor, 1966; Perez Lopez, 1993). Due to space
limitations, these and other connections will not be analysed further in this paper, acknowledg-
ing that they are avenues for further research.
[7] In addition, we place every generic motive within Figure 1 according to the literature and the
nature of each motive. For example, Jensen and Meckling (1994) argue that individuals always
make trade-offs and substitutions, even of preferences such as morality, which opens the door
for the inclusion of altruism within the definition of self-interest ( Jensen, 1994, p. 5). However,
this assertion contradicts the very nature of duty, which takes others always as ends. For this
reason, enlightened self-interest is not included in the cells where duty is involved. As an
additional example, the so-called reciprocal altruism is not included as altruism but as enlight-
ened self-interest, because altruism implies the intention of the actor to genuinely sacrifice his
own interests (Sesardic, 1995, p. 130). In the previous examples and in the explanations that
follow, we limit our exposition to psychological altruism, keeping biological altruism (cf.
Sesardic, 1995) out of the scope of the paper due to space limitations.
[8] Note that this definition of pleasure is broader than the hedonistic definition provided by the old
utilitarians. For a discussion, see Hausman and McPherson (1993).
[9] When a person is moved by her own pleasure, altruism is not possible, because it reduces rather
than increases the welfare of the doer of the action. When the action is done for the praise of
others, therefore others’ interest is considered as means, which results in enlightened self-interest
(cell 2).
[10] In effect, they assert that ‘[like] it or not, individuals are willing to sacrifice a little of almost
anything we care to name, even reputation or morality, for a sufficiently large quantity of other
desired things, and these things do not have to be money or even material goods’ (1994, p. 7).
Note that this assertion relates to human nature. In effect, it attempts to be descriptive of human
behaviour in general, although Jensen corrects his views in a companion article, arguing that his
model is more prescriptive than descriptive ( Jensen, 1994, p. 7). The Jensen and Meckling
quote also relates to the interaction of different motives rather than to the way individuals
advance a given motive. For example, if an individual is concerned with the well being of her
daughters, she will consider the associated cost in deciding how much of her resources she will
devote to make them better off. The motive is given and informs the whole decision process;
then, it is a matter of evaluating how much of those resources she will invest to advance that
motive, which is related to instrumental rationality or the relationship between means and a
given end. A different issue is to evaluate which end should be given priority: the well being of
her daughters or a higher personal consumption. This latter issue is at the heart of Jensen and
Meckling’s assertion, given that different ends (i.e. the duty of looking after the well being of a
daughter and the pleasure derived of a higher consumption of goods) are evaluated as if they
were substitutable commodities.
[11] In effect, the former asserts ‘every individual...intends only his own gain, and he is...ledby
an invisible hand to promote an end which was no part of his intention....Bypursuing his own
interest he frequently promotes that of society more effectually than when he really intends to
promote it’ (Smith, 1999, Book IV, p. ii.9). Following the same intuition, Bentham asserts that
‘the interest of the the sum of the interests of the several members who
compose it’ (Bentham, 1982, p. 12, cited in Strauss and Cropsey, 1987, p. 719).
[12] As Adam Smith pointed out, ‘People of the same trade seldom meet together, even for
merriment and diversion, but the conversation ends in a conspiracy against the public, or in
some contrivance to raise prices’ (1999, Book I, p. x.2).
H. O. Rocha and S. Ghoshal614
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[13] Our focus is on the intellectual roots of the self-interest conception; due to space limitations,
this section is deliberately short. For detailed analysis of the intellectual roots of general
assumptions in economics, see Hausman and McPherson (1993), Hausman (1994), and Blaug
(1992, 1997). For a discussion on reasons for the dominance of economic ideology, see
Dumont (1977).
[14] Rousseau shares the idea of the autonomous and free individual as the only important reality,
but contrary to Hobbes, he assumes that human beings are naturally good. Through a social
contract individuals obey to themselves when they obey the sovereign (Messner, 1976).
[15] Note that in the case of unselfishness, the personal interests that are negatively affected are
welfare in the case of sentiment-driven altruism (cell 3), and welfare and sentiments in the case
of duty-driven altruism (cell 6). Sentiments in the former case and duty in the latter case are the
interests that drive human behaviour, and therefore they are not negatively affected.
[16] These theoretical arguments have been further developed by many researchers (see, for
example, the works of Sen (1990a), Elster (1986), Frank (1987), and Etzioni (1988)). For an
extensive list of articles criticizing the internal consistency assumption, see Sen (1990a).
[17] See especially Aristotle (1984b, Book IX, 4, 1166a–b; 8, 1168–9) and Aquinas (1963, Book I, 60,
5; I–II, 27, 3; 28, 3; II–II, 25, 4).
[18] Nygren proposes Agape as a specific additional motivation, which would be placed in the cell
that is at the intersection of Excellence and Only Others’ interests. We have not included this
motivation in our framework given that the arguments for its inclusion are theological, which go
beyond the scope of the paper. For a textual exposition of Nygren standpoint and a critique of
it, see Pieper (1986).
[19] In effect, based on the need for relative simplicity in formal modelling, Mansbridge argues that
‘we can accommodate motives other than self-interest in three ways: by extending the range of
single motives we model, by modelling the relations between two or more motives in new ways,
and most importantly, by trying out models based on different single motives in different contexts’
(Mansbridge, 1990b, p. 254; emphasis added).
[20] See Winship and Rosen (1988), Martinelli and Smelser (1990), and Hausman (1994) for a
[21] Viktor Frankl is the founder of the third Viennese School of Psychotherapy (after Freud’s
psychoanalysis and Adler’s individual psychology). Especially revealing is his contrasting of
experiences in the living laboratory of concentration camps with the theoretical position of
Freud regarding individual differences. ‘. . . Freud once asserted, “Let one attempt to expose a
number of the most diverse people uniformly to hunger. With the increase of the imperative
urge of hunger all individual differences will blur, and in their stead will appear the uniform
expression of the one unstilled urge”. Thank heaven,...Freud was spared knowing the con-
centration camps from the inside. His subjects lay on a couch designed in the plush style of
Victorian culture, not in the filth of Auschwitz. There, the “individual differences” did not “blur”
but, on the contrary, people became more different; people unmasked themselves, both the
swine and the saints’ (Frankl, 1984, p. 178).
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... As proposed by Rocha and Ghoshal (2006), motivations for humans' behaviors are derived from both objective and subjective dimensions. First, the objective dimension refers to what is considered good for themselves in terms of choice on pleasure and calculative reasons (selfinterest). ...
... More importantly, by employing the self-determination theory (Deci andRyan, 1985, 2000), we have argued for and found the moderating effects of extrinsic motivation and prosocial motivation on the relationship between intrinsic motivations and sustained PECB. This finding thus further supports the self-interest-unselfishness continuum of motivations (Rocha and Ghoshal, 2006). Besides being motivated by their personal interests in terms of both internal satisfaction and external economic rewards offered, individuals are also interested in benefits for others or for the environment. ...
Purpose This paper employed the self-determination theory (SDT) to examine the synergistic impacts of intrinsic, extrinsic and prosocial motivations in promoting sustained pro-environmental consumption behaviors (PECB). To provide evidence for the study’s theoretical framework, the authors focus on the behavior of reducing single-use plastics. Design/methodology/approach A mall-intercept survey for consumption of single-use plastic products in three big cities of Vietnam (Hanoi, Da Nang and Ho Chi Minh city) was conducted to test the theoretical framework. In total, 468 consumers completed the questionnaires. Data were analyzed with SPSS and AMOS. Findings Intrinsic and prosocial motivations are found to be significant predictors of sustained PECB. More importantly, beyond the direct effects of intrinsic and prosocial motivations, the authors also found positive interaction effects between intrinsic and extrinsic motivation and between intrinsic and prosocial motivation on encouraging sustained PECB. Originality/value This research offers a new insight for encouraging sustained PECB. Different from the extant perspectives which usually deal with initiating PECB, the authors emphasize sustaining the behavior. Moreover, this research examines the interaction effects between intrinsic and extrinsic motivations and between intrinsic and prosocial motivations in sustaining PECB.
... Die Klärung der Bedeutung von Ideen im Prozess der institutionellen Entwicklung erfordert eine Auseinandersetzung mit den Grundlagen kollektiven Handelns, die elementare Fragen nach motivationalen, handlungstheoretischen und kognitiven Mechanismen im Verhältnis zwischen Individuum und Kollektiv aufwirft. Gary Orren (1990) hält ein solches Vorhaben deshalb für eine kaum zu bewältigende Herausforderung: "Understanding shared ideas and values is an enormous challenge. It amounts to unlocking the mysteries of human nature and human motivation" (S. 29). ...
... When the government subsidies increase high enough, it will drive the managers of the new energy enterprises to exploit the information asymmetry to squeeze the enterprise profits for their own welfare maximization, namely, management self-interest (MIS). The MIS may distort the consistent goal and amplify the departure of the objective functions and interest demands between the managers and the enterprises (Rocha and Ghoshal 2006). When the government subsidies are high enough to create great temptation for the managers, the MIS appears and impairs the enterprise efficiency. ...
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During 2013–2017, the new energy industry in China experienced prosperous growth with the financing support of the government. To evaluate the real performance of this industry and the government subsidy effect during this period, this paper measures both the original and adjusted industry efficiencies and investigates the non-linear impact of the government subsidy. Applying a four-stage data envelopment analysis (DEA) method to a sample of listed companies during 2013–2017, we find that: (1) China’s new energy industry obtains relatively a high efficiency while showing a noticeable decline after a rising trend; (2) the industry efficiency presents a downward adjustment after eliminating the environmental factors; (3) a single threshold of government subsidy is identified, indicating a shackle after a short-term positive impact; (4) the positive mediating effect of cash flow and R&D investments are identified; and whereas the management self-interest presents a negative mediating effect, (5) the regional and ownership endogeneity of the government subsidy effect are recognized.
... Defining performance in terms of diverse dimensions all of which are equally valuable and necessary (e.g., cost-efficiency, quality of service, and wellbeing) implies that the means-end logic may be unhelpful as the ends cannot be treated as if they were exchangeable. In that case, a part-whole logic focused on understanding interconnections to be able to balance or harmonize the attention and actions needed for delivering the different dimensions appear more appropriate (Rocha and Ghoshal 2006). ...
Performance management systems can be a source of stress and anxiety, and yet they can also provide clarity and focus, which are both factors that have positive effects on wellbeing at work. Employee wellbeing is essential as it has been shown to enhance organizational performance and employees’ quality of life. These paradoxical results represent a challenge for organizations when designing performance management systems. In this chapter, we examine current research on the relationship between performance management practices and employee wellbeing and formulate a conceptual framework elucidating the conditions under which different wellbeing results are likely to occur. The purpose of our work is to help organizations design performance management mechanisms that account for and foster employees’ wellbeing as well as raise awareness regarding the situations that can deteriorate it. We conclude by highlighting the importance of managerial philosophies and organizational goals definitions, recommending the adoption of an enabling or a hybrid set of performance management mechanisms to better accommodate the complex nature of wellbeing and other organizational goals.
... In fact, the self-concept has been deeply embedded in social science research (Ghoshal & Moran, 1996;Rocha & Ghoshal, 2006). To illustrate, 400 years ago, the French philosopher René Descartes undertook a thought experiment on the world and self. ...
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The win-win paradigm of corporate sustainability suggests that firms can transform sustainability issues into strategic opportunities, thereby creating shared values at the intersection of business and society. This study explores an alternate approach by delving into Buddhism and its meditative tradition. To deeply immerse myself into the monastic life of Buddhist monks and their meditation practice, I conducted a 5-year ethnographic fieldwork in 82 Buddhist temples across Asia. In the fieldwork process, I was even ordained as a Buddhist monk to internalize the practice. This level of immersion allowed me to investigate the nature of Buddhist meditative mindfulness and its role in reframing corporate sustainability. Drawing upon the findings and relevant literature , I suggest a Buddhist approach to corporate sustainability that offers a unique worldview on the interrelationships between economy, society, and environment. In conclusion, I compare the Buddhist approach to the win-win paradigm.
... -François de La Rochefoucauld Self-love is an important aspect of human life with personal and moral significance. It enhances health and longevity, prompting individuals to strive for their own good and perfection (Rocha and Ghoshal, 2006;Gebauer et al., 2012); moreover, it enables individuals to conform to social norms and is even regarded as an important force in the fight against terrorism (Kruglanski et al., 2013). In psychology, researchers have viewed this important topic in different ways. ...
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Although self-love is an important topic, it has not been viewed as appropriate for psychological research, especially in China. We conducted two studies to understand how Chinese people view self-love. In the first study, we surveyed 109 Chinese people about the dimensions of self-love using an open-ended questionnaire. In the second study, 18 participants were selected by means of intensity sampling and interviewed about the connotations and structure of Chinese self-love. The two studies revealed three important aspects of the Chinese understanding of self-love: (1) self-love has four dimensions: self, family, others, and society; (2) it comprises five components: self-cherishing, self-acceptance, self-restraint, self-responsibility, and self-persistence; and (3) the five components of self-love are linked together to form a stable personality structure. The reliability and validity of the two studies were strong. Finally, the results showed that Chinese self-love is dominated by Confucian culture, which provides guiding principles for how to be human. At the same time, it shows that there are differences in the understanding of self-love between Chinese and Western cultures, which provides an empirical basis for further research based on cross-cultural psychology and self-love psychology.
... Egoism clearly prizes self-evaluation and self-interest (Beggan et al. 1988). Associated with individualism, egoism and individualism build on self-preservation (Rocha and Ghoshal 2006). Based on its culture, China has shaped its social structure hierarchically to maintain power distance (Leung and Au 2010;K. ...
This book addresses the sustainability of happiness and well-being in Chinese societies. It starts by introducing the various conceptions of well-being, particularly in the Chinese sociocultural context. The book then proceeds with the examination of the sustainability of well-being by scrutinizing the effects of sociocultural, contextual, and personal factors on well-being. The contextual factors are the aggregates or averages of personal factors at the contextual levels of the regions and colleges in Mainland China, its special administrative region, and Taiwan. These factors cover personality traits, strengths, orientations, beliefs, values, and idolizing. By bringing together empirical studies and theoretical perspectives applied to Chinese societies, this book offers researchers in social science and humanities a valuable reference work on happiness and well-being in Chinese societies.
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Purpose This study explores how status, demographic and positional, moderates the negative effect of deep-level dissimilarity on leader–member exchange (LMX) quality. Design/methodology/approach Data from three samples were analyzed using hierarchical linear regression and linear mixed-effects methods. Findings Results suggest that the negative effect of deep-level dissimilarity (perceived work-related attitude and perspective differences) on LMX quality is stronger when the LMX partner has low demographic status (e.g. the LMX partner is an African-American woman). This moderating effect was not significant when deep-level dissimilarity was extended to include differences in personality, interests and values. Results were mixed on whether low positional status (i.e. when the LMX partner is a member rather than a leader) strengthens the negative effect of deep-level dissimilarity on LMX quality. Practical implications This study may help leaders, organizational members and diversity managers better manage attitude and perspective dissimilarity in leader–member dyads. Originality/value This study expands research exploring interactive effects of dissimilarity and status on work-related outcomes. It is novel in that it explores status not in relative terms but at the societal level. It is also the first study to analyze the moderating effects of two types of status: demographic and positional.
Although unethical pro-organizational behavior (UPB) in the workplace has been widely researched, studies have focused on its antecedents rather than its outcomes. To fill this gap in the literature, we integrated moral licensing theory and the literature on leader gratitude expression to explore the ethical consequences of UPB. Using a sample of multi-source time-lagged surveys of 206 leader–employee dyads, we found that the pro-organizational nature of UPB fostered employees’ psychological entitlement and thereby increased their likelihood of engaging in subsequent unethical behavior. Leaders’ expressions of gratitude for employee UPB strengthened the relationship between UPB and psychological entitlement, ultimately reinforcing employees’ unethical behavior. The theoretical and practical implications of the findings are discussed.
Purpose This study examines users' information selection strategy on knowledge-sharing platforms from the individual level, peer level and societal level. Though previous literature has explained these three levels separately, few have simultaneously examined their impacts and identified the dominant one according to their effect strengths. The study aims to fill this research gap of the competitions among different levels of information selection mechanisms. Besides, this study also proposes a three-step decision-tree approach to depict the consumption process, including the decision of first-time exposure, the decision of continuous consumption and the decision of feedback behavior participation. Design/methodology/approach This study analyzed a clickstream dataset of a Chinese information technology blogging site, Employing a sequential logit model, it examined the impacts of self-level interest similarity, peer-level interest similarity and global popularity simultaneously on each turning point in the consumption process. Findings The authors’ findings indicate that self-level interest similarity is the most dominant factor influencing users to browse a knowledge-sharing blog, followed by peer-level interest similarity and then global popularity. All three mechanisms have consistent influences on decision-making in continuous information consumption. Surprisingly, the authors find self-level interest similarity negatively influences users to give feedback on knowledge-sharing blogs. Originality/value This paper fulfills the research gap of the dominance among three-levels of selection mechanisms. This study's findings not only could contribute to information consumption studies by providing theoretical insights on audience behavior patterns, but also help the industry advance its recommendation algorithm design and improve users' experience satisfaction. Peer review – The peer review history for this article is available at:
Cambridge Core - Economic Thought, Philosophy and Methodology - Economic Theory in Retrospect - by Mark Blaug
As the American economy surged in the 1990s, economic sociology made great strides as well. Economists and sociologists worked across disciplinary boundaries to study the booming market as both a product and a producer of culture, tracing the correlations they saw between economic and social phenomena. In the process, they debated the methodological issues that arose from their interdisciplinary perspectives. The New Economic Sociology provides an overview of these debates and assesses the state of the burgeoning discipline. The contributors summarize economic sociology's accomplishments to date, identifying key theoretical problems and opportunities, and formulating strategies for future research in the field. The book opens with an introduction to the main debates and conceptual approaches in economic sociology. Contributor Neil Fligstein suggests that the current resurgence of interest in economic sociology is due to the way it brings together many sociological subdisciplines including the study of markets, households, labor markets, stratification, networks, and culture. Other contributors examine the role of economic phenomena from a network perspective. Ron Burt, for example, demonstrates how social relationships affect competitive dynamics in the marketplace. A third set of chapters addresses the role of gender in economic sociology. In her chapter, Barbara Reskin rethinks conventional notions about discrimination and points out that the law only covers one type of discrimination, while in recent years social scientists have uncovered other forms of hidden discrimination, which must be addressed as well. The New Economic Sociology also addresses the problem of economic development and change from a sociological perspective. Alejandro Portes and Margarita Mooney elaborate on one of the key emerging concepts in economic sociology, arguing that social capital-as an attribute of communities and regions-can contribute to economic and social well-being by fostering collaboration and entrepreneurship. The contributors concur that economic action must be interpreted through the cultural understandings that lend it stability and meaning. By rendering these often complex debates accessible, The New Economic Sociology makes a significant contribution to this still rapidly developing field, and provides a useful guide for future avenues of research.