Abstract: Based on analyzing the unfitness of the conventional hierarchical organization in the knowledge economy, this paper gives a new management model cored on human’s knowledge and innovation: Knowledge-based Teams Organization, and further, interprets four basic principles that assure the attainment of both task outcomes and psycho-knowledgeable outcomes: fair process, common goals, rules and procedures and physical proximity in teams.

Key words: knowledge economy, teams, fair process, knowledge-based teams organization