A diverse nanostructure, key to property alteration, has been observed by the insertion of two dimensional nanoparticles through in-situ polymerization. Self-assembly at the molecular level has been revealed starting from nanoscale to observable microscale in thermoplastic polyurethane using alicyclic diisocyanate and how the self-assembly behaviour changes in presence of nanoparticle. Varying dispersion of nanoparticles observed using two different fillers has been explained from the interactions point of view through spectroscopic techniques. Thermal stability and unique crystallization behaviour have been reported in presence of nanoparticles. Better dispersion of nanofillers within the matrix offers greater number of nucleating site which enhances the ordering of the polymer chains, also supported by the semi-empirical calculation. The effect of modulated nanostructure and self-assembly augmented the shape memory behaviour in polyurethanes having alicyclic diisocyanate. Enhanced shape recovery has been observed in presence of organically modified clay as opposed to layered double hydroxide. The reason for this improved shape memory behaviour in nanohybrid is explained from the exclusive crystallization of the soft segment domain leading to a proposed model for shape recovery. Finally, the recovery of different shapes (coil, spinal and straight strip) at physiological temperature (37 degrees C) has been demonstrated, added advantage of these materials to be used in the biomedical applications. (C) 2016 Elsevier Ltd. All rights reserved.