Book excerpt: This book raises a fundamental question, What are companies & what are they for? Whereas the standard answer is that companies are organizations that carry out economic processes to produce goods or services, he argues that such narrow thinking leads to management practices & priorities that are detrimental to everyone--from shareholders to employees to stakeholders--often leading to the demise of firms. Today's scarce resource is knowledge, which is created by a company's human assets. As a result, management's top priority must be the optimization of human resources & its knowledge-creation ability to ensure the longevity of the firm. The author explores the theme of organizational learning & identifies four key elements to organizational survival & renewal: sensitivity to the environment (a company's ability to learn & adapt), cohesion & identity (a company's innate ability to create a community & a persona), tolerance (the ability to build constructive relationships with other entities), & conservative financing (the ability of a firm to govern its growth & evolution). Together, these four factors are essential to growth & viability. Winner, The Edwin G. Booz Prize for the Most Innovative, Insightful Management Book of 1997, The Financial Times/Booz-Allen & Hamilton Global Business Book Awards. A Business Week Best Business Book of the Year. Named as one of the Best Business Books of the Year by the Financial Times. "With a light touch & an interesting variety of examples, de Geus employs biological metaphors in order to analyze corporate management [&] provides an interesting challenge to basic assumptions about the way companies work."--Business Week "The Living Company earns a spot as one of this year's best business books."--Quality Digest "This profound & uplifting book is for the leader in all of us."--Dr. James F. Moore, Author of The Death of Competition "In contrast to the common gaggle of management books, few of which can truthfully be called thought-provoking, The Living Company is one that deserves a read."--Training "Arie de Geus has written an excellent book that gives senior executives & board members provocative insights into success."--Directors & Boards "A seminal book that will initiate far-ranging discussions regarding the nature & purpose of the company."--National Productivity Review