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Cydcor Reviews: In Good Company: How Social Capital Makes Organizations Work

Here is Cydcor’s review of In Good Company by Don Cohen and Laurence Prusak.

About In Good CompanyIn Good Company criticizes the agency theory that disregards social capital by emphasizing the free agency of employees who act in the interests of the organization only if it is in their financial interests.

The book is short and light reading, using largely anecdotal evidence to support its arguments. For managers considering telecommuting, hoteling, the reduction of business travel, or other efforts to gain efficiency should read this book. The authors conclude by stating that whatever the form of future organizations, they will require the nurture of “trust, community, connection, conversation and loyalty” to work effectively.

Cydcor recommends this book to future leaders because: In Good Company helps organizational leaders understand the social capital phenomenon. It is an excellent work for those who care about the quality of organizational life and the ability to do great things at work with your team. The authors do a great job of showing how a number of important companies, including HP and 3M, take the matter of social capital very seriously and make investments in building and nurturing it.

We suggest this book for thinkers who favor a more techno-centric approach. In Good Company digs into the profound social aspects of work, knowledge sharing, and learning, and offers a heavy dose of reality in its discussion of the “the challenge of virtuality.”

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Our favorite part: “Social capital consists of the stock of active connections among people, the trust, mutual understanding, and shared values and behaviors that bind the members of human networks and communities and make cooperative action possible.”

The authors argue for hiring and encouraging people who fit the values and culture of the organization, and creating an environment in which social capital will build. To do this, companies should actively take steps that build trust, networks, and communication through making appropriate spaces and time available, and help people learn through effective storytelling.

The benefits of this approach will result in better knowledge sharing, lower transaction costs, lower turnover of key employees, better coherence of action due to organizational stability, and more shared understanding.