Saturday, August 10, 2013

Chester Barnard - Functions Of The Executive

Chester Barnard is one of the most outstanding theorists in organizational theory. He pronounced most of the principles based on his personal experience. He is considered to be the father of "social system" school. He introduced social concepts into the analysis of managerial affairs. Starting from the individual level Barnard moved on to the co-operative effort of group of individuals and then to the executive functions. Barnard has highlighted the broader issues of administration such as formal and informal organizations, functions of the executive, relationship of the organization to the external environment and the equilibrium among the organizational units. Chester Barnard

Chester Barnard's book "The Functions of the Executive" remains a classic in the field of organization theory even today. His views have inspired a number of outstanding thinkers such as Simon. We will study the views of Barnard under the following heads:


Organization as a Co-operative System

Barnard regards organization as a system that is part of a broader system called society. According to him the outside environmental forces shape as well as limit the organizational functions and scope. Organization was viewed as a "social system" by him. Except the state and the church all the organizations were partial systems according to him as they were dependent on some larger systems.

Barnard rejected the traditional definitions of organization as they emphasized membership. He gave a new definition of organization "as a system of consciously coordinated activities of two or more persons". The organization comes into existence when:

  • There are persons who are able to communicate with each other


  • These people are willing to contribute action



  • These people stand for accomplishing some common purpose



The above conditions of existence of organization show that an organization is a co- operative system. According to Barnard this co-operative action comes into picture when the individual realizes that only alone he cannot achieve certain purposes. Due to this fact the existence of organization depends on the co-operation of other individuals. According to him, flexibility in the organization to change according to the external situations is the basic concern of organizations. Further Barnard dwells at length on the basic question what induces an individual to agree for co-operative action. "Net satisfaction" which an individual obtains from the organization is the basic motivating force/incentive for coming into co-operative action. The incentives to agree for co- operative action could be of two types: material and non-material. Conditions of promotion and chances of promotion etc. are the material incentives and pride of serving an organization & achieving some high position etc. are the non-material incentives. He advocates that an organization should provide both the types of incentives so that large number of people could come into co-operative action and advantages are more than the disadvantages.

Concept of Authority

Barnard terms authority as "the character of communication (order) in a formal organization by virtue of which it is accepted" by a member of the organization. He does not agree with traditional concept of authority and proposes "acceptance" as the basis of authority. A member of the organization accepts a communication as authoritative only when four of the following conditions are simultaneously satisfied:

  • When the communication is understood

  • It is in consistence with the organizational purpose

  • It is compatible with the personal interests of the member

  • The member of organization is mentally and physically able to comply with the order







Before Barnard gave his views on authority, it was believed that authority rests at the top levels in an organization but he believed that it rested on the consent or acceptance of the sub-ordinates. This according to Barnard is "fiction of authority".

Zone of Indifference

Zone of indifference is a zone of activity the orders falling within which will be accepted by the individuals unmindful of the nature of the authority. Superior is free to act in this zone of indifference. Whether this zone will be wider or narrow will depend on whether the inducements or incentives to follow the orders are more than the sacrifices made.

Hence inducements can widen this zone. As the acceptability of the orders of the executive depends on whether they fall within this zone, the executive in organization should be conscious of this zone. Only those orders which fall within this zone should be issued by the executive.

Concept of Informal Organizations

The members of an organization keep on interacting with each other due to some personal desires and not necessarily on the basis of organizational purpose, Such interactions can get systematized and give rise to what are called informal organizations. Barnard defines informal organizations as "aggregate of personal contacts interactions". Such types of organizations are structure less and could exist without any collective purpose, They involve just the inter-personal relationships. Informal organizations facilitate the functioning of the formal organizations according to Barnard and general customs etc. are maintained by them. He believed that formal and Informal organizations existed together. According to him, it is not possible to study the organization just on the basis of organizational charts, rules and regulations. It is only possible by learning the "organizational ropes" that is to know the organization thoroughly it is quite important to know the informal organizations within the formal ones.

Functions of the Executive

All the work undertaken by the executives in an organization is not executive work according to Barnard e.g. a vice chancellor giving class room lectures cannot be called the executive work. According to him the functions of executive can be classified under three heads:

  • Maintenance of communication networks in the organization

  • Securing essential services from the individuals

  • The formulation of organizational purposes





The first function of maintaining the communication network consists of defining the organizational positions i.e. division of work, preparing organizational charts etc. and establishing a personnel system i. e. recruiting the right type of personnel with a proper incentive system given to them. The second function of securing services from the individuals also consists of two sub-functions - bringing people into co-operative relationship with each other and eliciting services from them. This can be done by proper motivation, training and education etc. according to Barnard, The third function of formulating organizational purposed should be performed in such a way that it should be clear as well as accepted by all the members of the organization.

Criticism of Chester Barnard's Theory

Chester Barnard has been criticized on the following grounds:

  • The presentation by Barnard has been considered quite abstract Quite general examples are given to make points.

  • Though "purpose" has been recognized as central to the co-operative group effort still the process of its formulation has not been described in detail.

  • The concept of authority according to Barnard seems to give an impression that it may be accepted or rejected by the sub-ordinates. In practice, it is sometimes required to maintain order in the organization at all costs.






Chester Barnard has made phenomenal contribution towards recognizing organization as a social system and using systems approach in analyzing it. He recognized "co-operation" as a basic necessity of organizations. He takes into account the physical-biological and social factors while analyzing the functioning of the organizations, further he mentions that securing co-operation of individuals towards attainment of organizational purpose and not the coercion is the chief function of the executive. It was Chester Barnard only who advocated the idea of management by consent and who proposed acceptance as the basis of authority. These concepts are of great relevance in the context of democratic spirit of modern world. Barnard rejects the concept of "economic man" and sees the organizational members as parts of a social system. The combination of intellect and experience in the writings of Barnard makes him quite relevant to the modern executives in the functioning of modern organizations.


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