THE RELEVANCE OF CHESTER BARNARD
FOR TODAY’S MANAGER
Jay P. Chandran, Ph.D.
Assistant Professor
Richard DeVos Graduate School of Management
Northwood University
Email: chandran@northwood.edu
THE RELEVANCE OF CHESTER BARNARD FOR
TODAY’S MANAGER
It has been sixty years since the publication of Chester Barnard’s Functions of the
Executive. In many ways, Barnard’s book laid the foundation for Management and
Organization Theory as it exists today (Andrews, 1968; Wolf, 1974). His influence on
theoreticians and practitioners has been immense. Kenneth Andrews, in his introduction
to the 30th Anniversary edition of the book, states: “The Functions of the Executive
remains today, as it has been since its publication, the most thought-provoking book on
organization and management ever written by a practicing executive.” (Andrews 1968,
p. xxi). Barnard was not an academic; his theories were put together painstakingly from
decades of organizational experience. In this aspect, he is rather unique among
management scholars of the twentieth century. However, during the last several years,
Barnard’s stature in the realm of management theory and practice has gradually waned.
Although his book is required reading in the occasional Doctoral curriculum, it has more
or less disappeared from the mainstream of management literature. He is infrequently
cited, and credited with originating the “Acceptance Theory of Authority”, but not much
else.
Barnard partly owes this undeserved obscurity to his labored and lugubrious style:
He is extremely difficult to read. Wolf (1974, p. vii) writes:
“Over the years I became aware that Barnard’s book proved to be
obtuse for many professors as well as their students. Often in informal
discussions my colleagues would confess that they found Barnard
needlessly abstract, horribly redundant, and extremely hard to follow.”
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While this may discourage the casual reader, it should not stand in the way of the
serious student of Management, especially if there is value to be gleaned from such an
endeavor. It is perhaps appropriate, then, to examine, as we prepare for the end of the
millenium, whether the principles and theories developed by Barnard continue to be
relevant for today’s manager.
The purpose of this article, then, is to attempt to kindle the interest of the reader
by presenting certain ideas that are central to Barnard’s treatise, and establishing their
relevance for today’s managers by linking them to more recent views on management
and leadership. It will also attempt to convince the reader that these ideas, while they
have led to the origin and development of certain schools of thought in the field of
management, deserve further study and exploration.
THE COOPERATIVE SYSTEM: EFFICIENCY AND EFFECTIVENESS
Barnard is widely credited with having originated the “Systems” approach to the
study of organizations. He recognized that in order for the organization to survive in the
external environment and to succeed in the long run, it was necessary to sustain
cooperation from employees by satisfying the condition of efficiency. As Barnard
defined it, efficiency was the satisfaction of individual motives. He stated that the
cooperative system must create a “surplus of satisfaction” to be efficient (Functions, p.
58). While effectiveness, the ultimate objective of cooperative action, is important, it is
equally important to satisfy individual motives as well. In Barnard’s own words:
“Although effectiveness of cooperative effort relates to
accomplishment of an objective of the system and is determined with a
view to the system’s requirements, efficiency relates to the satisfaction of
individual motives.” (Functions, p. 56)
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And:
“The survival of cooperation, therefore, depends upon two
interrelated and interdependent classes of processes: (a) those which relate
to the system of cooperation as a whole in relation to the environment; and
(b) those which relate to the creation or distribution of satisfaction among
individuals. The instability and failures of cooperation arise from defects
in each of these classes of processes separately, and from defects in their
combination. The functions of the executive are those of securing the
effective adaptation of these processes.” (Functions, p. 60, 61)
This is a very simple and pragmatic synthesis of Frederick Taylor’s Scientific
Management school and the Human Relations approach of Elton Mayo and others. This
becomes all the more evident when Barnard talks about the kinds of management action
that lead to these outcomes of efficiency and effectiveness.
“These two appraisals and the processes related to them suggest
that behavior with reference to other persons either takes the form of
regarding such persons as objects to be manipulated by changing the
factors affecting them, or as subjects to be satisfied.” (Functions, p. 40;
italics in original)
The link is not clearly established by Barnard, as the discontinuity in chronology
of the above quotes indicates. This is a common failing in the book, as has already been
pointed out. It takes several readings before one can grasp Barnard’s argument, and then
it gives us a whole new perspective on management. For example, the behaviors
described above (we would, of course, have to ignore the negative connotations
associated with the word “manipulated” as these are mostly post-Skinnerian and nonexistent when Barnard wrote the book) form the basis for many of the subsequent
theories on leadership and management styles. The Ohio State models, the Blake &
McCanse (1991) managerial grid, and the classification of leaders as either task-oriented
or relationship-oriented (Hersey & Blanchard, 1988), fit the pattern established by
Barnard. And, more importantly, it reveals the flaws or shortcomings in these models. A
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9-9 style on the managerial grid would generate efficiency but no effectiveness—he or
she would treat employees as subjects to be satisfied. Also, a situational leader who
adjusts his or her style according to organizational factors and worker characteristics is
likely to accomplish either one outcome or the other. Barnard makes a case for a
balanced management or leadership style as few others do. Subsequent debates between
scholars on the subject of which leadership model is better, the grid model or the
situational model, may have benefited from examining whether Barnard’s conditions of
efficiency and effectiveness are satisfied by either one. (See Group and Organization
Studies 7, #2, 1982, p. 207-215.)
As shown in Figure 1, Barnard’s ideas can be linked to the conceptualization of
managers as either driven by the need for achievement (Personal Power managers), the
need for affiliation or social acceptance (Affiliative managers), or the need for
organizational power or influence (Institutional managers) (McClelland and Burnham,
1995). As the diagram indicates, personal power managers are likely to treat
subordinates as objects to be manipulated, affiliative managers are likely to treat them as
subjects to be satisfied, and institutional managers are likely to attain the desired balance.
PURPOSE: THE UNIFYING AND COORDINATING PRINCIPLE
Perhaps the single most significant contribution of Barnard’s book is the
articulation of the concept of organization purpose. According to Andrews (1968):
“The strength of Barnard’s concept of cooperative systems and of
his explanation of the essential conditions for rarely attained effectiveness
and efficiency seems to me to lie in the idea that purpose is central. He
believes the definition of organization purpose to be peculiarly an
executive function, made necessary to give meaning to the rest of the
environment, to serve as unifying principle.” (p. xi)
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The concept of purpose has not received much attention at the hands of scholars.
A search of management literature revealed hardly any references to it. The only article
with the word in its title that I could discover was by Bartlett & Ghoshal (1994). They
make a strong case for the importance of the concept, although they do not credit Barnard
with originating it:
“Purpose is the embodiment of an organization’s recognition that
its relationships with its diverse stakeholders are interdependent. In short,
purpose is the statement of a company’s moral response to its broadly
defined responsibilities, not an amoral plan for exploiting commercial
opportunity (p.88).
This is in line with Barnard’s moral imperative for executives, although Bartlett
and Ghoshal treat the subject more impersonally—they see purpose as an organizational
rather than an individual responsibility. Barnard asserts that the most important single
contribution required of the executive is loyalty, or domination by the “organization
personality” (Functions, p. 220). This assertion is based on Barnard’s concept of
executive responsibility, which transcends hierarchy and embraces managers from the
lowest echelons within the organization all the way to the Chief Executive. Only by
embodying such loyalty can the executives bring about in their subordinates the condition
of “self-abnegation” (Functions, p. 84), or the subordination of one’s personal outcomes
to those of the organization. This condition brings about in individuals the “willingness to
serve” which in turn results in cooperation. These interrelationships, when sustained over
long periods of time, can be considered a manifestation of purpose, or as proof of its
existence. They also indicate that the conditions of efficiency and effectiveness have
been met. As shown in Figure 1, this can only be accomplished by a manager who takes
a balanced approach, and treats his or her subordinates as subjects to be satisfied as well
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as objects to be manipulated. McClelland & Burnham (1995) would define such a
manager as an Institutional manager.
According to Andrews (1968), “Developing researchable and teachable concepts
of purpose is indeed currently one of the principal concerns of business education” (p.
xix). Institutional managers cannot be trained and developed without instilling in them a
clear understanding of purpose, and how to inculcate it within members of the
organization. In this endeavor, Barnard’s book is not only invaluable, but also essential.
OTHER CONCEPTS AND IDEAS
The model presented in Figure 1 deals with only what the author considers to be
some of the most important and relevant concepts in Barnard’s book. There are
numerous other ideas that are worth pursuing. Many of these have further evolved
through subsequent research and development, but Barnard’s treatment of them
nonetheless adopts a very unique perspective that is difficult to duplicate.
Barnard speaks of the limited value of material incentives, and the necessity for
the adoption of certain methods of persuasion. He also discusses several kinds of nonmaterial incentives. His ideas on the subject are quite intriguing, and insightful. His
treatment of the managerial decision making process is equally intriguing. He bifurcates
decisions into the personal and the organizational, and although he struggles to reconcile
the conflict associated with the process, presents some interesting insights as to the
relative significance of each type of decision at different levels in the organizational
hierarchy. Then, of course, there is Barnard’s well-known treatment of the acceptance
theory of authority. It is interesting to see how Barnard’s conceptualization differs from
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those of classical theorists such as Fayol, and how his ideas on establishing channels of
communication within a formal structure compare with Max Weber’s ideas on
bureaucracy. Finally, Barnard’s ideas on the importance of the informal organization
within the confines of a formal structure, and the role it plays in the maintenance and
survival of the formal organization, hold valuable lessons for the manager.
RELEVANCE OF THE MODEL:
The model presented above only deals with a very small part of what Barnard
postulates in his book. Nonetheless, it establishes the need for a deeper examination of
his ideas, as otherwise modern researchers may be spending their time re-inventing the
wheel. For academics, this model raises certain important issues. According to Barnard,
“The inculcation of belief in the real existence of a common purpose is an essential
executive function” (Functions, p. 87). Very few graduate business programs, to my
knowledge, focus on training managers to inculcate this belief. Neither is there an
emphasis on identifying the ethical and moral qualities that an executive must possess. It
is true that Barnard sets some very high standards for the executive:
“Following loyalty, responsibility, and capacity to be dominated by
the organization personality, come the more specific personal abilities.
They are roughly divided into two classes: relatively general abilities,
involving general alertness, comprehensiveness of interest, flexibility,
faculty of adjustment, poise, courage, etc; and specialized abilities based
on particular aptitudes and specialized techniques…. We deliberately and
more and more turn out specialists; but we do not develop general
executives well by specific efforts, and we know very little about how to
do it.”
What Barnard said sixty years ago is, in my opinion, true to this day. And this
situation may owe itself, in large part, to the absence of researchable and teachable
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concepts of purpose, as pointed out by Andrews. Reading The Functions of the
Executives would, in the opinion of the author, enable students to develop into “general
managers” and provide them with greater insights on what it takes to be effective in a
more complete sense.
CONCLUSION
This article has not attempted to summarize Barnard’s works, or explain his ideas,
theories and philosophy. Such a task has already been undertaken and creditably
accomplished by William Wolf through his book “The Basic Barnard: An Introduction to
Chester I. Barnard and His Theories of Organization and Management (1974). I
recommend the book to those who wish to acquaint themselves with Barnard’s life and
accomplishments, as well as his philosophy.
It is acknowledged by all those who read Barnard’s “Functions” that it is
extremely hard to wade through the first time. Few dispute, however, that subsequent
readings are much easier, and that the book begins to make a great deal of sense. I can
say this somewhat authoritatively, since we have been using the book as a Text for the
Executive MBA program at this University for the past five years. One of our graduates
who went on to pursue her Doctorate at a mid-western university had an interesting
experience. In one of her classes, the professor mentioned Barnard and his book, and
added that he did not expect any of the students to read it, since it was extremely hard.
When our graduate ventured that she had, in fact, read the book and found it to be
valuable, the professor was very surprised.
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For many of our graduates, Barnard has proved to be very valuable from a
practical standpoint. For those programs that wish to train general managers rather than
“specialists”, the book can be a great asset. Discussions with students in our Executive
MBA program have frequently centered round concepts such as loyalty, and their
relevance for today’s organizations. In today’s world of mergers and acquisitions,
corporate “rightsizing”, and rapidly evolving technologies, some of the values and
principles espoused by Barnard may seem archaic and even anachronistic. Surprisingly,
however, these values and principles find an echo in the hearts of many a student, and rekindle their faith in the nobility of the human spirit and the basic goodness of human
nature.
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REFERENCES
Andrews, Kenneth R., 1968: Introduction to the thirtieth anniversary edition of
The Functions of the Executive. Cambridge, MA: Harvard University Press.
Barnard, Chester I., 1968: The Functions of the Executive. Cambridge, MA: Harvard
University Press.
Bartlett, Christopher A. & Sumantra Ghoshal, 1994: Changing the Role of Top
Management: Beyond Strategy to Purpose. Harvard Business Review, Nov-Dec
1994, 79-88.
Blake, Robert R. & Anne Adams McCanse, 1991: Leadership Dilemmas—Grid
Solutions: Houston, TX: Gulf Publishing Company.
Hersey, Paul & Kenneth Blanchard, 1988: Management of Organizational Behavior:
Utilizing Human Resources, 5th Ed. Englewood Cliffs, NJ: Prentice Hall.
McClelland, David C. & David H. Burnham, 1995: Power Is the Great Motivator.
Harvard Business Review, Jan-Feb 1995, 2-11
Wolf, William B., 1974: The Basic Barnard: An Introduction to Chester I. Barnard and
his Theories of Organization and Management. New York, NY: ILR Press,
Cornell University.
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FIGURE 1
AFFILIATIVE
MANAGER
INSTITUTIONAL
MANAGER
OBJECTS
TO BE
MANIPULATED
SUBJECTS
TO BE
SATISFIED
Efficiency
PERSONAL
POWER
MANAGER
PURPOSE
COOPERATIVE
BEHAVIOR
LONG-TERM SURVIVAL
AND
SUCCESS OF THE
ORGANIZATION
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Effectiveness