Theories of Practice:
The Functions of the Chief
Executive Officer
MPA 8002
The Structure and Theory of Human
Organization
Richard M. Jacobs, OSA, Ph.D.
At a crisis in my youth,
my father taught me the wisdom of choice:
…to try and to fail is at least to learn
…to fail to try is to suffer the inestimable
loss of what might have been.
Chester I. Barnard (1938)
For the greater part of the 20th
century, the alleged objectivity
associated with the assumptions and
concepts of scientific management
have guided most inquiry into human
organizations.
Structural theories of practice, for
example, rationalize human
organizations and their functioning,
emphasizing the proper alignment of
people, process, and technology...
…suggesting that there exists “one
best way” to manage and lead all
human organizations.

concepts including...
division of labor
the general social setting within
which work is completed
functionalization
the particular work to be
completed as part of an organic
system of work
specialization
the emphasis upon individuals
and groups to contribute to the
organic system of work
For Chester Barnard, while structural
theories of practice offer the promise
of improving organizational
functioning, other factors are
absolutely essential to organizational
survival...
…factors including:
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the willingness to cooperate
the ability to communicate
the existence of and acceptance of
organizational purpose
For Barnard, organizational survival is not
dependent solely upon structure but more so upon
maintaining a dynamic equilibrium in a continuously
fluctuating environment of physical, biological, and
social materials, elements, and forces.
All of which calls for an individual who
possesses an abiding awareness of the
need to adjust the processes internal to
the organization continuously.
The structural concepts of
executive theory...
individual
 cooperative system
 organization
 complex formal organization
 formal organization
 informal organization
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individual:
…a single, unique, independent, isolate,
whole entity
…embodying innumerable forces and
materials past and present which are the
physical, biological, and social factors
…to which are superadded the limited power
of choice which results in purpose and for
which one bears personal responsibility

a “limitation”
…the function of the total situation or the
combination of physical, biological, or
social factors when viewed by individuals
from the standpoint of a purpose
An organization’s design as a whole can only be
changed by operating on one set of factors at a time
(the “strategic factor”) and dealing with the impact
this change will have on the other sets of factors.
…overcoming a limitation is a means to an
end, inducing within an individual the
necessity for cooperation with others
…or, making the decision that one’s
limitation cannot be overcome, the
individual decides to drop that end
Cooperation inculcates a shared “purpose”
for engaging in organized activity towards
an end.

cooperative system:
…an amalgam composed of the impersonal,
coordinated activities of human beings
…the concrete social process by which
social action is accomplished
…a change in the relationship of one part to
any or all of the others changes the
cooperative system

the social contribution of one person is the
primary factor in maintaining the system of
cooperation...
…this social contribution elicits physical
energy from other participants in the
cooperative system
…the physical energy, in turn, is then
converted into material at desired places.
For Barnard, then, it is not correct to
impute to any individual a definite
product.
Rather, the increase (or decrease) of
material product (the “value added”)
results from the combination or
coordination of efforts.
It is also not correct, in Barnard’s
thought, to impute to any individual a
particular contribution.
The only statement that one can make
about the significance of an
individual’s particular contribution is in
terms of its differential effect upon the
entire cooperative system.

the survival of an organization is dependent
upon its ability to create a surplus of
cooperation
…this reality illuminates the creative side of
managing and leading human organizations
…successful managers and leaders secure
the appropriate combination of the elements
of organization to produce utilities that
allow the organization to endure

organization:
…a system of consciously coordinated
individual human activities or forces
…the function of which is:
 to create
 to transform
 to exchange
…various personal and impersonal utilities

For Barnard, human beings not structures
are the constitutive element of organization:
1) individuals capable of communicating
with one another
2) each possessing a willingness to serve
3) each sharing a common purpose

However, it is not the individuals but rather
the services, acts, actions, or influences of
individuals that constitute organization...
…that is, the willingness of individuals to
contribute their efforts to the cooperative
system
…this is indispensable to an organization’s
effective and efficient functioning and
survival.

complex formal organization:
…a cooperative system composed of
physical, biological, and personal systems
…which prescribes, guarantees, and limits
the purpose and rights of subordinate
organizations, upon whom the
subordinate organizations are dependent

formal organization:
…the concrete social process by which
social action is accomplished
…the system of consciously coordinated
activities or forces of two or more persons

informal organization:
…the aggregate of personal contacts and
interactions and the associated groupings
of people
…provide a means of communication, of
cohesion, and of protecting the integrity
of the individual that is necessary to the
operation of a formal organization
The emergence of organization...
individual
organization
personal :
interests
needs
limits
free will
purpose
objectives
impersonal : strategies
goals
projects
The dynamic concepts of
executive theory...
free will
 cooperation
 communication
 authority
 the decision-making process
 maintaining a dynamic
equilibrium


free will:
…a limited power of choice
…presupposing the capacity for
self-determination
…preserving personal integrity
…upholding personal, ethical, and
legal responsibility for one’s
choices

because of various limitations which
constrict the choices available...
…the exercise of free will requires
individuals to develop a “purpose”
…which, in turn, provides a “motive” or
“rationale” to engage in cooperative
ventures that make other choices
possible

cooperation:
…an expression of human will and
purpose in a physical environment

communication:
…the necessary ability to translate
purpose into terms of the concrete
actions required to effect it
…reduces confusion and indecision as
these relate to the timing of actions
…creates the necessity for a leader

authority:
…the character of a communication in
a formal organization by virtue of
which the communication is
accepted by a contributor to or
“member” of the organization as
governing the action that individual
contributes

authority may be a consequence of:
…position…the advantage of
placement in the organizational
hierarchy
…leadership…the advantage of
possessing the respect of
individuals in the organization

however, the determination of
authority always remains with the
individual...
…objective authority cannot be imputed
to persons in organizational positions
unless subjectively they are first
dominated by the organization as
respects their decisions

authority, then, depends upon:
 a cooperative personal attitude of
individuals
 a system of organizational
communication
…which fosters organizational
effectiveness and efficiency as well
as survival

the decision-making process:
…the matter of discriminating important
strategic factors
...and redefining or changing the
organization’s purpose
...on the basis of an estimate of future
results of action in the existing situation
...in light of history, experience, or
knowledge of the past

the decision-making process first involves…
D1
personal decisions: decisions by the
individuals affected whether or not to
contribute to a cooperative effort as a
matter of a personal choice
 external to the organizational system
 not delegated to others

the decision-making process then involves…
D2
impersonal decision: a response
made by individuals whose role and
intent is to effect the organizational
system as a whole
 internal to the organizational system
 delegated to others

the responsibility for an organization
decision is assigned positively and
definitely to those located at the
organization’s communication centers...
…that is, the aptness of a decision depends
upon those who possess the knowledge
of facts and of organizational purpose

maintaining a dynamic equilibrium:
…the ability to juggle subjective
(personal) motives and objective
(impersonal) purpose so as to
develop a surplus of cooperation
among the people whose social
contributions constitute the
organization
…this dynamic equilibrium is disturbed by false
ideologies, particularly those held by
managers/leaders, which...
 vitiate experience from consciousness when
dealing with organizational problems
 reinforce personal predilections, prejudices,
and interests in guiding organizational action
False ideologies can become destructive
factors, inhibiting further cooperation.
The fundamental concepts of
executive theory...
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efficiency
effectiveness
organization purpose
zone of indifference
strategic factor
organization economy
span of control
leadership density
responsibility

efficiency : individual : motives
the maintenance of an equilibrium of
organizational activities through the
satisfaction of the motives of
individuals sufficient to induce
cooperative action

efficiency of effort depends upon the
ability of the executive to secure and
maintain the personal contributions of
energy that is prerequisite to effect
organizational purposes
…that is, the executive capacity to offer
effective inducements and in sufficient
quantity to maintain organizational
equilibrium

effectiveness : organization : purpose
the appropriateness of the means
selected under the conditions of the
organization as a whole for the
accomplishment of a specific desired
end

effectiveness of cooperation is evident in
the accomplishment of the recognized
objectives of cooperative action
…these objectives are impersonal, that
is, these objectives aim at the system
of cooperation as a whole

organization purpose:
…the impersonal reason for which the
formal organization exists
Purpose is experienced as a belief that—as a
consequence of one’s limitations and reduced
choices and, then, through the exercise of will—
it is better to cooperate in “trying” or
“attempting” something impersonal to fulfill
one’s personal motive than it is to drop that end.

purpose is not empty words or
catchy phrases...
…but the bridge between the past and
the future which functions only as it
rests upon the present
…as all who contribute to the system
of efforts accept and act upon a
shared purpose

the challenge to managers/leaders is to
foster those conditions wherein:
…the aggregate of organizational actions
are a consequence of decisions
…decisions made by those “closest to the
action” relative to the organization’s
purpose and environment
...and resulting in closer and closer
approximations in concrete acts

zone of indifference:
…the willingness to accept orders
specifying action because the
individual feels indifferent about the
order in so far as authority is
concerned
The zone of indifference will be wider
or narrower depending upon the
degree to which the inducements
exceed the burdens and sacrifices
determining the individual’s adhesion
to the organization.

strategic factor:
…a limitation that, when controlled in
the right form, at the right place, and
at the right time, will establish a new
system or set of conditions which
meets the organizational purpose
To determine what element should be
changed or is missing is the first step
in defining what action is required.
Decision, then, is related to action which
sets into motion the dynamic and
developmental aspects of organizational
change.
The structural frame’s assumption of cause
and effect in an absolute sense is not
pertinent to organizational analysis...
…the only measurable variations in the effect of
single factors is in terms of strategic factors
…that is, those controllable alternatives which
effect changes in the system as a whole not
the contributions of any single factor
The strategic factor, then, is the center
of the environment of decision. It is
the point at which choice applies. To
do or not to do this, that is the
question.
The determination of the strategic factor is itself
the decision which reduces purpose to a new
level, compelling the search for a new strategic
factor in the new situation.
It is the series of strategic factors and
the actions that directly relate to the
strategic factors that determine the
course of organizational events, not
the general decisions.
As organizational members in subordinate
positions refine the organizational purpose
in practicable terms and conditions.
For Barnard, the determination of the strategic
factors that will stimulate cooperation is a
matter of sense not of science, of feeling the
proportions of the relationship of
heterogeneous details to the organic whole...
…the essential process is “sensemaking”
(Weick, 1995), that is, envisioning the
organization as a whole and the total situation
relevant to it.
When the process of managing and leading
organizations is viewed as integrating the
elements of organization into a whole, of
balancing local and broad considerations
with general and specific requirements...
…the symbolic frame provides a helpful
theoretical perspective for learning about the
actual factors influencing organizational
culture
…transforming managing and leading
organizations...
 from an intellectual exercise to an aesthetic
and ethical exercise
 from science and facts to art and sensing fitness
and appropriateness
 from coercing compliance to inducing normative
cooperation
 from responding to orders to bearing
responsibility for purpose

organization economy:
…the pool of values as assessed by
the organization as a social system
physical
materials
social
relations
personal
activities
…as these values impact coordinated
action

span of control:
…the ability for an executive to
communicate essential information
regarding or governing specific
action
…normally less than 15 individuals
and preferably 5 or 6 individuals

leadership density
…at the lowest levels of a formal
organization, where ultimate
authority resides, individuals make
personal decisions reflecting their
willingness to contribute to a
cooperative effort

responsibility
… the power of a particular private
code of ethics to control the conduct
of individuals in the presence of
strong contrary desires or impulses
The primary executive function...
LEADERSHIP
…the personal capacity for exercising
authority that affirms decisions and lends
quality and ethics to the coordination of
organized activity through the formulation
and inculcation of organizational purpose
…the technical attainments and ethical
complexities associated with executive
responsibility
…a necessary and constitutive element
of organization made necessary by:
 the need for communication that
translates the organization’s
purpose into concrete actions
 to make decisions about what to do
and when and where to do it in the
midst of differing ideas
Leadership inspires cooperative
decisions by creating faith...
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in common understanding
in the probability of success
in the ultimate satisfaction of
personal motives
in the integrity of objective authority
in the superiority of common
purpose as a personal aim of those
who partake in it
The ethical element of leadership...

foundational elements...
…the objective field within which
action must take place
…the decision-making process as it
relates to the objective field where
the action will take place
…the aesthetic and intuitive, not
conscious, analysis of factors
The ethical sector of
organizational action...
first: identifying the individual’s...
attitudes
values
that are
ideals
hopes
distilled into
specific purposes
(“attitudes”)
inducing cooperation
second: getting individuals to focus
on the elements of the ethical sector...
personal choices
ideals
motives
aspirations
values
appraisals of utility
attitudes
norms of conduct
third: inducing cooperation among all
who contribute to the organization as
a whole
…requires managers/leaders who create faith
…which is the catalyst by which the living
system of human efforts continues its
incessant interchanges of energies and
satisfactions
Exercising “ethical creativeness”...

involves resolving conflict between individual
ethical codes by substituting a new action for
that originally conceived so that the new way
is “worked out” to meet all of the individual
requirements
Ethical creativeness is the highest expression of
personal responsibility for it moves individuals
beyond a concern for doing things right and
towards the consideration of doing right things.

requires inventing an ethical basis for
the solution of dilemmas (Cuban, 1992)
...by substituting a new action which avoids the
conflict
...or providing an ethical justification for an
exception or compromise
Creative ethics emphasizes personal responsibility
in the form of a sincere and honest conviction that
what one does for the good of the organization one
personally believes is right.
1) to secure, create, and inspire “morale”
2) to inculcate points of view, fundamental
attitudes, and loyalty to to the cooperative
system as a system of objective authority
Ethical creativeness results in subordinating
individual interest and the minor dictates of
personal ethical codes to the good of the
cooperative whole.
Using executive theory...
formulate, redefine, break in to details,
and decide upon the innumerable
simultaneous and progressive actions
that are the stream of syntheses
constituting purposive actions

as managers and leaders…

pyramid the formulation of purpose: pushing
responsibility for defining and acting upon
purpose at the base where the authority for
effort resides

teach: indoctrinating those at the lower levels
with the general and major decisions so that
they remain cohesive and make the ultimate
detailed decisions coherent
This module has focused on...
The executive theory that managers
and leaders can utilize in practice
episodes...
...as this theory of practice provides
managers and leaders a frame of
reference to inform thinking about
the nature of human organization
making...
…and the importance of inculcating
a shared purpose that develops
an ethical code guiding
cooperative efforts toward
organizational ends.
AN EXECUTIVE THEORY SCENARIO
Executives endeavor to foster cooperative
efforts toward shared purposes within the
organizations. Executives are incessant as
they struggle to integrate purpose and action
so that the cooperative efforts of the
organization will exceed the ability of any
individual and overcome individual
limitations.
MANAGEMENT AND LEADERSHIP
IN AN EXECUTIVE THEORY SCENARIO
Executives believe that the most important part of their
job is to inculcate a shared purpose so that a group of
diverse individuals will effectively and efficiently
contribute their efforts to the cooperative endeavor
called “organization.” This purpose inspires faith in
the organization and develops loyalty as individuals
engage in ethical actions that enable every member of
the organization to overcome individual limitations.
Effective executives create a synergy uniting the many
“parts” so that the organization, as a “whole,” fulfills
its purpose and is capable of adapting as necessary.
References

Barnard, C. I. (1938/1968). The functions of the
executive. Cambridge, MA: Harvard University Press.
 Cuban, L. (1992). Managing dilemmas while building
professional communities. Educational Researcher,
21(1), 4-11.
 Weick, K. E. (1995). Sensemaking in organizations.
Thousand Oaks, CA: Sage Publications, Inc.