The Basic Barnard:

An Introduction to Chester I. Barnard and His Theories of Organization and Management

Concept of Formal Organization

Barnard’s Goals in Writing the Functions of the Executive

To understand what a man has said is helpful to know what motivates him to say it.

Barnard’s central goal was to provide sound generalizations about social cooperation which could
provide an adequate theoretical basis for training in the administrative professions.

Barnard was attempting to write a general theoretical work which would have wide applicability.

His theory of organization deals with:

1) The broader environmental setting in which organization functions

The Nature of Organization

The goal is to generalize and be able to discuss the broad spectrum of organizations in terms of their
common features; yet, the tendency is to think in terms of specifics.

To Barnard, it was essential to focus on organization as “an integrated aggregate of actions and
interactions having a continuity in time.

The basic concept of system involved field or gestalt theory.

In conceptualizing organizations as systems, Barnard raises several important points which need to be
recognized.

1) Organizations are in reality only partial systems. They grow very much like cells and add new
unit organizations and in the process develop complex organizations we conclude:
a. The limit in effectiveness in complex organizations is a function of communication
b. In complex organizations the necessity for communication almost variably results in the
development of an executive organization which maintains communication within and
outside the organization
c. Within complex organizations members must live with contradictory forces (for
example, conflict of loyalty between the unit or subordinate organization and the
superior or complex organization of which it is a part).
 d. The organic nature or wholeness of organization develops because actions of
participants in organizations contribute to both the special working unit of organization
and other organization systems.

Barnard’s definition specifies that an organization is a system of consciously coordinated activities of

Purpose is the coordinating and unifying principle of formal organization

The points to be emphasized are that Barnard was seeking a general definition of formal organization
and that his definition includes such key concepts as “system”, consciously coordinated activities of
persons and purpose, and continuity of time

1)The Broader Environment of Organization

Barnard’s observations as to the role of physical, biological, and social forces in influencing the nature
of organization:

The pressures, restrictions, and limitations which come from outside the organization lie in the
environment in which the organization exists. The environment is of two kinds 1)The natural, physical
environment; and 2) the social environment of people, governments, religion, numerous other
organizations, and innumerable individuals.

The physical environment imposes certain fixed and unchangeable laws of physics and chemistry, and
important variabilities in conditions . Adaptation to conditions is required. Control of them as a whole is
impossible.

Of the social aspects of the environment, we are on the whole more conscious. We hardly recognize
how completely we are dominated.

Of importance is his definition of formal organization and his recognition that formal organization, while
being a system exists as part of a more complex formal organization and that the executive organization
arises to maintain communication and coordination of the various unit organizations which interact to
give unity and wholeness to a complex organization.

By focusing on environmental forces, Barnard shows that the executive is not completely free to act. He
faces limitations and prohibitions that restrict his range of activity. His environment places physical,
biological, and social restraints upon his power of choice and his ability to act.

A Consideration of Individuals in Cooperative Systems

Barnard has defined organization as the consciously coordinated activities of two or more people. For
organization to exist there must be two or more people who are willing to communicate and cooperate
in attaining a stated purpose or goal.
Individuals as Organizational Participants and as Whole Persons

In thinking about people as contributors to an organization we have to differentiate between the

The need to depersonalize the individual arises from the fact that his activities in organization are
determined by the needs of the system. They are impersonal

Motives:

People performing their organization roles must be motivated to act in the prescribed manner

We can think of individuals as being motivated by the desire to relieve tensions or satisfy needs.

Motivations of any specific individual are extremely complex. The individual himself is seldom fully
aware of his own motivations. In fact, what a man desires is best inferred from what he does rather
than what he says.

Freewill and Determinism

We impute freewill to the individual. Reflection upon man and his nature, however, indicates that what
we are and what we do depends on all that is about us, upon inheritance, society, and forces in our
environment.

Man lacks complete free will. If man lacks will, can he be responsible for his act? Barnard’s point of view
is that the executive must recognize the absence of complete free will, but must, at the same time,
assume free will to exist. Without the assumption of free will the concepts of personal integrity, legal
responsibility, and moral responsibility cannot be meaningful.

Barnard sees the conflict of free will and determinism at the heart of many organizational problems.
The position taken by Barnard is that both determinism and free will exist within an organization;
however, he maintains that free will is essential for it is impossible to consider the individual in society
or organization without moral responsibility.

The executive should recognize that intelligent action in directing organization behavior involves
changing the conditions of the environment, inculcating (instill by persistent instruction) desired
attitudes in people, and constructing appropriate incentives rather than erroneously blaming the
individual for actions beyond his control.

Efficiency and Effectiveness

A key concept in Barnard’s analysis of the individual concerns the sought and unsought results of
organizational activities.
The individual acting in the organization may achieve ends sought by the organization. Such activity is
identified as effective.

The behavior directed toward organizational goals may also satisfy personal motives of the individual.
To the extent that personal motives are satisfied the activity is considered efficient.

Organizational survival depends both on effective and efficient.

The executive task involves maintaining effectiveness and efficiency.

Informal Organization

An important facet of formal organization is informal

Informal organization is personal and unconscious in the sense that it is not planned and is not
dominated by the formally stated goals of the organization

Informal organization involves “learning the ropes” or knowing how to get along as a member of an
organization, encompasses the unwritten laws of the organization, and involves knowing who’s who,
what’s what, and why’s why.

Barnard defined informal organization as “……..the aggregate of personal contacts and interactions and
associated groupings of people….”

Informal organization arises because of interaction between people.

Informal organization grows and develops primarily without conscious planning.

Informal organization grows and develops primarily without conscious planning

Formal organization can’t exist without informal

Barnard found three important functions performed by informal organizations:

1) It facilitates communication
2) It monitors and regulates the participation of individuals and in so doing maintains the stability
of objective authority by influencing individual responsibility toward the acceptance of authority
in the mutual interest.
3) The informal organization provides a means for maintaining personal integrity and individualism
within the formal organization.

Barnard says, formal organizations cannot exist for long without informal. Formal organization provides
the skeletal structure. It is impersonal. In contrast informal organization provides the energy and
driving force and is personal.

Aspects of Formal Organization

Bernard’s central concepts regarding perspectives for viewing formal organization