Chester irving barnard

Father of modern organizational theory

1886-1961

Bibliography
Born in Maiden, Masachussets in 1886
Started the life of hardwork at the age of 12
Enrolled at a Massachusetts prep school to prepare for
Harvard entry

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Career
worked for American Telephone and Telegraph
Company (ATT) for 40 years
President of the New Jersey Bell Telephone company
in 1927
President of the Rockefeller Foundation in 1948
Effectiveness vs. efficiency
EFFECTIVENESS- being able to accomplish stated
goals which results from the actions of employees
and managers
EFFICIENCY- degree to which that organization is
able to satisfy the motives of the individuals; the time
it takes one to do something
EFFECTIVENESS
EFFICIENCY
about doing the right task,
about doing things in an
completing activities and
optimal way, for example
achieving goals
doing it the fastest or in the
least expensive way. It could
be the wrong thing, but it was
done optimally.
Ideally, individuals and companies find ways to be
effective and efficient, but it is possible to be effective,
but not efficient, or vice versa, or neither
Functions of the executive (1938)
20th centurys most influential book on management
and leadership

was written for posterity

deriving them from a conception of cooperative

systems

required reading in many sociology departments and

business schools
Key functions of management (executive) are described
according to Barnard as follows:
1. Establishment and maintenance of the system of
communication
2. Securing of the essential services from individuals
3. Formulation of the organizational purpose
and objectives
Authority
dismissed the classical theories of organization and
their view as being the Positional View on
Authority
He developed his own Acceptance View on
Authority
For Authority to be meaningful, it must be accepted
first.
Command only when it is going to be accepted by the
subordinate

If the command is not accepted by the subordinate, it

will result to non-meaningful authority.
A person will accept authority under the following
(4) conditions:
The communication is understood.
It is consistent with the purpose of the organization.
It is compatible with his personal interest.
He is mentally and physically able to comply with it

Incentives
The benefits provided by the organization towards
the individual in exchange for the contribution
Two ways of convincing subordinates to
cooperate:
1. Tangible incentives
2. Persuasion (given more importance than economic
incentives)
GENERAL INCENTIVES:
1. Associated attractiveness
2. Adaptation of working conditions to
habitual methods and attitudes
3. Opportunity for the feeling of enlarged
participation in the course of events
4. Condition of communing with others
SPECIFIC INCENTIVES:
1. Money and other material inducement
2. Personal non-material opportunities for
distinction
3. Desirable physical conditions of work
4. Ideal benefactions
FORMAL vs. INFORMAL organization
FORMAL ORGANIZATION
operate under a set of rules and policies
management-employee hierarchy
cold, impersonal
Example: Meetings on companys financial status
INFORMAL ORGANIZATION
not governed by rules and policies
personal contacts and interactions between workers
intensely personal
Example: Hanging out at the pantry
Formal organizations are made of informal groups
informal organizations values and beliefs
organizational culture acceptance of formal
authority
Workers interact bond together sustain the
informal organization Cohesive relationships
people work together
IMPORTANCE
1. Provides individuals with social status
2. Promotes communication
3. Influences and regulates behavior
4. People want to work together
5. Idea sharing
WORKS
Organization and management (1948)
The functions of the executive (1938)