Chester I. Barnard
Barnard, Chester I.
Barnard, Chester I.
Chester Irving Barnard (1886–1961) was both a successful corporation executive and a powerful theorist about the nature of corporate organizations.
Born in Maiden, Massachusetts, Barnard rose from humble origins, beginning a life of hard work at the age of 12. He supported himself while attending Mount Hermon School and during his three years at Harvard College. Upon leaving Harvard at the age of 23, he took a job as a statistical clerk with the American Telephone and Telegraph Company in Boston. He stayed with the Bell System for 39 years, from 1909 to 1948.
Barnard’s first 13 years with the company were spent working as an expert on the economics of telephone rates. By 1922, when he was 36, he began performing what he was later to call “executive services,” and by the age of 41 he had become the first president of New Jersey Bell Telephone. His 21 years as president were also the period of his most fruitful intellectual activity; both his books were written during those years. It may be remarkable that the Bell System tolerated such “deviant” behavior on the part of one of its chief executives, but Barnard surely separated his “personal decisions” from his “organizational decisions” (as he called them in The Functions of the Executive).
From 1931 to 1933, and again in 1935, Barnard served as state director of the New Jersey Relief Administration, an experience that allowed him to sample organization life outside of the Bell System. This experience inspired his only piece of formal research as a participant–observer: he recorded and analyzed his experiences in the form of a case for Lawrence J. Henderson’s course at Harvard on “concrete sociology.”
Barnard’s association with Henderson brought him into contact with a wider group at Harvard that included Elton Mayo; Wallace B. Donham, then dean of the Harvard Business School; Alfred North Whitehead; A. Lawrence Lowell, the president of Harvard University; and Philip Cabot, a member of the business school faculty, whose social position gave him access to the elite in both the academic and the business community. All these men varied considerably in their principal academic interests, but they were all concerned with developing a new conceptual scheme to explain the behavior of men at work in modern organizations.
Until that time neither a commitment to interdisciplinary activity nor the recognition of intellectual ability without academic certification were at all common at Harvard. The leadership of Lowell and Henderson produced academic innovations. Henderson, whose researches in blood chemistry had brought him great distinction, gave seminars on Pareto to educate many of his colleagues and friends. Lowell organized the Society of Fellows, with Henderson, Whitehead, and himself as senior fellows and with junior fellows who were permitted to choose subjects for study on the basis of their interests rather than their disciplinary affiliations (Homans 1936–1961). The result of Barnard’s encouragement by such men as Cabot, Donham, Lowell, Whitehead, and Mayo was his writing of The Functions of the Executive (1938), an examination of his own experiences as an executive in terms of the new conceptual scheme that they had been developing.
In this book, which was not a product of any formal research, Barnard analyzed organizations as “cooperative systems,” that is, as open-ended natural dynamic systems of cooperative effort that had to meet two conditions in order to survive in the long run. The two conditions were that they must secure both their objectives and the cooperation of their individual contributors; that is, they must, in Barnard’s terminology, be both effective and efficient. There were for Barnard three givens in any cooperative system: a common impersonal organizational purpose, individual motives that had to be satisfied in order to secure the individual’s contribution, and the processes of communication by which these opposite poles of the system of cooperative effort would be brought into dynamic equilibrium.
Barnard re-examined the problems of organization and the dilemmas of leadership in terms of this model, studying such variables as the nature of authority, decision making, responsibility, and satisfactory exchange between the contributors to the system and the system of cooperative effort as a whole. He restated the functions of the executive as being the formulation of purpose, the securing of the essential services from the contributors by the maintenance of a satisfactory condition of exchange (organizational equilibrium), and the maintenance of organizational communication.
The contributors to the cooperative effort in a business organization were investors, suppliers, employees, distributors, customers, and managers. The principle of satisfactory exchange was to “give, so far as possible, what is less valuable to you but more valuable to the receiver; and [to] receive what is more valuable to you and less valuable to the giver” (1938, p. 254). This concept of satisfactory exchange was later developed by Herbert A. Simon in what he called the Barnard–Simon theory of organizational equilibrium, which for him was essentially a theory of motivation (Simon 1947), and by George C.Homans, who considered satisfactory exchange to be the condition for all human exchanges, even at an elementary social level (Homans 1961).
Barnard’s book was received immediately with acclaim by academics. It became required reading in many sociology departments and business schools. But for many businessmen the new terminology and the level of discourse became serious barriers to understanding. Barnard was called upon to elucidate and amplify his ideas. He delivered papers to many professional groups—a good sample of which he published in Organization and Management (1935–1946).
One of Barnard’s favorite themes was that the common understanding of organizational phenomena which skilled executives showed in their behavior at a practical level tended to disappear when these same phenomena were raised for consideration at a theoretical level. Much of his writing was addressed to this paradox.
Take, for example, management’s seeming disregard of the fact and the necessity of informal organization. Barnard’s theory stressed that informal organization emerges in any formal organization; that these two types of organization are interdependent aspects of the same cooperative phenomena; and that informal organization performs indispensable functions as a means of communication, of cohesion, and of protecting the integrity of the individual.
These phenomena of informal organization are recognized intuitively by executives in many of the actions they take. But when they were raised for serious consideration at a systematic level, Barnard found, executives would tend to deny their existence.
Equally paradoxical were the executives’ ideas about the nature of authority, particularly what Barnard called its subjective aspect. According to Barnard’s formulation, authority resides in the person who receives the order and not in the person who gives it. In the final analysis it is the recipient of the order who decides to accept or reject the order as authoritative for him.
Again, this conception of authority in terms of cooperative phenomena is well understood intuitively by any skillful leader. He knows that not every order he gives is complied with but only those orders which the recipient can understand, which he feels are consistent with the purposes of the organization, and with which he is mentally and physically capable of complying. To give orders that cannot or will not be obeyed is the best way for him to lose the “authority” he is supposed to possess.
Yet Barnard found that because these phenomena could not be easily conceptualized by the executive and because they went against his legalistic notions of authority, he would misstate their nature and underestimate their importance. He would talk as though he got things done by “his” authority alone. He would fail to see how ineffective “his” authority was in particular situations and, thus, how many of his orders were not complied with.
Barnard was well on the road to becoming an academic. In addition to his other achievements, he received honorary degrees from many universities. World War ii, however, caused him to change his direction, and from 1942 to 1945 he was president of the United Service Organization, Inc. (USO), for which he received the Presidential Medal of Merit in 1946. After the war the demands for his services did not cease. He became a member of the Board of Consultants to the State Department on Atomic Energy and coauthor of the department’s report on international control of atomic energy in 1946.
In 1948 Barnard again faced the decision of whether or not to join a university. When he retired as president of New Jersey Bell, he chose to become president of the Rockefeller Foundation, a post he held from 1948 to 1952.
Those in the behavioral sciences in academe might be interested to note that at the death of Chester Barnard, the New York Times, a very faithful recorder of the facts of importance to our society, accurately cited Barnard’s many accomplishments except two: there was no mention of his two books.
F. J. Roethlisberger
[For the historical context of Barnard’s work, seeOrganizations, article ontheories of organizations; and the biographies ofHenderson; Lowell; Mayo; andWhitehead. For discussion of the subsequent development of Barnard’s ideas, seeadministration, article onadministrative behavior; Leadership, article onsociological aspects; Social control, article onorganizational aspects.]
(1935–1946) 1956 Organization and Management: Selected Papers. Cambridge, Mass.: Harvard Univ. Press.
(1938) 1962 The Functions of the Executive. Cambridge, Mass.: Harvard Univ. Press.
Homans, George C. (1936–1961)1962 Sentiments and Activities: Essays in Social Science. New York: Free Press.
Homans, George C. 1961 Social Behavior: Its Elementary Forms. New York: Harcourt.
Simon, Herbert A. (1947) 1961 Administrative Behavior: A Study of Decision-making Processes in Administrative Organization. 2d ed. New York: Macmillan. → A paperback edition was published in 1965 by the Free Press.
Barnard, Chester I.
). Barnard argued that organizations are inherently co-operative systems—in sharp contrast to previous approaches, which stressed their hierarchical, rule-bound, and authoritarian nature.