PARTS I & II — PHASES OF COOPERATION
Chester Irving Barnard (1886-1961) was an American business executive, public administrator, and the author of pioneering work in management theory and organizational studies. His magnum opus, The Functions of the Executive, sets out a theory of organization and of the functions of executives in organizations. This work is a real cornerstone of organizational theory and management and is, accordingly, studied in many business schools today. Much of Barnard’s insight came from his work at the American Telephone and Telegraph Company (now AT&T) and the New Jersey Bell Telephone Company, which he was a president of from 1927. During the Great Depression, he directed the New Jersey state relief system. He was elected a Fellow of the American Academy of Arts and Sciences in 1939. He was president of the United Service Organizations (USO), 1942-1945. Upon his retirement, he served as president of the Rockefeller Foundation from 1948 to 1952, and as chairman of the National Science Foundation from 1952 to 1954.
In The Functions of the Executive, Barnard presents a ‘theory of cooperation and organization’ and ‘a study of the functions and of the methods of operation of executives in formal organizations’. He argues that organisations are essentially formed of two contrasting elements: creativity and leadership. While creativity is the natural output of cooperation, it is the role of leaders in organizations to direct that creativity towards an organizational purpose/goal. Barnard was the first to insist that organizations, by their very nature, are cooperative systems and cannot fail to be so – cooperation is the essence of organizations. The survival of organizations depends on cooperation which is achieved through contracts between the individual and the formal.
One of the major appeals of Barnard’s work is how authentic he appears to be about his sense of the organization. Combining the objectivism of scientific management with an intuition about how people and groups of people work, Barnard proposes an aesthetic feeling of managing. This is distinctly different from mechanical idealism of his predecessors.
We are going to be discussing The Functions of the Executive in this episode and the next. For this episode we are reading Parts I and II of the book, where Barnard outlines his understanding of the individual, of why individuals would form organizations, and of the basic principles of the formal organization. For Episode 8, we are finishing the book with Parts III and IV. You will note that our conversation reflects the breath of Barnard’s legacy – he is building on Max Weber, F.W. Taylor, Henri Fayol and Elton Mayo among others, and inspiring theories such as organizational routines and systems theory.
Join us as we discuss this truly fascinating thinker over the next two episodes!
Read with us:
Barnard, C.I. (1938). The Functions of the Executive. Cambridge, MA: Harvard University Press.
Part I: Preliminary Considerations Concerning Cooperative Systems
Part II: The Theory and Structure of Formal Organizations
To Learn More:
Mahoney, J.T., and Godfrey, P. (2014). The Functions of The Executive at 75: An invitation to reconsider a timeless classic. Working Paper.