It has been sixty years since the publication of Chester Barnard’s Functions of the Executive.

In many ways, Barnard’s book laid the foundation for Management and Organization Theory as it exists today (Andrews, 1968; Wolf, 1974). His influence on theoreticians and practitioners has been immense. Kenneth Andrews, in his introduction to the 30th Anniversary edition of the book, states: “The Functions of the Executive remains today, as it has been since its publication, the most thought-provoking book on organization and management ever written by a practicing executive. (Andrews 1968, p. xxi).Barnard was not an academic; his theories were put together painstakingly from decades of organizational experience.

In this aspect, he is rather unique among management scholars of the twentieth century. However, during the last several years, Barnard’s stature in the realm of management theory and practice has gradually waned. Although his book is required reading in the occasional Doctoral curriculum, it has more or less disappeared from the mainstream of management literature.He is infrequently cited, and credited with originating the “Acceptance Theory of Authority”, but not much else. Barnard partly owes this undeserved obscurity to his labored and lugubrious style: He is extremely difficult to read. Wolf (1974, p.

vii) writes: “Over the years I became aware that Barnard’s book proved to be obtuse for many professors as well as their students. Often in informal discussions my colleagues would confess that they found Barnard needlessly abstract, horribly redundant, and extremely hard to follow. ”While this may discourage the casual reader, it should not stand in the way of the serious student of Management, especially if there is value to be gleaned from such an endeavor. It is perhaps appropriate, then, to examine, as we prepare for the end of the millenium, whether the principles and theories developed by Barnard continue to be relevant for today’s manager. The purpose of this article, then, is to attempt to kindle the interest of the reader by presenting certain ideas that are central to Barnard’s treatise, and establishing their relevance for today’s managers by linking them to more recent views on management and leadership.

It will also attempt to convince the reader that these ideas, while they have led to the origin and development of certain schools of thought in the field of management, deserve further study and exploration. Barnard is widely credited with having originated the “Systems” approach to the study of organizations. He recognized that in order for the organization to survive in the external environment and to succeed in the long run, it was necessary to sustain cooperation from employees by satisfying the condition of efficiency.As Barnard defined it, efficiency was the satisfaction of individual motives.

He stated that the cooperative system must create a “surplus of satisfaction” to be efficient (Functions, p. 58). While effectiveness, the ultimate objective of cooperative action, is important, it is equally important to satisfy individual motives as well. In Barnard’s own words: “Although effectiveness of cooperative effort relates to accomplishment of an objective of the system and is determined with a view to the system’s requirements, efficiency relates to the satisfaction of individual motives. (Functions, p. 56) 3 And: “The survival of cooperation, therefore, depends upon two interrelated and interdependent classes of processes: (a) those which relate to the system of cooperation as a whole in relation to the environment; and (b) those which relate to the creation or distribution of satisfaction among individuals.

The instability and failures of cooperation arise from defects in each of these classes of processes separately, and from defects in their combination. The functions of the executive are those of securing the effective adaptation of these processes. ” (Functions, p. 0, 61) This is a very simple and pragmatic synthesis of Frederick Taylor’s Scientific Management school and the Human Relations approach of Elton Mayo and others.

This becomes all the more evident when Barnard talks about the kinds of management action that lead to these outcomes of efficiency and effectiveness. “These two appraisals and the processes related to them suggest that behavior with reference to other persons either takes the form of regarding such persons as objects to be manipulated by changing the factors affecting them, or as subjects to be satisfied. ” (Functions, p. 0; italics in original) The link is not clearly established by Barnard, as the discontinuity in chronology of the above quotes indicates. This is a common failing in the book, as has already been pointed out.

It takes several readings before one can grasp Barnard’s argument, and then it gives us a whole new perspective on management. For example, the behaviors described above (we would, of course, have to ignore the negative connotations associated with the word “manipulated” as these are mostly post-Skinnerian and nonexistent when Barnard wrote the book) form the basis for many of the subsequent theories on leadership and management styles.The Ohio State models, the Blake & McCanse (1991) managerial grid, and the classification of leaders as either task-oriented or relationship-oriented (Hersey & Blanchard, 1988), fit the pattern established by Barnard. And, more importantly, it reveals the flaws or shortcomings in these models. A 4 9-9 style on the managerial grid would generate efficiency but no effectiveness—he or she would treat employees as subjects to be satisfied.

Also, a situational leader who adjusts his or her style according to organizational factors and worker characteristics is likely to accomplish either one outcome or the other.Barnard makes a case for a balanced management or leadership style as few others do. Subsequent debates between scholars on the subject of which leadership model is better, the grid model or the situational model, may have benefited from examining whether Barnard’s conditions of efficiency and effectiveness are satisfied by either one. (See Group and Organization Studies 7, #2, 1982, p. 207-215. )As shown in Figure 1, Barnard’s ideas can be linked to the conceptualization of anagers as either driven by the need for achievement (Personal Power managers), the need for affiliation or social acceptance (Affiliative managers), or the need for organizational power or influence (Institutional managers) (McClelland and Burnham, 1995).

As the diagram indicates, personal power managers are likely to treat subordinates as objects to be manipulated, affiliative managers are likely to treat them as subjects to be satisfied, and institutional managers are likely to attain the desired balance.Perhaps the single most significant contribution of Barnard’s book is the articulation of the concept of organization purpose. According to Andrews (1968): “The strength of Barnard’s concept of cooperative systems and of his explanation of the essential conditions for rarely attained effectiveness and efficiency seems to me to lie in the idea that purpose is central. He believes the definition of organization purpose to be peculiarly an executive function, made necessary to give meaning to the rest of the environment, to serve as unifying principle. (p. xi) 5 The concept of purpose has not received much attention at the hands of scholars.

A search of management literature revealed hardly any references to it. The only article with the word in its title that I could discover was by Bartlett & Ghoshal (1994). They make a strong case for the importance of the concept, although they do not credit Barnard with originating it: “Purpose is the embodiment of an organization’s recognition that its relationships with its diverse stakeholders are interdependent.In short, purpose is the statement of a company’s moral response to its broadly defined responsibilities, not an amoral plan for exploiting commercial opportunity (p.

88). This is in line with Barnard’s moral imperative for executives, although Bartlett and Ghoshal treat the subject more impersonally—they see purpose as an organizational rather than an individual responsibility.Barnard asserts that the most important single contribution required of the executive is loyalty, or domination by the “organization personality” (Functions, p. 20).

This assertion is based on Barnard’s concept of executive responsibility, which transcends hierarchy and embraces managers from the lowest echelons within the organization all the way to the Chief Executive. Only by embodying such loyalty can the executives bring about in their subordinates the condition of “self-abnegation” (Functions, p. 84), or the subordination of one’s personal outcomes to those of the organization.This condition brings about in individuals the “willingness to serve” which in turn results in cooperation. These interrelationships, when sustained over long periods of time, can be considered a manifestation of purpose, or as proof of its existence. They also indicate that the conditions of efficiency and effectiveness have been met.

As shown in Figure 1, this can only be accomplished by a manager who takes a balanced approach, and treats his or her subordinates as subjects to be satisfied as well 6 as objects to be manipulated.McClelland & Burnham (1995) would define such a manager as an Institutional manager. According to Andrews (1968), “Developing researchable and teachable concepts of purpose is indeed currently one of the principal concerns of business education” (p. xix). Institutional managers cannot be trained and developed without instilling in them a clear understanding of purpose, and how to inculcate it within members of the organization.

In this endeavor, Barnard’s book is not only invaluable, but also essential.