Chester Barnard’s Social Systems Approach and Contribution to management!

Chester Barnard was the President of new Jerray Bell Telephone Company. He served in various other organisations too. His important writings include: The Functions of Executive (1938). Organisation and Management (1948). Elementary Conditions of Business Morals.

His writings had important impact on human organisation. In his organisation theory he adopted a sociological approach and in dealing with the functions of executives, he stressed the importance of leadership and communication. Barnard divided organisation into formal and informal. He said that informal organisation is an important part of formal organisation.

Barnard’s Contributions to Management Thought:


Barnard suggested social systems approach to management. His main contributions to management thought can be described as follows:

1. Theory of Formal Organisation:

Barnard gave a theory of formal organisation. He defined it as “a system of consciously co-ordinated activities of forces of two or more persons.” According to him, organisation consisted of human beings whose activities were co-ordinated and therefore becomes a system : According to Barnard initial existence of organisation depends upon three elements : (i) the willingness of persons to contribute efforts to the co-operative system (ii) there should be an objective of co-operation and (iii) proper communication system is necessary.

2. Organisational Equilibrium:

Barnard suggested an equilibrium model to describe the balance achieved between the contributions of the members of an organisation and return contribution made by the organisation to the fulfilment of private goals of the members. Barnard treated organisation as separate from the environment where it works.

The persons working in the organisation have two roles—a personal role and an organisational role. There should be a balance between what employees get out of the organisation (money, status, recognition, etc.) and what they contribute in form of time, knowledge, discomfort, production, etc.

3. Acceptance Theory of Authority:


Barnard did not agree with the classical concept of authority where it comes from top to bottom. He said that authority comes from bottom. In his opinion authority is confirmed only when it is accepted by a person to whom it has been addressed. Disobedience of such a communication is a denial of authority.

According, to Barnard the decision as to whether an order has authority or not lies with the person to whom it is addressed, and does not reside in persons of authority or those who issue these orders. Thus in Barnard’s view, if a subordinate does not accept his manager’s authority, it does not exist.

A person will accept authority under following conditions’:

(a) He can and does understand the communication;


(b) At the time of his decision he believes that it is not inconsistent with the purpose of the organisation.

(c) At the time of his decision, he believes it to be compatible with his personal interest as a whole; and

(d) He is able (mentally and physically) to comply with it.

4. Functions of the Executive:

Barnard postulated three types of functions for the executives in forma! organisational set up. These functions are:


(a) Maintaining proper communication in the organisation

(b) Obtaining essential services from individuals for achieving organisational goals

(c) Formulating purposes and objectives at all levels.

5. Informal Organisation:

Barnard was of the opinion that both formal and informal organisations co-exist in every enterprise. Informal organisation refers to those social interactions which do not have consciously co-ordinated joint purpose.


This organisation exists to overcome the problems of formal organisation. Barnard suggested that executives should encourage the development of informal organisation to bring cohesiveness in the organisation and also to serve as a means of communication.