Chester Barnard’s contribution to management is important. His book ‘The Functions of the Executive’ is the most influential book on the management during the pre-modern management era. He analyzed management as a social system. His analysis of the executives based on the major tasks in the system in which they operate. He also stated the co-operative social system. He also found non-logical factors influencing human behaviour in the organization.
The major contributions of Chester Barnard is as follows:
1. Concept of Organization: According to Barnard, an organization exists when the following three conditions are fulfilled. a) there are persons able to communicate with each other b) they are willing to contribute to the action and c) they are willing to accomplish a common purpose.
2. Formal and informal organizations: There can be two types of organizations. They are formal and informal. In the formal organization there are co-ordinated interaction, which are deliberate and have common object. On the other hand the informal organization refers to those social interactions, which do not have deliberate joint object. Informal organizations overcome the problems of formal organization. Both the formal and informal organizations depend on each other and there is continuous interaction between the two.
3. Elements of Organization: Barnard had suggested four elements of a formal organization. They are a) a system of fictionalization (specialization) b) a system of effective and efficient incentives c) a system of power to accept the decision of the executives d) a system of logical decision-making.
4. Authority: in the classical view authority comes from the top. Bernard has given a new concept of authority, which is called ‘Acceptance Theory of Authority’ or ‘Bottom-up authority’.
In his opinion person should obey an order not because it has given by the superior but he will take it as a communication. This is possible only when
i. he can understand the communication
ii. he believes that it is not contradictory with the organizational purpose
iii. it is compatible with his personal interest as a whole and
iv. he is mentally and physically able to obey with it.
5. Functions of the executives: According to Barnard there are three types of functions, which an executive performs. They are a) maintenance of organization communication through a system of organization b) the securing of essential services from individuals in the organizations to achieve organizational purpose c) the formulation and definition of organizational purpose.
6. Motivation: Apart from financial incentives Barnard has suggested a number of non-financial techniques for motivating people. They are opportunity of power and distinction, pride of workmanship, pleasant organization participation, mutual supporting personal attitudes, feeling of belongings, etc.
7. Executive Effectiveness: Responsible leadership is required to make the executive effective. Leadership is the most strategic factor in securing co-operation from the people. Executive leadership demands high caliber, technological competence and social skills. It should be above personal preference and prejudices.
8. Organizational Equilibrium: This means the matching of the individual efforts and organizational efforts to satisfy individuals. The organization must afford satisfaction to individuals. This requires the equilibrium in the organization.
The above contributions of Barnard indicate how he was concerned for the development of the organization through social system.