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Chester Barnard

Topics covered

  • About Chester Barnard
  • Three elements in an organization
  • Contribution- Satisfaction Equilibrium
  • General and Specific Inducements
  • Positional View on Authority
  • Zone of Indifference
  • Barnard’s View on Responsibility
  • Decision making

About Chester Barnard

  • Chester Irving Barnard was an American business executive, public administrator, and the author of pioneering work in management theory and organizational studies.
  • His landmark 1938 book, The Functions of the Executive, sets out a theory of organization and of the functions of executives in organizations.

Chester Barnard’s Theory Explains Three Elements In An Organization:

  • Common Purpose
  • Objective Purpose– He refers to the organizational purpose or the common purpose. He calls this as individual’s purpose or individual’s goal. Unless the individuals come together, cooperate with each other, it won’t be possible for the organization to exist.
  • Subjective Purpose
  • Willingness to Contribute– Organizational survivability requires that the individuals must contribute willingly towards the organizational goal. By this, he is trying to explain the motivation of the individuals. He has dismissed the classical view on motivation i.e. classical theories are mono-motivational in nature. For classical theories, economic reasons are the only factors for motivation. He emphasized that the motivation is not just monetary but also based on non-monetary factors.

Contribution- Satisfaction Equilibrium

  • Chester barnard has come out with  a concept called as Contribution- Satisfaction Equilibrium to explain individual motivation.
  • By contribution, he refers to individual’s efforts and activities undertaken in pursuance of the organizational goal. By satisfaction, he refers to the incentives or the benefits provided by the organization towards the individual in exchange for the contribution.
  • Chester barnard says that the individual’s motivation depends on individual satisfaction being more than individual’s contribution.
  • Individual becomes fully motivated when he derives a feeling that individual’s satisfaction is more than the individual’s contribution.
  • Equilibrium refers to the balance in the system i.e. system to be functional requires that the individual contributes towards the organizational goal.
  • Satisfaction of the individual has been explained through the concept ofInducement.

Concept Of Inducement

  • Inducement refers to the factors which are provided by the organization to the individual to induce him to do work.
  • He has discussed eight types of inducements.
  • The main purpose of all these theories is to achieve efficiency in the organization. He has given few important points in this regard.

Specific Inducements

  • Material Incentives– This refers to money or salary.
  • Personal Non- Monetary Opportunities– This refers to personal power or personal recognition etc
  • Desirable Physical Condition of Work– The working space should not be dingy or dirty.
  • Ideal Benefaction– He refers to the job which satisfies individual’s values, ideals or ideologies etc.

General Inducements

  • Associated Attractiveness– This refers to a desirable social condition in the workplace. Here, social refers to Individual to Individual relationship or the relation among the colleagues. Undesirable social condition is a disincentive to work. A friendly atmosphere is always welcomed by the employees.
  • Adaptation of the Working Condition of Work towards Individual’s habits and attitudes– He refers to the matching of the individual’s habits and attitudes to the job requirements or job conditions.
  • Opportunity for Enlarged Participation– He refers to the opportunity to participate in the decision making or the opportunity to participate in various organizational activities.
  • Opportunity to undertake Desirable Communication– Freer communication with colleagues and supervisors in the organization acts as an incentive.

Views On Authority

  • Chester barnard dismissed the classical theories of organization and their view as being the Positional View on Authority.
  • He developed his own Acceptance View of Authority. Positional view means that the authority flows from the position and the authority lies with the superordinate.
  • Whereas, he has emphasized that the authority does not lay with the position which issues command rather lies with the position which accepts it. According to him, the authority lies with the subordinate and does not lie with superordinate.
  • For Authority to be meaningful requires that it be accepted first i.e. Command only when it is going to be accepted by the subordinate.
  • If the command is not accepted by the subordinate, it won’t be complied resulting into non- meaningful authority.
  • The acceptance of command depends on four conditions.
    • It should be intelligible.
    • It should be consistent with the organizational goals.
    • It should be compatible with individual’s personal goal.
    • It should be within the physical and mental limits.

Zone of Indifference

  • In order to substantiate Authority, Chester barnard used a concept called as the Zone of Indifference. Within the organization, individuals carry Zone of Indifference as well as Zone of Denial. There are individuals who have more of Zone of Indifference.
  • On the other hand, there are also individuals who have more of Zone of Denial. An individual who carries of Zone of Indifference, command issued towards them is more likely to fall within the Zone of Indifference and thereby will be complied. On the other hand, Command issued towards the individuals having more of Zone of Denial is more likely to fall within the Zone of Denial and thereby is liable to be disobeyed.
  • The executives within the organization should always strive to increase the Zone of Indifference while decreasing the Zone of Denial. This can be done by working on individual’s Contribution- Satisfaction Equilibrium. Zone of Indifference or Denial refers to a psychological condition of being obedient or disobedient.
  • While being in the Zone of Indifference, the individual being indifferent towards the merit (four conditions discussed above) of the authority complies with the authority. Within the organization, while the acceptance of authority lies with the subordinate, the power of Veto lies with the superordinate.
  • Power of Veto has been symbolically used and it means that the responsibility for the failure of authority or negation of authority lies with the superordinate.

Fiction of Superior Authority

  • He emphasizes that the manager should be aware of the myth and the reality about the authority.
  • Functionaries in the organization carry a number of beliefs such as
    • Superiors carry superior authority.
    • Disobedience will lead to loss of incentive or even loss of job.
    • Lack of performance may result into loss of reputation.
  • These beliefs may not be real but it helps the supervisor to exercise the authority meaningfully. Such beliefs can be manipulated by the superior to exercise more and more control over the subordinates.
  • The fiction of Superior Authority will lead to making the subordinates delegate the authority upwards.

System of Communication (Exchange of ideas between the sender and the receiver) 

  • Communication helps in conveying the purposes and helps in exercising authority. Because of this, he believes that Communication is Authority (Everything within the organization is sustained through communication).
  • Thus, there should be a proper system of communication within the organization. The characteristics of proper system of communication.
  • The entire channel of communication should be known.
  • Every functionary should have access to the formal channel of communication.
  • The line of communication should be as direct as possible. The communication centres should be competent.
  • The entire channel of communication should be used. The communication must not jump layers. Jumping of layers will lead to misgivings, misunderstandings or even indiscipline.
  • The channel of communication should not be interrupted. The positions acting as Communication centres should not fall vacant. If it falls vacant, the chain of communication will break. There should be immediate replacement for these positions.
  • The communication should be authentic. The communication should be made within the domain of the authority.
  • The communication centres should be competent. The functionaries should be skilled, able and be equipped with tools, techniques and technologies of communication.

Barnard’s View on Responsibility

  • Chester barnard discussed the moral aspect of the responsibility. While referring to the responsibility within the organization, he says that the responsibility is carried out through multiple codes such as legal code, cultural code, social code etc.
  • Within the job situation, the individual’s responsibility might face conflict of codes. One code might go contrary to other code. When there is a conflict between the internal codes and the external codes, most likely, the external code surrenders to the internal code.
  • Based on the conflict of codes, the behaviour of individuals is identified.
  • It might result into paralysis of action or inaction.
  • Individual might choose one code as against other code or codes. In this case, individual goes through a feeling of guilt.
  • Individual while following one code might find a way to satisfy the other codes. In this case, the individual does not go through the feeling of guilt.
  • Chester barnard recognizes that his study is inadequate in this regard and further studies are required on these topics.
  • Classical theories say that individual does exactly what has been prescribed by the law. Thus, classical theorists believe only in one code i.e. legal code.

Decision Making

  • Barnard is called the pioneer in Decision Making.
  • Decision is an act of choice reached through deliberation, calculation and thought.
  • Choice becomes available only when there are more than one alternative. Decisions are of two types.
    • Organizational Decisions- Barnard refers to the decisions undertaken to advance the organizational goal or decisions made in organizational capacity. These decisions are to be based on logical or non-logical analysis.
    • Personal Decisions- It refers to decisions made outside the organization. These might be based on logical analysis, non-logical analysis or even illogical analysis. (Non- logical refers to decisions based on inadequate or hybrid information)
  • Every decision carries two elements.
  • Chester barnard has used the Means- End Paradigm in this regard. Chester barnard says every decision contains the goal component and the means component.
  • The goal component is the moral component because the goal is a desirable one for the individual who is making the decision.
  • The means through which the goal is to be achieved has been referred to as the opportunistic component.
    • Moral Element
    • Opportunistic Element
    • Complementary Factor- He refers to all the factors which help in achieving the goal.
    • Strategic Factor- He refers to all the factors which when absent helps to achieve the goal.



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