In The Functions of the Executive, Chester Irving Barnard established an intellectual foundation for America’s leadership by a professionalized managerial elite.
Published in 1938, Chester Irving Barnard’s The Functions of the Executive filled an immense theoretical and practical void in knowledge of executive goals and of executives’ institutional and public responsibilities. Despite the fact that a managerial class had been the principal force in modernizing the United States, wielding immense power as a consequence, executives carried out their functions and met responsibilities chiefly through reliance on habit and intuition. Formal analyses of what they did or how and why they did it, except in reference to profits and losses, were almost as unknown to them as their names were to the general public. Guides to rationalizing and improving their performance and to coping with their expanding responsibilities were notably lacking. Fewer still were studies produced by the kinds of people whose works executives were likely to read or whose advice they might follow—namely, other successful and experienced executives. The seminal studies of organization theorist Henri Fayol,
A “science” of management—of the executive’s roles in regard to the organization, the public, and the government—was still being explored in the United States by a handful of positivist and progressive social scientists in 1938, but their inquiries were far from complete. Moreover, most studies originated with academics. Their approaches to what occurs—or ought to occur—inside the organizational world of executives was marked by an understandable caution characteristic of outsiders.
To be sure, a new breed of executives had appeared during the 1920’s and 1930’s. They brought fresh precepts and practices to running their corporations, thus developing their own contributions to a systematized knowledge of management that was commensurate with a mature industrial economy. Pierre S. du Pont undertook the decentralization of the Du Pont Corporation, for example, and Julius Rosenwald and Robert E. Wood restructured Sears, Roebuck. Such novel successes were swiftly studied by consultants and by academic specialists. These operations, as perceived by other executives, however, seemed idiosyncratic and thus unworthy of conscious imitation. Only much later did literature flow from them. Alfred P. Sloan, for example, did not publish what he had learned from restructuring General Motors until 1964. Thus, despite the changes and successes in management during the 1920’s and 1930’s, analyses of managerial tasks and responsibilities were still far removed from the public domain. They had little effect on the formal training of prospective executives until after World War II.
This was the gap that was filled by Barnard’s pathbreaking work, combining as it did the fruits of his eclectic readings, particularly in philosophy and the social sciences, with the dividends of his high-level executive experience. Barnard received preparatory education and Christian moral instruction at Mount Hermon School and then attended Harvard University. Under the mentorship of Walter S. Gifford, Barnard joined the statistics department of American Telephone and Telegraph (AT&T) in 1909. Gifford’s promotion to chief executive officer of AT&T in 1925 resulted in Barnard’s promotion to the presidency of AT&T’s subsidiary, New Jersey Bell Telephone Company, in 1927. He held that position until 1948. Over time, he accompanied his presidency with the direction of several foundations as well as with government service and continuing close rapport with his Harvard faculty friends. This was the career that generated The Functions of the Executive, originally a series of eight lectures delivered at Boston’s Lowell Institute in 1937.
The book carefully defines in scholarly language the nature of cooperative systems and the role of individuals within them. It examines both formal and informal organizational theory and structure as well as the bases of specialization, economic incentives, the decision-making environment, and specific executive roles and responsibilities. Recognizing the abundant technical literature available to executives on accounting, personnel, technology, and the like, Barnard stressed instead the need for a science of management that synthesizes materials from the physical, biological, and social sciences. His cooperative system of management was based on this catholic amalgam of knowledge.
Barnard’s explicit assumptions were that highly complex private and public organizations are the permanent and central characteristics of modern societies. The key role in these organizations is that of the executive. By Barnard’s estimate, five million executives were working in the United States at the time he was writing, of whom approximately one hundred thousand occupied major, mostly corporate, positions. Their authority was immense, and, in his mind, they ran American society. One issue was the legitimacy of their position in a democratic setting. According to Barnard, that legitimacy depended on their ability to satisfy the needs of individuals in their workforces and in society by efficiently delivering material goods in socially responsible ways and by enhancing the quality of individual lives. To the extent that executives meet these criteria of performance, they ensure a stable social system as well as their own longevity in authority.
Barnard’s The Functions of the Executive was a functionalist manifesto. Barnard regarded systems of cooperation as being alive. His concept of businesses, particularly of corporations and their executives, was therefore an organic one.
The book was also a guide to scientific management that drew speculation and evidence from some of the finer minds of Barnard’s era. Barnard generously acknowledged his debts to them. His organic theories, for example, derived from works by the brilliant Italian economist and sociologist Vilfredo Pareto, from the distinguished English philosopher and mathematician Alfred North Whitehead, and from Barnard’s Harvard colleagues Lawrence Henderson (a specialist on Pareto) and Mary Parker Follett (an authority on the dynamics of administrative control). His concepts of cooperation came from one of the great American administrators, Herbert Hoover, as well as from Gestalt psychologist Kurt Koffka. Barnard borrowed from sociologist Eugene Ehrlich and from the famed labor historian and institutional economist John R. Commons the idea that law itself does not confer legitimacy on authority, but, rather, legitimacy comes from the people. These are only a few of the impressive figures whose works contributed to blending Barnard’s own executive experiences with scholarly theory and abstractions.
This range of creatively synthesized learning, abstrusely explained by Barnard, was heavy reading for working executives and heady fare for prospective managers. Nevertheless, it possessed the authentic smack of science and represented the first work of its type in the United States. Business management schools, foremost Dean Wallace B. Donham’s Harvard Graduate School of Business Administration,
Barnard’s book was more than a timely set of nostrums that happened to appear during the years prior to World War II, a time that Peter F. Drucker, a prolific and influential American authority on management and an ideological descendant of Barnard, has described as years of management innocence, obscurity, and ignorance. By 1968, the thirtieth anniversary of the book’s first publication, it had been reprinted eighteen times. Its usefulness and relevance, and consequently its impact, had grown during the astounding organizational, managerial, and technological changes that had occurred through the decades.
Barnard’s work is cited as pioneering in nearly every book Drucker wrote on managers and management. Drucker’s first influential book, The Practice of Management (1954),
Barnard believed that order and freedom in the United States could be combined best under the leadership of a managerial elite that knows its business, can deliver material goods, and can maintain a quality of life that ensures social stability. Because most Americans are employees, he noted, some loss of liberty is required for order to prevail, a point he stressed by quoting Aristotle. In Barnard’s view, application of the kind of knowledge dealt with in his book, in combination with refined rational and moral sensibilities among managers, legitimates managerial authority.
American Progressivism furnished the context into which Barnard fit. Predominantly represented by well-educated, urban, middle-class professionals and businessmen, the Progressives sought between the 1890’s and the 1930’s to recast American life and to reorder it by applying scientific principles to nearly everything that fell under their scrutiny. Like Frederick Winslow Taylor, who premised his study of work on scientific principles so as to bring efficiency into the workplace, or Barnard’s colleague, Mary Parker Follett, who among many others sought scientific principles that might be applied to dynamic administration, the Progressives sanguinely believed that applications of knowledge—whether to government, to politics, or to enterprise—would ensure both a healthier democracy and social stability. Both goals could be achieved at small expense. Seen as part of this tradition, Barnard was the first American to attempt to ground executive functions on the most advanced, relevant knowledge and thereby convert management into a discipline rather than an art.
The American managerial revolution was well under way when Barnard published his seminal work. Executives, among them Barnard’s friend and mentor Gifford, by 1938 were already running the United States. John Kenneth Galbraith,
Beginning in the 1970’s and continuing into the early 2000’s, evidence flowed in from social commentators, the press, polls, scholars, and even novelists that confidence in managerial leadership was undergoing a precipitous decline. This erosion, observers noted, was specific to executive leadership and did not extend to basic American institutions. Successions of business failures and scandals certainly quickened the loss of respect, as did the general perception that American technology and the quality of major American products lagged behind those of foreign competition. The erosion of confidence came from within as well. A number of major executives expressed the opinion that the vast majority of their colleagues working in Fortune’s top five hundred corporations held their jobs only for what they could get out of them and were failing in their performance if measured against legal, moral, and ethical criteria. More philosophical observers simply wondered whether any elite, no matter how golden its moments, can enjoy great longevity in a democratic society.
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Barnard, Chester Irving. The Functions of the Executive. 30th anniversary ed. Cambridge, Mass.: Harvard University Press, 2005. Reprint edition of Barnard’s original work includes an introduction by Harvard Business School professor Kenneth Richmond Andrews. -
Drucker, Peter F. Management: Tasks, Responsibilities, Practices. 1974. Reprint. New York: HarperCollins, 1993. Readable work by an acknowledged authority on all aspects of management. Includes discussion of the legitimacy of management. -
Gabor, Andrea. The Capitalist Philosophers: The Geniuses of Modern Business—Their Lives, Times, and Ideas. New York: Crown Business, 2000. Examines the history of American business by focusing on important individuals. Chapter 3 is devoted to discussion of Barnard. Includes selected bibliography and index. -
Lipset, Seymour Martin, and William Schneider. The Confidence Gap: Business, Labor, and Government in the Public Mind. Rev. ed. Baltimore: The Johns Hopkins University Press, 1987. Presents information from polls, the press, and many other sources confirming a steady decline in public confidence in managerial leadership. Includes figures, tables, index of poll results, and general index. -
Scott, William G. Chester I. Barnard and the Guardians of the Managerial State. Lawrence: University of Kansas Press, 1992. Well-written and well-researched work discusses Barnard and his influences. Places Barnard within the context of his times. -
Williamson, Oliver E., ed. Organization Theory: From Chester Barnard to the Present and Beyond. Expanded ed. New York: Oxford University Press, 1995. Excellent collection of essays provides information on the theoretical context into which Barnard fits. Includes index.
Harvard University Founds a Business School
Gilbreth Publishes The Psychology of Management
Fayol Publishes General and Industrial Management
Donham Promotes the Case Study Teaching Method at Harvard
American Management Association Is Established
McKinsey Founds a Management Consulting Firm
Berle and Means Discuss Corporate Control