Barnard’s Theory of System Organization
The late Chester Barnard developed a theory on the effective organization of systems, which has served as the foundational basis since the mid-20th century’s industrial revolution. Barnard proposed that organizations, as an assemblage of interdependent elements, are entities that maintain stability in the face of changing environmental forces. His central premise was that effective organization was based on the integration of subsystems within an overall system. The successful coordination and integration of these subsystems enabled the organization to maximize efficiency, minimize errors, and remain competitive within the market.
Barnard was one of the first management theorists to consider the human and social elements of organizational success. He theorized that organizations rely on individuals acting cooperatively to achieve emergent results that the organization could not achieve independently. Thus, for Barnard, the success of any organization was determined by its ability to satisfy the individual needs of its stakeholders. To accomplish this, Barnard argued that organizational structures must reflect “the needs of members, internal harmony and cooperation, and maintain perfect order and adjustment.”
No matter the size, Barnard believed that all organizations are composed of five distinct systems: economic, technical, administrative-managerial, environmental-social, and psychological. Each system is further composed of two distinct subsystems, respectively: a decision-making or coordination subsystem and an execution subsystem. The coordination subsystem is responsible for establishing clear and efficient channels for communication and decision-making, while the execution subsystem implements the decisions and goals of the organization.
The five systems of Barnard’s theory further interact with each other and must be integrated in order for the organization to function effectively. Barnard noted that the human element was the most difficult, yet most important of these systems to coordinate and manage. Thus, an effective coordination of the economic, technical, administrative-managerial, environmental-social, and psychological systems maxims efficiency, productivity, and stability of the organization.
Barnard’s system-based approach to organization eventually laid the foundations of modern organizational design and behavior. This theory provided the framework for a generation of managers to view their organization as an interconnected and interdependent collection of resources striving towards the achievement of a common goal. Furthermore, it helped redefine the aspiring goal of organization, shifting the emphasis from corporate profits to sustainable growth and customer satisfaction.
Chester Bernard’s theory of system organization has continued to influence the way organizations are structured, especially as the demand for effective organizational performance has exponentially increased in the 21st century. Barnard’s specific systems-based approach to organization also provides a much needed emphasis on the human element of the process, something that is often overlooked in more traditional approaches to organizational design. Barnard’s system-based approach provides a relevant, modern foundation for successful organizational design and behavior by considering both the human and operational elements of an organization.
