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The functions of the executive:

Chapter 2: The individual and organization


It is something of a marvel to recognize just how much of what is only now coming forth concerning leadership by means of complex systems research was already anticipated in the carefully considered insights published by Chester Bernard as far back as 1938. In his book, The Functions of the Executive, Barnard described an integrated perspective placing the individual actions of leaders squarely within the context of a systemic understanding of organizations. In this regard, the economist John Kenneth Galbraith credited Barnard with had providing the most informative definition of organization of the time. Other researchers from Nobel Laureate Herbert Simon to James March have also been inspired by his insights - March suggesting that Barnard had actually instigated much of the later research and Simon pointing out the deep complexity perspective that Benard enunciated.

Chester Barnard (1886-1961) is believed to be the first executive who wondered out loud about what a business leader should be. Born in Malden, Massachusetts, his father was a mechanic; his mother died when he was five years old. At the age of fifteen, he worked as a piano tuner. He won an economics scholarship to Harvard and studied economics and languages. In the third year in Harvard, he dropped out of college due to a shortage of funds, but fortuitously landed a job that was to prove a great benefit to himself and American industry when he joined American Telephone and Telegraph to work as a statistician in 1909. He spent his entire working life with the company, becoming President of New Jersey Bell in 1927, finally retiring in 1952.

Chester Barnard’s best-known book, The Functions of the Executive (1938), collected his eight lectures given at the Lowell Institute in Boston in 1937. Another well-known work is Organization and Management (1948). Barnard also made great contributions to not-for-profit foundations. He was a president of the United Service Organizations for National Defense (1942-1945) during World War II; state director of the New Jersey Relief Administration during the Depression; President of the Rockefeller Foundation and the General Education Board (1948-1952); Chairman of the National Science Board (1950-1956); and, Chairman of the National Science Foundation (1952-1954). In addition, Barnard was a co-author of the State Department report on International Control of Atomic Energy which went on to become a fundamental policy statement for the government in that area. Bernard was also known for his work supporting African American Soldiers of which he once said, “In the long run this accomplishment may be more important than anything we have done, for unity amid diversity is a fundamental problem of world peace” (Krass, 1998).

Overview of the excerpt "The individual and organization"

We have chosen this specific excerpt because it highlights three key aspects of his approach that are of importance to complex systems research:

  1. The duality of individuals as both autonomous agents and also actors influenced by their situation within a system;

  2. Purpose as the underlying driver of cooperation among agents, and;

  3. The distinction between effectiveness and efficiency in evaluating action and choices within a system.

When the individual is considered as an organizational actor, the relevant actions must be considered within an organizational purpose - purpose being a critical determinant of cooperation. It is not simply the capacity of individuals to act for their own benefit and to make choices toward that end which drives human events.

Just as importantly, it is the organization’s capacity to limit the choices available to individuals that in the end channels coordinated action. If Chester Barnard were alive today, we believe he would be very excited about the insights being supplied into individual and systemic purpose through the study of complex systems. We suggest that a close reading of the excerpt juxtaposed with the findings of the papers in this special issue can lead to valuable cross-fertilizations between a visionary of the past and those of the present, and between leadership practice and leadership theory.


Originally published in Barnard, C. I. (1938). The Functions of the Executive, ISBN 0674328035 (2005), pp. 8-21. The E:CO editorial team would like to thank Harvard University Press for their kind permission to reprint this chapter. The original article can be downloaded from here.



Crainer, S. (1998). “Chester Barnard,” The Ultimate Book of Business Gurus: 110 Thinkers Who Really Made a Difference, Oxford, England: Captone Publishing Limited, ISBN 0814404480, pp. 11-14.


Wren, D. A. (2000). “Barnard, Chester Irving,” American National Biography Online,


Gabor, A. (2000). The Capitalist Philosophers: The Geniuses of Modern Business - Their Lives, Times, and Ideas, New York, NY: Times Books, ISBN 0812928202, pp. 67-82.


Krass, P. (1998). Chester I. Barnard. The Book of Leadership Wisdom, Canada: Wiley& Sons, Inc., ISBN 04712945501, pp. 37-42.

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