Chester Barnard, a president of the new Jersey Bell Telephone Company, help advance thinking about organizations when he published The Functions of the Executive in 1938. Barnard give us a much more realistic view of what really goes on in formal organization. According to Barnard individual have only a limited amount of power.
A person can do only so much when acting alone. Barnard theorizes that there are two ways to measure this new cooperation. The first is effectiveness, which is social in character and the second is efficiency, which relates to the satisfaction of individual matters and is more personal in nature.
Barnard contribution comes in the areas of communication, decision making, and authority. Barnard’s four conditions need to be met in order for an individual to accept a communication as authoritative. First , the person must understand the communication, second, at the time of his or her decision, that person must believe that what is to be done is consistent with the purpose of the organization, third at the time of his or her decision, that personal interest and fourth that person is mentally and physically able to comply with the communication.