# The Functions of the Executive (Barnard 1938) ## 🎯 핵심 주장 "A good executive doesn't give an order that is unlikely to be followed." Organizations are **cooperative systems** requiring voluntary participation. Authority comes from **acceptance by subordinates**, not from formal position. ## 💡 Null Breaking **They Said** (Classical management): Authority flows top-down from position. Managers command, workers obey. **Barnard Said**: Authority is **accepted from below**, not imposed from above. Organizations are voluntary coalitions held together by: 1. Common purpose 2. Willingness to cooperate 3. Communication **Surprise**: The "zone of indifference" exists because people accept orders **voluntarily**, not because bosses have power. ## 🔑 Keep / Retire ### Keep ✅ - **Coalitional view**: Organizations as voluntary cooperative systems - **Zone of indifference**: Area where people accept orders without question - **Authority = acceptance**: Subordinates grant authority by following - **Informal organization**: Unofficial networks matter as much as formal structure - **Executive functions**: Purpose, communication, securing effort ### Retire ❌ - **Too normative**: Assumes shared purpose exists (March 1962 critique) - **Underplays conflict**: Organizations have competing interests - **No formal model**: Verbal theory only (though that's his era) ## 🧱 논증 블록 ### Block 1: Organizations as Cooperative Systems Organizations exist because individuals can't achieve goals alone. Cooperation requires: - Communication - Willingness to serve - Common purpose ### Block 2: The Authority Paradox Formal authority theory says: Boss → Order → Worker obeys Barnard's inversion: Worker accepts → Order has authority → Boss can lead ### Block 3: Zone of Indifference Each person has a zone where they'll accept orders without question. The executive's job is: 1. Expand this zone (through incentives, purpose) 2. Only give orders **within** this zone ### Block 4: Executive Functions Not command, but: 1. Provide communication system 2. Secure essential effort 3. Formulate/define purpose ## 🔗 Connections ### Builds On - **Mayo (1933)**: Hawthorne studies—social factors matter - **Follett (1924)**: Authority as dynamic, not static - **Weber (1922)**: Bureaucracy theory (but inverts authority logic) ### Built Upon By - **Simon (1947)**: "Leader as bus driver—passengers can get off" - **March (1962)**: Business firm as political coalition - **Cyert & March (1963)**: Behavioral theory of the firm - **Gibbons (2025)**: Coalitional reconception of management ### Contrasts With - **Coase (1937)**: "Conscious power" of entrepreneur (Barnard: power is granted, not inherent) - **GH (1986)**: Ownership = control rights (Barnard: control requires acceptance) ## 🎓 Teaching Notes ### The Key Insight **Management is persuasion**, not command. Example: Professor assigning homework - **Classical view**: I'm the boss → Assign 10 papers → Students comply - **Barnard view**: Students grant authority by staying enrolled → I assign **within zone of indifference** → They comply voluntarily ### Zone of Indifference Illustration ``` [Will refuse] | [Zone: will accept] | [Will refuse] ↑ ↑ Unreasonable Unreasonable (too hard) (too irrelevant) ``` Executive's job: 1. Expand zone (better incentives, clearer purpose) 2. Stay inside it (don't give orders that won't be followed) ### Three Audiences 1. **Classical management**: Shocking—authority from below?! 2. **Modern students**: Obvious—of course people can quit 3. **Gibbons**: Foundational for coalitional view ## 🔬 Research Implications ### For Organizational Economics - Challenges unitary-actor models (firm as single decision-maker) - Requires modeling **participation constraints**: people can leave - Authority as **equilibrium phenomenon** (Gibbons 2025) ### Empirical Predictions 1. Orders outside zone of indifference → low compliance 2. Clearer purpose → larger zone → more effective leadership 3. Informal networks predict outcomes better than org charts ### Connection to Relational Contracts BGM (2002): Formal contracts + relational agreements Barnard (1938): Formal orders + informal acceptance **Same logic**: Cooperation requires more than written rules! ## 📊 Impact ### Academic - **28,000+ citations** (impressive for 1938 book!) - Foundation of **behavioral organization theory** - Influenced Carnegie School (March, Simon, Cyert) ### Practical - Shifted management education toward "leadership" vs "command" - Validated participatory management styles - Explained why authoritarian management often fails ## 📝 Personal Notes ### Why Gibbons Loves This Barnard provides the **coalitional foundation** for Gibbons' project: | Coase (1937) | Barnard (1938) | Gibbons (2025) | |--------------|----------------|----------------| | Entrepreneur's conscious power | Authority = acceptance | Coalitional management | | Command | Cooperation | Equilibrium-building | | Unitary actor | Voluntary coalition | Multiple equilibria | ### Connection to 14.282 - **Module 3**: Delegation (Aghion-Tirole) = formal vs. real authority - Barnard: Real authority = what subordinates accept - **Module 6**: Culture = shared understanding that sustains cooperation - Barnard: Informal organization + shared purpose ### The One Sentence Barnard Never Wrote (But Should Have) **"Managers don't manage organizations; they manage coalitions that happen to be organized."** ## 🎯 One-Sentence Summary Organizations are cooperative systems held together by voluntary acceptance of authority, requiring executives to provide purpose, communication, and incentives—not commands. --- *"A good executive doesn't give an order that's unlikely to be followed."* — Barnard (1938) *"The leader is only a bus driver; the passengers can get off."* — Simon (1947), extending Barnard *"Managers manage internal coalitions as much as external environments."* — Gibbons (2025), via Barnard