Chester Barnard (1886-1961) followed Mary Parker Follett's major themes with a far more comprehensive theory in the functions of the executive. Barnard,a bell system executive who was closely associated with the Harvard business school,and those faculty who were involved with the Hawthorne studies, saw organizations as Cooperative systems Where the function of the executive was to maintain the dynamic equilibrium between the needs of the organization and the needs of its employees. in order to do this, management had to aware of the interdependent nature of the formal and informal organizations. Barnard's chapter on the significance and role of informal organizations, "Informal Organizations and Their Relations to Formal Organizations," reprinted here, provided the theoretical foundations for a whole generation of empirical research.