Barnard-Simon Theory of Organizational Equilibrium
The most important resource of an organization is it's people. Barnard (1938)
stressed that motivating participants to continue to make contributions
is one of the most important activities of managment. Simon built Barnard's
observations into the Barnard-Simon theory of organizational equilibrium,
which refers to the organization's ability to attract sufficient contributions
to ensure it's survival (Scott p. 171). The postulates are:
1. An organization is a system of interrelated social behaviors of a number
2. Each participant receives inducements form the organization for which
the participant makes contributions.
3. The participant will continue as long as her or his perception is that
the inducements are higher than their contributions.
4. The contributions from all the participants provides the pool of resources
from which the organization manufactures the inducements.
5. Thus, an organization is "solvent" only as long as the contributions
are sufficient to provide inducements necessary to sustain contributions.
This theory borders on tautology, and it's hard to define both the pool
of inducements (both material and non-material), their particular value
to an individual, and the relative value and type of contributions made.