Organization charts are subject to important limitations. A chart shows only formal authority relationships and omits the many significant informal a… - Harold Koontz

The Social System School: Closely related to the human behavior school and often confused or intertwined with it is one which might be labeled the social system school. This includes those researchers who look upon management as a social system, that is, a system of cultural interrelationships. Sometimes, as in the case of March and Simon, the system is limited to formal organizations, using the term "organization" as equivalent to enterprise, rather than the authority-activity concept used most often in management. In other cases, the approach is not to distinguish the formal organization, but rather to encompass any kind of system of human relationships.

This book undertakes the study of management by utilizing analysis of the basic managerial functions as a framework for organizing knowledge and techniques in the field. Managing is defined here as the creation and maintenance of an internal environment in an enterprise where individuals, working together in groups, can perform efficiently and effectively towards the attainment of group goals. Managing could, then, be called "performance environment design." Essentially, managing is the art of doing, and management is the body of organized knowledge which underlies the art.

A prominent manufacturer once said that although he could see some use for an organization chart for his factory, he had refused to chart the organization above the level of factory superintendent. His argument was that charts tend to make people overly conscious of being superiors or inferiors, tend to destroy team feeling, and give persons occupying a box on the chart too great a feeling of "ownership"?Another top executive once said that if an organization is left uncharted, it can be changed more easily and that the absence of a chart also encourages a competitive drive for higher executive positions on the part of the uncharted middle-management group.