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Theory X and Theory Y

Douglas McGregor

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Douglas McGregor –Theory X and Theory Y

Douglas McGregor, an American social psychologist, proposed his famous X-Y theory in his 1960 book 'The Human Side Of Enterprise'.

Theory X and theory Y are still referred to commonly in the field of management and motivation, and whilst more recent studies have questioned the rigidity of the model, McGregor's X-Y Theory remains a valid basic principle from which to develop positive management style and techniques.

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Theory X(AUTHORITARIAN STYLE)

Theory X assumes autocratic management. The theory says that managers under Theory X assume that most people are naturally lazy and need to be controlled and supervised. They think that people need to be motivated all the time. One of the notions that Theory X managers have toward their people is that they are not very smart and they need good encouragement to do good work.

This style of management assumes that workers:

Dislike working. Avoid responsibility and need to be directed. Have to be controlled, forced, and threatened to deliver what's needed. Need to be supervised at every step, with controls put in place. Need to be enticed to produce results; otherwise they have no ambition or

incentive to work.

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Characteristics of Theory X managers

Some of the most noticeable characteristics of Theory X managers are autocratic behavior.

The managers are results-driven. They are concerned with the completion of a

given task.They issue deadlines for the completion of work.

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Characteristics of Theory X managers

The managers lack tolerance. They are very intolerant in nature.

Most of the theory X managers distances themselves from workers. They do not have much of an attachment to with their employees.

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Characteristics of Theory X managers

Theory X managers issue threats and warnings to make people follow their instructions.

They do not participate in the process of team building.

They are unconcerned about the welfare or morale of the employees.

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Characteristics of Theory X managers

They are one-way communicators and poor listeners.

They withhold rewards and suppress pay and remuneration levels.

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Characteristics of Theory X managers

They are poor at delegating responsibilities and think giving orders is delegating responsibility.

They hold on to responsibility but shift accountability to subordinates.

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Theory Y(PARTICIPATIVE STYLE)

Conversely, Theory Y assumes democratic management. The theory says that managers under Theory Y assume that most people like to work. The managers assume that they have self-control. They assume that people can motivate themselves and want to do a good job. One of the important notions that Theory Y managers have about their people is that they are smart.

This style of management assumes that workers:

Take responsibility and are motivated to fulfil the goals they are given. Seek and accept responsibility and do not need much direction. Consider work as a natural part of life and solve work problems

imaginatively. This more participative management style tends to be more widely

applicable. In Y-Type organizations, people at lower levels of the organization are involved in decision making and have more responsibility.

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Characteristics of Theory Y managersSome of the characteristics of Theory Y managers

can be seen. Theory Y managers are quite opposite to that of Theory X.

Even Theory Y managers are results-oriented, after all, but they are also concerned with not just the completion of work, but they assist their subordinates in doing things.

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Characteristics of Theory Y managersTheory Y managers are very tolerant in nature.

They tolerant mistakes and try to rectify them by explaining what should not be done and what needs to be done.

Theory Y managers do not distance out from their employees. They think it is all one team including oneself and move along providing motivation and encouragement to the team.

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Characteristics of Theory Y managersThey do not threat employees for non-

compliance. Instead, they explain them about the norms and compliance issues and make them realize that instructions are for the betterment of work.

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Characteristics of Theory Y managersThey actively participate in the team building

process and make sure that every employee in the team is more than a better performer.

They are very much concerned about the welfare and morale of employees. They try to know the grievances of their employees, if any and try to solve them, if possible.

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Characteristics of Theory Y managersThey are good communicators and good listeners

and take suggestions and constructive criticism seriously.

They do not withhold any rewards and compensations to threat the employees. They also praise their employees for their good work.

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Characteristics of Theory Y managersThey are very good at delegating responsibilities.

They not only give orders but also give directions and suggestions to complete the work.

They hold on to responsibility and also accountability to themselves.

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Characteristics of Theory Y managersThese are the fundamental differences in the views of Theory X and Theory Y. The theories are used extensively in the management school of thought for the betterment of work, productivity and organizational culture in the long run.

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Comparison- Theory X & Y

COMPARISON- Theory X - Theory YMotivation

Theory X assumes that people dislike work; they want to avoid it and do not want to take responsibility.responsibility.

Theory Y assumes that people are self-motivated, and thrive on responsibility

Management Style and Control

In a Theory X organization, management is authoritarian, and centralized control is retained,

whilst in Theory Y, the management style is participative: Management involves employees in decision making, but retains power to implement decisions.

Work Organization

Theory X employees tend to have specialized and often repetitive work.

In Theory Y, the work tends to be organized around wider areas of skill or knowledge; Employees are also encouraged to develop expertise and make suggestions and improvements.

Rewards and Appraisals

Theory X organizations work on a ‘carrot and stick’ basis, and performance appraisal is part of the overall mechanisms of control and remuneration.

In Theory Y organizations, appraisal is also regular and important, but is usually a separate mechanism from organizational controls. Theory Y organizations also give employees frequent opportunities for promotion.

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THEORY Z- William Ouchi

William G. Ouchi (born 1943) is an American professor and author in the field of business management. Ouchi first came to prominence for his studies of the differences between Japanese and American companies and management styles. His first book in 1981 summarized his observations. Theory Z: How American Management Can Meet the Japanese Challenge and was a New York Times best-seller for over five months. It currently ranks as the seventh most widely held book of the 12 million titles held in 4000 U.S. libraries. His second book, The M Form Society: How American Teamwork Can Recapture the Competitive Edge, examined various techniques implementing that approach.

• Ouchi proposed that a Theory Z management approach could lead to;

1. Greater employee job satisfaction

2. Lower rates of absenteeism and turnover

3. Higher quality products

4.Better overall financial performance for U.S. firms.

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Approach

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Strategies to Transform the Organization 12 strategies to transform a typical American company, named as

type A company to type Z company.

1. Skeptics have to be allowed to exist.

2. Audit its philosophy.

3. Define desired philosophy and be able to involve company leaders.

4. Create structure and incentive in the company.

5. Develop interpersonal skills.

6. Test themselves and the system.

7. Stabilize employment.

8. Slow evaluation and promotion.

9. Broaden the people’s career paths.

10. Working into the lower level.

11. Employee participation is allowed in decision making.

12. Create a sense of family between everyone.

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THEORY Z(JAPANESE MANAGEMENT STYLE)

Theory Z essentially advocates a combination of all that's best about theory Y and modern Japanese management, which places a large amount of freedom and trust with workers, and assumes that workers have a strong loyalty and interest in team-working and the organisation. Theory Z also places more reliance on the attitude and responsibilities of the workers, whereas McGregor's XY theory is mainly focused on management and motivation from the manager's and organisation's perspective.

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Comparison & Contrast of Management Theorists

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Comparison & Contrast of Management Theorists

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GENERALIZATION:

McGregor’s Theory X- (Authoritarian Management Style)

– produces strict and controlling supervision

McGregor’s Theory Y- (Participative Management Style)

– associated and participative supervision

William Ouchi’s Theory Z- (Japanese Management Style)

– managers must be more supportive and trusting of their employees, in order to receive the benefit of increased participation in the decisions of the company.

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Few More Motivational theories- which we will understand next time

Classical : -

• Maslow’s Hierarchy of Needs Theory• Herzberg’s Two factor theory

Modern :-

• ERG Theory :- Existence, Relatedness, Growth• McClelland’s Theory of Needs• Goal Setting Theory of Motivation• Reinforcement Theory of Motivation• Equity Theory of Motivation• Expectancy Theory of Motivation

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Thank you