"X, Y, & Z" Management Theory
In the study of business, many theories about management come into play as an explanation of how things happen or will happen. Managing people in the workforce is no exception as this can be a highly complex area. Perhaps one of the most popular management theories that is referenced often and studied the most is the one that Douglas McGregor formulated in his 1960 book "The Human Side of Enterprise." McGregor's management theory is simply known as "Theory X" and "Theory "Y." To read a short biography on the life and work of Douglas McGregor, click here.
McGregor was a student of psychologist Abraham Maslow who, in 1943, proposed a theory of motivation according to which workers’ behavior is determined by a wide variety of needs known as Maslow's Hierarchy of Needs. Like Maslow, McGregor studied worker attitudes and believed that managers' basic beliefs have an enormous influence on the way that organizations are run, and central to this are managers' assumptions about the behavior of people.
According to McGregor, traditional organizations are based on either of two sets of assumptions about human nature and human motivation, which he called Theory X and Theory Y. Theory X assumes that most people prefer to be directed; are not interested in assuming responsibility; and are motivated by money, fringe benefits, and the threat of punishment. Theory Y assumes that people are not, by nature, lazy and unreliable; it suggests that people can be basically selfdirected and creative at work if properly motivated.
Below is a comparison of the traits the define McGregor's view of Theory X and Theory Y:
Theory X: The Traditional View of Direction and Control In this particular theory, McGregor concluded that people dislike work, try to avoid work it and must be forced and prodded. The belief is that people avoid responsibility and are motivated by the fear of punishment. Many managers lean towards this style of management in the workplace, and often with poor results. |
Theory Y: The Integration of Individual and Organizational Goals In contrast to McGregor's Theory X is this other theory that states that work is fulfilling to people. Moreover, work environments should be created to facilitate employee growth and responsibility. More enlightened managers lean towards this approach. |
Theory X (Results Oriented) | Theory Y (People Oriented) |
People are: Aloof and/or arrogant Short-Tempered Deadline and/or results driven Intolerant and/or demanding Distant Shouts and/or gives ultimatums Poor Listener Does not thank or praise | People naturally enjoy work People will apply self-control and self-motivation Rewards motivate while fear does not People enjoy responsibility Imagination and creativity is common Praises and thanks good performance Suggestions are welcome The Manager participates with employees Interested in growth and development |
Another Management Theory: That of "Z":
Although Theory Y has much to offer and is widely followed, many organizations still use a variety of policies and practices that are based on Theory X principles. A further development in explaining human work behavior and then adjusting management and leadership practices to it is Theory Z. McGregor worked on the foundation for what later became known as "Theory Z." During the 1970s, William Ouchi began to expound on McGregor's principles by comparing and contrasting Japanese and U.S. organizations. Theory Z is probably the most prominent of the theories and practices coming from Japan and combines typical practices from the United States and Japan into a comprehensive system of management and leadership traits. Ouchi described the characteristics of the efficient Japanese companies that produce high employee commitment, motivation, and productivity.
Theory Z has had a marked impact on the manner in which companies are led today (think Toyota, IBM, HP, Kodak, and Procter & Gamble). Theory Z strategies have been instrumental in building stronger working relationships between subordinates and their leaders because of the increased level of worker participation in decision making as well as leaders’ higher level of concern for their subordinates.
Below is a chart showing the characteristics of organizations who follow the principles of Theory Z:
Theory Z |
Organizations tend to offer: Long-term employment culture
within the organization
Collective decision making to their
employees as much as possible
The increase and reinforcement of the
importance of individual responsibility
The establishment of a slow and long-term
process for evaluation and promotion
The employment of implicit, informal control
that uses explicit, formal measures/tools of performance
The instituition and use moderately specialized
job descriptions and career paths
The development of policies and practices that
support a holistic concern for and support of the individual both at work and at home (as regards family issues) |
Resource materials for understanding Theory X & Y:
Courtesy of www.BusinessBalls.com, they have provided several free downloads for the assessment, study, and practice of McGregor's Theory X and Y principles to any individual or organization. Although these materials were not created by McGregor himself, they are based on the understanding and application of his theories.
The above links were last tested on 06.13.08
Other management theory resources:
To learn more about other types of popular management theories, check out Bono and Heller's "Thinking Managers" website.