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Douglas McGregor – Theory X & Theory Y

In 1960 Douglas McGregor defined contrasting assumptions about

the nature of humans in the work place. These assumptions are the basis

of Theory X and Theory Y.

Theory X. Theory X basically holds the belief that people do not like

work and that some kind of direct pressure and control must be exerted

to get them to work effectively. These people require a rigidly managed

environment, usually requiring threats of disciplinary action as a prima-

ry source of motivation. It is also held that employees will only respond

to monetary rewards as an incentive to perform above the level of that

which is expected. From a management point of view, autocratic (The-

ory X) managers like to retain most of their authority. They make deci-

sions on their own and inform the workers, assuming that they will carry

out the instructions. Autocratic managers are often called “authorita-

tive” for this reason; they act as “authorities”. This type of managers is

highly task oriented, placing a great deal of concern towards getting the

job done, with little concern about workers’ attitudes towards manager’s

decision. This show that autocratic managers lose ground in the work

place, making way for leaders who share more authority and decision

making with other members of the group.

Theory Y. A more popular view of the relationship found in the work

place between managers and workers, is explained in the concepts of

Theory Y. This theory assumes that people are creative and eager to

work. Workers tend to desire more responsibility than Theory X workers,

and have strong desires to participate in the decision making process.

Theory Y workers are comfortable in a working environment which al-

lows creativity and the opportunity to become personally involved in or-

ganizational planning. Theory Y workers are emphasizes to be far more

prevalent in the work place than are Theory X workers. For instance, it

is pointed out that ingenuity, creativity and imagination are increasingly

present throughout the ranks of the working population These people

not only accept responsibility, but actively seek increased authority.

William Ouchi – Theory Z. Another theory which has emerged, and

deals with the way in which workers are perceived by managers, as well




as how managers are perceived by workers, is William Ouchi’s Theory Z.

Often referred to as the “Japanese” management style, Theory Z of-

fers the notion of a hybrid management style which is a combination of

a strict American management style (Theory A) and a strict Japanese

management style (Theory J). This theory speaks of an organizational

culture which mirrors the Japanese culture in which workers are more

participative, and capable of performing many and varied tasks. Theory

Z emphasizes thing such as job rotation, broadening of skills, general-

ization versus specialization, and the need for continuous training of


Much like McGregor’s theories, Ouchi’s Theory Z makes certain as-

sumptions about workers. Some of the assumptions about workers under

this theory include the notion that workers tend to want to build co-op-

erative and intimate working relationships with those they work for and

with, as well as the people that work for them. Also Theory Z workers

have a high need to be supported by the company, and highly value a

working environment in which such things as family, cultures add tradi-

tions, and social institutions are regarded as equally important as the

work itself. Finally, Theory Z workers, it is assumed, can be trusted to do

their jobs to their utmost ability, so long as management can be trusted

to support them and look out for their wellbeing.


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