Douglas McGregor

Theory X and Theory Y

 Facts about his life
• Born in 1906, in Detroit, and died in 1964, in
Massachusetts.
• His grandfather Thomas McGregor in about
1895 founded McGregor Institute to aid Great
Lakes sailors and other transient labour. This
Institute housed and fed more than 1000 men
every year.
• In his youth he worked in his grandfather's
institute for transient labourers in Detroit,
where he gained insight into the problems
faced by labour.
• He worked as a district manager for a retail
gasoline merchandising firm to gather up
family to start a family. In the course of this
job, he learned the concepts of management.
• He was the first full time professor of
Psychology at MIT University.
• In 1960, he wrote the book “The Human Side
of Enterprise”, where he identifies and
develops his renowned Theory X and Theory
Y.
 His Theory
Theory Y and Theory X are theories of human motivation that have been used
for human resource management, organizational behaviour and
organizational development. They describe two very different attitudes
toward workforce motivation, and are based upon Maslow's “hierarchy of
needs”, in that he grouped the hierarchy into "lower order" (Theory X) needs
and "higher order" (Theory Y) needs. He suggested that management could
use either set of needs to motivate employees, but better results could be
gained by the use of Theory Y, rather than Theory X.
 Theory X
The role of management is to
coerce and control
employees:
• People have an inherent
dislike for work and will avoid it
whenever possible.
• People must be coerced,
controlled, directed, or
threatened with punishment in
order to get them to achieve
the organizational objectives.
• People prefer to be directed,
do not want responsibility, and
have little or no ambition.
• People seek security above all
else.
 Problems with Theory X
Drawing on Maslow's Needs
Hierarchy, McGregor argues that a
need, once satisfied, no longer
motivates. Under Motivation
Theory X, the firm relies on money
and benefits to satisfy employees'
lower needs (mentioned before),
and once those needs are
satisfied the source of motivation
is lost. This is why McGregor
makes the point that a command
and control environment is not
effective because it relies on lower
needs as levers of motivation, but
in modern society those needs
already are satisfied and thus no
longer motivate.
 Theory Y
The role of management is to develop the
potential in employees and help them
to release that potential towards
common goals:
• Work is as natural as play and rest.
• People will exercise self-direction if they
are committed to the objectives (they are
NOT lazy).
• Commitment to objectives is a function of
the rewards associated with their
achievement.
• People learn to accept and seek
responsibility.
• Creativity, ingenuity, and imagination are
widely distributed among the population.
People are capable of using these
abilities to solve an organizational
problem.
• People have potential.
 Business Implications of applying
Theory Y
• Decentralization and Delegation - If firms decentralize control and reduce
the number of levels of management, managers will have more subordinates
and consequently will be forced to delegate some responsibility and decision
making to them.
• Job Enlargement - Broadening the scope of an employee's job adds variety
and opportunities to satisfy ego needs.
• Participative Management - Consulting employees in the decision making
process taps their creative capacity and provides them with some control over
their work environment.
• Performance Appraisals - Having the employee set objectives and participate
in the process of evaluating how well they were met.
 Theory Z
Theory Z is the name
applied to the so-called
"Japanese Management"
style popularized during
the Asian economic boom
of the 1980s. It contasts
with theories X and Y
because it focuses on
increasing employee
loyalty to the company by
providing a job for life
with a strong focus on the
well-being of the
employee, both on and
off the job.
 Conclusion
Several business and economics
professors and theologists sustain that
McGregor was in some way
misinterpreted. They say that
McGregor wrote his book (The Human
Side of Enterprise”) with the objective
of leading managers into investigating
the two theories and into inventing new
ones according to their situation or
reality. Instead, his Theory Y was
accepted as a new superior ethic- a
set of moral values that ought to
replace the values managers usually
accept.
Nevertheless, there is no doubt that
McGregor’s work has had a
tremendously beneficial impact on the
way managing is looked at today.
 Sources
• http://en.wikipedia.org/wiki/Douglas_McGregor
• http://en.wikipedia.org/wiki/Theory_X_and_theory_Y
• http://www.nwlink.com/~donclark/hrd/history/xy.html
• http://www.strategyvectormodel.com/management_theories/im
• http://www.envisionsoftware.com/Management/TheoryX.html
• http://www.brainbasedbusiness.com/uploads/lazy%20worker-
• http://www.designspotter.com/weblog/archives/trendsport1.jpg
• http://en.wikipedia.org/wiki/Theory_Z
• http://images.pingmag.jp/images/title/worker.jpg