Theory X and Y (L02)

The second lecture started with an emphasis on theories of motivation. The discussion gradually moved towards two sets of assumptions about human nature and human behaviour that are relevant to the practice of management represented by Theory X and Theory Y.

Theory X represents a negative view of human nature that assumes individuals generally dislike work, are irresponsible, and require close supervision to do their jobs. Theory Y denotes a positive view of human nature and assumes individuals are generally industrious, creative, and able to assume responsibility and exercise self-control in their jobs. One would expect, then, that managers holding assumptions about human nature that are consistent with Theory X might exhibit a managerial style that is quite different than managers who hold assumptions consistent with Theory Y. These two opposing perceptions theorized how people view human behavior at work and organizational life:

Theory X

·        With Theory X assumptions, management's role 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.

Theory Y

·        With Theory Y assumptions, management's role 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.

Intellectual creativity cannot be 'programmed' and directed the way we program and direct an assembly line or an accounting department. This kind of intellectual contribution to the enterprise cannot be obtained by giving orders, by traditional supervisory practices, or by close systems of control. Even conventional notions of productivity are meaningless with reference to the creative intellectual effort. Management has not yet considered in any depth what is involved in managing an organization heavily populated with people whose prime contribution consists of creative intellectual effort. 

We can view these videos to get a better grasp of the concept.

THEORY X THEORY Y-I

THEORY X THEORY Y-II

THEORY X AND THEORY Y IN THE TWENTY-FIRST CENTURY

McGregor's work on Theory X and Theory Y has had a significant impact on management thought and practice in the years since he first articulated the concepts. In terms of the study of management, McGregor's concepts are included in the overwhelming majority of basic management textbooks, and they are still routinely presented to students of management. Most textbooks discuss Theory X and Theory Y within the context of motivation theory; others place Theory X and Theory Y within the history of the organizational humanism movement.

Theory X and Theory Y are often studied as a prelude to developing greater understanding of more recent management concepts, such as job enrichment, the job-characteristics model, and self-managed work teams. Although the terminology may have changed since the 1950s, McGregor's ideas have had tremendous influence on the study of management.

In terms of the practice of management, the workplace of the early twenty-first century, with its emphasis on self-managed work teams and other forms of worker involvement programs, is generally consistent with the precepts of Theory Y. There is every indication that such programs will continue to increase, at least to the extent that evidence of their success begins to accumulate.

The Triumph of Y

We are all Theory Y people now —at least when it comes to delivering or receiving motivational talks —and yet, truth be told, we all have our doubts that the world has caught up with our wisdom about it. It will have already occurred to many people, for example, that quite a few of  those companies are great places to work because they are successful, rather than the other way around. (I mean, any old company can offer free haircuts and on-site medical care if  it has a market capitalization of  US$200 billion and a fast-growing market.) There is also plenty of  anecdotal evidence to suggest that firms change their assumptions about human nature after their fortunes change, rather than before. The dot-coms, for example, were all exuberantly convinced about the merits of  self-realization in the workplace as long as the market-valuation bubbly was pouring. In the gloomy aftermath, many of  the surviving firms transformed themselves with impressive speed into gulag archipelagos, imposing harsh, Xstyle discipline on employees who were doing all those jobs that the dot-coms did not outsource.