Theory X, Y and Z

THEORY X, Y AND Z
~ Shubhada kakkad (22143)

McGregor’s Theory X and Theory Y
The idea that a manager’s attitude has an impact

on employee motivation was proposed by Dr.
Douglas McGregor.
He was an American management professor at
the MIT Sloan School of Management. He also
taught at the Indian Institute of Management
Calcutta.
In his 1960’s book ‘The Human Side of

Enterprise’ he told us about how a
managers's basic assumptions about human
behaviour will determine their managerial
style.
2
Theory X (Assumptions)
1. Work is inherently distasteful to most people and they will attempt to
avoid work whenever possible.
2. Most people are not ambitious, have little desire for responsibility and
preferred to be directed.
3. Most people have little aptitude for creativity in solving organisational

problems.
4. Motivation occur only at the psychological and security levels of

Maslow’s hierarchy of needs.
5. Most people are self centered. As a result, they must be closely controlled
to achieve organisational objectives.
6. Most people resist change.
7. Most people aur gullible and unintelligent.

3
Theory X managers tend to take a pessimistic view of
their employee and assume that they are naturally
unmotivated and dislike work.
Authority is rarely delegated and control remains firmly

centralized.
Theory X management has largely fallen out of fashion in

recent times.
4
Theory Y (Assumptions)
1. Work can be as natural as play if the conditions are favourable.
2. People will be self-directed and creative to meet their work and

organisational objectives if they are committed to them.
3. People will be committed to their quality and productivity objectives if

rewards are in place that address higher needs such as self fulfilment.
4. The capacity for creativity spreads throughout organisations.
5. Most people can handle responsibility because creativity and ingenuity are
common in population.
6. Under this conditions, people will seek responsibility.
5
Theory Y managers have an optimistic, opinion of their
people and they tend to use a decentralised, participative
management style.
This encourages a more collaborative, trust based relationship

between managers and their team members.
Appraisals are regular and used to encourage open

communication rather than staff control.
Theory Y has become more popular among organizations.
6
Theory X and Theory Y in the workplace
• For new starters who will likely need a lot • For a team of experts who are used to working
of guidance. under their own initiative and need little direction.
• Requires the manager to take control such • Favoured by organizations that have a flatter
as a crisis. structure and where people at lower levels are
• More prevalent in larger organizations or in involved in decision making and have some
teams where work can be repetitive and responsibility.
target-driven.
Gives people too much freedom, it may
Could cause people to become demotivated
allow people to stray from their key
and non-cooperative.
objectives and lose focus.
7
Ouchi’s Theory Z
William ouchi is an American professor,

consultant and author in the field of business
management. He was best known for identifying a
style of management which he termed theory z.
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.
8
Theory Z (Assumptions)
1. Employees seek to build cooperative and intimate working relationships

with their co-workers.
2. Employees expect reciprocity and support from the company.
3. When given the right management support, employees can be trusted to do

their jobs.
Theory Z represents a humanistic approach to management. It is a hybrid

management approach combining Japanese management philosophies with
U.S. culture.
9
Theory Z
Benefits :
• Reduced employee turnover
• Increased commitment
• Improved morale and job satisfaction
• Drastic increase in productivity
Limitations:
• It can be difficult for organizations and employees to make
life-time employment commitments.
• Slow promotions and group decisions may not be a good fit
with companies operating in cultural, social and economic
environment where those work practices are not the norm.
10
THANK YOU…

Theory X, Y and Z

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THEORY X, Y AND Z

~ Shubhada kakkad (22143)

The idea that a manager’s attitude has an impact

In his 1960’s book ‘The Human Side of

3. Most people have little aptitude for creativity in solving organisational

4. Motivation occur only at the psychological and security levels of

6. Most people resist change.

7. Most people aur gullible and unintelligent.

Authority is rarely delegated and control remains firmly

Theory X management has largely fallen out of fashion in

1. Work can be as natural as play if the conditions are favourable.

2. People will be self-directed and creative to meet their work and

3. People will be committed to their quality and productivity objectives if

4. The capacity for creativity spreads throughout organisations.

6. Under this conditions, people will seek responsibility.

This encourages a more collaborative, trust based relationship

Appraisals are regular and used to encourage open

Theory Y has become more popular among organizations.

William ouchi is an American professor,

Ouchi first came to prominence for his studies of the

1. Employees seek to build cooperative and intimate working relationships

2. Employees expect reciprocity and support from the company.

3. When given the right management support, employees can be trusted to do

Theory Z represents a humanistic approach to management. It is a hybrid

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