APRIL, 2009.


The Impact of Mc Gregor’s Theory X and Theory Y on Contemporary Management Practice I. Background information Douglass Mc Gregor (1961) looked at different approaches to motivating people. He classified management and supervisory styles according to attitudes exhibited under two extremes, calling these extremes theory X and theory Y. Under theory x, each point represents an assumption of negative, adversarial and conflicting working attitudes and practices. Theory x managers assumed that: 1) People dislike work and will avoid it if they can. 2) People must be forced, bribed, bullied, cajoled or threatened to put out the right effort. 3) People would rather be directed than accept responsibility 4) People avoid responsibility 5) People are motivated mainly by money 6) People are motivated by anxiety about their security 7) People have little creativity, except when it comes to avoiding rules and prescribed directions. Theory ‘Y’ managers assumed that: 1) Work is necessary to peoples’ psychological growth 2) People want to be interested in their work and under the right circumstances, they can enjoy it. 3) People will direct themselves towards accepted and acceptable targets 4) People will seek and accept responsibility given any encouragement to do so. 5) The discipline that people impose on themselves is much more effective and can be much more severe than any imposed on them by managers and supervisors 6) Under the right conditions, people are motivated by the desire to realize their own potential 7) Creativity and ingenuity are present in everybody and grossly under-used in organizations.


Generally, theory X is the assumption that employees dislike work, are lazy, dislike responsibility and must be coerced to perform. Theory Y is the assumption that employees like work, are creative, seek responsibility and can exercise self-direction. This theory was based on Maslow's hierarchy of needs where he (Mc Gregor) grouped Maslow’s 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 subject to their characteristics and theory of description.

Esteem Love (Social) Safety & Security Physiological
( 1Ketts;32)

Theory Y - a set of assumptions of how to manage individuals motivated by higher order needs Theory X - a set of assumptions of how to manage individuals motivated by lower order needs

II. Statement of the problem Improving performance at work is the essence of management. Even if the right equipment, skills and organizational framework are in place, the employees must be willing to work. Motivation is required if employees are to successfully undertake the tasks that contribute to the achievements of organizational objectives. This motivation is defined as the force that energizes behavior, gives direction to that behavior and underlies its tendency to persist. It is a set of attitudes and values that influence a person to act in a specific goal-directed manner. Motivating therefore is a process of arousing and sustaining goal-directed behavior induced by the expectation of satisfying individual needs. At the core of motivation is human needs satisfaction. In assuming that “lower order” needs motivate individual behavior, theory X can do very little to harness the


motivational energy of employees. In today’s competitive and ever changing business environment, expectations are high, the tasks are demanding. The need to motivate workers has never been more significant. III. Thesis Drawing on Maslow’s hierarchy, McGregor argues that a satisfied need no longer motivates. Under Theory X the firm relies on money and benefits to satisfy employees’ lower needs, and once those needs are satisfied the source of motivation is lost. Theory X management styles in fact hinder the satisfaction of higher level needs. Consequently, the only way that employees can attempt to satisfy their higher level needs in their work is by seeking more compensation, so it is quite predictable that they will focus on monetary rewards. While money may not be the most effective way to self fulfillment, in Theory X environment it may be the only way. Under Theory X, people use work to satisfy their lower needs, and seek to satisfy their higher needs in their leisure time. But it is in satisfying their higher needs that employees can be more productive. This paper seeks to evaluate Douglas McGregor's most important legacy which was neither Theory X nor Theory Y. “It was his insistence that managers question their core assumptions about human nature...." ((2Heil et al;121) 2000). IV. Methodology This paper uses exploratory research technique including ordinary-concept research and social problems research to identify, examine, interpret and define primary and secondary information. This methodology sought to determine the relevance of the data collected, its nature and dependability for the study. The study is qualitative in nature and seeks to provide a qualitative understanding of the title. V. Data Analysis It is widely acknowledged that Douglas McGregor's landmark book, The Human Side of Enterprise (1960), changed the path of management thinking and practice. Questioning some of the fundamental assumptions about human behavior in organizations, he outlined a new role for managers: rather than commanding and controlling subordinates, managers


should assist them in reaching their full potential. At the foundation of McGregor's Theory Y are the assumptions that employees are: (1) not inherently lazy, (2) capable of self-direction and self-control, and (3) capable of providing important ideas/suggestions that will improve organizational effectiveness. Thus, with appropriate management practices, such as providing objectives and rewards and the opportunity to participate in decision making, personal and organizational goals can simultaneously be realized. In contrast to Theory Y, McGregor indicated that conventional managerial assumptions (which he called Theory X) reflect essentially an opposite and negative view: that employees are lazy; are incapable of self-direction and autonomous work behavior; and have little to offer in terms of organizational problem solving. It is reported that by the time The Human Side of Enterprise was republished in 1985, it had become a classic. Writers like Drucker hailed it as "ever more relevant, more timely, and more important. Kanter claimed it contained "profound and timeless truths." Waterman declared it "a classic text that is a fundamental touchstone for anyone in management and organizational development." Bennis wrote "... this book, more than any other book on management, changed an entire concept of organizational man and replaced it with a new paradigm that stressed human potentials, emphasized human growth, and elevated the human role in industrial society" (3McGregor, 1985: iv). However, as Miner noted in his comprehensive (2002) text on organizational behavior theories and research, "there are very few direct tests of McGregor's formulation in the literature ... Furthermore, McGregor himself conducted no research related to his formulations, nor did he attempt to make his variables operational in any kind of measurement procedures" (4miner; 261). In his view, McGregor's theorizing about the effects of individual differences in managerial assumptions has remained virtually unexamined due to the absence of prior construct validation research. Clearly, it is not possible to test McGregor's theory if the central construct--the assumptive world of the focal manager--lacks a published, construct-valid measure. To reinforce his theory, McGregor identified a number of management practices that he thought were consistent with Theory Y assumptions. This he described as participative leadership, delegation, job


enlargement and performance appraisals. Moreover, he recognized that implementation of these practices with a Theory X mindset would be limitedly successful, with employees seeing such techniques as disingenuous manipulations (5Heil et al;26: 2000; McGregor;51: 1966, 1967). At the heart of McGregor's argument is the notion that managers' assumptions/attitudes represent, potentially, self-fulfilling prophecies. The manager who believes that people are inherently lazy and untrustworthy will treat employees in a manner that reflects these attitudes. Employees, sensing that there is little in the job to spur their involvement, will exhibit little interest and motivation. Consequently, and ironically, the manager with low expectations will lament that "you can't get good results nowadays," oblivious as to the actual nature of cause and effect. Closing the serf-reinforcing cycle, the manager feels vindicated; that is, his/ her low expectations were warranted. Conversely, the manager who believes that employees are generally trustworthy and desirous of growth will facilitate their achievement. McGregor's explanation was that the manager had created conditions that enabled "the individual to achieve his [her] own goals (including those of self-actualization) best by directing his [her] efforts toward organizational goals" (6Mc Gregor; 78). Subsequently, numerous, more intricate, psychological and socialpsychological mechanisms have been invoked to explain this phenomenon (e.g.,

Bandura and Locke, 2003; Eden, 1990; Heil et al., 2000; McNatt and Judge, 2004).

McGregor (1957, 1967) noted that some businesses were adopting practices that could be expected to yield superior results, such as decentralization and delegation, job enlargement, participative/consultative management, and performance appraisal. However, he also observed that these programs often were unsuccessful due to the way they were implemented. When those executing the programs did so with Theory X attitudes or within organizations with Theory X climates, the programs would be likely to fail--perhaps another self-fulfilling prophecy. Eden (1990) reported on numerous field experiments demonstrating that when managers were led to have high expectations of some subordinates (based on fictitious


information), the subordinates outperformed their peers. Attempting to apply this finding to leadership training but without using deception, Eden et al. found weak results in seven field experiments, results they characterized as "a disheartening basis for practical application" (2000: 195). Indeed, Eden et al. went on to say that leadership training, in general, may be unrealistic; some managers "have it naturally and some do not, and those that do not cannot be trained, coaxed, or coached to have it" (2000: 204; emphasis added). However, neither the early nor the latter studies by Eden and his colleagues speak to McGregor's theorizing; in all of Eden et al.'s research, expectations were artificially manufactured. In contrast, McGregor's theory relates to organic differences in managers' assumptive worlds. Given the implications of theory Y, If Theory Y holds, Mc Gregor implies that a firm can do many things to harness the motivational energy of its employees: • Decentralization and Delegation – If firms decentralize control and reduce the number of levels of management; each manager 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. If properly implemented, such an environment would result in a high level of motivation as employees work to satisfy their higher level personal needs through their jobs. VI. Conclusion "Douglas McGregor's most important legacy was neither Theory X nor Theory Y. It was his insistence that managers question their core assumptions about human nature...." ((8Heil et al;56) 2000). This lasting legacy of McGregor's The Human Side of Enterprise


and his Theory X and Y is that it shows how far management thinking has come. Objecting to the dominance of Theory X in the workplace of the time, McGregor noted that 'if there is a single assumption that pervades conventional organization theory, it is that authority is the central, indispensable means of managerial control.' McGregor then put forward an alternative perspective. Theory Y was based on the opposite set of assumptions, namely that people need not only to work but want to work. Under Theory Y, the worker finds that physical and mental effort at work are as natural as in leisure; that external control and threats are not the sole means of control in an organization; that the average human learns not only to accept but to seek responsibility; and that most of us have a capacity to display a high degree of imagination, and ingenuity in sorting out problems. It is true that neither of McGregor's two polar opposites are attainable in any organization. Even the most turgid corporate giant has human spirit lurking within it, while the most off-beam creative firms require an organizational underpinning. McGregor recognized this fact and was busy devising a hybrid of organizational human endeavor, theory Z, when he died. While most firms settle for a theory Z-style middle way of matching people with profits, all companies now aspire to the Theory Y perspective. Its obvious desirability is McGregor's lasting legacy. Theory Y may seem unattainable and out of touch with management, but it remain desirous.


1 2 3 4 5 5 6 7 8

F. R Ketts, “Ideology of work”, Tavistock Press, p.32. Heil et al, “Healthy organizations”, Routledge publishers p.121. McGregor, “The human side of enterprise”, 25th anniversary printing, p.iv. Miner, “Management by theory”, Hardback press, p.261. Heil et al, “Healthy organizations”, Routledge publishers p.26. McGregor, “The human side of enterprise”, 25th anniversary printing, p.51. McGregor, “The human side of enterprise”, 25th anniversary printing, p.78. Bandura and Locke, “Needs and human satisfaction”, Smith Press. Heil et al, “Healthy organizations”, Routledge publishers p.56.