The Human Side of Enterprise

byJOEL DENY JOHN

H117

Douglas McGregor

Theory X and Theory Y

Theory X and Theory Y are two sets of assumptions about human nature and behavior that are related to the practice of management.

Theory X: Representing a negative view of human nature that assumes people generally are naturally irresponsible for their work and require close supervision to do jobs.

Theory Y: Indicating a positive view of human nature that assumes people are generally hard-working, creative and responsible for exercising self-control over their jobs.

Theory X (Authoritarian Management Style)

Management is responsible for organizing the elements of productive enterprise in the interest of economic ends.

With respect to people, this is a process of directing their efforts, motivating them, controlling their actions, modifying their behavior to fit the needs of the organization.

Without this active intervention by management, people would be passive to organizational needs. They must therefore be persuaded, rewarded, punished, controlled—their activities must be directed .

Contd….

The average man is by nature indolent—he works as little as possible.

He lacks ambition, dislikes responsibility, prefers to be led.

He is inherently self-centered, indifferent to organizational needs.

He is by nature resistant to change. He is gullible, not very bright.

The management can be:

Hard or Strong• Coercion• Threat• Close supervision• Tight controls over behavior Soft or Weak• being permissive• Satisfying peoples demands• Achieving harmony

“FIRM BUT FAIR”

McGregor’s Remarks on Theory X

It is of "hard" management whose methods involve close supervision, rigid control and compulsion. It would lead to restriction of output, mutual distrust and even sabotage.

The managers influenced by Theory X believe that most employees are only out for themselves and their sole interest in the job is to earn money.

They tend to blame employees in most situations, without questioning the systems, policy, or lack of training which could be the real cause of failures.

http://www.youtube.com/watch?v=kLxVhUA5n24

Theory Y (Participative Management Style)

Management is responsible for organizing the elements of productive enterprise.

People are not by nature passive or resistant to organizational needs. They have become so as a result of experience in organizations.

The motivation, responsibility, the readiness to direct behavior toward organizational goals are present in people. It is the responsibility of management to make it possible for people to recognize

and develop these human characteristics .

The essential task of management is to arrange organizational conditions and methods of operation so that people can achieve their own goals .

Theory X - authoritarian, repressive style. Tight control, no

development. Produces limited, depressed culture.

Theory Y - liberating and developmental. Control, achievement and continuous improvement achieved by enabling,

empowering and giving responsibility.

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Which is More Effective, Theory X or Theory Y?

• Organizations putting Theory Y into practice tend to go back to Theory X in hard economic times.

• Theory Y is not always more effective than Theory X.

• Unforeseen events of each managerial situation determine whether Theory X or Theory Y was proper.