Monday, August 1, 2011

Management Theories # 1 - X Theory Y Theory

This month of August - we are now back to Management methods, models and theories. Let us spend some time in understanding few of the very interesting management theories. This is one of my favorite subjects, and I might continue this run another month soon :)

To start with, let us study the X Theory and Y Theory - proposed by Douglas McGregor, an American social psychologist, in his 1960 book 'The Human Side Of Enterprise'.

McGregor's XY Theory remains central to organizational development, and to improving organizational culture. It is a salutary and simple reminder of the natural rules for managing people, which under the pressure of day-to-day business are all too easily forgotten.

McGregor maintained that there are two fundamental approaches to managing people. Many managers tend towards theory x, and generally get poor results. Enlightened managers use theory y, which produces better performance and results, and allows people to grow and develop.

Theory X ('authoritarian management' style - the manager thinks like this)

  • The average person dislikes work and will avoid it he/she can.
  • Therefore most people must be forced with the threat of punishment to work towards organisational objectives.
  • The average person prefers to be directed; to avoid responsibility; is relatively unambitious, and wants security above all else.

Theory Y ('participative management' style - the manager thinks like this)

  • Effort in work is as natural as work and play.
  • People will apply self-control and self-direction in the pursuit of organisational objectives, without external control or the threat of punishment.
  • Commitment to objectives is a function of rewards associated with their achievement.
  • People usually accept and often seek responsibility.
  • The capacity to use a high degree of imagination, ingenuity and creativity in solving organisational problems is widely, not narrowly, distributed in the population.
  • In industry the intellectual potential of the average person is only partly utilised.

In conclusion, McGregor sees Theory Y as the preferable model and management method, however he felt Theory Y might prove difficult to use in large-scale operations.

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