Theory Z
Name of Theorist
• William Ouchi was born in 1943. He is an American
Professor and an author in business management.
He was born and raised in Honolulu, Hawaii.
• Ouchi wrote a book called Theory Z How American
Business Can Meet the Japanese Challenge.
• The secret to Japanese success, according to Ouchi,
is not technology, but a special way of managing
people. "This is a managing style that focuses on a
strong company philosophy, a distinct corporate
culture, long-range staff development, and
consensus decision-making"
Theory Z
•Employees are viewed as long-term assets who
will stay with the same firm throughout their
careers. They value a working environment
where family, cultures, traditions and social
institutions are regarded as equally
important as the work itself.
• The Japanese management style popularized
in the 1980s that assumes employees have an
interest in good working relationships with
management and other employees.
Management generally has high confidence
in employees, who are encouraged to
participate in the management decision
Time Period of Development
• Theory Z is the name applied to the socalled "Japanese Management" style
popularized during the Asian economic
boom of the 1980.
• Japan had the world's second largest gross
national product (GNP)—just behind the
United States
• and ranked first among major industrial
nations in 1990 in per capita GNP at
Characteristics of Theory Z
• Long-term employment and job
• Collective responsibility
• Implicit, informal control with
explicit, formalized measures
• Collective decision-making
• Slow evaluation and promotion
• Moderately specialized careers
Limitations of Theory Z
• Theory Z can be difficult to
implement because Japanese
companies do not operate the
same as companies in the United
States and other nations.
• Theory Z requires workers in
different jobs, such as office
workers and factory workers, to
make decisions together.
• Under Theory Z management, a
worker also stays longer in a job
without receiving a promotion.
• A worker in another country who
does not expect lifetime
employment at the same firm may
decide to switch employers.

Theory Z - Richview Business Department