Introduction
In the year 1960, Douglas McGregor, a management professor at the Massachusetts
Institute of Technology, proposed two theories based on the hypothesis related to
human behaviour in his book The Human Side of Enterprise.
He believed that while motivating people, there are certain assumptions about
human nature that should be taken into consideration.
According to McGregor, there are two aspects of human behaviour at work which he
described as Theory X (negative aspect) and Theory Y (positive aspect).
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Overview of Theory X
• Definition: Assumes employees are inherently lazy and require close supervision.
According to McGregor, Theory X is based on the following assumptions:
• The average human being will avoid work whenever it is possible because of their inherent dislike
of work.
• Most of the people are gullible and not very intelligent.
• Most people by nature, always resist change and have security as their priority.
• An average person doesn’t like responsibility, lacks ambition, and prefers to be directed by others.
• Lastly, an average human being is self-centred and indifferent to organisational goals.
• Leadership Style: Authoritative, controlling.
• Focus: Clear instructions, strict oversight.
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Overview of Theory Y
• Definition: Assumes employees are self-motivated and seek responsibility.
• it is assumed that if the working conditions are favourable, then it can be as natural as play and rest.
Average human being has no inherent dislike towards work. If the work is meaningful to a person, then it
can be a source of satisfaction and there is a high possibility that it is performed voluntarily.
• If an individual is committed to work, then he/she will exercise self-control and self-direction to
accomplish the work and organisational objectives. In simple terms, the threat of punishment or external
control is not the only means of motivating an individual to complete the work and accomplish
organisational goals.
• Besides, if an objective is associated with some reward, then the employee will have a high commitment
toward the accomplishment of those objectives. For example, a person will be more committed to an
organisational objective or work which accomplishes his self-development needs and satisfies his ego.
Also, once an individual has selected his goal, he will continue with the work without any control or close
supervision.
• Leadership Style: Participative, empowering.
• Focus: Collaboration, autonomy, and trust.
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Overview of Theory Z
• Theory Z was developed by American management consultant William G. Ouchi, who
spent years researching Japanese and American company management styles.
Theory Z is a management approach combining Japanese and American management
philosophies and organization values.
Definition: Focuses on long-term employment, collective decision-making, and employee
well-being.
Theory Z suggests a kind of give and take relationship between the organization and the
employees. It suggests that an employee will feel motivated and give his best to the
organisation if his human needs & social, personal & professional needs are realized and
fulfilled by the organisation. Theory Z is a participative management style, for it to be a
success, it is important that management must have a high degree of confidence in its
workers.
• Leadership Style: Supportive, inclusive.
• Focus: Teamwork, loyalty, and job security.
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