Theory Y - Business Studies A Level for WJEC

Douglas MacGregor
Theory X and Theory Y
The Human Side of Enterprise
In his 1960 management book, The Human Side of
Enterprise, Douglas McGregor suggested two very
different management views on how employees behave
and how to achieve employee motivation.
He referred to these nearly opposite management
approaches as Theory X and Theory Y.
Both of these theories assume that management's role is to
organize human resources - employees, in a way that
maximises productivity. But how the two types of
manager achieve this objective are very different.
Theory X and Theory Y managers have
completely different views of workers.
If a manager has a Theory X approach to management , he
will always set objectives for workers without consulting
them, will give instructions without feedback and will
punish or reward according to strict rules.
In contrast, a manager who has a Theory Y view of workers
will involve them in decision making, encourage
feedback during communication and empower workers.
Behaviour of Theory X Managers
Theory X managers take the view that
• Workers must be forced or controlled in work to do a good job
• Workers prefer to be told what to do – supervised and instructed
• Work is unpleasant to most people, who will attempt to avoid work
whenever possible.
• Most employees are not ambitious, have little desire for
responsibility, and prefer to have simple, understandable tasks.
• Motivation occurs only at the physiological and security levels of
Maslow's Hierarchy of Needs – forget Hertzberg’s motivators
Most workers have little capacity for creativity in solving problems.
Applying Theory X Management
– the business impact
If Theory X managers are in charge, the a business is likely
to use the principles of Taylors scientific management to
control and ensure quality. So we would see:
Motivation through financial means - even piece rate pay
High levels of supervision
Jobs broken down into simple tasks
A strict hierarchy – each worker having clear understanding of their
• An authoritarian management
Behaviour of Theory Y Managers
Theory Y managers take the view that :
• Workers learn to accept and seek responsibility
• Workers will be self-directed and creative in their efforts to meet
their work and organizational objectives.
• Workers will be committed to quality and productivity objectives if
rewards are in place that address higher needs such as selffulfilment.
• The capacity for creativity spreads through all layers of the work
place – everyone has something to contribute.
Applying Theory Y Management –
the business impacts
If Theory Y managers are in control the organization is likely to use the
principles of management more like Hertzberg's motivators to
improve employee performance:
• Decentralization and delegation - If firms decentralize control and
reduce the number of layers of hierarchy, managers will have wider
spans of control and will delegate some responsibility and decision
making to them.
• Job enlargement / enrichment/empowerment - Broadening the
scope of an employee's job adds variety and opportunities to satisfy
higher level needs like self fulfilment.
Theory Y Management – the
business impacts
• Workers will be consulted during the decision making process,
which motivates them and takes advantage of their creativity and
problem solving skills and provides workers with more control over
their work environment.
• Performance Appraisals can be used to have each employee set
their own objectives and take part in the process of evaluating how
well they were met.