VII. THEORY X AND THEORY Y ► LEARNING OBJECTIVE 5 Explain the differences between Theory X, Theory Y, and Theory Z. (Text page 39) A. American social psychologist Douglas McGregor proposed a division of management styles that capture what are fundamentally different ways of managing people. 1. THEORY X managers manage in a very controlling and authoritative manner. 2. THEORY managers believe that employees: a. can be trusted to meet production targets without being threatened b. will often seek additional responsibilities because they enjoy the satisfaction of being creative and increasing their own skills 3. The theory Y manager manages in a democratic and participative manner. B. In the late 20th century a broader approach to management was proposed. POWERPOINT 2-13 Theory X and Theory Y (Refers to text page 39) CRITICAL THINKING EXERCISE 2-1 Theory X or Theory Y Students are asked to analyze the assumptions of a past boss. See complete exercise on page 2.Error! Bookmark not defined. of this manual. CRITICAL THINKING EXERCISE 2-2 Management Challenge How would a Theory X boss handle a crisis situation? How would a Theory Y boss? See complete exercise on page 2.Error! Bookmark not defined. of this manual.