Douglas Mcgregor

Theory X and Theory Y

His life and Works

8/13/2010
B.C.C.A Institute Of management Studies
Zeba Salmani And Group
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Its my Invention In the Field Of

Management
Theory X and Theory Y
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Biography
Management Pioneer, Douglas Murray Mcgregor (1906 - 1964) Was Born In
The Bustling Border Metropolis Of Detroit, Michigan Just As It Was Emerging
As The World's Great Motor City. While He Was At High School, Mcgregor
Worked As Night Clerk At The Mcgregor Institute And Also Played Piano At
Its Regular Services. The Institute Was Very Much A Family Affair; Originally
Set Up By His Grandfather, It Was Now Being Managed By His Uncle Tracy
And Father Murray To Provide Temporary Accommodation For Around 100
Transient Workers At A Time.

At 17, Mcgregor Briefly Considered Becoming A Lay Preacher, Before

Choosing To Enrol For A Psychology Degree At The College Of The City Of
Detroit (Now Wayne State University). After Two Years Of The Course He
Tried A Term At Oberlin, His Uncle's Old College In Ohio. But At 19, He
Decided To Get Married, Drop Out Of College Altogether And Earn His
Living As A Gas Station Attendant In Buffalo. By 1930, Mcgregor Had Risen
To The Rank Of Regional Gas Station Manager.

Meanwhile In Depression-Hit Detroit, Unemployment Was Soaring And The

Local Department Of Public Works Had Handed The Mcgregor Institute A
Large Subsidy To Increase Its Facilities. Douglas Mcgregor Decided He Could
Now Afford To Resume His Studies If He Also Worked Part-Time At The
Much Expanded Institute. This Meant That When He Finally Completed His
First Degree In 1932, He Was Also Organising Mass Soup Kitchens For The
Unemployed, While Helping With The Management Of The Institute. Soon
After His Graduation He Chose To Move To The Academic Tranquillity Of
Cambridge, Massachusetts To Continue His Education. For Three Years He
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Studied At Harvard Gaining An Ma And Phd In Psychology. (The Colour

Blind Mcgregor Had Chosen The Sensitivity Of The Eye To The Saturation Of
Colours For His Phd Topic.) For The Next Two Years He Stayed On At
Harvard As A Psychology Lecturer. Then In 1937 He Took The Short Trip
Down Massachusetts Avenue To Set Up An Industrial Relations Section At
Massachusetts Institute Of Technology.

In Addition To His Teaching Work At Mit, Mcgregor Took On Increasing

Amounts Of Industrial Relations Consultancy Work, Particularly At Dewey
Almy, A Local Rubber And Sealants Company. This Work Covered Wage And
Salary Administration, Contract Negotiation, Foremen Training, Grievance
Handling, Executive Development Programs, Union And Management
Cooperation Programs, And Problems Of Organizational Structure And
Function. He Was Also Much In Demand As A Speaker By Both Business And
By Labour Unions. But When In 1947, The President Of The Progressive
Antioch College In Yellow Springs, Ohio, Resigned, Douglas Mcgregor Seized
The Opportunity And Applied For The Post.

The 41 Year Old Mcgregor Commenced His Presidential Term At Antioch In

1948. It Was To Prove A Pivotal Point In His Life And In His Personal
Development. As He Tried To Put His Cooperative Style Into Practice, He
Could Now Appreciate The Problems Of Leadership First Hand. At The
Forefront Of What Was To Become The Civil Rights Movement, Antioch
Were One Of The First Us Mainstream Colleges To Welcome African-
Americans. But When They Qualified As Teachers, Mcgregor Struggled To
Get Them Placed In Any Of The Local White Schools. He Also Had To Resist
Pressure From The Powerful House Un-American Activities Committee To
Expel Student Activists With Left-Wing Views. And, Of Course, There Were
Always The Continuing Problems Of Attracting Enough New Students And
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Fee Income To Balance The College's Books. As Mcgregor Was Later To

Reflect, I Thought I Could Avoid Being A 'Boss'. ........... I Could Not Have
Been More Wrong. It Took A Couple Of Years, But I Finally Began To Realise
That A Leader Cannot Avoid The Exercise Of Authority Any More Than He
Can Avoid Responsibility For What Happens To His Organization. Moreover,
Since No Important Decision Ever Pleases Everyone In The Organization, He
Must Absorb The Displeasure, And Sometimes Severe Hostility, Of Those
Who Would Have Taken A Different Course.

After Six Years Of Trying To Reconcile The Conflicting Demands Of

Leadership At Antioch College, Mcgregor Decided To Return To Mit, This
Time As A Faculty Member Of The Recently Established Sloan School Of
Management. He Persuaded The Former Trade Union Accountant Joe Scanlon
To Join Him At Mit. Mcgregor Had Worked With Scanlon At Dewey Almy.
The Coarsely Spoken Ex-Boxer And Steelworker Had Built An Impressive
Reputation With His Scanlon Plan For Staff Involvement, Suggestion Schemes
And Gainsharing. Scanlon's Work Was To Become An Important Source For
Theory Y In Mcgregor's 1960 Best-Seller The Human Side Of Enterprise.
Mcgregor's Compelling New Vocabulary Assured Him Of Almost Instant
Global Fame. However For The Remainder Of His Life Mcgregor Tried Vainly
To Dispel The Simplified Paradigm Of Theory X = Bad; Theory Y= Good That
Others Had Imposed On His Analysis. Though Douglas Mcgregor Was To Die
Suddenly Of A Heart Attack Aged Just 58, His Work Has Stood The Test Of
Time. One Small Reflection Of This Is That The Main Antioch Campus At
Yellow Springs Is Now Called Antioch University Mcgregor, Or More
Commonly Just Mcgregor.
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Facts about his life

 Born in 1906, in detroit, and died in 1964, in massachusetts.

 His grandfather thomas mcgregor in about 1895 founded

mcgregor institute to aid great lakes sailors and other transient
labour. This institute housed and fed more than 1000 men
every year.

 In his youth he worked in his grandfather's institute for

transient labourers in detroit, where he gained insight into the
problems faced by labour.

 He worked as a district manager for a retail gasoline

merchandising firm to gather up family to start a family. In the
course of this job, he learned the concepts of management.

 He was the first full time professor of psychology at mit

university.

 In 1960, he wrote the book “the human side of enterprise”,

where he identifies and develops his renowned theory x and
theory y.
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His theory
Theory y and theory x are theories of human motivation that have
been used for human resource management, organizational behaviour
and organizational development. They describe two very different
attitudes toward workforce motivation, and are based upon maslow's
“hierarchy of needs”, in that he grouped the hierarchy into "lower
order" (theory x) needs and "higher order" (theory y) needs. He
suggested that management could use either set of needs to motivate
employees, but better results could be gained by the use of theory y,
rather than theory x.
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Theory ‘x’ and theory ‘y’

Theory x and theory y are theories of human motivation
developed in the 1960s that have been used in human
resource management, organizational behavior, and
organizational development. They describe two very different
attitudes toward workforce motivation. Mcgregor felt that
companies followed either one or the other approach
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Theory ‘x’
In this theory, which has been proven counter-effective in most
modern practice, management assumes employees are inherently lazy
and will avoid work if they can and that they inherently dislike work.
As a result of this, management believes that workers need to be
closely supervised and comprehensive systems of controls developed.
A hierarchical structure is needed with narrow span of control at each
and every level. According to this theory, employees will show little
ambition without an enticing incentive program and will avoid
responsibility whenever they can. According to michael j. Papa
(ph.d., temple university; m.a., central michigan university; b.a., st.
John’s university), if the organizational goals are to be met, theory x
managers rely heavily on threat and coercion to gain their employee's
compliance. Beliefs of this theory lead to mistrust, highly restrictive
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supervision, and a punitive atmosphere. The theory x manager tends

to believe that everything must end in blaming someone. He or she
thinks all prospective employees are only out for themselves. Usually
these managers feel the sole purpose of the employee's interest in the
job is money. They will blame the person first in most situations,
without questioning whether it may be the system, policy, or lack of
training that deserves the blame. A theory x manager believes that his
or her employees do not really want to work, that they would rather
avoid responsibility and that it is the manager's job to structure the
work and energize the employee. One major flaw of this management
style is it is much more likely to cause diseconomies of scale in large
businesses.
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The Role of management is to force and control

employees:
 People have an inherent dislike for work and will avoid it
whenever possible.
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People must be coerced, controlled, directed, or threatened

with punishment in order to get them to achieve the
organizational objectives
 People prefer to be directed, do not want responsibility, and have
little or no ambition.
 People seek security above all else.
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Problems with Theory ‘x’

Drawing on maslow’s hierarchy, mcgregor argues that a satisfied need no
longer motivates. Under theory x the firm relies on money and benefits to
satisfy employees’ lower needs, and once those needs are satisfied the source of
motivation is lost. Theory x management styles in fact hider the satisfaction of
higher level needs. Consequently, the only way that employees can attempt to
satisfy their higher level needs in their work is by seeking more compensation,
so it is quite predictable that they will focus on monetary rewards. While
money may not be the most effective way to self fulfillment, in theory x
environment it may be the only way. Under theory x, people use work to satisfy
their lower needs, and seek to satisfy their higher needs in their leisure time.
But its is in satisfying their higher needs that employees can be more
productive.

Drawing on maslow's needs hierarchy, mcgregor argues that a need, once

satisfied, no longer motivates. Under motivation theory x, the firm relies
on money and benefits to satisfy employees' lower needs (mentioned
before), and once those needs are satisfied the source of motivation is lost.
This is why mcgregor makes the point that a command and control
environment is not effective because it relies on lower needs as levers
of motivation, but in modern society those needs already are satisfied and
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thus no longer motivate.

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Characteristics of the theory ‘x’ manager

• Results-driven and deadline-driven, to the
exclusion of everything else
• intolerant
• Issues deadlines and ultimatums
• Distant and detached
• Aloof and arrogant
• selective
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• Short temper
• Shouts
• Issues instructions, directions, edicts
• Issues threats to make people follow instructions
• Demands, never asks
• Does not participate
• Does not team-build
• Unconcerned about staff welfare, or morale
• Proud, sometimes to the point of self-destruction
• One-way communicator
• Poor listener
• Fundamentally insecure and possibly neurotic
• Anti-social
• Vengeful and recriminatory
• Does not thank or praise
• Withholds rewards, and suppresses pay and remunerations levels
• Scrutinises expenditure to the point of false economy
• Seeks culprits for failures or shortfalls
• Seeks to apportion blame instead of focusing on learning from the
experience and preventing recurrence
• Does not invite or welcome suggestions
• Takes criticism badly and likely to retaliate if from below or peer group
• Poor at proper delegating - but believes to be good at delegating
• Thinks giving orders is delegating
• Holds on to responsibility but shifts accountability to subordinates
• Relatively unconcerned with investing in anything to gain future
improvements
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How you can manage upwards your ‘x’ theory

boss:
Working for an x theory boss isn't easy - some extreme x theory
managers make extremely unpleasant managers, but there are ways
of managing these people upwards. Avoiding confrontation (unless
you are genuinely being bullied, which is a different matter) and
delivering results are the key tactics.
• Theory x managers (or indeed theory y managers displaying theory x
behaviour) are primarily results oriented - so orientate your your own
discussions and dealings with them around results - ie what you can
deliver and when.
• Theory x managers are facts and figures oriented - so cut out the
incidentals, be able to measure and substantiate anything you say and do
for them, especially reporting on results and activities.
• Theory x managers generally don't understand or have an interest in the
human issues, so don't try to appeal to their sense of humanity or
morality. Set your own objectives to meet their organisational aims and
agree these with the managers; be seen to be self-starting, self-
motivating, self-disciplined and well-organised - the more the x theory
manager sees you are managing yourself and producing results, the less
they'll feel the need to do it for you.
• Always deliver your commitments and promises. If you are given an
unrealistic task and/or deadline state the reasons why it's not realistic, but
be very sure of your ground, don't be negative; be constructive as to how
the overall aim can be achieved in a way that you know you can deliver.
• Stand up for yourself, but constructively - avoid confrontation. Never
threaten or go over their heads if you are dissatisfied or you'll be in big
trouble afterwards and life will be a lot more difficult.
• If an x theory boss tells you how to do things in ways that are not
comfortable or right for you, then don't questioning the process, simply
confirm the end-result that is required, and check that it's okay to
'streamline the process' or 'get things done more efficiently' if the chance
arises - they'll normally agree to this, which effectively gives you control
over the 'how', provided you deliver the 'what' and 'when'.
And this is really the essence of managing upwards x theory
managers - focus and get agreement on the results and deadlines - if
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you consistently deliver, you'll increasingly be given more leeway on

how you go about the tasks, which amounts to more freedom. Be
aware also that many x theory managers are forced to be x theory by
the short-term demands of the organisation and their own superiors -
an x theory manager is usually someone with their own problems, so
try not to give them any more.

Theory ‘y’
In this theory, management assumes employees may be ambitious
and self-motivated and exercise self-control. It is believed that
employees enjoy their mental and physical work duties. According to
papa, to them work is as natural as play.
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They possess the ability for creative problem solving, but their talents
are underused in most organizations. Given the proper conditions,
theory y managers believe that employees will learn to seek out and
accept responsibility and to exercise self-control and self-direction in
accomplishing objectives to which they are committed. A theory y
manager believes that, given the right conditions, most people will
want to do well at work. They believe that the satisfaction of doing a
good job is a strong motivation. Many people interpret theory y as a
positive set of beliefs about workers. A close reading of the human
side of enterprise reveals that mcgregor simply argues for managers
to be open to a more positive view of workers and the possibilities
that this creates. He thinks that theory y managers are more likely
than theory x managers to develop the climate of trust with
employees that is required for human resource development. It's here
through human resource development that is a crucial aspect of any
organization. This would include managers communicating openly
with subordinates, minimizing the difference between superior-
subordinate relationships, creating a comfortable environment in
which subordinates can develop and use their abilities. This climate
would include the sharing of decision making so that subordinates
have say in decisions that influence them. This theory is a positive
view to the employees, meaning that the employer is under a lot less
pressure than some one who is influenced by a theory x management
style.
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The Role of management is to develop the potential in

employees and help them to release that potential towards
common goals:
Work is as natural as play and rest.
People will exercise self-direction if they are committed
to the objectives (they are not lazy).
Commitment to objectives is a function of the rewards
associated with their achievement.
People learn to accept and seek responsibility.
Creativity, ingenuity, and imagination are widely
distributed among the population. People are capable of
using these abilities to solve an organizational problem.
People have potential.
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Characteristics of the theory ‘y’

manager

• Focus on methods as well as results

• Forgiving

• Involved, interested

• Outgoing, friendly

• People-oriented

• Patient

• Asks, rewards

• Delegates

• Seeks to boost morale

• Seeks opinions of others

• Accepts responsibility

• Assigns pay levels fairly

• Looks at the big picture

• Participative, team builder

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Business implications of Applying

Theory ‘y’
If theory y holds, the firm can do many things to harness the motivational
energy of its employees:

• Decentralization and delegation – if firms decentralize control and

reduce the number of levels of management; each manager will have
more subordinates and consequently will be forced to delegate some
responsibility and decision making to them.
• Job enlargement – broadening the scope of an employee’s job adds
variety and opportunities to satisfy ego needs.
• Participative management – consulting employees in the decision
making process taps their creative capacity and provides them with some
control over their work environment.
• Performance appraisals – having the employee set objectives and
participate in the process of evaluating how well they were met.

If properly implemented, such an environment would result in a high level of

motivation as employees work to satisfy their higher level personal needs
through their jobs.
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Mcgregor and Maslow's hierarchy

Mcgregor's work was based on maslow's hierarchy of needs. He grouped

maslow's hierarchy into "lower order" (theory x) needs and "higher order"
(theory y) needs. He suggested that management could use either set of needs
to motivate employees but that better results could be obtained by meeting the
theory y needs.
Physiologic
SA
Estee
Safety
Love &
Theory
(Social)
m
Security
al
Y --a
X
a set
set ofof
assumption
s of how to
manage
individuals
motivated
by lower
higher
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Criticism
Nowadays mcgregor's theory is seen as outdated, representing two extremes.

Theory x is perhaps visible in low paid or menial work but employees in those
situations will move on in search of positions with theory y conditions if they
are motivated.

Personal development, management training and even general perceptions of

behaviour are against a theory x outlook towards work.

There is no doubt that this outlook would have been more prevalent in the
1960s when mcgregor created his theory.

Before he died mcgregor started working on a new theory that he called theory
z to address these criticisms.

Unfortunately he died before this could be widely published and the ideas have
since faded from mainstream management theory.

They were, however, landmark ideas at their time and now form an important
part of the historical study of management theory.
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Conclusion
Several business and economics professors and theologists sustain that
mcgregor was in some way misinterpreted.
they say that mcgregor wrote his book (“the human side of enterprise”)
with the objective of leading managers into investigating the two theories
and into inventing new ones according to their situation or reality. Instead,
his theory y was accepted as a new superior ethic- a set of moral values
that ought to replace the values managers usually accept.
Nevertheless, there is no doubt that mcgregor’s work has had a
tremendously beneficial impact on the way managing is looked at today.