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In 1960 McGregor published his book The Human Side of Enterprise in which he put forward
two sets of assumptions in relation to human behavior. These sets of assumptions are presented
as Theory X and Theory Y. Management has to use either set of needs to motivate people. He
grouped Maslows ve categories of needs into lower order needs incorporating Physiological
and Security Needs, and higher order needs incorporating Belonging, Esteem and Selfactualization Need. Like Maslow, his theory of motivation has had a signicant impact the eld
of managing people. He presented two approaches to managing people. The Theory X approach,
with its associated assumptions, generally produces poor results and the Theory Y approach, with
its associated assumptions, produces better performance and results. How managers manage
people in practice depends on what assumptions they make about workers. In a situation where
they make Theory X assumptions they will manage people by directing and controlling them,
whereas in a situation where they make Theory Y assumptions they will manage people by
involvement and by delegating responsibility.

McGregor developed a philosophical view of humankind with his Theory X and Theory Y in
1960. His work is based upon Maslow's Hierarchy of Needs, where he grouped the hierarchy into
lower-order needs (Theory X) and higher-order needs (Theory Y). He suggested that
management could use either set of needs to motivate employees, but better results would be
gained by the use of Theory Y, rather than Theory X. These two views theorized how people
view human behavior at work and organizational life.

Understanding the Theories

If ones management style is strongly influenced by his beliefs and assumptions
about what motivates members of his team: If one believe that team members
dislike work, he will have an authoritarian style of management; On the other
hand, if one assume that employees take pride in doing a good job, he will tend to
adopt a more participation style.
Theory X and Theory Y

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Theory X Approach and Its Assumptions

Theory X assumes that employees are naturally unmotivated and dislike working, and this
encourages an authoritarian style of management. According to this view, management must
actively intervene to get things done. This style of management assumes that workers:
Dislike working.
Avoid responsibility and need to be directed.
Have to be controlled, forced, and threatened to deliver what's needed.
Need to be supervised at every step, with controls put in place.

Theory X and Theory Y

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Need to be enticed to produce results; otherwise they have no ambition or motivation to

X-Type organizations tend to be top heavy, with managers and supervisors required at
every step to control workers. There is little delegation of authority and control remains
McGregor recognized that X-Type workers are in fact usually the minority, and yet in
large scale production environment, X Theory management may be required and can be

Theory Y Approach and Its Assumptions

Theory Y is based on an optimistic view of employee motivation and behavior. Theory Y
assumes that employees enjoy work that is meaningful, are willing to take on responsibility, and
are willing to work for organizational goals or causes they believe in. Theory Y also assumes that
employees are capable of creativity, ingenuity, and self-direction.
Theory Y shows a participation style of management that is de-centralized.
It assumes that employees are happy to work, are self-motivated and creative, and enjoy
working with greater responsibility.
Take responsibility and are motivated to fulfill the goals they are given.
Seek and accept responsibility and do not need much direction.
Consider work as a natural part of life and solve work problems imaginatively.
This management style tends to be more widely appropriate. In Y-Type organizations,
people at lower levels of the organization are involved in decision making and have more

Theory X and Theory Y

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Use of Theory X and Theory Y

The use of the two approaches depends on the circumstances.
In a situation where workers have to be controlled then the Theory X approach becomes
appropriate. This might be the case, say on the shop oor.
In a situation where it is possible to get commitment from employees then the Theory Y
approach is recommended. In such situations employees will assume self-direction and
control to carry out their work.
Some authors have referred to Theory X as an autocratic style of management and
Theory Y as a participative style of management.
Autocratic managers like to take control and focus more on the task rather than the
people. Their main objective is to get the job done.
Participative managers consult employees and involve them in making decisions.
It is generally believed that workers under Theory Y are far more prevalent in the work
place than those under Theory X.

Theory X and Theory Y

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Comparing Theory X and Theory Y

Theory X assumes that people dislike work; they want to avoid it and do not want to take
responsibility. Theory Y assumes that people are self-motivated, and thrive on responsibility.
Management Style and Control
In a Theory X organization, management is authoritarian, and centralized control is retained,
while in Theory Y, the management style involves employees in decision making, but retains
power to implement decisions.
Work Organization
Theory X employees tend to have specialized and often repetitive work. In Theory Y, the work
tends to be organized around wider areas of skill or knowledge; Employees are also encouraged
to develop expertise and make suggestions and improvements.
Theory X organizations work on a carrot and stick basis and performance is part of the overall
mechanisms of control. In Theory Y organizations, appreciation is also regular and important, but
is usually a separate mechanism from organizational controls. Theory Y organizations also give
employees frequent opportunities for promotion.
Although Theory X management style is widely accepted as poor to others, it has its place in
large scale production operation and unskilled production-line work. Many of the principles of
Theory Y are widely adopted by types of organization that value and encourage participation.
Theory Y-style management is suited to knowledge work and professional services. Professional
service organizations naturally evolve Theory Y-type practices by the nature of their work; even
highly structure knowledge work, such as call center operations, can benefit from Theory Y
principles to encourage knowledge sharing and continuous improvement.

Theory X and Theory Y

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Comparing Theory X and Theory Y

Theory X

Theory Y

Inherent dislike for work

Unambitious and prefer to be directed by

Work is natural like rest or play

Ambitious and capable of directing their own

Avoid Responsively

Accept and seek responsibility under proper

Lack creativity and resist change

Focus on lower level ( physiological and

Creativity widely spread
Both lower level and higher order needs like

safety) needs to motive workers

social, esteem, and self-actualization are

External control and closse supervision

sources of motivation
Self-direction and self-control

required to acieve organizational objectives.

Centralization of authority and autocratic

Decentalization and participation in decision

People lack self-motivation

Peolple are self-motivated

Criticism of Theory X / Theory Y

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.

Theory X and Theory Y

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Theory X-Y by McGregor is one of the easy ways to conduct people with natural rules, in daily
business which goes through pressure. The concept of McGregor says that there are two
fundamental approaches to managing people. Several managers influenced by theory x, and
generally get poor results. On the other hand, liberal managers use theory y, which produces
better performance and results, and allows people to grow and develop. Theory Y managers are
the effective leaders who could fulfill the psychological contract of employees. Its believed that
mainly Theory Y managements style is about psychological contract fulfillment and this area of
study is suggested for future research.

Kermally S. (2004). Gurus on People Management, Thorogood Publishing Ltd, Retrieved
Theory X and Theory Y

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Gannon D. & Boguszak A. (2013). Douglas Mcgregors Theory X And Theory Y, Versita
Mohamed R K. M. H. & Dr Nor C. S.M. (2013). The Relationship between McGregor's X-Y
Theory Management Style and Fulfillment of Psychological Contract: A Literature
Review, International Journal of Academic Research in Business and Social Sciences

Theory X and Theory Y

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