MCGREGOR'S THEORY X AND THEORY Y

Douglas McGregor was heavily influenced by both the Hawthorne studies and
Maslow. His classic book, The Human Side of Enterprise, advances the thesis that
managers should give more attention to the social and self-actualizing needs of
people at work.23 McGregor called upon managers to shift their view of human
nature away from a set of assumptions he called Theory X and toward ones he called
Theory Y. You can check your managerial assumptions by completing the self-
assessment at the end of the chapter.
According to McGregor, managers holding Theory X assumptions approach their
jobs believing that those who work for them generally dislike work, lack ambition,
are irresponsible, are resistant to change, and prefer to be led rather than to lead.
McGregor considers such thinking inappropriate. He argues instead for Theory Y
assumptions in which the manager believes people are willing to work, capable of
self-control, willing to accept responsibility, imaginative and creative, and capable
of self-direction.

An important aspect of McGregor's ideas is his belief that managers who hold either
set of assumptions can create self-fulfilling prophecies--that is, through their
behavior they create situations where others act in ways that confirm the original
expectations. Managers with Theory X assumptions, for example, act in a very
directive "command-and-control" fashion that gives people little personal say over
their work. These supervisory behaviors create passive, dependent, and reluctant
subordinates, who tend to do only what they are told to or required to do. This
reinforces the original Theory X viewpoint.

In contrast to Theory X, managers with Theory Y assumptions tend to behave in

"participative" ways that allow subordinates more job involvement, freedom, and
responsibility. This creates opportunities to satisfy esteem and self-actualization
needs; workers tend to perform as expected with initiative and high performance.
The self-fulfilling prophecy thus becomes a positive one.25 Betsy Holden, former
president and CEO of Kraft Foods, Inc., for example, showed a lot of Theory Y in
her approach to leadership. She was praised for a "positive, upbeat, enthusiastic,
collaborative, and team-oriented" management style. She also focused on helping
others with questions like these: "What skills do you need? What experiences do you
need? What development do you need? How do we help you make that happen?"26

SOURCE: Management by John R. Schermerhorn, Jr