MMM132 Managment, Trimester 1, 2011 1

Assignment 1: Literature Review Essay

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Douglas McGregors Theory X and Theory Y of management has been said to have had an immense impact on the thoughts and practice of management since its inception (Davis, Kopelman, Prottas, 2008). This theory is first noted in McGregors 1960 book titled The Human Side of Enterprise. McGregor (1960) suggests that managers whom are of the Theory X will assume that employees are unable to be independent in their work, are generally lazy and are not driven to succeed. Waddell (2011) suggests that this view spurs managers to believe, that to impede the employees habit to avoid work is their central focus. This is conducted through keen supervision and offering rewards as incentive or punishments as a consequence. In stark contrast to Theory X according to Waddell (2011), Theory Y assumes workers are neither lazy or dislike their work, but rather are willing to commit themselves to work and contribute their own ideas for the better of the organisation. This essay will discuss in further McGregors X and Y Theories and their relevance for managers in the 21st Century, and their overall impact on the general development of management theories.

According to Bobic (2003), Douglas McGregors Theory X is widely regarded as the less preferred managerial assumption, but should still be considered a crucial theory in regard to management theories as a whole and its impact on modern day management. Theory X, assumes that employees are lazy, are incapable of self direction and autonomous work behavior, and have little to offer in terms of organizational problem solving, (Davis, Prottas, Kopelman, 2008, p.255) Bobic (2003) demonstrates that the assumptions of theory X will lead to employees having little to no control over their job, and managers undertake an overseeing position in which they must monitor the working habits and behaviors of their subordinates. Bobic (2003) also puts forward that McGregors Theory X stems from Abraham Maslows Hierarchy Of Needs, a management theory that states all employees/workers are motivated by a set of needs which Maslow places in a pyramid containing 5 levels. He categorised these needs as physiological needs, safety needs, belonging and love, esteem needs and self-actualisation needs, (Kermally, 2005, p. 26). Bobic (2003) suggests that Theory X is somewhat based upon assuming employees strive only for the basic needs, located on the first two levels on Maslows pyramid, physiological
Name: Richard Costantino Student ID: 211298995

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needs and safety needs, and hence the reason why a manager may assume an employee to be lazy or to have very little to offer in terms of ideas to the organisation and it is only into the 1950s that McGregor saw workers has moving past the lesser needs to strive for social needs and self actualisation, and thus begun an alternative view by which managers assume the nature of an organisation, which McGregor labelled Theory Y.

Rather than disliking work, McGregors Theory Y presumptions believe that staff, will have self-control and direction, and seek responsibility (McGregor, 1960). It is suggested by Carson (2005) that Locke (1960) and Smith (1776) were somewhat the forefathers of the ideas that became the roots of Theory Y and the thinking behind it, Locke places the responsibility of power, liberty, and legal matters at a personal level (Carson, 2005 p. 451) Also expressed by Carson (2005) a recurrent theme amongst the ideas of Locke and McGregors Theory Y is that they both place faith and responsibility in the employee and did not condone an authoritarian style of management, one which was controlling and hierarchal, but rather used a flatter span of control and in turn gave the employees more freedom in their work. McGregor (1960) contends that the potential created by having the positive view of a Theory Y manager on the contrary to a Theory X manager, is more likely to help create trust between managers and employees.

Theory X and Theory Y are still an important aspect when approaching management in the 21st century. Bobic (2003) suggests that despite Theory X being widely regarded as an ageing theory, it is still very applicable in many organisations of today. Bobic (2003) points out that Theory X still applies to certain industries, such as the area of Information Technology, better than what Theory Y might, and as a result is still having an impact in modern day management. The Enterprise Funds and the Overseas Private Investment Corporation ....require close regulation and clear, unambiguous policy objectives (Bobic, 2003 p. 258) In summary, organisations that fit this category, operate more efficiently and effectively if they have reduced freedom within organisational tasks, and provide strong supervision, direction and control over their actions. This extract from the Journal of Public Administration Research and Theory evidently depicts the need for Theory X in the 21st Century. According to Carson (2005), recent history shows Theory Y has been the root of countless managerial concepts as it sparked ideals such as independence of an employee within an organisation to complete a task, problem solving and being the potential for
Name: Richard Costantino Student ID: 211298995

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employees to gain enjoyment from their work. Global organisations around the world are incorporating the idea of a flatter organisational structure, involving employees in corporate decisions and accepting their ideas on the improvement of tasks, an idea that stems from Theory Y itself.

Both Theory X and Y assumptions have evolved along side management as it has progressed right through to the 21st Century.The theories outlined by Douglas McGregor in 1960, Theory X and Theory Y, were innovative and insightful for their time, and continue to be sought upon to conceive new managerial concepts and strategies. Indicative of McGregor's impact. Miner's (2003) review of 73 established organisational behavior theories found that Theory X/Y was tied for second in terms of recognition and in 33rd place with respect to importance (Davis, Kopelman, Prottas, 2008, p. 256), this quotation supports idea that these theories are most certainly still relevant. Managers of today whom adapt either of these theories will find their own respective benefits in any organisation, and it is for this reason that these theories are still so highly valued and relevant, and will continue to be for years to come.

Name: Richard Costantino

Student ID: 211298995

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REFERENCES ________________________________________________
Davis, A.L, Prottas, D.J, Kopelman, R.E. 2008, Douglas McGregors Theory X an Y: Toward a Construct-valid Measure, Journal of Managerial Issues, vol. 20, no. 2, pp. 255271, retrieved 20 March 2011, Business Source Complete Database. McGregor, D.M. 1960, The Human Side of Enterprise, McGraw-Hill Book Co., New York, NY Waddell, D, Jones, G.R, George, J.M. 2011, Contemporary Management, McGraw Hill, North Ryde, NSW Bobic, M.P, Davise, W.E. 2003, A Kind Word for Theory X: Or Why So Many Newfangled Management Techniques Quickly Fail, Journal of Public Administration Research & Theory, Vol. 13, no. 3, pp. 239 - 264, retrieved 22 March 2011, Business Source Complete Database. Kermally, S. 2005, Gurus on People Management, Thorogood Publishing, London Carson, C.M. 2005, "A Historical View of Douglas McGregor's Theory Y", Management Decision, Vol. 43 no. 3, pp. 450 - 460, retrieved 23 March 2011, Business Source Complete Database

Name: Richard Costantino

Student ID: 211298995

MMM132 Managment, Trimester 1, 2011 5

Name: Richard Costantino

Student ID: 211298995