Difference Between Theory X and Theory Y

Ever since Douglas MacGregor’s The Human Side of Enterprise out into the marketplace in the 60’s, the people have been talking about his classic, a bit radical then, Theory X and Theory Y – at management institutions, organizations, and corporate.

It’s almost three score years. But still, we try to understand, relate, and teach the contrasting differences and similarities (if any) about the management models of Theory X and Y.

A theory x, y or z can be theory only unless otherwise its assumptions are tested, recorded and analyzed in the actual organizational setting. Like physical laws or theories, these theories in the management of people to play a pivotal role in making effective managerial strategies.

As the title indicates, we have two contrasting sets of assumptions and values – Theory X and Theory Y. According to Dough, each theory is not a cause in itself, but the consequence of managerial policy and practice. Hence, a different theory of management style gets an opposite and equal outcome from the workforce.

Here we go…

Theory X: The Pharaoh Style of Management

In one statement, Theory X is a traditional view of direct and control management of the workforce.

In April 1957, before which there was no such explicit theory of management called Theory X and Theory Y, MacGregor delivered a talk on the topic The Human Side of Enterprise, which was later to become Theory Y (coined by him).

In his epic speech, the social psychologist addresses his managerial folks at MIT Sloan School of Management, with one thought-provoking question: “What are your assumptions (implicit as well as explicit) about the most effective way to manage people?”

The question led him to further his research which culminated in his one and only book – The Human Side of Enterprise, as the answer.

Most of his speech was about radical Theory Y. Then the contrasting premises are Theory X. As mentioned at the beginning, Theory X is a conventional, theory of management. It was there for ages even before MacGregor coined the term, but better understood after his Theory Y management model.

Before we take down the list of assumptions and values, let’s see two classic examples of Theory X style of management.

Example 1: It was some three thousand years back. When you look into the annals of human civilization, the Egyptian Civilization during the reign of the Pharaoh was most advanced and powerful in the day. To tell the story in a nutshell, the autocratic Pharaoh and his martinet officials (read managers) used to leave his subjects without their choice, except the Pharaoh’s Hobson choice – what to do, how much to do and when to finish their tasks off.

The subjects were threatened to complete the day-to-day tasks, with varying degrees of punishments including beatings with whips. Despite their pleadings for better working conditions, that’s only in vain. Their pleadings only fell on the Pharaoh’s deaf ears.

These historical events were the first ever recorded use of Theory X’s command and control assumption. And it was in force at its zenith level – the oppressive management style of Pharaoh.

Example 2: In modern-day, the military establishments put Theory X management into practice. They represent and carry the legacy of the traditional style of management. The Japanese military during World War II was the finest example.

The obedience at gunpoint! That’s another trait of Theory X management. (You can understand it better from the Letters from Iwo Jima, a Clint Eastwood’s war movie.)

Not only the military organizations but almost every institution -small or big across the spectrum of the industry – run by the Theory X management.

Theory X Assumptions and Values:
1. The average human being inherently dislikes to work
2. Avoids work, if possible
3. Takes no responsibility, nor is he ambitious
4. Desires security (like a government job)
5. Has to be forced, controlled, and directed to meet the economic objectives of the organization. Use threats and punishment, if needed. (Just like example one.)

In his magnum opus, MacGregor iterates time and again to point out that these assumptions are “inadequate” about human nature and behavior in the organizational setting. He further argues that what appear to be new strategies – “decentralization, consultation by supervision, democratic leadership” – is “old wine in the new bottle.” That is these managerial policies are derived from the same “inadequate assumptions” of Theory X management model, which is pervasive in the managerial policy and practice of Human Resource Management, Industry Relations, and organizational development.

According to this social psychologist, “Man is a wanting animal – as soon as one of his needs is satisfied, another appears in its place, and this process is unending. It continues from birth to death. Man continuously puts forth effort – works, if you please – to satisfy his needs.”

He further goes on to say, “A satisfied need is not a motivator of behavior. This is a fact of profound significance. It is a fact which is unrecognized in Theory X and is, therefore, ignored in the conventional approach to the management of people.”

Moreover, MacGregor points to the political revolutions which take place when the collective social needs such as – self-respect, freedom for achievement, knowledge, status, recognition, and appreciation – threatened. That’s the extreme case of Theory X management.

In a nutshell, the managerial policy and practice influenced by Theory X management model only thwart employees to reach their maximum potential at their workplaces.

Theory Y: The Participative Management

If Theory X puts customers (or clients) first, Theory Y puts employees first “without changing the fundamental theory of management.”

For example, think of Virgin Airlines founder, Sir Richard Branson. You remember his famous quote, “ think of your employees first.” Another real example is the list of the best companies to work with. The question here is, on what basis do you think they prepared such a list?

It’s none other than Theory Y model.

Now let’s look at the core principles of Theory Y management model.

The assumptions and values of Theory Y model

1. For man, work is as good as “play or rest.” (It shows the innate character of man who was made to work the Garden of Eden.)
2. When a man commits, he exercises self-control and commitment, not necessarily when he is threatened to work towards the objectives of the organization.
3. Learns to accept and take up responsibility under proper conditions.
Commitment towards objectives functions out of rewards.
4. With a wide distribution of creative abilities and imagination, the workforce can play an instrumental role in the solution to the problems of organization.
5. Even in this industrial life, the intellectual potential of an average human being is still untapped to the maximum extent.

Difference Between Theory X and Theory Y

Let’s see the fundament difference between the two management models in the words of the 20th-century management guru.

“Theory X offers management an easy rationalization for ineffective organizational performance: It is due to the nature of the human resources with which we want to work. Theory Y, on the other hand, places the problems squarely in the lap of management. If employees are lazy, indifferent, unwilling to take responsibility, intransigent, uncreative, uncooperative, Theory Y implies that the causes lie in the management’s methods of organization and control.”

In conclusion, this is what MacGregor sums up Theory Y: ” The assumptions of Theory Y point up the fact that the limits on human collaboration in the organizational setting are not limits of human nature but of management’s ingenuity in discovering how to realize the potential represented by its human resources.”

Latest Posts

What is a good business plan?

October 24, 2019

Do you think it is necessary that every business needs a viable, palpable…

PGDM Entrepreneurship Development Career Opportunities

July 24, 2019

Scope & its career opportunities in PGDM Entrepreneurship Development In today’s world, we…

PGDM in Business Analytics Scope

January 21, 2019

PGDM BA Scope & Career Opportunities Postgraduate diploma in business analytics(PGDBA) is designed…

Leave a Reply

Your email address will not be published. Required fields are marked *