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Management Hall of Fame
Most Respected Management Gurus

Douglas McGregor
Theory X, Theory Y in Managing and Leading People (1906-1964)

  • "Commitment to objectives is a function of the rewards associated with their achievement." (Douglas McGregor)

Key Work

Douglas McGregor is a pioneer in the field of industrial relations. Abraham Maslow viewed McGregor as a mentor. His book " The Human Side of Enterprise: laid the foundations for the modern, people-centered view of management. He believed that managers' basic assumptions have a dominant influence on the way that organizations are run. He argues that these assumptions fall into two broad categories - Theory X and Theory Y. Theory X and Theory Y describe two views of people at work and two opposing management styles.

McGregor was a Management professor at the MIT Sloan School of Management whose 1960 book The Human Side of Enterprise had a profound influence on management practices. In the book he identified an approach of creating an environment within which employees are motivated via authoritative, direction and control or integration and self-control, which he called theory X and theory Y, respectively. He earned a B.E. Mechanical from Rangoon Institute of Technology, an A.B. from Wayne State University in 1932, then earned an M.A. and Ph.D. in psychology from Harvard University in 1933 and 1935 respectively.

In his youth he worked in his grandfather's Institute for transient laborers in Detroit, where he gained insight into the problems faced by labor. As district manager for a retail gasoline merchandising firm, he learned the concerns of management. He was the first full time psychologist on the faculty of MIT, and helped to found its Industrial Relations Section. Throughout his career he consulted for union and management alike and served on the panel of arbitrators for the American Arbitration Association. McGregor resigned the presidency of Antioch to rejoin the MIT faculty in its new School of Industrial Management in 1954

Theory X: The Traditional View of Direction And Control. It is based on the assumptions that:

  • Average human beings dislike work, wishes to avoid responsibility it if at all possible. Therefore most people must be coerced, controlled to achievement of organizational objectives. Theory X management style therefore requires close, firm supervision with clearly specified tasks combined with financial "carrot and stick" approach as motivating factors. 
  • Managers working under these assumptions will employ autocratic, detailed controls that can lead to mistrust and resentment from those they manage.

Theory Y: The Integration of Individual And Organizational Goals. It is based on the assumptions that:

  • Average human beings does not dislike work and they will in many times seek responsibility. Depending on personal meaning and conditions of work ( ownership, responsibility and empowerment) , work may be a source of satisfaction, or a source of resentment. Employees will exercise self-direction and self-control in the service of objectives to which they are committed. The personal meaning and social and financial rewards, such as success, satisfaction of ego and self-actualization can integrated with organizational objectives;
  • Avoidance of responsibility, lack of ambition are generally consequences of negative experiences, like not getting the rewards associated with their efforts and achievements.
  • The  capacity and potential to to produce and innovate is widely, not narrowly, distributed among people. creating the right conditions to unleash this potential is the challenge of the management and leadership

When he & Maslow' put theory into practice at several factories. They found that an organization driven solely by Theory Y or Theory X could not succeed.

Successful motivation is a complex result of company policy and administration, level of supervision vs. self-scheduling and creative environment, working relationships, working conditions, status, security, pay, advancement or growth, among others.

Leadership

  • For McGregor, leadership was not a property of the individual characteristics  but a function of the relationship between the leader the situation it is a product of a complex relationship among several variables like the attitudes and needs of the followers, the nature and structure of the organization itself, and the social, economic, and political environment.  

Books & References:

  • The Human Side of Enterprise, Annotated Edition. New York: McGraw-Hill, 1960.
  • Leadership & Motivation. Cambridge, MA: MIT Press, 1966.
  • Six Sigma for Managers

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