Theories X and Y are concepts of business leadership and organizational behavior. They were fashioned by Douglas McGregor when he was working at the MIT Sloan School of Management from the early 1950s through the late 1960s. Both concepts are derived from psychology, with McGregor dealing primarily with factors relating to motivation. He applies these concepts and methodologies to business leaders as an executive coach in The Human Side of Enterprise.
The two concepts are closely related, but the actual origin of Theories X and Y is unclear. Douglas McGregor derived Theories X and Y from his experience as a psychologist and behavioral researcher. When he applied these concepts and methodologies to leadership and organizational behavior, he came up with two major takeaways. One, people are born with social instincts and drives that drive behavior; and two, humans can be motivated by achieving personal goals. The second major takeaway from The Human Side of Enterprise is that people can get work done if they’re given the right motivation, which is why this book is called The Human Side of Enterprise.
This is a book about how many organizations fail to implement Theories X and Y, especially in software development. The author examines many of the methods and software applications used in many organizations and then shows how using these methods or applying these software development principles to an organization can lead to successful implementation. By showing how many organizations don’t have a Theory X or Y, and then showing how these methods can be implemented in many organizations, this book the human side of enterprise is revealed for everyone to see.
The first concept in Theories X And Y, and the one that leads to many of the other theories, is the organizational dysfunction triumvirate. This refers to CEOs, managers, and employees as the three parts of a “unified” management style. The CEO is the “leader,” and managers are the “dogs” of the team, who try to protect and maintain the status quo, while the employees are the “dogs” trying to get out of the box and change management style. The authors identify five key problems that arise when trying to apply the theories to an organization. Then they offer real-world examples from real companies that highlight the issues.
The second concept is structure and refers to how managers can organize their teams so that maximum efficiency can be achieved. The authors describe six factors that affect the quality of work produced by managers, including motivation, flexibility, communication, leadership, and teamwork. In addition to describing the six factors, the authors describe five ways to improve motivation, such as rewarding workers on success, offering bonuses, and providing recognition. The authors also give a good description of what managers should look for in employees and how managers should relate to employees on the job. The last concept they describe in the book is workplace conflict, which refers to situations that arise from unspoken agreements between workers.
The third theory, called the individual-group distinction, refers to differences in behavior between individuals within a group, rather than between groups as in unimportant cases such as isolated cases or one-off incidents. The theory of individual-group distinction, motivated followers, explains how some people may behave more like members of their own clique or group. In contrast, others may exhibit more diffuse versions of group behavior, such as working in teams. The fourth theory, called learning, describes how employees learn new things through their work experience. The fifth and sixth theories on business and motivation, which are organizational theories, are valuable for understanding employee motivation.
The authors concluded with a concise review of what has been learned about management and findings of human motivation. They then examine two competing models of organization and cause, particularly the corporate and family business. The authors describe three main models, each with its own strengths and weaknesses. They also describe a fourth model, called the team process, which may underestimate the importance of the individual’s role and underestimate the importance of the group’s role. Finally, they identify three main assumptions about motivation that is central to organizational theory and practice.
Unlike Michigan State University, Douglas Carlow has written an engaging primer that provides a rich account of theory and research on organizational issues. While not the most thorough survey of theories and approaches to management style, this is an easy read, well-organized, and accessible text. Theory X and Y are useful for understanding many important managerial issues, such as aligning vision and mission with organizational objectives, developing skills and talents, motivating employees, managing change, identifying opportunities and risks, and developing leadership. The six chapters cover various aspects of theory X and Y, including defining the theory, identifying related concepts, and organizing concepts. The final chapter addresses issues that arise when organizing a company, such as a relationship between management style and organizational objectives, managing and communication skills, creating a vision, and managing change.
Bert Swope
