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McGregor, D. M. 1957. The human side of enterprise. Management Review (November).

Note by James R. Martin

The purpose of this paper is to describe two conflicting management theories related to human behavior. McGregor refers to these as theory X and Theory Y. The exhibit below provides a comparison of the two concepts.

 EXHIBIT 1

McGregor's THEORY X AND THEORY Y

MANAGEMENT OBJECTIVES, ATTITUDES AND ASSUMPTIONS


THEORY X


THEORY Y

Overall objective of management: Organizing resources to produce economic results. Organizing resources to produce economic results.
Management attitude towards employees: Must direct their efforts, motivate, control and modify their behavior. Without active intervention, employees will be indifferent towards the goals of the organization. Thus, they must be rewarded and punished, i.e., treated as children. Emphasize external control. Provide conditions and methods for people to achieve their own goals directed towards organization objectives. Employees are not by nature indifferent to the organization's needs. They become indifferent as a result of experience. Treat them as mature adults. Emphasize internal self control.
Managements assumptions about employee characteristics and behavior: Employees are lazy, lack ambition, dislike responsibility and prefer to be led. They are self centered, indifferent to the needs of others, resistant to change, gullible and not very bright. Employees have needs based on Maslow's hierarchy: Physiological - rest, exercise and shelter. Safety - protection from the elements. Social - friendship, belonging and love.

Ego - self esteem, status and recognition. Self fulfillment - realizing potential. Behavioral problems are caused by need deprivation.*

Management attitude towards groups: Groups are a threat to management and should be discouraged. Groupiness can be beneficial to the organization.

* Employee indifference to the needs of the organization, hostility and refusal to accept responsibility are not indications of inherent human nature, but symptoms of illness caused by the deprivation of social and egoistic needs. A satisfied need is not a motivator. In other words, once a person fills a need, it cannot be used to motivate that individual. However, a person deprived of some needs may attempt to substitute more of one for the lack of another. For example, although money cannot satisfy many higher level needs, in many organizations, demanding more money may be the only available means of attempting to do so.

Also see McGregor, D. M. 1960. The Human Side of Enterprise. McGraw-Hill.

 

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