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The theory of management emerged in the early 19th century when Henri Fayol, a Frenchman, described management as cooperative integration of various functions in an organization in order to achieve organizational goals.
In early part of the 20th century, Mary Parker described management as an art of mobilizing people to perform specific tasks that translate into organizational goals (Arthurs & Busenitz 2003, p.150). In 1960, Douglas McGregor revolutionized management theory by formulating theories that describe two aspects of management, the X and Y theories.
In his theories, McGregor postulated that motivation of employees is central to achieving organizational goals. He recognized that, “…human capital and knowledge are the most important sources of value for the 21st century organization…” (Kochan & Orlikowski 2009, p.2).
This view has greatly changed the management strategies and structures in terms of human resources and technology. Hence, this essay explores literature review regarding the evolution of McGregor’s X and Y theories with the view of analyzing their relevance to the 21st century managers.
Theory X postulates authoritarian style of management, which assumes that employees cannot work effectively and achieve organizational goals unless the management forces them to do so.
McGregor posited that “conventional managerial assumptions of theory X reflect essentially an opposite and negative views namely, that employees are lazy, are incapable of self-direction and autonomous work behavior, have little to offer in terms of organizational problem solving” (Kopelman, Prottas & Davis 2008, p.255).
Theory X assumes that employees are inherently lazy thus views them as organizational costs that need constant monitoring and control in order to reduce losses and gain maximum benefits from them.
Another assumption of theory X is that employees cannot utilize their autonomy effectively to benefit organization because they are not responsible; hence, they need proper management to lead them.
Further assumption holds that employees are not creative and tend to resist organizational changes that are critical for economic growth. Due to these assumptions, authoritative management is imperative in mobilizing reserved employees. Based on Maslow’s theory, organizations under the management style of theory X rely on the satisfaction of basic needs such as money and other benefits in motivation of their employees.
According to Daniels, “McGregor makes the point that a command and control environment is not effective because it relies on the lower needs as a levers of motivation, but in modern society those needs are already satisfied and thus no longer are motivators” (2008, p.11).
Management according to theory X exclusively motivates employees using money, which only satisfies the lower human needs leaving higher needs that provide elevated and lasting motivation. Thus, theory X does not give satisfactory motivation to the employees for them to be very productive.
Theory Y elucidates participative style of management that is very effective in the management of modern mega organizations. The assumptions of this theory are that employees are invaluable resources, effective work involves concerted efforts, integration of technology with social systems enhances work, and delegation of responsibilities is essential in achieving organizational goals.
According to the first assumption, human resources are invaluable resources in an organization that need development and motivation. Proper motivation of the employees will enhance their self-esteem and creates conducive environment where working becomes as interesting as playing.
In the second assumption, theory Y posits that knowledge-based systems encourage “…high levels of performance that can only be achieved by organizing work in ways that allow workers to utilize and deepen their knowledge and skills, while working collaboratively on multiple, temporary projects to accomplish flexible and innovative operations” (Wubbolding 2002, p.3).
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Coordination of systems in a manner that enhances concerted efforts would expediently lead to the achievements of organizational goals. The third assumption predicts that integration of technology with social systems would significantly change the application of technology in an organization.
The effectiveness of technology depends on the integration of human resources and the physical part of technology resulting into viable technology that effectively drives the workforces for the organization to realize its goals. In the fourth assumption, delegation of responsibilities by the top management to the lower management levels enhances productivity in the organization.
“The average man learns, under proper conditions, not only to accept but also to seek responsibility by employing creativity and imaginations in solving organizational problems” (Deming 2007, p.9).This assumption recognizes that employees have abilities that are very crucial in solving impending management problems in that motivation and delegation of responsibilities enhances their participation.
Relevance and Value of X-Y Theories
Douglas McGregor’s X and Y theories describe contrasting management styles of 20th and 21st centuries respectively. Theory X depicts 20th century style of management that relies heavily on authoritative supervision of employees as this theory assumes that employees are costs that need constant management in order realize organizational goals.
Regarding motivation of workers, theory X is very poor since it only depends upon money and other material benefits to satisfy the needs of the employees, which are the lowest needs according to Maslow’s theory. McGinnis warns that, motivation of employees using the lowest human needs is not lasting and effective in enhancing productivity of human resources in an organization (2006, p 22).
The X theory is relevance to the 21st managers because it indicates the level of management the organization is employing in the continuum of X-Y management levels. The poorest management style tends to shift towards X while the best management tends to shift towards Y. On the other hand, theory Y describes participative style of management that is very effective in the 21st century.
This theory appreciates human labor as invaluable resource that the organization should develop and expand through motivation. In terms of motivation, this theory asserts that motivation of employees should entail satisfaction of highest needs according to the Maslow’s theory.
Gosling and Marturano argue that, “the expenditure of physical and mental efforts in work is as natural as play or rest, and the average human being under proper conditions, learns not only to accept but to seek responsibility” (2003, p. 7).
Satisfaction of the highest needs such as self-esteem and self-actualization would motivate employees to be highly productive since work would be enjoyable as play thus enhancing the values of creativity, commitment, and responsibility in employees.
Management theory has been developing over centuries and managers have been wondering on what type of management style can effectively motivate employees and propel organizations towards achieving their goals. Douglas McGregor formulated X and Y theories that describe contrasting management styles for the managers to perceive their level of management.
Theory X postulates that employees are inherently lazy and a form of costs that needs constant supervision for them to work effectively for the organization to attain its goals. In contrast, theory Y postulates that employees are integral resources that organizations should always optimize by motivating them.
Motivation entails satisfaction of highest human needs, self-esteem and self-actualization as classified in the Maslow’s theory of hierarchy of needs. These theories are relevant to the 21st century managers since they assess their levels of management and predict the performance of their organizations.
Arthurs, D., & Busenitz, L., 2003. The Boundaries and Limitations of Agency Theory and Stewardship Theory in the Venture Capitalist/Entrepreneur Relationship. Entrepreneur Theory and Practice, pp. 145-162.
Bolden, R., Gosling, J., & Marturano, A., 2003. Review of Leadership Theory and Competency Frameworks. Centre for Leadership Studies, pp. 1-44. Available from: <http://business-school.exeter.ac.uk/>
Daniels, T., 2008. Douglas McGregor: Theory X and Theory Y. Journal of Human Resources Management, pp. 1-25.
Deming, W., 2007. Total Quality Management: Explanation of the Fourteen Points of Management. Organizational Management Level, pp. 1-11. Web.
Kochan, T., & Orlikowski, W., 2009. Beyond McGregor’s Theory Y: Human Capital and Knowledge in the 21st Century Organization. Human Resource Development Journal, pp. 1-24.
Kopelman, R., Prottas, D., & Davis, A., 2008. Douglas McGregor’s Theory X and Y: Toward a Construct-valid Measure. Journal of Managerial Issues, 20(2), pp. 255-272.
McGinnis, S., 2006. Organizational Behavior and Management Thinking. Organization Management Journal, pp.37-57.
Wubbolding, R., 2002. Employee motivation. Quality Management of Employees, pp. 1-6.