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Literature Review of McGregors Ideas of Management

In 1960 American MIT lecturer, Douglas McGregor, became one of the forefathers of modern day management thinking when he published his publication, The Human Area of Enterprise. In his book McGregor submit his two packages of assumptions associated with how management needed to use these assumptions to effectively and proficiently control, as well as motivate the ones that worked well underneath them (Kermally). These two assumptions became known as McGregor's Theory X and Theory Y.

In this essay both of McGregor's ideas on management, Theory X and Theory Y, will have their development described with the dissimilarities between your two assumptions referred to and described, as well as the relevance that both Theory X and Theory Y have upon management in organizations in the 21st Century.

Evolution of Theory X and Theory Y

In 1960 when McGregor had written, The Human Aspect of Organization, he essentially challenged the practice and thinking of management, as he questioned some of assumptions about behavior at work (Koppelman, Prottas and Davis). Koppelman et al, dispute that through questioning these assumptions Mc Gregor developed a fresh role for management; that rather than forcing and handling the employees working underneath them professionals should, in reality, 'help them' to reach their potential; McGregor finding this in an effort to help a business achieve their set goals.

The Advancement of Theory X and Theory Y was based on McGregor's point of view of management; which he considered to be more than simply enforcing requests and coercing employees to work. McGregor's perspective was that there had to be an equal balance between the needs of an employee and those of the organisation (Bobic and Davis). Endeavoring to meet this balance between individual and enterprise, McGregor applied psychologist Abraham Maslow's hierarchy of must his ideas on management.

Maslow's hierarchy of needs theory was an set up of the five basic needs: self-actualisation, esteem, belonging, protection and physiological needs, that according to Maslow motivate behavior (Waddell, Jones and George). When McGregor formed the foundation of his Theory X and Theory Y assumptions, he grouped Maslow's five basic needs into 'high' and 'low' order needs, the 'high order needs' encompassing the Belonging, Esteem and Self-Actualisation needs while the 'low' contained the Physiological and the Security needs (Kermally). Using this method McGregor was able to come to the realisation that motivation was the key to managing others and interpreted it into his Theory X and Theory Y.

The Main Assumptions of Theory X and Theory Y

Theory X and Theory Y derive from two different assumptions regarding human being behaviour within an organisation. Theory X assumes the view that professionals are accountable for the organizing of employees, materials, and the machines that the company uses to achieve their organisations goals or even to get desirable results (Halepota).

According to Halepota, who helps McGregor's view on the idea X management approach, under Theory X professionals should assume that all workers are lazy, lack aspiration, that they can not undertake any position of responsibility, will place their personal needs before those of the company, oppose change and will do whatever they can to get out of work.

Essentially Theory X is seen as a 'carrot and adhere' strategy, as employees are rewarded for extra work and punished for his or her incorrect doing. However, Theory X is based on an invalid and incorrect assumption, which explains why McGregor created Theory Y (Bobic and Davis).

Theory Y is similar to Theory X in that it supports management for the employees, materials and machinery that the organization needs to achieve their goals. However it is different in that it is dependant on completely different assumptions than Theory X.

Contrasting to Theory X, Theory Y proposes that personnel are not lazy and that they can be motivated to accomplish maximum outcome to benefit the organization, given that they have the flexibility to achieve their goals (Halepota). Halepota also argues that under the Theory Y methodology that management should show self confidence in allowing their workers freedom for it allows them to achieve the goals of the organization.

Relevance and Value of Theory X and Theory Y in the 21st Century

McGregor acquired created his Theory X and Theory Y assumptions, he had foreseen the changes that could occur, generations later, for management. The improvement of technology and the surge of internet companies have seen a go back of McGregor's ideas, as a few of the changes that he previously foreseen: people working from home and requiring higher flexibility and understanding from professionals to create in order to produce quality products took place (Bobic and Davis).

With such a change, it seems that many more organisations have taken the Theory Y management strategy over the idea X approach. One particular industry is the software and internet companies which stress creativity to solve various, business, academic, and information control problems (Bobic and Davis). However, Bobic and Davis also claim that with this Theory Y management strategy there is a problem for the reason that: workers who work in this environment have a tendency to complain that there surely is no clear management way.

All though predicated on assumptions that were and invalid rather than as well-used as Theory Y management, Theory X still has a place in management today (Bobic and Davis). The assumptions that Theory X helps such sectors where there's a level of risky involved. One particular example is the nuclear power industry where, regarding to Bobic and Davis, they found the Theory Y reduced efficiency and increased risk to everyone, and this control and enforcement by the managers was needed. Though limited, Theory X management still is accessible as some workers see this process to fit more closely with their style of work (Bobic and Davis).


When McGregor published The Human Area of Organization and using the backdrop work of Abraham Maslow's hierarchy of needs, he identified Theory X as a more forceful approach of management compared to Theory Y, thinking that personnel were sluggish and would do anything to escape working, with both ideas still relevant to business organisations today.

In my opinion, the decision of whether a business should take Theory X or a Theory Y design of management is dependent on what field an organization is at and whether this style of management allows them to successfully achieve the organizations placed goals.

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