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Running Head: Management Theories X, Y, Z

 

Management Theories X, Y, Z

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In the many studies of management that have been conducted over the past 50 years, it has been shown time and again that management style is dictated by the assumptions managers have about people generally – and specifically about the people under their authority.

In The Human Side of Enterprise, McGregor explored a model that illustrated two very different styles of management, underpinned by two opposing mindsets, and looked at their subsequent behaviours and the impact these approaches could have on business. He called his findings Theory X and Theory Y and stated that businesses (or their managers) were either of one type or the other. While his depictions may seem a little exaggerated, they go a long way towards explaining.

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If you find yourself thrust into management, or you are looking to get into that field for the first time, it may be helpful to familiarize yourself with the three popular management theories. If you are consistent with your approach to management it will make it easier for your employees to know what to expect from you and the workplace. The three theories are known simply as Theory X, Theory Y, and Theory Z.

Theory X managers are often stereotyped as a stern, unyielding type of person. They view their employees as people who generally dislike work and need strict direction and threats of punishment in order to get a job done. If an employee is not performing well, it is seen as strictly the employee's problem. There are some people who need a very strict manager like this, but not every employee will respond to this kind of management. You may also want to consider whether this approach will be best for you and your business.

Theory Y managers view their employees much differently. In this theory, employees generally like work and gain satisfaction from doing a job well. Employees are given the opportunity to use imagination and creativity in their occupation. If an employee does not perform as expected, a Theory Y manager will place the problem with management techniques, not the employee. This theory does not mean that everything is a free for all; there is still some level of control and guidance, just not as much as there is with Theory X.

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Theory Z is much different from the other two theories. This theory focuses on the culture of an organization, creating an environment in which all employees work together very well. Theory Z managers give workers more freedom, allowing them to perform a variety of tasks rather than one mundane task day in and day out. This theory places direct focus on the employees, creating concern for an employee's problem or personality, not just their work performance.

In this theory management assumes employees are inherently lazy and will avoid work if they can. Because of this workers need to be closely supervised and comprehensive systems of controls developed. A hierarchical structure is needed with narrow span of control at each level. According to this theory employees will show little ambition without an enticing incentive program and will avoid responsibility whenever they can.

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The Theory X manager tends to believe that everything must end in blaming someone. He or she thinks all prospective employees are only out for themselves. Usually these managers feel the sole purpose of the employee’s interest in the job is money. They will blame the person first in most situations, without questioning whether it may be the system, policy, or lack of training that deserves the blame.
Furthermore, Theory X supervisors cannot trust any employee, and they reveal this to their support staff via their communications constantly. A Theory X manager can be said to be an impediment to employee morale and productivity.

Managers that subscribe to Theory X, tend to take a rather pessimistic view of their employees. A Theory X manager believes that his or her employees do not really want to work, that they would rather avoid responsibility and that it is the manager's job to structure the work and energize the employee. The result of this line of thought is that Theory X managers naturally adopt a more authoritarian style based on the threat of punishment.

One major flaw of this management style is it is much more likely to cause Diseconomies of Scale in large businesses. Theory Y allows a business to expand while making more profit because factory-floor workers have their own responsibilities.

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In this theory management assumes employees may be ambitious, self-motivated, anxious to accept greater responsibility, and exercise self-control, self-direction, autonomy and empowerment. It is believed that employees enjoy their mental and physical work duties. It is also believed that if given the chance employees have the desire to be creative and forward thinking in the workplace. There is a chance for greater productivity by giving employees the freedom to perform at the best of their abilities without being bogged down by rules.

A Theory Y manager believes that, given the right conditions, most people will want to do well at work and that there is a pool of unused creativity in the workforce. They believe that the satisfaction of doing a good job is a strong motivation in and of itself. A Theory Y manager will try to remove the barriers that prevent workers from fully actualizing themselves.

Many people interpret Theory Y as a positive set of assumptions about workers. A close reading of The Human Side of Enterprise reveals that McGregor simply argues for managers to be open to a more positive view of workers and the possibilities that creates.

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Theory Z is the name applied to the so-called "Japanese Management" style popularized during the Asian economic boom of the 1980s. In contrast Theory X, which stated that workers inherently dislike and avoid work and must be driven to it, and Theory Y, which stated that work is natural and can be a source of satisfaction when aimed at higher order human psychological needs, Theory Z focused on increasing employee loyalty to the company by providing a job for life with a strong focus on the well-being of the employee, both on and off the job. According to Dr. William Ouchi, its leading proponent, Theory Z management tends to promote stable employment, high productivity, and high employee morale and satisfaction.

Ironically, "Japanese Management" and Theory Z itself were based on Dr. W. Edwards Choid Deming's famous "14 points". Deming, an American scholar whose management and motivation theories were rejected in the United States, went on to help lay the foundation of Japanese organizational development during their expansion in the world economy in the 1980s. Deming's theories are summarized in his two books, Out of the Crisis and The New Economics, in which he spells out his "System of Profound Knowledge". He was a frequent advisor to Japanese business and government leaders, and eventually became a revered counselor. Deming was awarded the Second Order of the Sacred Treasure by the former Emperor Hirohito, and American businesses ultimately tried unsuccessfully to use his "Japanese" approach to improve their competitive position.

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Various management styles can be employed dependent on the culture of the business, the nature of the task, the nature of the workforce and the personality and skills of the leaders.

This idea was further developed by Robert Tannenbaum and Warren H. Schmidt (1973) who argued that the style of leadership is dependent upon the prevailing circumstance; therefore leaders should exercise a range of leadership styles and should deploy them as appropriate.

STYLE OF MANAGEMENT

Here we are looking at and discussing some of the basic requirements for achieving good management and administration, good leadership and government.

From the point of view of results, the effectiveness of the organisation is determined by the way work is organised and by the way people work with or against each other. The way in which people co-operate with each other, with the leadership and with the community, indeed the extent of their commitment to their organisation, depend on the style of management.

So here we look at different styles of management, on their impact on people, on the way in which people work together and on results.
In our modern, industrialised, technological and highly competitive international environment it is essential that many experts from different areas of activity and different levels of society coming from different backgrounds work together to successfully achieve the completion of large projects such as exploring space, or the building of large oil gathering and refining installations.

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Many experts have to work together to provide our daily needs, to enable us to have good and satisfying lives. Discord in one area can inconvenience many people and it is essential that people co-operate with each other freely and effectively.

Experience shows that the larger the organisation the more difficult it is to achieve the necessary degree of co-operation and that larger organisations are usually much less effective than smaller ones as people are working against each other instead of co-operating. We will see that improving the style of management can by itself increase the effectiveness of operating, improve results obtained and the way in which resources are being used, by about 20-30%. The gains to be made by improving the style of management are thus very considerable not only from the point of view of a better return to the shareholders and to the community but also from the point of view of greater contentment and satisfaction felt by employees.

An Autocratic or authoritarian manager makes all the decisions, keeping the information and decision making among the senior management. Objectives and tasks are set and the workforce is expected to do exactly as required. The communication involved with this method is mainly downward, from the leader to the subordinate, critics such as Elton Mayo have argued that this method can lead to a decrease in motivation from the employee's point of view. The main advantage of this style is that the direction of the business will remain constant, and the decisions will all be similar, this in turn can project an image of a confident, well managed business. On the other hand, subordinates may become highly dependent upon the leaders and supervision may be needed.

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A more Paternalistic form is also essentially dictatorial, however the decisions tend to be in the best interests of the employees rather than the business. A good example of this would be David Brent running the business in the fictional television show The Office. The leader explains most decisions to the employees and ensures that their social and leisure needs are always met. This can help balance out the lack of worker motivation caused by an autocratic management style. Feedback is again generally downward, however feedback to the management will occur in order for the employees to be kept happy. This style can be highly advantageous, and can engender loyalty from the employees, leading to a lower labour turnover, thanks to the emphasis on social needs. It shares similar disadvantages to an authoritarian style; employees becoming highly dependent on the leader, and if the wrong decisions are made, then employees may become dissatisfied with the leader.

In a Democratic style, the manager allows the employees to take part in decision-making: therefore everything is agreed by the majority. The communication is extensive in both directions (from subordinates to leaders and vice-versa). This style can be particularly useful when complex decisions need to be made that require a range of specialist skills: for example, when a new ICT system needs to be put in place, and the upper management of the business is computer-illiterate. From the overall business's point of view, job satisfaction and quality of work will improve. However, the decision-making process is severely slowed down, and the need of a consensus may avoid taking the 'best' decision for the business. It can go against a better choice of action.

In a Laissez-faire leadership style, the leader's role is peripheral and staff manages their own areas of the business; the leader therefore evades the duties of management and uncoordinated delegation occurs. The communication in this style is horizontal, meaning that it is equal in both directions, however very little communication occurs in comparison with other styles. The style brings out the best in highly professional and creative groups of employees, however in many cases it is not deliberate and is simply a result of poor management. This leads to a lack of staff focus and sense of direction, which in turn leads to much dissatisfaction, and a poor company image.

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References

Business Studies by Malcom Surridge; Publishers: NY: Guilford Press (1999).
Vocational Business: Training, Developing and Motivating  People by Richard Barrett; Publishers: Chicago:     University of Chicago Press (1990).
The Knowledge Evolution: Expanding Organizational Intelligence by Butterworth-Heinemann, Boston; Publishers:  New York and London: Garland     Publishing (1997).

Enhancing the fault tolerance of workflow management systems  by A. El Abbadi, and C. Mohan; Publishers:  Urbana and   Chicago: University of Illinois Press, 2nd edition,(1987).
 
 


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