LECTURE 4 (2):
UNDERSTANDING
MANAGEMENT
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LECTURE CONTENTS
4.5. Douglas McGregor's Theory X and Theory Y management
4.6. Blake and Mouton's Managerial Grid
4.7. Likert's Management system
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4.5.
Douglas McGregor Theory X
and Theory Y management
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Douglas McGrego
▸ An American management professor at the MIT
Sloan School of Management and president of
Antioch College from 1948 to 1954.
▸ He also taught at the Indian Institute of Management
Calcutta. His 1960 book The Human Side of
Enterprise had a profound influence on education
practices
▸ Born: September 6, 1906, Detroit, Michigan, United
States
▸ Died: October 1, 1964, Massachusetts, United States
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Theory X and Theory Y management
▸ Drawing on Maslow’s hierarchy of needs model, McGregor, in 1960, put forward two suppositions
about human nature and behaviour at work.
▸ He argued that the style of management adopted is a function of the manager’s attitudes towards
people and assumptions about human nature and behaviour .
▸ The two suppositions are called Theory X and Theory Y and are based on polar assumptions
about people and work.
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Theory X assumptions
Theory X represents the carrot-and-stick assumptions on which traditional organisations are based.
Its assumptions are that:
▸ The a vera ge pers on is la zy a nd ha s a n inherent dis like of work;
▸ Mos t people mus t be coerced, controlled, directed and threa tened with punis hm ent if the
orga nis a tion is to a chieve its objectives ;
▸ The a vera ge pers on avoids res pons ibility, prefers to be directed, la cks a mbition and va lues
s ecurity m os t of a ll; a nd
▸ Motiva tion occurs only a t the phys iologica l a nd s ecurity levels
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Theory X assumptions
▸ The central principle of Theory X is direction and control through a centralised system of
organisation and the exercise of authority.
▸ Assumptions based on a Theory X approach, and the traditional use of rewards and sanctions
exercised by the nature of the manager’s position and authority, are likely to result in an
exploitative or authoritarian style of management.
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Theory Y assumptions
At the other extreme to Theory X is Theory Y, which represents the assumptions consistent with
current research knowledge. The central principle of Theory Y is the integration of individual and
organisational goals. Its assumptions are:
▸ For m os t people, work is a s na tura l a s pla y or res t;
▸ People will exercis e s elf-direction a nd s elf-control in the s ervice of objectives to which they a re
com m itted;
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Theory Y assumptions
▸ Commitment to objectives is a function of rewards associated with their achievement;
▸ Given the right conditions, the average worker can learn to accept and to seek responsibility ;
▸ The capacity for creativity in solving organisational problems is distributed widely in the
population ;
▸ The intellectual potential of the average person is only partially utilised; and
▸ Motivation occurs at the affiliation, esteem and self-actualisation levels as well as at the
physiological and security levels.
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Theory Y assumptions
▸ The Theory Y approach is not a ‘soft’ option . In practice it is often difficult to achieve
successfully . It can be frustrating and time consuming, and mistakes will occur.
“
Since 1952 I’ve been stumbling around buildings and running primitive Theory Y departments,
divisions, and finally one whole Theory Y company: Avis.
In 1962, after thirteen years, Avis had never made a profit (except one year when they jiggled their
depreciation rates).
Three years later the company had grown internationally (not by acquisitions) from $30 million in
sales to $75 million in sales, and had made successive annual profits of $1 million, $3 million, and $5
million.
If I had anything to do with this, I ascribe it all to my application of Theory Y. And a faltering,
stumbling, groping, mistake-ridden application it was.
(Townsend, 1985)
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Demands of the situation
▸ The two views of Theory X and Theory Y tend to represent extremes of the natural inclination of
managers towards a particular style of behaviour.
▸ In practice, however, the actual style of management behaviour adopted will be influenced by the
demands of the situation .
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Demands of the situation
▸ Where the job offers a high degree of intrinsic satisfaction or involves a variety of tasks , an
element of problem solving and the exercise of initiative, or where output is difficult to measure
in quantitative terms, then an informal, participative approach would seem to be more effective .
▸ In many cases this would apply to work of a scientific, technical or professional nature.
▸ Where commitment to the goals of the organisation is almost a prerequisite of membership ,
such as in certain voluntary or charity organisations, for example, then a Theory Y approach would
clearly seem to be most appropriate.
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Demands of the situation
▸ Even if a manager has a basic belief in Theory Y assumptions, there may be occasions when it is
necessary, or more appropriate, to adopt a Theory X approach.
▸ This approach may be indicated in emergency situations , or where shortage of time or other
overriding factors demand the use of authority in directing actions to the tasks in hand.
For example, in the hustle, heat and noise of a busy hotel kitchen preparing fresh meals for a large banquet, with many tasks to be
co-ordinated over very short time scales, it seems to be recognised that a Theory X style of management is most appropriate. In
such circumstances this style of management appears often to be accepted by the kitchen staff .
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Discussion:
Althoughpublishedin 1960, the underlyingconceptsof Mcgregor’stheory X
and theory Y are still someof the most significantand meaningfulinsights
into our understandingof managerialbehaviour.
What do YOUthink? What experienceshave YOUhad of Theory X or Y
management?What would be YOURpreferred natural style of managerial
behaviour,andwhy?
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4.6.
Blake and Mouton’s
Managerial Grid
Robert R. Blake and
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Jane S. Mouton
▸ Two renowned pioneers in management consulting.
▸ They specialized in organization transformation by
developing interdependent relationships as a core
feature of organization culture.
▸ Their exclusive Grid methodology for organization
transformation is proven for mobilizing human effort
and igniting capacity building, leadership
development, change management, conflict
resolution and performance improvement in any
business or industrial setting.
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The Managerial/Leadership Grid
▸ First published as the Managerial Grid in 1964, restated in 1978 and 198531 and republished in
1991 as the Leadership Grid.
▸ The Grid provides a basis for comparison of managerial styles in terms of two principal
dimensions : concern for production and concern for people.
Concern for production
• Is the amount of emphasis that the manager places on accomplishing the tasks in hand, achieving a
high level of production and getting results or profits.
• This is represented along the horizontal axis of the Grid
Concern for people
• Is the amount of emphasis that the manager gives to subordinates and colleagues as individuals and
to their needs and expectations.
• This is represented along the vertical axis of the Grid.
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Five basic
combinations
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Two additional grid styles
▸ The 1991 edition of the Grid covers two additional
styles, opportunism and 9 + 9 paternalism/maternalism,
which take account of the reaction of subordinates.
▸ In opportunistic management , organisational
performance occurs according to a system of
exchanges, whereby effort is given only for an
equivalent measure of the same. People adapt to the
situation to gain maximum advantage of it.
▸ In 9 + 9 paternalistic/maternalistic management,
reward and approval are granted to people in return for
loyalty and obedience, and punishment is threatened for
failure to comply.
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Relevance today
▸ Grid organisation development identifies and applies relevant aspects of behavioural science, and
Newborough maintains that the Grid is as relevant today as when it was first launched.
▸ And according to Crainer and Dearlove, ‘Crude as it is, the Grid helps people who are not
conversant with psychology to see themselves and those they work with more clearly, to
understand their interactions, and identify the sources of resistance and conflicts .
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4.7.
Likert's Management system
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Rensis Likert
▸ An American social psychologist mainly known for
developing the Likert scale, an approach to creating a
psychometrically sound scale based on responses to
multiple questions or "items."
▸ Born: August 5, 1903, Cheyenne, Wyoming, United
States
▸ Died: September 3, 1981, Ann Arbor, Michigan, United
States
▸ Known for: Likert Scale, Likert’s Management
Systems, Linking pin model
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Management systems
On the basis of a questionnaire to managers in over 200 organisations and research into the
performance characteristics of different types of organisations, Likert identifies a fourfold model of
management systems :
System 1 – Exploitive System 2 – Benevolent System 3 – System 4 –
authoritative authoritative Consultative Participative
• Decisions are imposed on • A condescending form of • Leadership involves some trust • Leadership involves trust and
subordinates, motivation is leadership, motivation is based in subordinates, motivation is confidence in subordinates,
based on threats, there is very on a system of rewards, there based on rewards but also motivation is based on rewards
little teamwork or is only limited teamwork or some involvement, there is a for achievement of agreed
communication; responsibility communication; responsibility fair degree of teamwork, and goals, there is participation and
is centred at the top of the is at managerial levels but not communication takes place a high degree of teamwork and
organisational hierarchy. at lower levels of the vertically and horizontally; communication; responsibility
organisational hierarchy. responsibility for achieving the for achieving the goals of the
goals of the organisation is organisation is widespread
spread more widely throughout throughout all levels of the
the hierarchy. hierarchy
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Supportive relationships
▸ The nearer the behavioural characteristics of an organisation approach System 4, the more likely
this will lead to long- term improvement in staff turnover and high productivity , low scrap, low
costs and high earnings .
▸ Likert sets out three fundamental concepts of System 4 management.
▸ These are the use of:
• the principle of supportive relationships among members of the organisation and in particular between superior
and subordinate;
• group decision-making and group methods of organisation and supervision; and high-performance aspirations
for all members of the organisation.
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Supportive relationships
▸ To be effective, these high performance goals should not be imposed but set by a participative
mechanism involving group decision - making and a multiple overlapping group structure .
▸ The mechanism should enable employees to be involved in setting high-performance goals that
help to satisfy their needs.
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Supportive relationships
▸ In considering high-performance aspirations, Likert refers to studies that suggest that employees
generally want stable employment and job security , opportunities for promotion and satisfactory
compensation .
▸ They want, also, to feel proud of their organisation and its performance and accomplishments .
▸ In System 4 management, superiors should therefore have high- performance aspirations , but so
also should every member of the organisation .
