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43,3 A historical view of Douglas
McGregor’s Theory Y
Charles M. Carson
450 School of Business, Samford University, Birmingham, Alabama, USA
Abstract
Purpose – The purpose of this paper is to trace Douglas McGregor’s Theory Y thinking back from
pre-industrial revolution philosophers up through McGregor and his contemporaries and to explore
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Douglas McGregor introduced us to Theory X and Theory Y in his 1960 book, The
Human Side of Enterprise. In this book, he details the characteristics of managers who
deal with employees with Theory X and Theory Y points of view and lists the qualities
that contribute to both ways of thinking. Managers who make Theory X assumptions
believe that employees dislike and attempt to avoid work, need direction, avoid
responsibility, and lack ambition. In contrast, managers who make Theory Y
assumptions believe that employees do not dislike work, have self-control and
direction, and seek responsibility (McGregor, 1960). As we will see, McGregor did not
originate these ideas; he just made them easy for practitioners to use and implement in
their work environments.
This paper traces Theory Y thinking back from pre-industrial revolution
philosophers up through McGregor and his contemporaries and concludes with a
brief look at how Theory Y evolved after its introduction. McGregor trumpeted the
values of Theory Y thinking and I will attempt to detail how his work was influenced
by the ideas and research of others. Theory X and Theory Y served as a true
benchmark for the human relations movement and Theory Y emerged as one of the
Management Decision
Vol. 43 No. 3, 2005
pp. 450-460 The author would like to thank William L. Gardner for his very helpful comments on an earlier
q Emerald Group Publishing Limited
0025-1747
draft of this paper. Much of the work on this paper was done while the author was a doctoral
DOI 10.1108/00251740510589814 student at the University of Mississippi.
hallmark relationship management principles of the last half of the 20th century. Douglas
Because McGregor, and subsequent scholars and practitioners, chose to promote McGregor’s
Theory Y assumptions, it is the emphasis of this paper. This decision is not a dismissal
of Theory X. Businesses borrowed the command and control model from the military Theory Y
over 100 years ago (Drucker, 1988). Such principles often became operational in a
manner consistent with Theory X. For the most part, this approach worked, largely
due to employees’ willingness to accept the dictates of management. Power and 451
position factors that the worker could not begin to overcome until the turn of the 20th
century contributed to their plight. Still, management philosophers like Max Weber
(1947) continued to promote ideas that included similarities to Theory X style
management in his works. Weber described a bureaucratic form of organization that
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Frederick Taylor
Scientific management has played an integral role in management history, in general,
and the human relations movement, in particular. Frederick Taylor, the father of
scientific management, was often unfairly labeled as being unfriendly towards the
cause of the worker. Taylor’s goal was to get the most out of employees, but he did so in
a manner that was fair and with the workers’ interests in mind. McGregor articulated
similar views in the first Theory Y assumption he identified: “The expenditure of
physical and mental effort in work is as natural as play or rest” (McGregor, 1960, p. 47).
Taylor often felt the criticisms of union leaders and even the United States
Congress, who chastised him for his scientific management principles, which were seen
as too strict or binding (United States House of Representatives, 1912). Taylor (1911)
proposed a complete mental revolution to produce a high level of cooperation between
employee and employer, which, in turn, would lead to increased productivity and
rewards for the employee. This “level of cooperation” was much akin to the integration
that Follett and McGregor advocated in the years to follow. Taylor solidified his beliefs
by stating “The principal object of management should be to secure the maximum
prosperity for the employer, coupled with the maximum prosperity for each employee”
(Taylor, 1911, p. 7). Taylor takes further steps toward full Theory Y thinking, but does
not quite get all the way there. He does not advocate increasing worker responsibility
and discretion, but when taken as a whole, Taylor’s contributions do support Theory Y
style management.
The growth of the human relations movement Douglas
After the turn of the 20th century, employers increasingly saw the need and benefit of McGregor’s
welfare work or industrial betterment (Wren, 1994). This movement transformed into
personnel work and eventually evolved into today’s human resource management. The Theory Y
purpose of such departments was to better integrate employees into companies while
providing services to them. The increased attention given to the employees by their
employer was a good way to reach out and let the worker know that they were valued 453
and their welfare was a concern of the company (Wren, 1994). McGregor made similar
conclusions about the need for management to be concerned with the welfare of its
employees when he spoke of putting Theory Y into practice (McGregor, 1960).
Additionally, McGregor states, “The average human being learns, under proper
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conditions, not only to accept but to seek responsibility” (McGregor, 1960, p. 48). As the
human relations movement grew, organizations continued to see the need to provide
their employees with these “proper conditions” that would support growth and
responsibility in their workforce.
Munsterberg (1913), an advocate of scientific management, also emphasized the
importance of the human factor in decision-making and management. Known as the
creator of industrial psychology, he sought to discover ways to identify the best job for
a person’s mental capabilities, the psychological conditions that produced the greatest
and most satisfactory output from employees, and how to tap into human needs to
produce the most benefit for a company (Wren, 1994). McGregor’s and Munsterberg’s
ideas have undeniable similarities. When he identified the sixth Theory Y assumption
McGregor stated that, “Under the conditions of modern industrial life, the intellectual
potentialities of the average human being are only partially utilized” (McGregor, 1960,
p. 48). While not endorsing all of the characteristics of a Theory Y manager,
Munsterberg does add another facet to Theory Y type thinking that had previously not
been expanded upon. Both Munsterberg and McGregor identified the need for
employers to examine mental factors as they relate to the employee.
such that the members of the organization can achieve their own goals best by
directing their efforts toward the success of the enterprise” (McGregor, 1960, p. 49).
Additionally, McGregor says “that the organization will be more effective in achieving
its economic objectives if adjustments are made, in significant ways, to the needs and
goals of its members” (McGregor, 1960, p. 50). Second, Follett saw the need to “develop
‘power-with’ instead of ‘power-over’ and ‘co-action’ to replace consent and coercion”
(Wren, 1994, p. 260). This bears a remarkable resemblance to the concerns McGregor
expressed in The Human Side of Enterprise. Working with someone was seen in a
much more favorable light than working for or under someone (Wren, 1994). Finally,
Follett detailed a third plank in her social person platform. Control and coordination
were necessary to meet commonly decided upon goals (Gulick and Urwick, 1937).
These employee-geared approaches helped Follett bridge the gap between scientific
management concepts and the Hawthorne Studies that followed (Daiute, 1964).
and outer needs and attempt to determine which needs matter most to them. Finally, he
mentions our basic physiological needs, which include food, shelter, and movement.
Argyris’ ideas also functioned as a precursor to McGregor’s work on Theory X and
Theory Y. Argyris felt that there was, “a basic incongruency between the needs of a
mature personality (as classified above) and the requirements of formal organizations”
(Argyris, 1957, p. 66). Formal organizations are defined to include task specialization,
chain of command, unity of direction, and span of control. When all of these elements of
an organizational form are present, it leads to a work setting, where employees are
“provided minimal control over their workday world, are expected to be passive,
dependent, and subordinate, are expected to have a short time perspective, are induced
to perfect and value the frequent use of a few skin-surface shallow abilities, and are
expected to produce under conditions leading to psychological failures” (Argyris, 1957,
p. 66). Argyris identified these Theory X-style characteristics as being incompatible to
the needs of a mature employee: needs very similar to those that Maslow before, and
McGregor after, felt necessary for all employees to satisfy.
Frederick Herzberg
Herzberg et al. (1959) took a different route in studying worker motivation. They asked
workers to identify when they felt exceptionally good or exceptionally bad about their
jobs (Herzberg et al., 1959). From their work they developed the two-factor theory,
which details differing causes for job satisfaction and dissatisfaction (Schermerhorn
et al., 2000). The first of the two factors is hygiene. The hygiene factors “relate more to
the environment in which people work than to the nature of the work itself”
(Schermerhorn et al., 2000, p. 114). Hygiene factors affect job dissatisfaction.
Closely related to Theory Y assumptions are Herzberg’s motivator factors, which
affect job satisfaction. Herzberg found that when these motivators, such as sense of
achievement, recognition, the work itself, responsibility, advancement, and growth are
added to employees’ jobs, they are more satisfied with their job and more productive.
McGregor identified six Theory Y assumptions that managers make, if those
assumptions are placed directly opposite Herzberg’s six motivator factors, the
similarities become clear.
McGregor said the average human being does not dislike work; Herzberg says work
itself is a motivator factor. Theory Y says that command and control is not the only
way to motivate workers. Self-direction and control is present when workers are
committed to company objectives. Herzberg found that recognition affects job
satisfaction. According to Theory Y assumptions, “Commitment to objectives is a
function of the rewards associated with their achievement” (McGregor, 1960, p. 47). In a Douglas
similar vein, Herzberg and associates identify achievement as a primary job context McGregor’s
motivator factor. Theory Y thinking goes on to say that the average human accepts
and even seeks responsibility. Herzberg, likewise, lists responsibility as a source of Theory Y
worker motivation. McGregor identified that the ability to solve problems was not a
unique skill in organizational settings. Without these problem-solving restrictions,
advancement, as defined by Herzberg was possible. Finally, Theory Y states that, 457
“Under the conditions of modern industrial life, the intellectual potentialities of the
average human being are only partially utilized” (McGregor, 1960, p. 48). Herzberg and
colleagues simplify matters and state that growth is a motivator factor that affects job
satisfaction. Herzberg and his associates identified these factors and McGregor’s
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Rensis Likert
Likert (1967) had the benefit of McGregor’s Theory X and Theory Y before he detailed
four management systems or styles of management. Likert defined each system along
six main organizational variables that he labeled operating characteristics. These
operating characteristics are: leadership process used, character of motivational forces,
character of communication process, character of interaction-influence process,
character of decision-making process, character of goal setting or ordering, character of
control processes (Likert, 1967). Each of these main variables contains sub-variables
that provide more detailed descriptions of the main variable in question. Each of the
four systems is measured and projected across all main and sub-variables. The
interesting element to Likert’s systems is the extent to which they are congruent with
McGregor’s Theory X and Theory Y.
System 1 reads like a detailed description of manager’s Theory X assumptions.
Supervisors have no confidence and trust in subordinates. Subordinates do not feel at
all free to discuss things about the job with their superior. The supervisor seldom gets
ideas and opinions of subordinates in solving job problems. Motivation is managed
through fear, threats, punishment, and occasional rewards. Rank and file employees
feel little responsibility for achieving the organization’s goals. There is very little
interaction and communication aimed at achieving the organization’s objectives.
Information flows downward and is viewed with great suspicion. The information that
is communicated upward tends to be inaccurate. Superiors have no knowledge of
understanding of problems of subordinates. There is little interaction between
management and the employees, and what interaction is there is done with fear and
distrust. There is no cooperative teamwork present. Decision makers who are either
unaware or only partially aware of lower level problems make the bulk of the decisions
at the top of the organization. Technical and professional knowledge is used in
decision-making only if possessed at higher levels. Subordinates are not involved
in decisions related to their work, which leads to little or not motivation for the
employees to implement the decision. Goal setting orders are issued and overtly
accepted, but covertly resisted strongly. The review and control functions are highly
concentrated in top management. There is an informal organization present that
opposes the goals of the formal organization. Control data are used for policing and
punitive means instead of self-guidance or group problem solving (Likert, 1967).
MD If the same variables are followed across to system 4, management’s actions
43,3 become increasingly similar to the Theory Y assumptions that McGregor outlined.
Supervisors have complete confidence and trust in subordinates. Subordinates feel
completely free to discuss things about the job with their superior. The supervisor
always gets ideas and opinions of subordinates in solving job problems and tries
to make constructive use of them. Motivation is managed through economic
458 rewards based on a compensation system developed through participation.
Personnel at all levels feel real responsibility for organization’s goal and behave in
ways to implement those goals. There is much interaction and communication
aimed at achieving the organization’s objectives. Information flows down, up,
between peers, and is generally accepted or candidly questioned. The information
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