Life and Works of

Douglas McGregor
By
Group 2

Members
Anindita Basu
Keshav Kumar
Krishna Darshan R.
Pankaj Singh
Vidyadhara K.
Vikrant Bahl

Date
12 July 2006
 Table of Contents
Theory X and theory Y ....................................................................................................4
Theory X......................................................................................................................4
Theory Y......................................................................................................................5
Characteristics of the Theory X Manager........................................................................6
Problems with Theory X..................................................................................................6
How you can manage upwards your X theory boss:........................................................7
Theory Y Management Implications................................................................................8
McGregor and Maslow's hierarchy..................................................................................9
APPENDIX A: ‘X-Y Theory’ Questionnaire.................................................................10
About Douglas McGregor
(1906-1964)

A pioneering figure in the field of industrial

relations, Douglas McGregor attended Wayne
State University (B.A., L.L.D.) and Harvard
(M.A., Ph.D.). In his youth he worked in his
grandfather's institute for transient laborers in
Detroit, where he gained insight into the
problems faced by labor. As district manager
for a retail gasoline merchandising firm, he
learned the concerns of management. He was
the first full time psychologist on the faculty of
MIT, and helped to found its Industrial
Relations Section. Throughout his career he
consulted for union and management alike and
served on the panel of arbitrators for the
American Arbitration Association. McGregor
resigned the presidency of Antioch to rejoin
the MIT faculty in its new School of Industrial
Management in 1954. Today Antioch
McGregor bears his name in honor of his
contributions to management theory. View a
biographical sketch of McGregor or his CV.

Life and Work of Douglas McGregor 1

Review of “The Human side of Enterprise (HSE)”
This book was published by Famed MIT scholar and father of Theory Y management,
Douglas McGregor some forty years ago. If newer were necessarily better, HSE would
now only merit a footnote. However, McGregor was an astute judge of the organizations
of his era, and his moral perspective on human relations remains valuable even in altered
circumstances. In fact, in this era of downsizing, pension insecurity, and aggressive
investors seeking immediate return, it is useful to reconsider McGregor’s call to honor the
unfulfilled potential of employees. The recent publication of Douglas McGregor,
Revisited: Managing the Human Side of the Enterprise, by Gary Heil, Warren Bennis, and
Deborah C. Stephens, makes it especially timely to look back at McGregor’s work.

McGregor’s Theories X and Y are still prominently featured in textbooks on management

and organizational theory. However, contemporary management scholars have largely
rejected McGregor’s arguments, preferring contingency theories emerging from empirical
studies. Even leading disciples of McGregor seem to follow the fashion and downplay the
critical moral core of his thinking. Partly as a result, management scholars fail to perceive
the need for profound reforms in organizations.

HSE is best known for its juxtaposition of Theory X and Theory Y management
philosophies. Theory X is the still persistent view that workers are ordinarily passive and
resistant to the legitimate expectations of management and the organization.
Alternatively, Theory Y, McGregor’s favored view, assumes that workers seek fulfillment
from work and will prosper in an environment inviting their creative involvement.
Throughout the book, McGregor subjects customary management practices to careful
scrutiny. He uncovers the arbitrary core of performance appraisal and merit pay and
scores managerial manipulation of the illusion of participation.

In HSE McGregor disputes the motivational value of traditional forms of merit pay in
which employees receive small variations in compensation based on subjective
assessments of performance. Instead, he favors group rewards based on objective
measures of unit performance and substantial awards for the few outstanding performers.
With the decline of unions and the corresponding increase in managerial discretion, merit
pay of the sort that McGregor challenged is common practice.

HSE is still a pleasure to read. It is clearly written, and it reveals a non dogmatic but
inquiring mind at work. Contemporary management students might miss the bright colors
and multiple fonts of today’s texts, but they would benefit from exposure to this classic.
McGregor’s thinking reminds one that there was a period in which many management
thinkers accepted the legitimacy of unions. For example, Mary Van Kleeck, a Russell
Sage Foundation researcher on human resource issues, grew increasingly committed to
trade unionism and economic planning in the 1920s and 1930s. She embraced an
“interpretation” of scientific management that prioritized workers and working conditions
over company profits (Oldenziel, 2000).

Life and Work of Douglas McGregor 2

Neil Chamberlain (1948) explored the union challenge to management control and found
managers anticipating a kind of codetermination. McGregor strove to build a new model
of management recognizing the new union reality, and his concept of the integration of
interests in the enterprise envisioned a fundamental change in direction. Theory Y is
compatible with collective bargaining, much more so than the unitarist-oriented human
relations doctrines that predated it and most contingency models that followed it.

A history of ideas perspective on McGregor highlights these discontinuities (as well as

reveals McGregor’s debt to Abraham Maslow).

McGregor’s years as president of Antioch College illustrate his willingness to experiment

with participatory systems. Antioch pioneered the integrated work/study curriculum under
the leadership of Arthur Morgan, better known for his stewardship of the Tennessee
Valley Authority. As Antioch president, McGregor helped construct a model of college
and community governance in which students played a decisive role. Antioch’s
experimental nature and freewheeling politics led to an investigation by the House
Un-American Activities Committee, and McGregor was obliged to defend its traditions of
dissent and social reform (Scott Sanders, personal communication).

McGregor later modified the extremely democratic views of his Antioch period.
Factionalism among students and faculty, among other things, exhausted him and
convinced him of the necessity of active leadership. When he retired, he commented:
It took the direct experience of being a line executive and meeting personally the
problems involved to teach me what no amount of observation of other people could
have taught. I believed, for example, that a leader could operate successfully as a
kind of adviser to his organization. I thought I could avoid being a “boss” . . .
. . . I hoped to duck the unpleasant necessity of making difficult decisions . . .
. . . I finally began to realize that a leader cannot avoid the exercise of authority any
more than he can avoid responsibility for what happens to his organization
(McGregor, cited in Bennis & Schein, 1966: 66–70).

This new moderation did not, however, mean a repudiation of unionism or embrace of
authoritarian management.

Life and Work of Douglas McGregor 3

Theory X and theory Y
Theory X and Theory Y are theories of human motivation developed in the 1960s that
have been used in human resource management, organizational behavior, and
organizational development. They describe two very different attitudes toward workforce
motivation. McGregor felt that companies followed either one or the other approach.

Theory X

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.

Many managers (in the 1960s) tended to subscribe to Theory X, in that they 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

Life and Work of Douglas McGregor 4

line of thought is that Theory X managers naturally adopt a more authoritarian style based
on the threat of punishment.

Theory Y

In this theory management assumes employees are ambitious, self-motivated, anxious to

accept greater responsibility, and exercise self-control and self-direction. It is believed
that employees enjoy their mental and physical work activities. It is also believed that
employees have the desire to be imaginative and creative in their jobs if they are given a
chance. There is an opportunity for greater productivity by giving employees the freedom
to be their best.

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 their
potential.

Life and Work of Douglas McGregor 5

Characteristics of the Theory X
Manager
• Results-driven and deadline-driven, to the
exclusion of everything else
• Intolerant
• Issues deadlines and ultimatums
• Distant and detached
• Aloof and arrogant
• Elitist
• Short temper
• Shouts
• Issues instructions, directions, edicts
• Issues threats to make people follow instructions
• Demands, never asks
• Does not participate
• Does not team-build
• Unconcerned about staff welfare, or morale
• Proud, sometimes to the point of self-destruction
• One-way communicator
• Poor listener
• Fundamentally insecure and possibly neurotic
• Anti-social
• vengeful and recriminatory
• Does not thank or praise
• Withholds rewards, and suppresses pay and remunerations levels
• Scrutinises expenditure to the point of false economy
• Seeks culprits for failures or shortfalls
• Seeks to apportion blame instead of focusing on learning from the experience and
preventing recurrence
• Does not invite or welcome suggestions
• Takes criticism badly and likely to retaliate if from below or peer group
• Poor at proper delegating - but believes to be good at delegating
• Thinks giving orders is delegating
• Holds on to responsibility but shifts accountability to subordinates
• Relatively unconcerned with investing in anything to gain future improvements

Problems with Theory X

Drawing on Maslow’s hierarchy, McGregor argues that a satisfied need no longer
motivates. Under Theory X the firm relies on money and benefits to satisfy employees’
lower needs, and once those needs are satisfied the source of motivation is lost. Theory X
management styles in fact hider the satisfaction of higher level needs. Consequently, the

Life and Work of Douglas McGregor 6

only way that employees can attempt to satisfy their higher level needs in their work is by
seeking more compensation, so it is quite predictable that they will focus on monetary
rewards. While money may not be the most effective way to self fulfillment, in Theory X
environment it may be the only way. Under Theory X, people use work to satisfy their
lower needs, and seek to satisfy their higher needs in their leisure time. But its is in
satisfying their higher needs that employees can be more productive.

How you can manage upwards your X theory boss:

Working for an X theory boss isn't easy - some extreme X theory managers make
extremely unpleasant managers, but there are ways of managing these people upwards.
Avoiding confrontation (unless you are genuinely being bullied, which is a different
matter) and delivering results are the key tactics.

• Theory X managers (or indeed theory Y managers displaying theory X behaviour)

are primarily results oriented - so orientate your your own discussions and
dealings with them around results - ie what you can deliver and when.
• Theory X managers are facts and figures oriented - so cut out the incidentals, be
able to measure and substantiate anything you say and do for them, especially
reporting on results and activities.
• Theory X managers generally don't understand or have an interest in the human
issues, so don't try to appeal to their sense of humanity or morality. Set your own
objectives to meet their organisational aims and agree these with the managers; be
seen to be self-starting, self-motivating, self-disciplined and well-organised - the
more the X theory manager sees you are managing yourself and producing results,
the less they'll feel the need to do it for you.
• Always deliver your commitments and promises. If you are given an unrealistic
task and/or deadline state the reasons why it's not realistic, but be very sure of
your ground, don't be negative; be constructive as to how the overall aim can be
achieved in a way that you know you can deliver.
• Stand up for yourself, but constructively - avoid confrontation. Never threaten or
go over their heads if you are dissatisfied or you'll be in big trouble afterwards and
life will be a lot more difficult.
• If an X theory boss tells you how to do things in ways that are not comfortable or
right for you, then don't questioning the process, simply confirm the end-result
that is required, and check that it's okay to 'streamline the process' or 'get things
done more efficiently' if the chance arises - they'll normally agree to this, which
effectively gives you control over the 'how', provided you deliver the 'what' and
'when'.

And this is really the essence of managing upwards X theory managers - focus and get
agreement on the results and deadlines - if you consistently deliver, you'll increasingly be
given more leeway on how you go about the tasks, which amounts to more freedom. Be
aware also that many X theory managers are forced to be X theory by the short-term

Life and Work of Douglas McGregor 7

demands of the organisation and their own superiors - an X theory manager is usually
someone with their own problems, so try not to give them any more.

Characteristics of the Theory Y Manager

• Focus on methods as well as results
• Forgiving
• Involved, interested
• Outgoing, friendly
• People-oriented
• Patient
• Asks, rewards
• Delegates
• Seeks to boost morale
• Seeks opinions of others
• Accepts responsibility
• Assigns pay levels fairly
• Looks at the big picture
• Participative, team builder

Theory Y Management Implications

If Theory Y holds, the firm can do many things to harness the motivational energy of its
employees:
• Decentralization and Delegation – If firms decentralize control and reduce the
number of levels of management; each manager will have more subordinates and
consequently will be forced to delegate some responsibility and decision making
to them.
• Job Enlargement – Broadening the scope of an employee’s job adds variety and
opportunities to satisfy ego needs.
• Participative Management – Consulting employees in the decision making process
taps their creative capacity and provides them with some control over their work
environment.
• Performance Appraisals – Having the employee set objectives and participate in
the process of evaluating how well they were met.

If properly implemented, such an environment would result in a high level of motivation

as employees work to satisfy their higher level personal needs through their jobs.

Life and Work of Douglas McGregor 8

McGregor and Maslow's hierarchy
McGregor's work was based on Maslow's hierarchy of needs. He grouped Maslow's
hierarchy into "lower order" (Theory X) needs and "higher order" (Theory Y) needs. He
suggested that management could use either set of needs to motivate employees but that
better results could be obtained by meeting the Theory Y needs.

SA Theory Y - a set of
assumptions of how to
Esteem
manage individuals
motivated by higher
Love (Social)
order needs
Theory X - a set of
Safety & Security assumptions of how to
manage individuals
Physiological motivated by lower
order needs

Criticisms
Today the theories are seldom used. They are thought to express extreme positions that
are not realistic. Most employees fall somewhere in between these extremes and the
theories are of little help in everyday human resource management decisions. However
Theory X and Theory Y are still important terms in the field of management and
motivation. Recent studies have questioned the rigidity of the model, but Jefferey
Dohmer's X-Y Theory remains a guiding principle of positive approaches to management,
to organizational development, and to improving organizational culture.

Life and Work of Douglas McGregor 9

APPENDIX A: ‘X-Y Theory’ Questionnaire
Score the statements (5 = always, 4 = mostly, 3 = often, 2 = occasionally, 1 = rarely, 0 = never)
To indicate whether the situation and management style is ‘X’ or ‘Y’:

1. My boss asks me politely to do things, gives me reasons why, and invites my suggestions.
2. I am encouraged to learn skills outside of my immediate area of responsibility.
3. I am left to work without interference from my boss, but help is available if I want it.
4. I am given credit and praise when I do good work or put in extra effort.
5. People leaving the company are given an 'exit interview' to hear their views on the
organization.
6. I am incentivised to work hard and well.
7. If I want extra responsibility my boss will find a way to give it to me.
8. If I want extra training my boss will help me find how to get it or will arrange it.
9. I call my boss and my boss's boss by their first names.
10. My boss is available for me to discuss my concerns or worries or suggestions.
11. I know what the company's aims and targets are.
12. I am told how the company is performing on a regular basis.
13. I am given an opportunity to solve problems connected with my work.
14. My boss tells me what is happening in the organisation.
15. I have regular meetings with my boss to discuss how I can improve and develop.

Total score

60-75 = strong Y-theory management (effective short and long term)

45-59 = generally Y-theory management
16-44 = generally X-theory management
0 -15 = strongly X-theory management (autocratic, may be effective short-term, poor long-term)

To indicate whether the person prefers being managed by ‘X’ or ‘Y’ style:

1. I like to be involved and consulted by my boss about how I can best do my job.
2. I want to learn skills outside of my immediate area of responsibility.
3. I like to work without interference from my boss, but be able to ask for help if I need it.
4. I work best and most productively without pressure from my boss or the threat of losing my job.
5. When I leave the company I would like an ‘exit interview’ to give my views on the
organisation.
6. I like to be incentivised and praised for working hard and well.
7. I want to increase my responsibility.
8. I want to be trained to do new things.
9. I prefer to be friendly with my boss and the management.
10. I want to be able to discuss my concerns, worries or suggestions with my boss or another
manager.
11. I like to know what the company's aims and targets are.
12. I like to be told how the company is performing on a regular basis.
13. I like to be given opportunities to solve problems connected with my work.
14. I like to be told by my boss what is happening in the organisation.
15. I like to have regular meetings with my boss to discuss how I can improve and develop.

Total score

60-75 = strongly prefers Y-theory management

45-59 = generally prefers Y-theory management
16-44 = generally prefers X-theory management

Life and Work of Douglas McGregor 10

0 -15 = strongly prefers X-theory management

Life and Work of Douglas McGregor 11