MANAGEMENT HISTORY

Theory X and Theory Y

y Theory X and Theory Y, created and developed by Douglas

McGregor at the MIT Sloan School of Management in the 1960s, pertain to employee motivation and have been used in human resource management, organizational behavior analysis, and organizational development. They describe two very different attitudes towards workforce motivation. McGregor felt that companies followed either one of these approaches. McGregor viewed the typical employee as an energetic and creative individual who could achieve great things if given the opportunity. He labeled the set of assumptions for this optimistic perspective Theory Y Theory Y McGregors optimistic assumptions about working people. This theory is also known as behavioral approach of management.

Theory x
y 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 control put in place. A hierarchical structure is needed, with narrow span of control at each level, for effective management. According to this theory employees will show little ambition without an enticing incentive program and will avoid responsibility whenever they can.

y The managers influenced by Theory X believe that everything must end in

blaming someone. They think most employees are only out for themselves and their sole interest in the job is to earn money. They tend to blame employees in most situations, without questioning the systems, policy, or lack of training which could be the real cause of failures. their employees. A Theory X manager believes 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. Critics believe that a Theory X manager could be an impediment to employee morale & productivity.

y Managers that subscribe to Theory X tend to take a rather pessimistic view of

Theory y
y Management influenced by this theory assumes that employees are

ambitious, self-motivated, anxious to accept greater responsibility and exercise self-control, self-direction, autonomy and empowerment. Management believes that employees enjoy their work. They also believe that, given a chance, employees have the desire to be creative at their work place and become forward looking. There is a chance for greater productivity by giving employees the freedom to perform to the best of their abilities, without being bogged down by rules. y 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 itself. A Theory Y manager will try to remove the barriers that prevent workers from fully actualizing themselves . y 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 create enthusiasm.

y Though these theories are very basic in nature, they provide a

platform for future generations of management theorists and practitioners to understand the changing dynamics of human behavior. Taken too literally, Theories X and Y seem to represent unrealistic extremes. Most employees (including managers) fall somewhere in between these poles. Recent studies have questioned the rigidity of the model, yet McGregor's X-Y Theories remain guiding principles to the management to evolve processes which help in organizational development. A mix of practices which ensure a healthy blend of systems and the freedom to perform at the work place is likely to motivate the employees more. This mix of practices calls for induction of technology into HR. How we can practice Talent Management in all types of organizations will indicate how well we have understood & deployed these theories X and Y in our real time environment.

Difference between theory X and Y

THEORY X LAZY, Avoids the work Requires close supervision Span of control is needed Show little ambition Cannot solve the problem easily Shows the negative view of employees THEORY Y Ambitious and self motivator No supervision required Self control and self directed Enjoy the responsibility Ability to solve the problem Shows the positive view of employees

Abraham Maslow s Theory

y Maslow's hierarchy of needs is a theory in psychology, proposed by Abraham Maslow in his 1943 paper A Theory of Human Motivation. Maslow subsequently extended the idea to include his observations of humans' innate curiosity. y Maslow studied what he called exemplary people such as Albert Einstein, Jane Addams, Eleanor Roosevelt, and Frederick Douglass rather than mentally ill or neurotic people, writing that "the study of crippled, stunted, immature, and unhealthy specimens can yield only a cripple psychology and a cripple philosophy."Maslow also studied the healthiest 1% of the college student population. y The lower four layers of the pyramid contain what Maslow called "deficiency needs" or "d-needs": physiological (including sexuality), security of position, friendship and love, and esteem. With the exception of the lowest (physiological) needs, if these "deficiency needs" are not met, the body gives no physical indication but the individual feels anxious and tense.

Self-Actualization

Esteem Abraham Maslow s Social

Safety

Physiological

Physiological needs
y For the most part, physiological needs are obviousthey are the literal requirements y y y y y y

for human survival. If these requirements are not met (with the exception of clothing and shelter), the human body simply cannot continue to function. Physiological needs include: Breathing Food Sexual activity Homeostasis Air, water, and food are metabolic requirements for survival in all animals, including humans. The intensity of the human sexual instinct is shaped more by sexual competition than maintaining a birth rate adequate to survival of the species. The theme of genetic heritage over survival is treated at length in The Selfish Gene. The urge to have sex is so powerful that it can drain psychic energy away from other necessary goals. Therefore every culture has to invest great efforts in rechanneling and restraining it, and many complex social institutions exist only in order to regulate this urge. The saying that "love makes the world go round" is a polite reference to the fact that most of our deeds are impelled, either directly or indirectly, by sexual needs.

Safety needs
y With their physical needs relatively satisfied, the individual's safety

y y y y y

needs take precedence and dominate behavior. These needs have to do with people's yearning for a predictable, orderly world in which injustice and inconsistency are under control, the familiar frequent and the unfamiliar rare. In the world of work, these safety needs manifest themselves in such things as a preference for job security, grievance procedures for protecting the individual from unilateral authority, savings accounts, insurance policies, and the like. For most of human history many individuals have found their safety needs unmet, but as of 2009 "First World" societies provide most with their satisfaction, although the poor both those who are poor as a class and those who are temporarily poor (university students would be an example) must often still address these needs. Safety and Security needs include: Personal security Financial security Health and well-being Safety net against accidents/illness and their adverse impacts

Social needs
y After physiological and safety needs are fulfilled, the third layer of y y y y

human needs are social and involve feelings of belongingness. This aspect of Maslow's hierarchy involves emotionally-based relationships in general, such as: Friendship Intimacy Family Humans need to feel a sense of belonging and acceptance, whether it comes from a large social group, such as clubs, office culture, religious groups, professional organizations, sports teams, gangs ("Safety in numbers"), or small social connections (family members, intimate partners, mentors, close colleagues, confidants). They need to love and be loved (sexually and non-sexually) by others. In the absence of these elements, many people become susceptible to loneliness, social anxiety, and clinical depression. This need for belonging can often overcome the physiological and security needs, depending on the strength of the peer pressure; an anorexic, for example, may ignore the need to eat and the security of health for a feeling of control and belonging.

Esteem
y All humans have a need to be respected and to have self-esteem and self-respect. Also

known as the belonging need, esteem presents the normal human desire to be accepted and valued by others. People need to engage themselves to gain recognition and have an activity or activities that give the person a sense of contribution, to feel accepted and selfvalued, be it in a profession or hobby. Imbalances at this level can result in low selfesteem or an inferiority complex. People with low self-esteem need respect from others. They may seek fame or glory, which again depends on others. Note, however, that many people with low self-esteem will not be able to improve their view of themselves simply by receiving fame, respect, and glory externally, but must first accept themselves internally. Psychological imbalances such as depression can also prevent one from obtaining self-esteem on both levels. y Most people have a need for a stable self-respect and self-esteem. Maslow noted two versions of esteem needs, a lower one and a higher one. The lower one is the need for the respect of others, the need for status, recognition, fame, prestige, and attention. The higher one is the need for self-respect, the need for strength, competence, mastery, selfconfidence, independence and freedom. The latter one ranks higher because it rests more on inner competence won through experience. Deprivation of these needs can lead to an inferiority complex, weakness and helplessness. y Maslow stresses the dangers associated with self-esteem based on fame and outer recognition instead of inner competence. He sees healthy self-respect as based on earned respect.

Self-actualization
y What a man can be, he must be. This forms the basis of the perceived

need for self-actualization. This level of need pertains to what a person's full potential is and realizing that potential. Maslow describes this desire as the desire to become more and more what one is, to become everything that one is capable of becoming. This is a broad definition of the need for self-actualization, but when applied to individuals the need is specific. For example one individual may have the strong desire to become an ideal parent, in another it may be expressed athletically, and in another it may be expressed in painting, pictures, or inventions. As mentioned before, in order to reach a clear understanding of this level of need one must first not only achieve the previous needs, physiological, safety, love, and esteem, but master these needs. Below are Maslows descriptions of a self-actualized persons different needs and personality traits. taught him two ways of understanding self-actualization: 1) To be free of the good opinion of others. 2) To do things not simply for the outcome but because it's the reason you are here on earth

y Maslow was a professor of Dr. Wayne Dyer. Dyer suggests that Maslow

Limitations of Maslow's Hierarchy

y Maslow's hierarchy makes sense but there is little evidence to support its hierarchical aspect. In fact, there is evidence that contradicts the order of needs specified by the model. For example, some cultures appear to place social needs before any others.

Finally, there is little evidence to suggest that people are motivated to satisfy only one need level at a time, except in situations where there is a conflict between needs.
y Even though Maslow's hierarchy lacks scientific support, it is quite well-known and is the first theory of motivation to which many people they are exposed.

David McClelland - Human Motivation Theory

y One of McClellands most well known theories is that human y y y y

motivation, is dominated by three needs. McClelland's theory, sometimes referred to as the three need theory or as the learned needs theory, categorizes the needs as follows; the need for achievement ( N-Ach), the need for power ( N-Pow) and the need for affiliation ( N-Affil). The importance of each of these needs will vary from one person to another. If you can determine the importance of each of these needs to an individual, it will help you decide how to influence that individual. cultural background and life experiences. He also asserted that the majority of these needs can be classified as the needs for affiliation, achievement or power. A persons motivation and effectiveness can be increased through an environment, which provides them with their ideal mix of each of the three needs (N-Ach, N-Pow and/or N-Affil).

y McClelland asserted that a persons needs are influenced by their

The need for affiliation (N-Affil)

y This is the need for friendly relationships and human

interaction. There is a need to feel liked and accepted by others. A person with a high need for affiliation is likely to be a team player and thrive in a customer services environment. They will perform best in a co-operative environment. McClelland said that a strong need for affiliation will interfere with a managers objectivity. The need to be liked will affect a managers decisions, prompting them to make decisions to increase their popularity rather than furthering the interests of the organisation.

The need for power (N-Pow)

y This is the need to lead others and make an impact. y This need can exhibit itself in two ways. The first

which is the need for personal power may be viewed as undesirable as the person simply needs to feel that they have power over others. They dont have to be effective or further the objectives of their employer. y The second type of need for power is the need for institutional power. People with the need for institutional power; want to direct the efforts of their team, to further the objectives of their organisation.

The need for achievement (N-Ach)

y This is the need to achieve, excel and succeed. A person

with this type of need, will set goals that are challenging but realistic. The goals have to be challenging so that the person can feel a sense of achievement. However the goals also have to be realistic as the person believes that when a goal is unrealistic, its achievement is dependant on chance rather than personal skill or contribution. This type of person prefers to work alone or with other high achievers. They do not need praise or recognition, achievement of the task is their reward.

SYSTEM APPROACH
y It was first proposed under the name of "General System Theory" by

the biologist Ludwig von Bertalanffy.

y By a systems approach to management is meant the study of a firm

in its totality so that the men and material resources of the firm can be organized to realize the firm's overall objectives as efficiently as possible. This approach is now becoming essential because of the growth of complexity of firms and the increasing potential of automatic computers. The systems approach to management implies that every manager should be much more precise about decisionmaking and information flow. For this to be effective, a company should have an overall system of corporate objectives. First a detailed systems study will be necessary to decide on the best objectives and then subsidiary systems must be set up to realize these objectives as efficiently as possible. This paper is directed at senior management and is a simple attempt to emphasize the urgent need to apply the systems approach, both in government and industry.

y The input is the resources available. E.g. material and

machines could be referred as input. This input is then converted into output with the help of managerial and technological process. Output can be the finished goods or the better services. y Feedback is the process of getting comments from customers and clients. y An organization that interacts little with its external environment and because of that it receives little feedback is known as closed system. y In contrast open system interacts continually with its external environment. Therefore it is well informed about the changes within its surroundings and its position relative to this changes.

y The systems approach is a problem-solving method which

helps to:
y 1. y 2. y 3. y 4. y 5.

Define the problem as clearly as possible. Analyse the problem and identify alternative solutions. Select from the alternatives and develop the most viable solution mix. Implement and test the solution. Evaluate the effectiveness and worth of the solution.

y Thus system management theory has a great influence of

management science. Basically a system is set of interrelated set of elements functioning as a whole. y A subsystem is any system that is a part of larger system. y And with the help of system approach the synergy is possible for the company. y Synergy means the ability of the whole system to equal more than the sum of its own parts. Thus due to which the company is able to produce more and due to which the profit is achievable.

Contingency Approach
y The contingency approach to management is based on the idea that

there is no one best way to manage and that to be effective, planning, organizing, leading, and controlling must be tailored to the particular circumstances faced by an organization. Managers have always asked questions such as "What is the right thing to do? Should we have a mechanistic or an organic structure? A functional or divisional structure? Wide or narrow spans of management? Tall or flat organizational structures? Simple or complex control and coordination mechanisms? Should we be centralized or decentralized? Should we use task or people oriented leadership styles? What motivational approaches and incentive programs should we use?" The contingency approach to management (also called the situational approach) assumes that there is no universal answer to such questions because organizations, people, and situations vary and change over time. Thus, the right thing to do depends on a complex variety of critical environmental and internal contingencies.

Contingency Perspective And Organization Theory

y Environmental change and uncertainty, work technology, and the size of a company are all identified as environmental factors impacting the effectiveness of different organizational forms. According to the contingency perspective, stable environments suggest mechanistic structures that emphasize centralization, formalization, standardization, and specialization to achieve efficiency and consistency. Certainty and predictability permit the use of policies, rules, and procedures to guide decision making for routine tasks and problems. Unstable environments suggest organic structures which emphasize decentralization to achieve flexibility and adaptability. Uncertainty and unpredictability require general problem solving methods for nonroutine tasks and problems.

y Organizational size is another contingency variable thought to impact the

effectiveness of different organizational forms. Small organizations can behave informally while larger organizations tend to become more formalized. The owner of a small organization may directly control most things, but large organizations require more complex and indirect control mechanisms. Large organizations can have more specialized staff, units, and jobs. Hence, a divisional structure is not appropriate for a small organization but may be for a large organization.
y In addition to the contingencies identified above, customer diversity and the

globalization of business may require product or service diversity, employee diversity, and even the creation of special units or divisions. Organizations operating within the United States may have to adapt to variations in local, state, and federal laws and regulations. Organizations operating internationally may have to adapt their organizational structures, managerial practices, and products or services to differing cultural values, expectations, and preferences. The availability of support institutions and the availability and cost of financial resources may influence an organization's decision to produce or purchase new products.

y Economic conditions can affect an organization's hiring and layoff

practices as well as wage, salary, and incentive structures. Technological change can significantly affect an organization. The use of robotics affects the level and types of skills needed in employees. Modern information technology both permits and requires changes in communication and interaction patterns within and between organizations. y Contingency Perspective And Leadership: y Dissatisfaction with trait-based theories of leadership effectiveness led to the development of contingency leadership theories. Various aspects of the situation have been identified as impacting the effectiveness of different leadership styles. For example, Fiedler suggests that the degree to which subordinates like or trust the leader, the degree to which the task is structured, and the formal authority possessed by the leader are key determinants of the leadership situation. Task-oriented or relationship oriented leadership should would each work if they fit the characteristics of the situation.