chapter - Pearson

Chapter 1
over workers’ behaviors and minimize the workers’ control
over the pace of work. These managers believe that workers
must be made to do what is necessary for the success of the
organization, and they focus on developing rules, standard
operating procedures, and a well-defined system of rewards
and punishments to control behavior. They see little point in
giving workers autonomy to solve their own problems
because they think that the workforce neither expects nor
desires cooperation. Theory X managers see their role as to
closely monitor workers to ensure that they contribute to
the production process and do not threaten product quality.
Henry Ford, who closely supervised and managed his workforce,
fits McGregor’s description of a manager who holds
Theory X assumptions.
Theory Y
In contrast, Theory Y assumes that workers are not inherently
lazy, do not naturally dislike work, and, if given the opportunity,
will do what is good for the organization. According to
Theory Y, the characteristics of the work setting determine
whether workers consider work to be a source of satisfaction
or punishment; and managers do not need to closely control
workers’ behavior in order to make them perform at a high
level, because workers will exercise self-control when they are
committed to organiztional goals. The implication of Theory
Y, according to McGregor, is that “the limits of collaboration
in the organizational setting are not limits of human nature
but of management’s ingenuity in discovering how to realize
the potential represented by its human resources.” 13 It is the
manager’s task to create a work setting that encourages commitment
to organizational goals and provides opportunities
for workers to be imaginative and to exercise inititative and
self-direction.
When managers design the organizational setting to
reflect the assumptions about attitudes and behavior suggested
by Theory Y, the characteristics of the organization are
quite different from those of an organizational setting based
on Theory X. Managers who believe that workers are motivated
to help the organization reach its goals can decentralize
authority and give more control over the job to workers, both
as individuals and in groups. In this setting, individuals and
groups are still accountable for their activities, but the manager’s
role is not to control employees but to provide support
and advice, to make sure they have the resources they need to
perform their jobs, and to evaluate them on their ability to
help the organization meet its goals.
THEORY Z
In the 1980s, William Ouchi, a professor interested in differences
between work settings in Japan and the United States,
took the management approach inherent in Theory Y one
Organizational Behavior and Management
39
step further. 14 In the United States, national culture emphasizes
the importance of the individual, and workers view their
jobs from an individualist perspective and thus behave in ways
that will benefit them personally. Perhaps because of this,
Ouchi noted, many U.S. managers adopt Theory X rather
than Theory Y assumptions. They expect workers to behave
purely in their own self-interest and believe workers will leave
an organization at a moment’s notice if they see a better
opportunity elsewhere. To counter this expectation, Ouchi
speculated, managers simplify jobs and increase supervision to
make it easy to replace workers and to minimize any problems
that might result from high rates of turnover. In U.S. companies,
control is frequently explicit and formalized: Job
requirements are clearly specified, and most workers are evaluated
on and rewarded for their individual level of performance.
In contrast, Japanese managers expect workers to be
committed to their organizations and therefore treat them
differently. Some large Japanese companies guarantee workers
lifetime employment and view the training and development
of workers as a lifelong investment. Moreover, Japanese workers
tend to have a collective or group orientation to their
work, a result of the characteristics of Japan’s national culture,
which emphasizes the importance of groups and organizations
rather than individuals. Consistent with the Japanese culture,
Japanese managers create work settings that encourage a
group-oriented approach to decision making, they give work
groups responsibility for job performance, and they allow
work groups to control their own behavior.
Ouchi suggested that U.S. companies could capture
many of the advantages that Japanese companies enjoy by
combining various characteristics of the Japanese and U.S.
management systems and following the approach to management
that he called Theory Z. In what Ouchi calls a “Type Z
organization,” workers are guaranteed long-term (but not
lifetime) employment, so that their fears of layoffs or unemployment
are reduced. Type Z managers attempt to combine
the Japanese emphasis on the work group with a recognition
of individual contributions by setting objectives for individual
workers so that individual performance achievements can be
recognized within a group context. Thus, individuals are recognized
and rewarded not only for individual performance
but also for interpersonal skills that improve decision making
or communication. As we discuss in later chapters, the implementation
of Theory Z requires an organizational structure
that allows the organization to be flexible and responsive to
changes inside the organization and in the external environment.