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Douglas McGregor, The Human Side of Enterprise (1960)Douglas McGregor, The Human Side of Enterprise (1960)


American professor (pictured right) at  MIT's Sloan School of Management in Boston, USA, famous for his Theory X and Theory Y in this book.

He died in 1964.


See also...

Douglas McGregor in the Management Gurus section. 


Book summary


Theory X and Theory Y

These are two ways of looking at people at work - see below.


Theory XDouglas McGregor, The Human Side of Enterprise (1960)

Theory X is based on assumptions associated with F.W. Taylor’s (pictured right) scientific management:

  • people inherently dislike work and will avoid it if they can.
  • they must be controlled and forced to work with financial reward (a ‘carrot and stick’ approach to motivation).
  • they are unambitious and avoid responsibility.

Theory YDouglas McGregor, The Human Side of Enterprise (1960)

Theory Y is is based on these assumptions:


a) people will motivate themselves to work

(if they are fulfilled, autonomous and involved in decision making).


b) they have the ability to be creatively brilliantDouglas McGregor, The Human Side of Enterprise (1960)

(but this potential is usually never fully realized).


c) they can accept responsibility and become leaders

“The price of freedom is responsibility”, says McGregor.


Theory Y strategies

 Douglas McGregor, The Human Side of Enterprise (1960)

1. Management by objectives

  • involving employees in setting their objectives.
  • giving them the autonomy to achieve them.
  • appraising their performance.


2. Employee participation

(in decision making)

 Douglas McGregor, The Human Side of Enterprise (1960)

3. Creating trust and confidence in managers

(through their integrity and ethical behaviour).

Theory Y won’t work if managers are seen to be manipulative.


4. EmpowermentDouglas McGregor, The Human Side of Enterprise (1960)

(although McGregor didn’t use the term)

Central to Theory Y are:

  • results from responsibility.
  • self-fulfilment (from interesting work.)
  • identification with organizational objectives.
  • self-motivation.


5. LearningDouglas McGregor, The Human Side of Enterprise (1960)

  • encouraging people to take responsibility for their own skills and personal development – you can’t force people to learn, they must want to do it.
  • giving them feedback.
  • learning from experience.


6. Creative teamwork

This results from:Douglas McGregor, The Human Side of Enterprise (1960)

  • free exchange of ideas.
  • constructive criticism and disagreement.
  • good leadership.
  • an informal, relaxed atmosphere.
  • focus on the job.
  • quick implementation of decisions.


Theory X strategies

 Douglas McGregor, The Human Side of Enterprise (1960)

1. Supervision and autocratic control

People must be “coerced, controlled, directed, threatened”.


2. Carrot and stick motivation

Financially reward and punish people for good and bad performance.


What about leadership and management? 

Leadership is a complex two-way relationship between the leader and his (or) her situation, particularly:

  • followers’ needs and attitudes.Douglas McGregor, The Human Side of Enterprise (1960)
  • organizational structure and policy.
  • the external environment (e.g. market changes).

McGregor generally supports Theory Y

But he says that it isn’t appropriate in every management situation. 

Theory X will be better if quick, autocratic action is required.


Key quotes on leadership and management

Theory Y assumes that people will exercise self-direction and self-control in the achievement of organizational objectives to the degree that they are committed to those objectives.

Theory X leads naturally to an emphasis on the tactics of control. Theory Y, on the other hand, leads to a preoccupation with the nature of leadership.

The central principle of managerial control is the principle of self-control.


Key quote on innovation

Theory Y is an invitation to innovation.


Key quote on motivation

So long as the assumptions of Theory X continue to influence managerial strategy, we will fail to discover, let alone utilize, the potential of the average human being.


Key quote on management training

Managerial competence is created on the job, not in the classroom.

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