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  • Douglas Mcgregor is a behaviorist and social psychologist of repute. He is a strong believer in the potentialities of human beings in contributing to organizational performance.
  • His work, “The Human Side of Enterprise” (1960) opened new vistas in organisation and management theory through providing answers to some of the intriguing questions.
  • Later he published another book “The Professional Manager” (1964). His focus is on utilizing human potential in organisations and getting the best out of people through creating a conducive and harmonious environment.
  • He felt that the theoretical assumptions about controlling men determine the character of the enterprise. According to McGregor, the failure to bring the best out of human beings in organisations can be attributed to our conventional view of organisation and man.
  • He calls this view as ‘Theory X’. According to ‘Theory X’ oriented thinking, management is viewed as the master of an enterprise in directing economic activity and allocation of possessions. Management, to them, is getting work done through other people and hence a manager needs to control the behaviour of other people in the organisation.
  • They feel that the organisation can suitably intervene in the procedure of direction controlling and motivating people to accomplish the purpose of the organisation.
  • Behind these views there are a few assumptions about human nature-and human behaviour. These assumptions are so pervasive that one can see them in mainly of the literature on organisation and management. The assumptions are:
  • “The average human being has an inherent dislike of work and will avoid it if he can”;
  • “Because of this human feature of dislike of work, mainly people necessity be coerced, controlled, directed, threatened with punishment to get them put forth adequate effort towards the attainment of organizational objectives”, and
  • “The average human being prefers to he directed, wishes to avoid responsibility, has relatively little ambition, and wants security above all.

Assumption of Manager under theory X

  1. ‘Theory X’ assumes human beings as lazy, lacking in ambition, resisting change, and non creative, capable of being deceived easily, etc.
  2. In such a case management has two strategies to adopt, viz., hard and soft. Hard strategy implies the use of techniques like secure supervision, tight control, coercion, and threat. Soft strategy, on the other hand, is more permissive, meets the demands and attempts to harmonies the demands for organisation and that of employees.
  3. But both these strategies have troubles. For instance, if the management is hard, it may lead to militant unionism, sabotage, and antagonism. On the other hand soft management in its anxiety to purchase harmony may abdicate itself. McGregor notes that this conventional management approach is inadequate as it makes more troubles than it solves.
  4. He emphasized the need to revise the motivational factors to understand the organizational behaviour. For, he believes, deprivation of needs has behavioral consequences at all stages. Hostility and passivity in the middle of employees are not inherent in human nature.
  5. They are only symptoms of deprivation of human needs. ‘Theory X’ explains ‘the consequences of management strategy and it does not explain human nature. The assumptions on human nature under ‘theory X’ are unnecessarily limiting. Such assumptions prevent the management from seeing possibilities in other strategies.
  6. Even when we use techniques like decentralization and consultative supervision, their implementation would be based on inadequate assumptions of human nature. Finally McGregor emphasizes that the assumptions of ‘Theory X’ would not discover human potentialities in their entirety.

‘Theory X’ which represents classical administrative theory, as you know, lays stress on efficiency and economy. As the human being tries to avoid work, this inherent human tendency should be counteracted through the management. So, ‘Theory X emphasizes on direction and control. ‘Theory X’ only explains the management strategy. It does not explain as to which factors motivate the employee. This also lays emphasis on manager and creates his job more hard and complex. He cannot expect cooperation from his employees if he continually distrusts them. Manager also has to spend a great part of his time on direction and control. This leaves very little time for policy creation and planning. McGregor felt that this traditional view is helpful neither to achieve the goals nor to motivate the employees to accomplish the goals.


McGregor holds the opinion that ‘Theory X‘ assumptions about organisation, management, and man are obstacles to performance, and productivity. They are inadequate to realize all the human potentialities. So, in place of ‘Theory X’ McGregor proposed a new theory broadly recognized as ‘Theory Y’. This new theory gives a new look to the relationships flanked by human being and management. According to this theory the management is responsible for coordinating the activities in an organisation and for accomplishing its purposes.

In this new theory McGregor replaces direction and control through integration.

The assumptions about: human nature under ‘Theory Y‘ is:

  1. The expenditure of physical and mental effort in work is as natural as play or rest. The average human being does not inherently dislike work. Depending upon controllable circumstances, work may be a source of satisfaction (and will be voluntarily performed) or a source of punishment (and will be avoided if possible).
  2. External control and the threat of punishment are not the only means for bringing about effort towards organizational objectives. Man will exercise self-direction and self- control in the service of objectives to which he is committed.
  3. Commitment to objectives is a function of the rewards associated with their attainment. The mainly important of such rewards, e.g., the satisfaction of ego and self-actualization needs, can be direct products of efforts directed towards organizational objectives.
  4. The average human being learns, under proper circumstances, not only to accept but to seek responsibility. Avoidance of responsibility, lack of ambition, and emphasis on security an usually consequences of experience, not inherent human features.
  5. The capability to exercise a relatively high, degree of imagination, ingenuity, and creativity in the solution, of organizational troubles is widely, not narrowly, distributed in the population.

Under  the  circumstances  of  modern  industrial  life,  the  intellectual potentialities of the average human being are only partially utilized.

McGregor suggests that there is a need for a new management strategy which is more dynamic than static. This strategy should give for human growth and development. It should discover the human possessions that have substantial potentialities to contribute to the organisations. ‘Theory Y’ underlines the importance of maintaining an organisation where people feel confident and motivated. It emphasizes developing and improving performance orientation of the people working in the organisations. It involves lot of leadership skills on the part of the managers to achieve these objectives. The cornerstone of McGregor‘s framework is self-restraint, self-direction, goal orientation, and human values in the organisation.

Mcgregor says that ―theory Y‖ is an invitation to innovation. The innovative ideas constant with ‘Theory Y‘ assumptions are delegation and decentralization of authority and responsibility; creation jobs more and mare appealing through job redesign; participative system of involving more and more people in decision-milking procedure; and developing appropriate performance appraisal systems.

McGregor‘s ‗Theory Y‘ emphasizes integration. To him integration means, “creation of circumstances such that, the members of organisation can achieve their own goals best through directing their efforts towards the success of the enterprise’. In this, both organizational needs and individual needs are recognized and integrated. It implies both management and employees working together. This approach is also recognized as management through integration and self control.

Determining job necessities

The manager has to understand the purpose and productivity indicators of his job, so that he can guide his associates towards the attainment of key result areas.

Goal setting

Once the manager knows the purpose of his job, he has to formulate goals with reference to quantity, quality, and time. This is normally done in consultation with one’s associates and supervisors. Once there is an agreement on desired and committed goals, it will be easier to evaluate objectively at any point of time in the future.

In flanked by period

In flanked by the period of goal setting and its final evaluation in performance appraisal, a manager has to use his self-control and direction to develop his associates. This requires leadership skills on the part of managers.

Self appraisal

A manager has to evaluate his own performance against the goals set and agreed. While doing this analysis he has to measure each of the performance indicators as against the agreed targets. This gives an objective picture of targets and achievements of the manager with reference to quality, quantity, and time. It also gives an opportunity to analyze the set-backs and shortcomings and helps in goal setting in the future. The importance of this step is that it enhances the understanding flanked by the organisation and the individual.


  • McGregor‘s ‘X’ and ‗ Y‘ theories are based on diametrically opposed assumptions of human nature. The latter theory holds that man is positive with potentiality to development.
  • This has, implications for management. McGregor observes that if employees are lazy, indifferent, unwilling to take responsibility, stubborn, noncreative and no cooperative, the cause lies with management’s methods of control. Theories ‗X‘ and ‗Y‘ should not be taken as neat categories of human relationships.
  • They are only analytical tools through which behaviour can be analyzed, predicted, and corrected. After McGregor, several scholars have gone beyond ‘Theory Y’ in analyzing the human nature and its implications to organisation. This, though does not reduce the importance of McGregor‘s contributions.

Public Administration by G.Rajput

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