The X And Y Business Theories Business Essay


In this assignment, I will be looking at Douglas Mcgregor's, Theory "X" and Theory "Y" and how this theory can alter beliefs and human behaviour which will be helpful in the situation in improving productivity and employment relations of Muddles Corporation.

Muddlers Corporation has been affected by the downturn of the financial economy, this has led to a loss of income, redundant employees, and pension schemes axed. This has influenced a lack of motivation in the company consequently morale's have plummeted and absenteeism has risen, there has been backlash from staff on ideas of the company, instead of the company cooperating together, they're antagonistic to each other.

Motivation according to Griffin (1999) is a "set forces that cause people to behave in certain way." Consequently motivation can affect the productivity of the employee's performance. Nel, Gerber, Van Dyk, Haasbroek, Schultz, Sono and Werner (2001:326) describe motivation as intentional and directional. The word 'intentional' refers to personal choice and persistence of action. The word 'directional' indicates the presence of a driving force aimed at attaining a specific goal. A motivated person is always aware of the fact that a specific goal must be achieved, and continuously directs his/her efforts at achieving that goal. Motivation is a component that drives an individual to achieve a goal. Motivation illustrates inspiration and encouragement. Motivation will yield an individual's mind to think: "If I make one step backwards, I will make two steps forward".

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Douglas McGregor introduced Theory Y and Theory X. In this theory he lists the characteristics of managers and how they deal with its employees. He gives qualities of Theory Y and Theory X and how they contribute to management.

Theory X managers believe that employees dislike and attempt to avoid work, need direction, avoid responsibility, and lack ambition (Bolman & Deal, 1984). Theory X manager's style of working with its employees is to direct and control, this can be shown in Muddler Corporation by tightening controls on the internet.

Mcgregor believes if managers held the Theory X style, they embrace two distinctive approaches, which are "Hard" Theory X to "Soft" Theory X. The hard Theory X involves pressure, tight controls, threats and punishments from managers. Hard Theory X, in Mcgregor's view led to low productivity, antagonism, militant unions. The other possibility of the "soft" Theory X is to be is to be liberal and seek harmony with the hope that in return employees will cooperate when asked to do so, however this leads to employees laziness, indifference with employees, and people expecting more and more from the company but giving less such as productiveness.

Mcgregor suggested that managers needed a dissimilar theory to Theory X. He gave the Theory Y, which was similar to Theory X in that it expresses "management is responsible for organizing the elements of enterprise…in the interest of economic ends." In contrast, managers who make Theory Y assumptions believe that employees do not dislike work, have self-control and direction, and seek responsibility (McGregor, 1960). McGregor believed that Motivation is always present in people and Theory Y argues that people are not passive by nature; but only by result of experience in a company. The goal of Theory Y is that it arranges organizational conditions so that people can achieve their own goals best by directing their efforts toward organizational rewards (McGregor, 1960). This means that management have to arrange activities that organizations interests and the employee's self-interest coincide.

McGregor view is that Theory X relies too much on external control of people, while Theory Y relies on self-control and self-direction. Theory X treats people like children; on the other hand Theory Y treats them like adults. McGregor believed that there is a conflict between individuals and organizations as organizations often treat people like children. Theory X chain of commands requires that people at higher levels be able to direct and control people at lower levels, creating a situation of passivity and dependence. McGregor believed that under such condition people experience "Physiological failure" and this will consequently bring conflict between the individual and the organization and if the conflict frustrates then employees can:

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Withdraw from the company through quitting or frequent absenteeism.

They might withdraw from the company psychologically, becoming indifferent, inactive and lazy.

McGregor believes that managers often misinterpret such employee behaviour to mean that something is wrong with the employees rather than the organization and this could lead the company to bring chastisement on employees and this will result in backlash from employees.

Muddlers Corporation can apply a Theory Y management style, which is participation Management which is the process of giving the employees a voice in making decisions about their own work.

Participative management appears to offer tremendous advantages which can be helpful in Muddler Corporation. It can create atmosphere where employees reason for themselves and manage their own work, this will reduce costs as staff support and supervision requirements will be lessened, employees will feel there role is a significant part of the company, this will reduce tardiness and absenteeism, as employees will be more willing to come to make difference as their role is more significant to outcome of how the company is run. Muddler employees will have a chance to put forth the suggestions that he feels will benefit both himself and the company. It creates a better work environment due to improved employee satisfaction.

Muddlers Corporation can apply alternative Theory Y management style which is termed Performance appraisals.

The performance appraisal is essentially an opportunity for employees and managers to get together to engage in a dialogue about the individual's performance, development and concerns the employee is facing.

Performance appraisals offer a rare chance for supervisors and subordinates to discuss work issues such in Muddlers case will be reduction of income and pension scheme ending.

Consequently appraisals offers a valuable opportunity to focus on work activities and goals, to identify and correct existing problems and to encourage muddlers corporation with better performance and tackle the problem with absenteeism

If nothing else, the existence of an appraisal program indicates to an employee that the organization is genuinely interested in their individual performance and development. This alone can have a positive influence on the individual's sense of worth, commitment and belonging.

In conclusion by examining the problems Muddlers Corporation are facing they are applying the Theory X management style towards their employees this has led decrease in morale and high absenteeism, I imagine that if Muddlers alter their style to Theory Y, employees will feel appreciated enjoying 'supportive relationships' with managers. Ideally, Muddlers members will see its objectives as being personally significant to them.