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Empowerment Through Knowledge
No.06: McGregor’s Theory X and Theory Y

Douglas McGregor first put forward Theory X and Theory Y in his 1960 book “The Human Side of Enterprise”. He explains the use of two very different management styles based on the factors that motivate different types of employees, while taking into consideration the nature of their work or varying business situations. Keeping both theories in mind can help you identify the most appropriate motivational tools for your own scenarios, maintaining or even boosting productivity.

Theory X

Some assumptions that may lead you to choosing an authoritative management style include that your employees:

  • Do not like to work.
  • Are incapable of thinking independently or creatively, disliking change.
  • Avoid responsibility.
  • Need constant direction to deliver results.
  • Will stop delivering results if unsupervised.
  • Need target-related rewards and threats to keep them motivated due to a lack of intrinsic motivation to do good work.
  • Are just in it for the money, ranking job security as an important factor when choosing work.


Theory Y

Some assumptions that may lead you to choosing a participative management style include that your employees:

  • Enjoy working on their own initiative.
  • Want to be more involved in decision making.
  • Are resourceful and able to come up with creative solutions independently.
  • Need to feel challenged and fulfilled through their work.
  • Welcome change and diversity in their work.
  • Prefer responsibility and ownership of their work, needing little direction.


Different situations with different management needs

Although the authoritative approach of Theory X is becoming increasingly unpopular, with the participative Theory Y becoming the preferred approach in more fulfilment driven populations, there are still many situations today when an authoritative style is necessary for achieving consistent results.


Take a factory line commonly managed through Theory X, for example; introducing Theory Y might result in finished products that are less effective than those designed through careful research and development. There is little room for independence and creativity at this employee level, making a system of rewards and threats almost necessary to provide external motivation for keeping the line productive and everyone focused on their targets and specific role within the production. The business relies on the repetitiveness of tasks and on workers meeting daily targets. Therefore, with everyone taking initiative, the production line would be disrupted, with people spending more time being creative than producing.

Similarly, think of a well-established, horizontally managed company. Most departments are used to working with a Theory Y management style and the company normally exceeds targets that way. Now introduce a crisis, such as a sudden flooding of the office building due to abnormally heavy rains. Keeping the team going with a participative management style may cause the company to lose track of what actions would be vital in that scenario, meaning that a quick shift to Theory X may be necessary to keep the vital functions of the company going and the business ‘afloat’.

On the other hand, a team that is responsible for the design and development of a new product, having sufficient previous experience and knowledge, will likely feel demotivated by a Theory X, authoritative management style. Despite creativity being one of the departmental objectives, creating extrinsic motivation such as micromanaged targets or threats, takes away from that self-motivated passion for their work and can cause a reduction in their creative abilities.



As you may have noticed, neither Theory X nor Theory Y will work as a one-stop management style. Every business requires a different blend of these management styles, more often than not even differing greatly internally between departments due to the nature of the work. You may even choose a more authoritative style during the induction of a new employee, avoiding them getting overwhelmed about where to start, and then shift to a participative style when they have learned enough about the way the business works and begin showing initiative. Taking you back to our fourth edition of Empowerment Through Knowledge, about Maslow’s Hierarchy of Needs, individuals that are more driven by physiological and safety needs will be more likely to achieve results through an authoritative approach, while those that are more motivated by social, esteem and self-actualisation needs will be more productive through a participative approach to management.


McGregor’s Theory X and Theory Y is discussed in our Introduction to Business and Management Award Certificate, one of the first modules in our Bachelor in Business and Management. It is also related to several modules on the Henley Executive MBA and our Leadership Skills Professional Workshop.

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