Mike Schmidt
EDAD 802: Leader Development
Organizational Theory Report
Fall 2009

	
Douglas McGregor, an American social psychologist, first proposed his famous X-Y Theory in 1960 in his book “The Human Side Of Enterprise“. McGregor maintained there are two fundamental approaches to managing people, which he labeled X and Y. Theory X and Theory Y are still referenced today in the field of management and motivation and remain a valid basic principle from which to develop positive management style and techniques. McGregor's Theory remains vital to organizational development, and to improving organizational culture through management. It employs the natural rules and foundations of what instinctively motivates people, regardless of setting or objectives.
	As production lines of the industrial era began to interface with business management, Theory X, an “Authoritarian Management” style arose, getting short-term results, followed by long-term breakdowns in the workplace. 
Management can typically see or demonstrate the following under Theory X:
•	The management is “tough” with tight controls and personnel are fearful of consequences. 		
•	Personnel dislike their work and atmosphere and will avoid it if possible. 
•	The threat of punishment to work towards organizational objectives is used by management. 
•	Responsibility and ownership within the organization is avoided by personnel. 
•	Management is the reason for success, not the employee.
	Theory Y, a “Participative Management” style came as an adaptation and response to the issues created by Theory X and unquestionably produced better performance and results, in addition, promoted its workers to develop and take ownership in the business, a welcomed side effect. 
Management can typically see or demonstrate the following under Theory Y:
•	Effort in work is as natural and perceived as enjoyed. 
•	People will apply self-control and self-direction in the pursuit of organizational objectives, without external control or the threat of punishment. 
•	People usually accept and often seek responsibility. 
•	The capacity to use a high degree of imagination, ingenuity and creativity in solving organizational problems is widely, not narrowly, distributed by the management.
•	Staff is valued and credited in regards to meeting the objectives. 
	McGregor acknowledges that by design a manager must demonstrate and exercise some authority due to the nature of the position and the objectives and goals needing to be met within an organization. However, the survival of such an organization is dependent on its personnel at-large to sustain such success. 
For the reasons that survival and success go hand-in-hand in the global era, Theory Y is a widely used and respected management style because of the emphasis it places on the hierarchy within the workplace, which in turn, values the ownership and responsibility of the individual working within such structure.