The Human Side of Enterprise
Where Theory X and Theory Y first appear, delivered as a talk at MIT on 9 April 1957 and much sharper than the personality typology it later became. McGregor's claim is not that there are two kinds of manager but that all managerial practice rests on assumptions about human nature, and that the conventional ones are wrong about cause and effect. Theory X is named deliberately to avoid the complications of a label, and set out as three propositions: management organises money, materials, equipment and people for economic ends; managing people means directing, motivating, controlling and modifying their behaviour; and without that intervention people would be passive or resistant. Five less explicit beliefs sit behind it, that the average man is indolent, lacks ambition, is self-centred, resistant to change, and the ready dupe of the charlatan and the demagogue.
The pivot is that the observed behaviour is real but misread: social scientists do not deny people behave roughly as management describes, they deny it follows from human nature, holding it a consequence of how organisations and policies are built. The evidence offered is Maslow's hierarchy, from his Brandeis colleague, and one principle from it: a satisfied need is not a motivator, as with your need for air. The passage psychological safety readers will recognise concerns safety needs. Because every employee stands in a dependent relationship, arbitrary management action, uncertainty about continued employment, favouritism or discrimination, and unpredictable administration of policy are powerful motivators of those needs at every level from worker to vice president. What people want is not security but the fairest possible break, and given confidence in that they are more than willing to take risks. Thwarted higher needs are treated as a kind of sickness, so passivity and refusal to take responsibility are symptoms rather than nature.
Theory Y follows as four propositions, sharing the first and then departing: people are not by nature passive or resistant but have become so through experience in organisations; motivation, the capacity for responsibility and the readiness to work toward organisational goals are already present and management does not put them there; and the essential task is arranging conditions so that people reach their own goals best by directing their own effort at organisational ones. McGregor is emphatic that this is not the soft approach: not abdication, not absent leadership, not lowered standards. The distinction is between external control and self-control, glossed as the difference between treating people as children and as adults. Carrot and stick works below subsistence and stops working above it, since management cannot supply self-respect and can only create or withhold the conditions in which someone finds it. Creating conditions is not control.
The tentativeness is his own and worth keeping. The talk opens on an analogy with atomic physics in the thirties, arguing that applying social science will be slow, costly and disappointing to anyone wanting practical results now; he says his account will be overgeneralised and ignore important qualifications, and calls the evidence far from conclusive but suggestive. The practical examples are of their time (Sears, IBM, the Scanlon Plan, Tavistock's British coal mining studies) and carry the warning that matters most: these fail when a management buys the idea and applies it inside Theory X assumptions, at which point participation becomes a farce and a sales gimmick.
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