Theory Y vs Management by Objectives

George S. Odiorne, in his book Management by Objectives defines the term "management by objective." Odiorne also describes the conditions under which "management by objective" work effectively. In his book, The Human Side of Enterprise, Douglas McGregor (1960) proposed the two motivational theories by which managers perceive employee motivation. He referred to these opposing motivational theories as Theory X and Theory Y. According to McGregor, each theory (Theory X and Theory Y) assumes that management's role is to organize resources, including people, to best benefit the company. The Theory Y manager makes the following general assumptions:

Work can be as natural as play if the conditions are favorable.

People will be self-directed and creative to meet their work and organizational objectives if they are committed to them.

People will be committed to their quality and productivity objectives if rewards are in place that address higher needs such as self-fulfillment.

The capacity for creativity spreads throughout organizations.

Most people can handle responsibility because creativity and ingenuity are common in the population.

Under these conditions, people will seek responsibility.

If Theory Y holds true, an organization can improve employee motivation and performance by employing the following ideas or techniques:

Decentralization and Delegation - If firms decentralize control and reduce the number

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Approximate Word count = 1080
Approximate Pages = 4 (250 words per page)

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