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Chapter 1 over workers’ behaviors and minimize the workers’ control over the pace of work. These managers believe that workers must be made to do what is necessary for the success of the organization, and they focus on developing rules, standard operating procedures, and a well-defined system of rewards and punishments to control behavior. They see little point in giving workers autonomy to solve their own problems because they think that the workforce neither expects nor desires cooperation. Theory X managers see their role as to closely monitor workers to ensure that they contribute to the production process and do not threaten product quality. Henry Ford, who closely supervised and managed his workforce, fits McGregor’s description of a manager who holds Theory X assumptions. Theory Y In contrast, Theory Y assumes that workers are not inherently lazy, do not naturally dislike work, and, if given the opportunity, will do what is good for the organization. According to Theory Y, the characteristics of the work setting determine whether workers consider work to be a source of satisfaction or punishment; and managers do not need to closely control workers’ behavior in order to make them perform at a high level, because workers will exercise self-control when they are committed to organiztional goals. The implication of Theory Y, according to McGregor, is that “the limits of collaboration in the organizational setting are not limits of human nature but of management’s ingenuity in discovering how to realize the potential represented by its human resources.” 13 It is the manager’s task to create a work setting that encourages commitment to organizational goals and provides opportunities for workers to be imaginative and to exercise inititative and self-direction. When managers design the organizational setting to reflect the assumptions about attitudes and behavior suggested by Theory Y, the characteristics of the organization are quite different from those of an organizational setting based on Theory X. Managers who believe that workers are motivated to help the organization reach its goals can decentralize authority and give more control over the job to workers, both as individuals and in groups. In this setting, individuals and groups are still accountable for their activities, but the manager’s role is not to control employees but to provide support and advice, to make sure they have the resources they need to perform their jobs, and to evaluate them on their ability to help the organization meet its goals. THEORY Z In the 1980s, William Ouchi, a professor interested in differences between work settings in Japan and the United States, took the management approach inherent in Theory Y one Organizational Behavior and Management 39 step further. 14 In the United States, national culture emphasizes the importance of the individual, and workers view their jobs from an individualist perspective and thus behave in ways that will benefit them personally. Perhaps because of this, Ouchi noted, many U.S. managers adopt Theory X rather than Theory Y assumptions. They expect workers to behave purely in their own self-interest and believe workers will leave an organization at a moment’s notice if they see a better opportunity elsewhere. To counter this expectation, Ouchi speculated, managers simplify jobs and increase supervision to make it easy to replace workers and to minimize any problems that might result from high rates of turnover. In U.S. companies, control is frequently explicit and formalized: Job requirements are clearly specified, and most workers are evaluated on and rewarded for their individual level of performance. In contrast, Japanese managers expect workers to be committed to their organizations and therefore treat them differently. Some large Japanese companies guarantee workers lifetime employment and view the training and development of workers as a lifelong investment. Moreover, Japanese workers tend to have a collective or group orientation to their work, a result of the characteristics of Japan’s national culture, which emphasizes the importance of groups and organizations rather than individuals. Consistent with the Japanese culture, Japanese managers create work settings that encourage a group-oriented approach to decision making, they give work groups responsibility for job performance, and they allow work groups to control their own behavior. Ouchi suggested that U.S. companies could capture many of the advantages that Japanese companies enjoy by combining various characteristics of the Japanese and U.S. management systems and following the approach to management that he called Theory Z. In what Ouchi calls a “Type Z organization,” workers are guaranteed long-term (but not lifetime) employment, so that their fears of layoffs or unemployment are reduced. Type Z managers attempt to combine the Japanese emphasis on the work group with a recognition of individual contributions by setting objectives for individual workers so that individual performance achievements can be recognized within a group context. Thus, individuals are recognized and rewarded not only for individual performance but also for interpersonal skills that improve decision making or communication. As we discuss in later <strong>chapter</strong>s, the implementation of Theory Z requires an organizational structure that allows the organization to be flexible and responsive to changes inside the organization and in the external environment.
40 ENDNOTES Chapter 1 Chapter 1 Organizational Behavior and Management 1. www.schlumberger.com, 2000. 2. E. Baird, Innovation, Vital Speeches of the Day (July 15, 1999), 600–602. 3. “Management Style,” www.nummi.com, 2000. 4. “NUMMI Milestones,” www.nummi.com, 2000. 5. “Return of the Stopwatch,” The Economist (January 23, 1993): 69. 6. “GM, Toyota Create Historic Partnership,” About.com (April 20, 1999). 7. H. Fayol, Industrial and General Administration (London: Pitman, 1949); P. F. Drucker, Management Tasks, Responsibilities, Practices (New York: Harper & Row, 1974). 8. www.flysouthwest.com, 2000. 9. www.pearson.com, 2000. 10. R. Evans, “Lone Star: Texan Marjorie Scardino Is Shaking Up Britain’s <strong>Pearson</strong>,” Barron’s (May 8, 2000): 20–22. 11. www.pearson.com, 2000. 12. H. Mintzberg, The Nature of Managerial Work (New York: Harper & Row, 1963). 13. R. L. Katz, “Skills of an Effective Administrator,” Harvard Business Review (September–October 1974): 90–102. 14. R. Forrester and A. B. Drexler, “A Model for Team Based Organizational Performance,” Academy of Management Executive (August 1999): 36–49. 15. G. H. Taylor, Knowledge Companies. In W. E. Halal (ed.), The Infinite Resource (New York: The Free Press, 1988): 97–101. 16. T. W. Malone & J. F. Rockart, “Computers, Networks, and the Corporation,” Scientific American 263 (1991): 128–137. 17. T. H. Davenport, and L. Prusak, Information Ecology (New York: Oxford University Press, 1997). 18. S. Kathleen, “Working Smart,” OIC 13(4) (1999): 104. 19. A. Affua, Innovation Management (New York: Oxford University Press, 1998). 20. C.W.L. Hill and G. R. Jones, Strategic Management: An Integrated Approach, 4th ed. (Boston: Houghton Mifflin, 1998). 21. S. M. Puffer, “Continental Airlines CEO Gordon Bethune on Teams and New Product Development,” Academy of Management Executive (August 1999): 28–35. 22. A. R. Jassawalla and H. C. Sashittal, “Building Collaborative Cross-Functional New Product Teams,” Academy of Management Executive (August 1999): 50–63. 23. R. M. Kanter, The Change Masters (New York: Simon and Schuster, 1983). 24. C. K. Prahalad and V. Ramaswamy, “Coopting Customer Competence,” Harvard Business Review, (January–February 2000): 79–90. 25. L. S. Richman, “Reengineering Under Fire,” Fortune (April 18, 1994): 186. 26. P. Evans and T. S. Wurstler, “Getting Real About Virtual Commerce,” Harvard Business Review (November–December 1999): 84–98. 27. www.deere.com, 2000. 28. P. Roberts, “John Deere Runs on Chaos,” Fast Company (November 1998): 164–66. 29. K. Kelly, “The New Soul of John Deere,” Business Week (January 31, 1994): 64–66. 30. R. Edward Freeman, Business Ethics: The State of the Art (New York: Oxford University Press, 1991). 31. R. C. Soloman, Ethics and Excellence (New York: Oxford University Press, 1992). 32. L. K. Trevino, “Ethical Decision Making in Organizations: A Person–Situation Interactionist Model,” Academy of Management Review 11 (1986): 601–17. 33. “ValuJet Crash Charges,” Miami Herald, July 13, 1999, p. 1A. 34. H. Mintzberg, “The Case for Corporate Social Responsibility,” Journal of Business Strategy (December 1983): 3–15; J. J. Chrisman and A. B. Carroll, “Corporate Responsibility—Reconciling Economic and Social Goals,” Sloan Management Review 25 (1984): 59–65.
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