MacGregor’s XY Theory and Ouchi’s Theory Z

Theory X and Theory Y

In 1960, Douglas MacGregor, a student of Abraham Maslow, introduced the management concept of Theory X and Theory Y (Rice University, N.D.). They are essentially different approaches to management.

Within the XY Theory of management, employees are believed to fit within one of two distinct and opposing groups that defined their motivational needs. Theory X and Theory Y are assumptions about all employee personalities made by a manager. Whichever side the manager fell on within the XY spectrum determined how they would approach managing those employees.

Theory Z was introduced by William Ouchi in the 1980s (Rice University, N.D.). Theory Z combined common management ideas from Japan and the United States with the purpose of increasing the employees’ motivation and loyalty. Theory Z built on and expanded MacGregor’s Theory X and Theory Y.


Theory X

Theory X managers expected employees to be slackers that required strict control. Employees needed an authoritarian level of leadership in order to be properly motivated to do their job adequately.

Theory X Managers:

  • Managers are pessimistic of the employee’s intentions
  • Managers are authoritarian
  • They prefer control over the employees
  • Must be hands-on and a Micromanager

Theory X Employee Personality:

  • Avoid responsibility
  • Dislike work
  • They prefer to be directed
  • They are unambitious
  • They have a preference for security over autonomy


Theory Y

Theory Y managers believed that employees were self-motivated and did not need the constant hand-holding of a micromanager. Managers believed that the employees would derive fulfillment from the work itself and that would push them to deliver better results.

Theory Y Managers:

  • Managers are more optimistic of employee’s intentions
  • Managers believe that employees prefer more autonomy
  • They allow employees to make more decisions

Theory Y Employee Personality:

  • May believe there is little difference between work and play
  • They want to be self-directed and have as little exerting control over them as possible
  • They will work harder for goals they believe in
  • They accept responsibility and even seek it out
  • They tend to be ambitious
  • They have a high degree of imagination and creativity


Theory Z

Theory Z is more about creating an environment that motivates employees through long-term employment, respect for the employee, individual responsibility, and more informal managerial control. Theory Z came about due to a transition in Japanese culture away from the more traditional approaches, merging many of them with U.S. values (Rice University, N.D.).

Theory Z Managers:

  • Work to be proactive, but not overly micromanaging
  • Try to build long-term relationships
  • Work to cultivate individual responsibility rather than assume its existence or lack of existence
  • Have more informal control over subordinates
  • Works to create more group collaboration

It is assumed that there are employees of both personality types (Theory X and Theory Y) within Theory Z. Theory Z should adapt to the existence of either personality type.



Sorensen, P. and Yaeger, T. (2015). Theory X and Theory Y. Retrieved From https://www.oxfordbibliographies.com/view/document/obo-9780199846740/obo-9780199846740-0078.xml

Rice University, (N.D.) MacGregor’s Theory X and Y. Retrieved From https://opentextbc.ca/businessopenstax/chapter/mcgregors-theories-x-and-y/

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