Principle & Practice of Management

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Theory Y

McGregor realised that theory X’s assumptions about human behaviour are not always true. As such, he developed an alternate theory of human behaviour, called “Theory Y”. This theory represents democratic approach. Theory Y indicates the individual and organisation both and highlights the need for improving and utilising inner motivation. The assumptions of this theory are as follows:
1. The average human being does not inherently dislike work. Depending upon controllable conditions, work may be a source of satisfaction.
2. External control and threat of punishment are not the only means for bringing about efforts towards organisation objectives.
3. Commitment to objectives is a function of the rewards associated with their achievement.
4. The average human being learns not only to accept but to seek responsibility.
5. Under conditions of modern industrial life, the intellectual potentialities of the average human being are only partially utilised.
Theory Y
The assumptions of theory Y suggest a new approach in management. It emphasizes on the cooperative endeavour of management and employees. The attempt is to get maximum output with minimum amount of control and direction. Generally no conflict is visible between organisational goals and individual goals. Thus, the attempts of employees which are in their best interest are also in the interest of organisations.
Both theories X and Y represent diametrically opposite views of human nature. Theory “Y” has been advanced to suggest that human beings combine a bit of both according to circumstances. If we relate the above theories to Maslow’s hierarchy of needs it may be said that theory X may be more applicable where a man is concerned with the lower level of needs. Once he has an adequate level of satisfaction of the basic physiological and safety needs, theory “Y” may be used for making an appeal to the higher level needs. McGregor believes that recent researches in the behavioural sciences has shown that the assumptions of what he calls theory Y may be more valid than the precepts of theory X.

Applicability of Theory Y in India

Theory Y represents democratic or participative management. Theory Y emphasises integrative leadership where the manager will be more of a coach and counsellor, less of a commander, supervisor or a judge. Theory Y requires following conditions:
1. People are literate, will informed, intelligent competent to participate in management with zeal and enthusiasm to satisfy their higher level wants particularly psychic wants.
2. People have duly and reasonably satisfied their basic needs such as physiological needs, safety needs as well as social needs.
The above two conditions are prevalent in the affluent countries like the USA, UK and many other European countries. But in underdeveloped or developing economies like India, these conditions are not found. National income is low, standard of living is low, poverty is universal, population is too large, people are illiterate and ignorant, labour is unorganised. Under
such conditions as long as the stomach is semi-empty, what is the use of igniting higher level wants. About 70 per cent population is busy in keeping the body and soul together and to solve the problem of physical survival. Financial incentives are naturally the greatest motivators. Thus, theory ‘Y’ does not have any role to play in India today on a large scale. Today,
there are lakhs of people who need external discipline from a manager for getting things done through them. Till then, we have to tolerate theory “X” with suitable and necessary modifications, e.g., recognition of human factor in industry, consultative management, use of non-financial incentives, etc.
We may conclude that the assumptions of theory “Y” have not been accepted in full by management in India. However, conditions favourable to theory Y are emerging on the scene.