Q3) Define leadership. Explain the features and importance of Mc Gregor’s theory X and Y?

The ability of a company’s management to make sound decisions and inspire others to perform well. Effective leaders are able to set and achieve challenging goals, to take swift and decisive action even in difficult situations, to outperform their competition, to take calculated risks and to persevere in the face of failure. Strong communication skills, self-confidence, the ability to manage others and a willingness to embrace change also characterize good leaders.

Theory X was McGregor’s name for the style of management most in use at the time. In this style, management and workers were pitted against each other in constant struggle. Managers believed that employees were basically lazy, shiftless, undisciplined, and unconcerned about issues relating to the company, such as quality of product and/or service and maintaining cost controls. In order to maintain quality and reduce costs as well as keeping workers on task, managers had to act as overseers. In addition, Theory X holds that most people do not like to have responsibility, and prefer to be told what to do and to have decisions made for them.

Interestingly, McGregor found that “while many managers would disavow these assumptions…, the majority do, in fact, behave as if they believed them to be true [italics the author’s], and that classical organization theory could only be based on the proposition that they are true.

Theory X is an elitist theory that extends directly from the separation between the nobility and the common man that was the foundation of 19th century and earlier management-worker relations. It is a form of negative reinforcement, and the social sciences in the mid part of the century learned that positive reinforcement produced better learning and promoted less stress in the subject.

One of the most important realizations of modern educational psychology is that the behaviour of a subject will frequently change to fit the observer’s opinions of the subject. For example, if a student is placed in a class with a teacher, and the teacher is told that the student is a troublemaker, the teacher will treat the student as if she is a troublemaker, and the student will change her behaviour to meet the teacher’s expectations. In experiments in the 1960s, teachers agreed that their students were brilliant or problematic based entirely upon information provided to the teachers sub rosa. In the workplace, “lack of productivity was an effect, not a cause, of the way that conventional management treated people.

What McGregor realized was that even if the ideas about workers held by Theory X managers are untrue, when treated as they were by these managers, the workers came to adopt those behaviours. If workers are never permitted to make decisions, and if all of the decisions they do attempt to make are second-guessed, eventually they will stop making decisions and seek all direction from their managers.

What McGregor proposed instead was Theory Y, based on new discoveries in the social sciences. The assumptions in Theory Y are:

The expenditure of physical and mental effort in work is as natural as play or rest.

Control and punishment are not the only ways to make people work; man will direct himself if he is committed to the aims of the organization.

If a job is satisfying, then the result will be commitment to the organization.

The average man learns, under proper conditions, not only to accept but to seek responsibility.

Imagination, creativity, and ingenuity can be used to solve work problems by a large number of employees.

Under the conditions of modern industrial life, the intellectual potentialities of the average man are only partially utilized.

McGregor believed that generally, workers would act like mature adults, and would make the goals of the company their goals. If management explained why certain actions were necessary for the good of the company, and presumably, the long term good of the company’s employees, workers would cooperate without browbeating. In the real world, we have seen this time and time again as a group of employees agrees to put off raises, or even to take a pay cut to help a company through tough times. This is behaviour that Theory X would not understand, believe possible, or be able to evoke.