Theory X and Theory Y revisited

How relevant are Douglas McGregor's theories today?

by Terry Goodwin (*)


“With every passing year, McGregor’s message becomes ever more relevant, more timely, and more important.”

Peter F. Drucker (May, 2000)

We are now well into the second half-century since the world of management theory was given a kick in the butt by the introduction of Theory X and Theory Y.

In 1960, four years before his death, Douglas McGregor, the first to apply the findings in behavioural science to the world of business, published his best-selling The Human Side of Enterprise that had a huge influence on managerial thought and practice.

It feels good to look at it again and see what validity it still has and what influence it continues to bring to bear on management thinking, particularly since advances in technology since McGregor wrote have, paradoxically, made McGregor's ideas more relevant, as they have also made companies more aware of the human element in business enterprise.

I'll start by re-stating the basic theories.

Douglas McGregor (19061964) was a social psychologist who became a professor of management at Massachusetts Institute of Technology (MIT).  He had been greatly impressed by Abraham Maslow's hierarchy of needs (1)  with working efficiency being shown to depend on behaviour and motivation.  McGregor applied Maslow's concept of self-actualization and esteem to the concept of creating a symbiosis between manager and worker.  In similar fashion to Maslow's structure of lower and higher needs, McGregor identifies two types of manager and uses Theory X for the former and Theory Y for the latter.


Works on the presumption that people subscribing to this theory have an inherent dislike for work and will avoid it whenever possible

They have to be controlled and coerced, or threatened with punishment if they are to achieve organisational objectives rather than personal objectives..

They have little or no ambition, spurn responsibility, and actually prefer to be controlled.

They are resistant to change and their main objective is security.


People in this theory are as happy working as they are relaxing.

They are not lazy and will be self-directing when committed to established objectives.

Commitment to objectives is an end in itself.

They welcome responsibility.

People subscribing to Theory Y will solve problems creatively and imaginatively.

They have under-utilized potential.


"Intellectual creativity cannot be 'programmed' and directed the way we program and direct an assembly line or an accounting department. This kind of intellectual contribution to the enterprise cannot be obtained by giving orders, by traditional supervisory practices, or by close systems of control. Even conventional notions of productivity are meaningless with reference to the creative intellectual effort. Management has not yet considered in any depth what is involved in managing an organization heavily populated with people whose prime contribution consists of creative intellectual effort."

— from Douglas McGregor's essay, New Concepts of Management


So how has management responded to these theories and what has been their effect?  Traditionally the old style "boss"  had followed the path of Theory X, but over the years an enlightened management moved over to Theory Y.  The Theory X boss rarely interacted with their workforce apart from issuing orders or providing discipline.  The Theory Y manager collaborates with staff, gives and receives feedback, and places motivation above discipline.

Matthew Stewart (2) suggests that following McGregor  "one management guru after another rediscovered Theory Y, packaged it in new language, and claimed it as his or her invention. Tom Peters, Rosabeth Moss Kanter, and Charles Handy, to name three, launched their highly successful careers on the basis of McGregor’s wisdom."

But although he singles out Peter Drucker as a special case who "could be called a Y-man avant la lettre,since he began to promote a version of the theory before McGregor gave it its name.", he nevertheless expresses doubt that "the world has caught up with our wisdom about it."  One  "does not have to spend much time in the cubicles these days to appreciate how the jargon of Theory Y has evolved into an Orwellian Newspeak."

To resolve the confusion that continues to belabour the McGregor theories, Stewart proposes two collateral theories.  Theory U (for Utopian) and Theory T (for Tragic).  Theory U attributes conflict as originating always in misunderstanding between people.  Theory T considers conflict to be endemic to human relations and arises "from real divergences of interest."

"The difference between U and T, in the final analysis, is that one is easy and the other is hard. Theory U assures us that our problems can be solved by changing our view of the world. Theory T says that the solutions may require actually changing the world. U tells us that we can bring everyone together with the right words. T replies that we’ll probably have to make some compromises, too. U rests its case on the fairness of its schemes. T emphasizes the fairness of its processes. U guarantees a happy ending. T promises only the temporary postponement of disaster." (op.cit.)



“We are all Theory Y people now - at least when it comes to delivering or receiving motivational talks.”

Matthew Stewart - Oxford Leadership Journal, June 2010



One has merely to examine the vast material on the internet, offering management skills and services, to appreciate the validity of Matthew Stewart's comment on the way "management gurus" latched on to McGregor's theories, and it is not the intention of this article to follow the same path, but merely to summarise what was, what is, and what may be, and to offer some suggestions for further study.

First, then, how as a manager do you identify whether you respond to the designation of Theory X or Theory Y?  Well, as a simple "rule of thumb", if your instant reaction to an unexpected situation or behaviour from an employee is to criticise or demean, you are almost certainly a Theory X manager.  On the other hand, if your first reaction is to examine the situation and try to ascertain what has gone wrong in a non-judgemental way, that is the behaviour of a Theory Y manager.

Essentially, therefore, regardless of whether a manager tends more towards Theory X or Theory Y, there can be no excuse for disrespectful behaviour. It is not a matter of one theory being good and the other being bad.  Theory Y is clearly what modern business practice and teaching favours, but it is equally true that lazy employees do exist and are an undesirable element in a forward-looking and effective organisation.  What management needs to do is to concentrate on cooperation rather than internal conflict; to motivate rather than criticize; to ensure commitment by both employee and employer; and to provide a high-performance, effective management team. The key terms for managers must be respect for others and by others, promotion of self-esteem, confidence and happiness.

            (1) Description of Maslow's Hierarchy of Needs from Issue No. 4 of Nurturing potential.

            (2) Oxford Leadership Journal, June 2010 -



[*] Terry Goodwin was senior marketing executive at Finexport Ltd in London and Bangkok until his retirement in 1992, following which he was in private practice as a marketing consultant.