Hard or Soft Management? Explanation of Theory X Theory Y of McGregor. (’60). Explanation of Theory Z by William Ouchi. (’81)
What is Theory X and Y? Description

Douglas McGregor, an American social psychologist, proposed his famous Theory X and Theory Y models in his book ‘The Human Side Of Enterprise’ (1960).

Theory X	Theory Y
Humans inherently dislike working and will try to avoid it if they can.	People view work as being as natural as play and rest. Humans expend the same amount of physical and mental effort in their work as in their private lives.	Assumptions
Because people dislike work they have to be coerced or controlled by management and threatened so they work hard enough.	Provided people are motivated, they will be self-directing to the aims of the organization. Control and punishment are not the only mechanisms to let people perform.
Average employees want to be directed.	Job satisfaction is key to engaging employees and ensuring their commitment.
People don’t like responsibility.	People learn to accept responsibility and seek responsibility. Average humans, under the proper conditions, will not only accept, but even naturally seek responsibility.
Average humans are clear and unambiguous and want to feel secure at work.	People are imaginative and creative. Their ingenuity should be used to solve problems at work.
Shop Floor, Mass Manufacturing. Production workers.	Professional Services, Knowledge Workers. Managers and Professionals.	Application
Large scale efficient operations.	Management of Professionals, Participative Complex Problem Solving.	Conducive to
Authoritarian, Hard Management.	Participative, Soft Management.	Management Style

McGregor sees Theory Y as the preferable model and management method, however he thought Theory Y was difficult to use in large-scale operations
Theory Z – Ouchi

In 1981, William Ouchi came up with a variant that combined American and Japanese management practices together to form Theory Z, having the following characteristics: long-term employment – collective decision-making – individual responsibility – slow evaluation & promotion – implicit, informal control with explicit, formalized measures – moderately specialized career paths – and a holistic concern for the employee, including family