"The assumptions of Theory X management are as follows:
- The average person dislikes work and will avoid it if possible.
- Because of this dislike, workers must be forced, controlled, directed, or threatened with punishment to make them put forth the effort to achieve the organization's goals.
- The average worker prefers to be directed, wishes to avoid responsibility, has relatively little ambition, and wants security.
- Primary motivators are fear and money."
"Theory Y makes entirely different assumptions about people:
- Most people like work; it is as natural as play or rest.
- Most people naturally work toward goals to which they are committed.
- The depth of a person's commitment to goals depends on the perceived rewards for achieving them.
- Under certain conditions, most people not only accept but also see responsibility.
- People are capable of using a relatively high degree of imagination, creativity, and cleverness to solve problems.
- In industry, the average person's intellectual potential is only partially realized.
- People are motivated by a variety of rewards. Each worker is stimulated by a reward unique to that worker (time off, money, recognition, etc.)"
The book goes on to state that in the United States Theory X is losing way to Theory Y. It then introduces a third theory.
"In addition... another reason for companies to adopt a more flexible managerial style is to meet competition from foreign firms such as those in Japan, China, and the European Union. Back in the 1980s, Japanese companies seemed to be outperforming Amerian businesses. William Ouchi, a management professor at the University of California-Los Angeles, wondere if the secret to Japanese success was the way Japanese companies managed their workers. The Japanese management approach (what Ouchi called Type J) involved lifetime employment, consensual decision making, collective responsibility for the outcomes of decisions, slow evaluation an promotion, implied control mechanisms, nonspecialized career paths, and holistic concern for employees. In contrast, the American management approach (what Ouchi called Type A) involved short-term employment, individual decision making, individual responsibility for the outcomes of decisions, rapid evaluation and promotion, explicit control mechanisms, specialized career paths, and segmented concern for employees.
"Type J firms are ased on the culture of Japan, which includes a focus on trust and intimacy within the group and family. Conversely, Type A firms are based on the culture of America, which include a focus on individual rights and achievements. Ouchi wanted to help American firms adopt the successful Japanese strategies, but he realized that it wouldn't be practical to expect American managers to accept an approach based on the culture of another country... Therefore, Ouchi recommended a hybrid of the two approaches in what he called Theory Z. Theory Z blends the characteristics of Type J and Type A into an approach that involves long-term employment, collective decision making, individual responsibility for the outcomes of decisions, slow evaluation and promotion, moderately specialized career paths, and holistic concern for employees (including family). The theory views the organization as a family that fosters cooperation and organizational values."
What I would like to know is which management theory you feel is more accurate and why. Then I would like to ask anyone living in Japan to comment on the last paragraph in this section of Chapter 10 and give their views on whether this trend is continuing today (the book was published in 2006), and what effect it's having.
"Today, economic decline, demographic and social changes, and fierce global competition have forced Japanese managers to reevaluate the way they conduct business. Whereas the Japanese system of the 1980s was admired for its focus on building long-term business relationships, today there is a realization that Japanese firms need to become both more dynamic and more efficient in order to compete effectively in the rapidly changing global economy. Feeling the pain of the worst recession in their country's history, some Japanese managers are changing the way they do business. For example, electronics giant Hitachi was the first major Japanese company to announce it had quit requiring corporate calisthenics - exercises done in groups not only for health but also to foster cohesion among employees. Having everyone start the day with group exercises symbolized doing the same thing the same way and reinforced the cultural belief that empoyees should not take risks or think for themselves. Many managers think that such conformity is what has hurt Japanese business."
I get the feeling that I'm one of the people referenced above...
ReplyDeleteNo one theory is correct. Different people respond to work, pressure, force and motivational tricks in different ways. Not everyone likes working - if they did, there'd be fewer managers and CEOs and more laborers. Some people respond well to rewards of money (hence the big CEO packages) which then means that they can retire early and stop working. Others want their ego stroked, and prefer recognition and awards over monetary payouts. Bottom line is that management theories are developed by teachers as something they can present in classes, and by authors that have nothing else to write about. True managers deal with workers on a one-to-one basis and motivate each as required.
As for Japan, the mistake is to correlate Japan's global business success to its management system. Japan's management only dates back to the 60's, and most of the rules were developed by U.S. consultants like Demming, who made suggestions based on observations. Lifetime employment, slow promotions, etc., were all established with two factors in mind - Japan's got limited natural resources and it's biggest resource is a surplus of people; and as long as people work cheap, you can throw lots of them onto a problem to solve it better than you can in the U.S. So, keeping and nurturing your people is necessary to keep them off the streets, but not necessarily important to becoming a successful company.
Japan's global success was in part due to governmental protections and anti-trade practices. Government-subsidized dumping of memory chips in the U.S. in the 80's, funding of R&D projects across trade groups, copying western technologies through reverse-engineering, etc. These all gave Japanese companies a short-term edge. What really undermined these companies isn't their management practices (although having more workers than you need and charging inflated prices doesn't help) - it's the group mentality of not saying "no" to a customer (customer asks for a 40% discount and the Japanese response is "ok", when saying "no" would have resulted in the customer being happy with a 10% discount). Japanese management still hasn't figured out how to interact with other cultures and how to position products and people in best-fit matches. The fact that the banking system caused the "economic bubble" to burst in the 1990's and made everyone tighten their belts then, and the U.S. financial crisis brought on by bad practices and fraud is bringing everyone to their knees now, shows of how little importance management theories are to the success or failure of a company. You can get successful if your government bails you out, and you can be destroyed if someone else's fraud steals billions of dollars from companies world wide.
All of this does mean that if a practice that worked in the past (treating your people well and working as a group) doesn't work now, you have to restructure your thinking in order to get back on your feet. But, unlike in the U.S., it's possible to give back what you've taken away in Japan. That is, benefits that you lose in a U.S. company during a restructuring, stay lost. In Japan, while the benefits of the group may be deferred to benefit the individuals at the top of the corporate structure, societal pressure will eventually cause the group ethic to return when the companies start flourishing again.