Theory Z: The In-Between and Grey Area
Name Here
Indiana University – Purdue University Fort Wayne
3/24/2013

Abstract
The purpose of this paper is to discuss the popular Theory X and Theory Y made famous by Douglas McGregor in the 1960’s which offers a very “hard” and “soft” view of leadership and addresses the grey area that is not addressed in his theory. We will take a look at the theory that is relatively new and in many respects attempts to blend the best of both of McGregor’s theories together. This theory is known as Theory Z and is often referred to as the Japanese Management style developed by William Ouchi. We will attempt to answer which theory is the best or if there is even one best theory to be used in every
This Theory assumes that people are creative and eager to work. Followers tend to desire more responsibility than Theory X workers, and have strong desire to contribute in the decision making process. Theory Y followers are comfortable in a working environment which allows creativity and the opportunity to become personally involved in organizational or group planning.
From a leadership point of view, participative (Theory Y) leaders like to share decisions with the group. They take a more “Democratic” style and allow the members of the working group to vote on decisions. This type of leader encourages group discussions and decisions which reflect the “consensus” of the group. In this theory, the cohorts not only accept responsibility, but actively seek increased authority.

William Ouchi – Theory Z
Being a current leader within my corporation, I saw many truths to McGregor’s theory. It seemed like some employees insisted on being micro managed, yet engaged employees only needed direction. Everything I had learned in class was black and white. You were either an X manager or a Y manager. It felt as though there was a missing piece to the puzzle. While doing research and preparing my own theory I came across Ouchi’s “Theory Z”. Much like McGregor’s theories, Ouchi’s Theory Z makes certain assumptions about a leaders followers. Some