William Ouchi: Theory Z Organizations and Motivation

One of our most popular videos is the one about Douglas McGregor’s Theory X and Theory Y. As a result, people have asked me about Theory Z.

Theory Z, which was developed by William Ouchi, to describe the adoption of Japanese ideas of management in the United States.

Watching this video is worth 2 Management Courses CPD Points*.
(See below for more details)

This video is part of course module number 3.7.2
Program 3: Managing and Leading Individuals
Course 7: Motivation
Section 2: Process Models of Motivation

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LESSON NOTES
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Theory X assumes …
‘I hate my work, I only do it for the money, i don’t want to think for myself, indeed, I’d rather just do as little as I can.’
So my boss will favour carrot and stick incentives, presuming I need to be compelled to do the job I’m paid for.

Theory Y assumes …
‘I like to work, it’s part of my life, i want to do well, and I will work hard if given the responsibility and recognition I deserve.’
So my boss will give me the responsibility I earn and reward me with the recognition I deserve.

William Ouchi developed McGregor’s work.
William Ouchi’s 1981 Theory Z assumes …
‘I want a long term career, I want to believe in what I do, I need to be led with a clear sense of purpose.’
So, my boss will work hard to convince me of the benefits of my endeavors and enroll me as a committed employee. In return, I see my career as a long-game. I will develop my skills but expect slow and steady promotion, rather than a stellar rise.

Theory Z follows Japanese management and employment practices of the 1970s. Japanese manufacturing won superiority over competitors in Europe and the US.

Some US and European businesses tried to emulate Theory Z companies. They largely failed. Motivation works in the context of culture. Traditional Japanese culture is different from European and US culture.

Now, many Japanese companies have abandoned a Theory Z approach.

RECOMMENDED EXERCISE
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1. What elements of Theory Z can you see in the culture of your organization? (1 MC CPD Point)
2. What elements of Theory Z can you see in the way your managers and supervisors lead their teams? (1 MC CPD Point)
3. What are the pros and cons of a more Theory Z approach within your own culture? (2 MC CPD Points)

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RECOMMENDED READING
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For a solid introduction to motivation:

The best of modern thinking on motivation, in accessible business books. These are all modern classics:

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[ManagementCourses]

William Ouchi created his Theory Z, as a response to the success of Japanese manufacturing. Its name is a deliberate nod to McGregor's Theory X and Theory Y. Thank you for watching - please do like, subscribe, and hit the notification bell.

[justrandomthings]

I love topics like this. Theories on management. If you want you can also make video about Ohio Studies and Managerial Grid by Blake & Mouton. It is related to Theory X & Y as well.

[lukkeith]

hello mike, how are you?

thank you very much for your knowledge about theory x, y, z.

im a master student in management and leadership, and i'm currently doing an assignment for leadership and organisational psy. i'm just wondering if you could critic on self-determination theory and theory x, y, z and their strength and weakness. and which one is more suitable in a contingency/ situational leadership context?

thank you very much

[ememman]

This has been very useful! I would like to say, from what I've observed the youtube algorithm favors "trendy videos". So look at current news and react to that from a management perspective I guess. I don't have any ideas, but good luck!

[yingho]

hi mike, can you describe the characteristic of theory Z?