Theories X, Y, Z are management theories built on assumptions about human nature. Each theory has different perspectives on people, which leads to different management methods.

Theory X

Theory X was developed by psychologist Douglas McGregor in 1960. Douglas McGregor is an American psychologist and manager. He is a professor at the Sloan School of Management at the Massachusetts Institute of Technology (MIT). He is considered one of the leading thinkers in the field of human resource management.

Theory X was built by McGregor based on traditional views of human nature, in which people are considered lazy, do not like working, and only work when being forced or frightened. Therefore, there needs to be strict control and supervision from managers so that they can complete their work.

Based on the assumptions of Theory X, managers often apply management methods such as:

• Assign tasks strictly, clearly and specifically
• Closely monitor and check regularly
• Use strict disciplinary measures as a deterrent

Theory Y

Theory Y was also developed by Douglas McGregor in 1960. This theory is built on modern views of human nature, in which people are considered to work hard and want to be independent, free, creative and responsible.

Theory Y assumes that people are naturally eager to work, want to be free, creative, and responsible. Therefore, it is necessary to create a favorable working environment so that they can develop their full potential.

Based on the assumptions of theory Y, managers often apply management methods such as:

• Create a free and democratic working environment
• Create opportunities for employees to participate in decisions
• Encourage employees to promote creativity

Theory Z

Theory Z was developed by William Ouchi in 1981. William Ouchi is a Japanese-American businessman and manager. He is a professor at the Anderson School of Business at the University of California, Los Angeles (UCLA). He is considered one of the leading thinkers in the field of international management.

Theory Z is built based on the views of Japanese businesses, assuming that people are naturally eager to learn, like stability and have a high sense of responsibility. Therefore, it is necessary to combine traditional and modern elements in management to create a harmonious and cohesive working environment.

Based on the assumptions of Theory Z, managers often apply management methods such as:

• Build long-term relationships with employees
• Create opportunities for employees to be trained and developed
• Respect and listen to employees’ opinions

Advantages and disadvantages of each theory X, Y, Z

Each theory have their advantages and disadvantages:

Theory X

• Easy to apply
• Effective in the short term
• Suitable for small-scale businesses with production lines

Its disadvantages:

• Can lead to stress and dissatisfaction among employees
• Causes passivity and stagnation at work

Theory Y

• Unleash employee potential
• Promote creativity and innovation
• Suitable for large-scale businesses with modern production

Its disadvantages:

Difficult to apply in the short term
Requires managers with good management skills and experience

Theory Z

• Create a harmonious and cohesive working environment
• Increase employee loyalty
• Suitable for large-scale businesses with strong corporate culture

Its disadvantages:

• Difficult to apply in the short term
• Requires managers to have long-term vision and strategy

Application of theory X, Y, Z in human resource management

Each theory X, Y, Z has its own assumptions and applications, suitable for each type of business and characteristics of workers.

• Theory X is usually applied in small businesses that produce products on assembly lines, have simple labor, and require strict adherence.
• Theory Y is often applied in large-scale enterprises with modern production, complex labor nature, and requiring creativity and innovation.
• Theory Z is often applied in large-scale businesses with a strong corporate culture that values employees as a valuable asset.

It can be seen that theories X, Y, and Z all have different views on human nature, thereby leading to different views on human resources and the workforce. Theory X has the most negative view of humans, while theories Y and Z have a more positive view.

See more: Apply the 6 thinking hats method to human resource management

Depending on the characteristics of the business and employees, managers can choose the appropriate theory to apply.