2.3.1.1 X or Y?
In the 1950s, management consultant Douglas McGregor defined two scientific
theories regarding the position of managers and employees that clarify different
positions of leadership: the X theory and the Y theory. They would later become the
basis of countless leadership models (McGregor 1960).
According to the X theory, the average person has an innate aversion to work and
tries to avoid it. Therefore most people usually have to be forced, directed and
threatened with punishment in order to be motivated. The average person prefers to
be taken by the hand and takes as little responsibility as possible, for they have little
ambition and a considerable need for security. If a superior perceives their
employees in this manner, he or she leads with an authoritarian, controlling
leadership style.
In the Y theory McGregor outlined a more positive vision of man. According to
the Y theory, the physical and intellectual effort of working is just as natural for a
person as resting or playing. Given suitable conditions, a person will strive to take
on responsibility, independently finding solutions to organizational problems based
on his or her own initiative and creativity. Supervision and punishment are not the
best ways to motivate a person. According to theory Y, people apply themselves
voluntarily, and have the self-discipline and self-control needed to meet goals. A
manager with this view of people gives them latitude, encourages commitment and
individual responsibility, and includes employees in the decision-making process.
Leaders with this view choose a participative and cooperative leadership style.
I feel it is fairly obvious that the X theory confuses cause and effect, forming a
vicious circle. People only become stupid and irresponsible when they are granted
no latitude to work autonomously. Such working climates are based on mistrust and
create the breeding ground for this type of employee. Reversed, the Y theory sees
people from a positive perspective, resulting in a desirable type of employee.
Is there a single correct method for leading people? According to Peter F.
Drucker, there is not. Nevertheless there is the desire for one correct theory for
leadership. However, Drucker was also a proponent of theory X and theory Y and
further stated that, just as different employees must be led in different ways, the
same employees must be led differently in different situations (Drucker 2004,
p. 102).
2.3.1.2 The Human Resource
The capital-oriented management philosophy has had its day – according to strat-
egy guru Sumantra Ghoshal (along with his colleague, Christopher Bartlett of the
Harvard Business School), and I agree. Financial capital is no longer the resource of
highest value to an organization, but it is rather the employees with their know-how
and orientation on performance that are essential. We need to be aware that it is
employees who provide the largest increase in value, we have to appreciate them
2.3 The Relationship Between Leader and Led 77