Douglas McGregor proposed Theory X and Theory Y, which categorize workers as either unwilling or self-motivated. William Ouchi proposed Theory Z, which believes workers are innately loyal and want the company to succeed. Theory Z managers act as coaches and let workers make decisions, while Theory X and Y managers retain more control. Conflict in Theory Z involves discussion, while Theory X managers may use power-based strategies and Theory Y allows some worker negotiation.

8. Management Douglas McGregor William Ouchi
Concept (Theory X & Y) (Theory Z)
Motivation Tends to categorise people as one type or Believes that people are innately self
another: either being unwilling or motivated to not only do their work, but
unmotivated to work, or being self also are loyal towards the company, and
motivated towards work. Threats and want to make the company succeed.
disciplinary action are thought to be used
more effectively in this situation, although
monetary rewards can also be a prime
motivator to make Theory X workers
produce more.
Leadership Theory X leaders would be more Theory Z managers would have to have a
authoritarian, while Theory Y leaders great deal of trust that their workers
would be more participative. But in both could make sound decisions. Therefore,
cases it seems that the managers would this type of leader is more likely to act as
still retain a great deal of control. "coach", and let the workers make most
of the decisions.

9. Management Douglas McGregor William Ouchi
Concept (Theory X & Y) (Theory Z)
Power & As mentioned above, McGregor's The manager's ability to exercise power
Authority managers, in both cases, would seem to and authority comes from the worker's
keep most of the power and authority. In trusting management to take care of
the case of Theory Y, the manager would them, and allow them to do their jobs.
take suggestions from workers, but would The workers have a great deal of input
keep the power to implement the and weight in the decision making
decision. process.
Conflict This type of manager might be more likely Conflict in the Theory Z arena would
to exercise a great deal of "Power" based involve a great deal of discussion,
conflict resolution style, especially with collaboration, and negotiation. The
the Theory X workers. Theory Y workers workers would be the ones solving the
might be given the opportunity to exert conflicts, while the managers would
"Negotiating" strategies to solve their play more of a "third party arbitrator"
own differences. role.