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Theory X and Theory Y

Theory X and Theory Y

Origin:

Theory X and Theory Y pertain to employee motivation and have been used in human resource management, organizational behavior analysis, and organizational development. This Theories are created and developed by Douglas McGregor at the MIT Sloan School of Management in the 1960s.

Understanding of Theories:

Management style is strongly influenced by ones beliefs and assumptions about what motivates members of your team: If you believe that team members dislike work, you will tend towards an authoritarian style of management – Theory X; On the other hand, if you assume that employees take pride in doing a good job, you will tend to adopt a more participative style – Theory Y.

Theory X or Authoritarian Style of management:

 This style of management assumes that workers:

·         Dislike working.

·         Avoid responsibility and need to be directed.

·         Have to be controlled, forced, and threatened to deliver what's needed.

·         Need to be supervised at every step, with controls put in place.

·         Need to be enticed to produce results; otherwise they have no ambition or incentive to work.

In this theory, a hierarchical structure is needed with narrow span of control at each and every level.

Theory Y or Participative Style of management:

 This style of management assumes that workers:

·         Take responsibility and are motivated to fulfill the goals they are given.

·         Seek and accept responsibility and do not need much direction.

·         Consider work as a natural part of life and solve work problems imaginatively.

Comparing Theory X and Theory Y:

·   Motivation

Theory X assumes that people dislike work; they want to avoid it and do not want to take responsibility. Theory Y assumes that people are self-motivated, and thrive on responsibility.

·   Management Style and Control
In a Theory X organization, management is authoritarian, and centralized control is retained, whilst in Theory Y, the management style is participative: Management involves employees in decision making, but retains power to implement decisions.

·   Work Organization
Theory X employees tend to have specialized and often repetitive work. In Theory Y, the work tends to be organized around wider areas of skill or knowledge; Employees are also encouraged to develop expertise and make suggestions and improvements.

·   Rewards and Appraisals
Theory X organizations work on a ‘carrot and stick’ basis, and performance appraisal is part of the overall mechanisms of control and remuneration. In Theory Y organizations, appraisal is also regular and important, but is usually a separate mechanism from organizational controls. Theory Y organizations also give employees frequent opportunities for promotion.

·   Application 
Although Theory X management style is widely accepted as inferior to others, it has its place in large scale production operation and unskilled production-line work. Many of the principles of Theory Y are widely adopted by types of organization that value and encourage participation. Theory Y-style management is suited to knowledge work and professional services. Professional service organizations naturally evolve Theory Y-type practices by the nature of their work; Even highly structure knowledge work, such as call center operations, can benefits from Theory Y principles to encourage knowledge sharing and continuous improvement.

Demonstration of Theory X and Theory Y:

Conclusion:

Though these theories are very basic in nature, they provide a platform for future generations of management theorists and practitioners to understand the changing dynamics of human behavior. Taken too literally, Theories X and Y seem to represent unrealistic extremes. Most employees (including managers) fall somewhere in between these poles. Recent studies have questioned the rigidity of the model, yet McGregor's X-Y Theories remain guiding principles to the management to evolve processes which help in organizational development. A mix of practices which ensure a healthy blend of systems and the freedom to perform at the work place is likely to motivate the employees more. This mix of practices calls for induction of technology into HR. How we can practice Talent Management in all types of organizations will indicate how well we have understood & deployed these theories X and Y in our real time environment.

Deloitte

Introduction:

Deloitte Touche Tohmatsu Limited, commonly referred to as Deloitte, is one of the Big Four professional services firms along with PricewaterhouseCoopers (PwC), Ernst & Young, and KPMG. Deloitte is the second largest professional services network in the world by revenue and has 182,000 employees in more than 150 countries providing audit, tax, consulting, enterprise risk and financial advisory services. In FY 2011, Deloitte earned a record $28.8 billion USD in revenues, ranking second behind PwC's record $29.2 billion. In 2012, it is reported that in the U.K. Deloitte has the largest number of clients amongst FTSE 250 companies. Its global headquarters is located in New York City, United States.

Vision:

To be the Standard of Excellence.

History:

1845: William Welch Deloitte opened an office in Basinghall Street in London. Deloitte was the first person to be appointed an independent auditor of a public company. He went on to open an office in New York in 1880.

1896: Charles Waldo Haskins and Elijah Watt Sells formed Haskins & Sells in New York.

1898: George Touche established an office in London and then in 1900 joined John Ballantine Niven in establishing the firm of Touche Niven in the Johnston Building at 30 Broad Street in New York. At the time, there were fewer than 500 CPAs practicing in the United States, but the new era of income taxes was soon to generate enormous demand for accounting professionals.                                          

On March 1, 1933, Colonel Arthur Hazelton Carter, President of the New York State Society of Certified Public Accountants and Managing Partner of Haskins & Sells, testified before the U.S. Senate Committee on Banking and Currency. Carter helped convince Congress that independent audits should be mandatory for public companies.

In 1947, Detroit accountant George Bailey, then president of the American Institute of Certified Public Accountants, launched his own organization. The new entity enjoyed such a positive start that in less than a year, the partners merged with Touche Niven and A.R. Smart to form Touche, Niven, Bailey & Smart. Headed by Bailey, the organization grew rapidly, in part by creating a dedicated management consulting function. It also forged closer links with organizations established by the co-founder of Touche Niven, George Touche: the Canadian organization Ross and the British organization George A. Touche. In 1960, the firm was renamed Touche, Ross, Bailey & Smart, becoming Touche Ross in 1969.

Mergers:

In 1952 Deloitte merged with Haskins & Sells to form Deloitte, Haskins & Sells. In 1968 Nobuzo Tohmatsu formed Tohmatsu Awoki & Co, a firm based in Japan that was to become part of the Touche Ross network in 1975. In 1972 Robert Trueblood, Chairman of Touche Ross, led the committee responsible for recommending the establishment of the Financial Accounting Standards Board. He led the expansion of Touche Ross in that era.

In 1982, David Moxley and W. Grant Gregory became the leaders at Touche Ross. In 1985, Edward A. Kangas, a management consultant, was appointed managing partner of Touche Ross. In 1984, J. Michael Cook became managing partner of Deloitte, Haskins & Sells.

In 1989 Deloitte Haskins & Sells in the USA merged with Touche Ross in the USA to form Deloitte & Touche. The merged firm was led jointly by J. Michael Cook and Edward A. Kangas. Led by the UK partnership, a smaller number of Deloitte Haskins & Sells member firms rejected the merger with Touche Ross and shortly thereafter merged with Coopers & Lybrand to form Coopers & Lybrand Deloitte (later to merge with Price Waterhouse to become PwC). Some member firms of Touche Ross also rejected the merger with Deloitte Haskins & Sells and merged with other firms.

Services Offered:

1. Audit and Enterprise Risk Services:

·         Financial Statement and Internal Control Audit

·         Finance Operations and Controls Transformation

·         Financial Accounting and Reporting Services

·         Internal Audit Transformation

·         Mergers and Acquisitions Services

·         Security & Privacy

2. Consulting:

·         Strategy & Operations

·         Technology

3. Financial Advisory:

·         Anti-money Laundering Consulting

·         Business Intelligence Services

·         Business Valuation

·         Capital Projects Consulting

·         Real Estate Consulting

4. Tax:

·         Financial Accounting & Reporting-Income Taxes

·         Global Employer Services

·         Private Client Advisors

·         Transfer Pricing

Structural Organization:

For many years, the organization and its network of member firms were legally organized as a Swiss Verein. As of 31 July 2010, members of the Verein became part of Deloitte Touche Tohmatsu (DTTL), a UK private company, limited by guarantee. Each member firm within its global network remains a separate and independent legal entity, subject to the laws and professional regulations of the particular country or countries in which it operates.

This structure is similar to other professional services networks which seek to limit vicarious liability for acts of other members. As separate and legal entities, member firms and DTTL cannot obligate each other. Professional services continue to be provided by member firms only and not DTTL. With this structure, the members should not be liable for the negligence of other independent members.

Deloitte fiscal year 2011 regional and function revenue breakdown (aggregate)

Region	$billions	USD Growth	Local Growth	% of Revenue
Americas	14.3	10.4%	9.3%	49.7%
Asia Pacific	4.2	15.8%	8.5%	14.6%
EMEA	10.3	3.2%	5.2%	35.6%
Total	28.8	8.4%	7.7%	100.0%

 Sources:

www.wikipedia.org

www.deloitte.com

The story of 3 monks.

In our last lecture, we watched a video. The video was based on chinese proverb : "One monk will shoulder two buckets of water, two monks will share the load, but add a third and no one will want to fetch water."


The video...

A young monk lives a simple life in a temple on top of a hill. His daily task was to haul 2 buckets of water up the hill. One day another monk joins him. He tries to share the job with another monk, but the carry pole is only long enough for one bucket. So they both share the load. Then comes the third monk. It prompts everyone to expect that someone else will take on the chore. Third monk drinks all the water. Consequently, no one fetches water though everybody is thirsty. At night, a rat comes to scrounge. The rat then knocks the candleholder. It leads to a devastating fire in the temple. The three monks finally unite together and make a concerted effort to put out the fire. Since then they understand the old saying "unity is strength" and device a method which leads to equal load sharing between the three of them and they begin to live a harmonious life. The temple never lacks water again.


Important learning from the video : 


1. Productivity :
We can see that at start, the first monk was carrying 2 buckets of water. When second monk joins him, we are expecting that the productivity will increase because there are 4 working hands. But, in contrast, it does not happen. They both carry 2 buckets of water. This is because of the no of sticks available i.e. 1. And finally when 3rd monk joins the team, they share the work of carrying buckets. But is the productivity really increasing?? No. They are still carrying 2 buckets of water only. Each monk is not getting utilized 100%. 



It teaches us that productivity on the part of employees is important because getting your job done will help the company's growth. If the company grows and progresses, profits will increase. If profits in the company increase, not only will the bosses be happier but they will hire more people and give raises to those doing a good job and increase benefits for them. If employees are share holders in the company they will win even more benefits since their shares will be worth more and they will have a nice nest egg when they retire. 
Productivity is good for everyone and important for a company's survival.


2. Innovation :
As they say, necessity is the mother of innovation. The story also depicts how a crisis situation can be beneficial for the organization. As the number of monks increased from 1 to 3, all of them were trying to pass on the job. But no one was trying to find a way out through which the job can be easily done. It was only after the temple caught fire that they realized the need to work together and find a faster way of getting the water up to the temple. This is when they thought of implementing a pulley system otherwise they might have continued with the traditional system of fetching the water by walking down to the river forever. Such a situation is very dangerous in today’s competitive world since there is always a chance of your competitor developing a new technology which can lead to obsoleteness and hence shutting down of operations for an organization. Successful Organizations today are those which are continuously hunting for internal and development.


3. Co operation : 
Co operation is defined as "working or acting together for a common purpose or benefit." In sociological terms cooperation is important because it increases the productivity of workers in the production. As we can see in the video, first of all 2 monks were not at all ready to co operate with each other for their task. When 3rd monk joined them, nobody co operated. But incident of fire on the monastery taught them to think about the situation and come with the solution. To achieve something if you are part of a team, of any kind
we need to cooperate so that we achieve what we are trying to do. If we don't talk to each other (one message doesn't go where it's intended, for example), and you want to tell someone something, it doesn,'t get done, does it? If people do do what they say they will do then it gets done. If someone expects you to do something and you don't, it could result in confusions in other people's minds, possibly, I don't know if you have observed this or not of course, but have a look and see if it makes sense to you.

Teamwork:Valley Crossing

Valley Crossing


The idea behind performing this exercise was to learn the importance of "Teamwork". To succeed at the task in hand everyone involved needs to combine their efforts. If everyone does their job well, then it increases what the team can accomplish. This teamwork has to be recognized by everyone and know that great things can happen if individuals master the fundamentals and work together as one unit. Everyone has their own unique role, but each person's individual role must be recognized and appreciated.


Teamwork is something that must be a high priority and given constant attention. Every player needs to understand how important it is for them to work smoothly together if they want to be successful. Each player must be dedicated to the whole team and be willing to act unselfishly. When challenges arise (as they always do), the team needs to have the resources, accountability and commitment to deal with them in a constructive and positive manner. A sense of teamwork will play an integral part in this.


Remember T.E.A.M. - Together Everyone Achieves More!!

As the picture shows, the exercise has to be carried out by 3 members. 3 members were supposed to carry a rod on their shoulders. They are supposed to cross the valley while carrying the rod. The distance of the valley is more than 1 and less than 2 steps. To carry out this exercise, the whole activity was divided into 9 steps : (Every person had 3 stages : safe, half risky, risky)




Idea behind performing this exercise was to understand the imporatnce of teamwork. Main points that I understood were:


Management by objectives :
a. Goal setting : To cross the valley safely with the use of the rod.
b. Big Objective : Subdivide it to achieve it. In this activity, we divided the whole activity in 9 different steps.

Step	State of 1st Person	State of 2nd person	State of 3rd person
1.	Safe	Safe	Safe
2.	Half-Risky	Safe	Safe
3.	Full-Risky	Safe	Safe
4.	Half-Risky	Half-Risky	Safe
5.	Safe	Full-Risky	Safe
6.	Safe	Half-Risky	Half-Risky
7.	Safe	Safe	Full-Risky
8.	Safe	Safe	Half-Risky
9.	Safe	Safe	Safe

Teamwork : 
This activity requires all the 3 team members to be in sync with each other. All 3 members should work as a team to accomplish the desired goal of crossing the valley. As shown in the table, at every stage, somebody is at risky or half risky position. Hence, they should work as a team. One mistake can cause problems for the whole team.

Dependence :
As we see, all the three members are dependent on each other to cross the valley safely. Hence the roles of every member are interlocked. Higher the dependency in the organization, higher is the success rate.


Communication :
Good teamwork starts with a shared understanding of its importance. Communication is what bridges teams together. It allows teams to understand each individual's view. Communication helps the team to work effectively and efficiently. When a team is not communicating well, there work is at stake. 


                                       
                                                 Miscommunication in Teamwork.


Effectiveness :
Effectiveness is doing right things at right time. In the exercise, we came with many solutions. But finally, we executed the solution that suited the conditions. It not only help in achieving the goal but also increases the productivity.