Theory X, Theory Z
Enlightened managers use theory Y or 'participative management' style, which produces better performance and results, and allows people to grow and develop. Theory Y. Effort in work is as natural as work and play. People will apply self-control and self-direction in the pursuit of organisational objectives, without external control or the threat of punishment. Commitment to objectives is a function of rewards associated with their achievement. People usually accept and often seek responsibility.
The capacity to use a high degree of imagination, ingenuity and creativity in solving organisational problems is widely, not narrowly, distributed in the population.
In industry the intellectual potential of the average person is only partly utilised.
Theory X and theory Y are referred to in the field of management and motivation and Mcgregor's XY Theory remains a valid basic principle from which to develop positive management style and techniques.
McGregor's XY theory is based on the natural rules for managing people. McGregor maintained that there are two fundamental approaches to managing people. Many managers tend towards theory X, and generally get poor results.