MOTIVATIONAL

THEORY Z – By
William G. Ouchi

PREPARED BY:
ANANT GUPTA (2K18/EE/025)
ANGAD SINGH NAGI (2K18/EE/026)
 TABLE OF
CONTENTS
01 MANAGEMENT AND MOTIVATION

02 VARIOUS THEORIES OF MOTIVATION

03 THEORY Z ORIGIN AND APPLICATION

04 EXAMPLES FROM THE ORGANISATIONS

 WHAT IS MANAGEMENT?
 Management involves the following aspects:
 Efficient coordination of the activities of organization’s
employees
 Optimum utilization of resources
 Achieving a wide range of goals
 According to Peter Drucker, "Management is a multi-
purpose organ that manages business and manages managers
and manages workers and work."
 In simple words, "Management is the art of getting things
done through people."
What is  Derived from word ‘Motive’
 Process of stimulating people towards goals
Motivation?  Few incentives in workplace that can cause motivation:
 Desire for money
 Success
 Recognition
 Job-satisfaction

Management and Motivation

 Management needs to create willingness to work amongst
employees
 Leads to best performance of an employee
 A leader has to arouse interest in following stages:
 A felt need or drive
 A stimulus in which needs have to be aroused
 When needs are satisfied, the satisfaction or accomplishment of goals
 EVOLUTION OF MOTIVATION IN
MANAGEMENT
Classical experiments and theories did
not explain the behaviour of Employees must be treated as
employees. Employee motivation was assets and they work better
ignored when appreciated

01 02 03 04

Behavioural theorists introduced Employees work efficiently

understanding human behaviour towards a goal if they feel like
they are a part of the group
It provides improved productivity
Social belonging creates happy
atmosphere
 T
H
E
Hawthorne’s Effect Maslow’s Hierarchy Theory X Theory Y O
In his experiment,
Hawthorne observed that
Maslow suggested 5 needs
that are hierarchical and
This theory suggests that
employees dislike their work and
This theory assumes that
employees are happy to work and
R
people work more
effecienty if someone is
watching them
once one of the needs get
fulfilled, their motivation
factor is the next level of
needs to be controlled. They have
no ambition, and needs to be
self motivated. They take
ownership and don’t need constant
Y
needs enticed by rewards vigilance.
Z
Douglas
McGregor
 NEED OF THEORY Z
Develop People are not
Guide to motivational
Over
just the two
generalisation
management technique extremes

But
Not expected Suggests that management
behaviour Realistic

Disadvantages
job is needs to

Advantages
picture
motivation motivate too

Easy to Theory Y Feel some

Quick tool understand followers constrictions
too

Different
ways to Too simplistic
Easy to apply No evidence
understand to use
Fun Facts

Many researchers tried to

Theory Z is not extension of propose Theory Z- Not
McGregor's convincing
XY theory

Theory z was created by

Z does not denote anything
William George Ouchi

Some researchers believe that it

Ouchi compared American and
Japanese organizations to stands for Zeal
develop Theory Z
 About the big deal
BIRTH
• Born in 1943
CAREER • Born and raised in Hawaii
• He was professor at
Stanford business school
for 8 years
• Now a faculty member at
Anderson School of
Management at University STUDIES
of California • B.A. from Williams
College in 1965
ACHIEVEMENTS • MBA from Stanford
• Prominence for his study- University
differences between • Ph.D. in Business
Japanese and American Administration from
management styles. the University of
• His first book in 1981 Chicago.
‘Theory Z: How American
Management Can Meet
the Japanese Challenge’
COMING INTO BEING
In 1980’s, the Japanese corporates were at boom while the American
companies were facing challenges

Ouchi spent years in Japan and closely studied the Japanese style of
management

In Japan, the word ‘Wa’ means a perfect circle or harmony, influencing

Japanese to stay as a team and promotes togetherness

Managing Ouchi wrote- Theory Z How American Business Can Meet the Japanese
People
Challenge in 1981

 Ouchi proposed a highly effective management style for

American businesses
 Japanese companies are have special way to manage people
 Results are less turn-over rate and increased commitment in
employees
 Ouchi compared the two organizational worlds and
proposed his theory Z
COMPARISON OF AMERICAN AND JAPANESE PRACTICES IN ORGANISATIONS

AMERICAN ORGANISATIONS JAPANESE ORGANISATIONS

Length of Employment In America, jobs are offered for short durations Employees are hired on life time basis and even
and firing and hiring is very fast process during recession, employees are not laid off

Evaluation and Promotion Evaluations are made periodically and quickly. First evaluation is made only after 10 years of
Rewards and demotions are based on evaluation service and then promotions are made

Decision Making Decisions here, are made by managers at higher Here, collective decisions are made by a group
positions which represents both employees and the
management

Responsibility Individualistic attitude. An employee is only The responsibility is taken up as a group and
responsible for his/her own work and is collective growth is given more importance
concerned with his/her own growth
CONTINUED…

AMERICAN ORGANISATIONS JAPANESE ORGANISATIONS

Job Specialisation The jobs here are highly specialised and a Job rotation is quite frequent and each employee
particular person is expected to do a particular is habitual in generalised familiarising
job. He/she is trained accordingly themselves with all operations

Control The employees are closely monitored so as to General and informal control than formal and
drive expected results from them close monitoring. The devotion of the employees
is trusted here

Concern for Employees Management tends to be only concerned about Japanese organisations take care of the
their employees’ work life and them meeting employees and help them out with their off work
goals life as well

Organisational Structure Management stay formal with their employees Management is very informal with their
and tend to maintain a distance from them employees and try to mix up with them as much
as possible
COMPARISON OF AMERICAN AND JAPANESE ORGANISATIONS

Evaluation and

Responsibility

Organisational
Specialisation
Employment

Concern for
Employees
Promotion
Length of

Decision

Structure
Making

Control
Job
Short term By Individual Specialised Segmented Completely
employment
Very Fast Management responsibility External
job Concern Formal

Emphasis on Slower Emphasis on Emphasis on Focus more Emphasis on More of

evaluation, More
long term collective joint on internal holistic Informal
more training general
relationship decision responsibility control development setting

Long term Group Joint Genaralised Holistic Completely

employment
Very Slow Decision responsibility Internal
job Concern Informal
 INTRODUCTION
• Theory Z is A hybrid model that combines elements of effective Japanese management
with an evaluation of the needs of US employees.
• It emphasizes a humanistic ethic, teamwork, and decision-making by consensus.
• This hypothesis is based on the premise that workers who are invested in and committed
to a company would be inspired to work harder.
• Theory Z managers use motivational strategies like:
 long-term jobs
 promotion from within
 participatory management
 
CONTINUE… 
Theory Z organizations follow clan cultures

They retain some elements of bureaucratic hierarchies like:

 Formal authority relationships

 Performance evaluation

 Some work specialization

ASSUMPTION: workers tend to want to build happy and

intimate working relationships with those that they work
for and with, as well as the people that work for them.
 Workers have a high need for company support
 They want working environment where traditions and cultures
are valued
 Employees can be trusted with sincerity in their jobs
 Management can be trusted to support their employees

Desire- to make a workforce which is loyalty to the company

 FEATURES OF THEORY Z
TRUSTEESHIP- Since management is a collaborative endeavour
between the employer and the employee, mutual confidence and faith
are essential for avoiding conflict and fostering cooperation and
harmony.

POSESSIVENESS- Possessiveness is the result of feelings that the

organisation recognises the worker's worth. He/she has an equal say in all
aspects of the organization's growth, and he is always proud of his work.

SELF CONTROL- Employees need to have a sense of power over the

projects they are concerned with. A dedicated worker would always
have self-control and self-direction in his work.

SHOULDERING RESPONSIBILITY- In the right circumstances, an ordinary

human being wants to understand and accept his obligations. Even in
corporate setting, this is true.
 CONTINUE….
CREATIVITY- Many problems can be overcome with imaginative thinking
and proper imagination. When innovative thinking is used correctly, it can
lead to new ideas and positive improvements in the workplace.

PHYSICAL AND MENTAL SATISFACTION- Individuals accept work for

both emotional and physical fulfilment. Work should not be a source of
frustration or retaliation.

AWARDS AND REWARDS- Individual actions driven with wholehearted

dedication toward organisational goals can be a source of both objective and
subjective satisfaction. Such dedication should be rewarded.

UTILISATION OF INTELLECTUAL POTENTIAL- Often, the full potential

of employees is not achieved because of self and managerial conflicts. Theory
Z provides an environment where this full potential can be achieved.
 PILLARS OF THEORY Z

Mutual Trust Strong Bond Employee Integrated Coordination Informal Control Human Resource
When trust and Involvement Organisation In order to System Development
Lifetime employment
openness exist develop Emphasis should
which leads to loyalty Involvement implies Focus is on sharing Potential of every
between common culture be on mutual
towards the participation of of information and and class feeling trust and person is recognized
employees, work
enterprise. Building employees in the resources rather in the cooperation and attempts are
groups, union
and loyalty amongst decision making than formal organization, the rather than on made to develop it
management, employees and process , particularly structures. Deep leader must use superior- through job
conflict is creating trust from in matters affecting understanding about the processes of subordinate enlargement
reduced to the communication, relationships
management’s side is them. This generated interdependent
minimum debate and
important a sense of tasks.
analysis
responsibility
 The Double Edged Sword

Based on shared Suggests strong Employee Encourages

Encourages
concern for bondage between involvement automatic
the practice
multiple organization and is a coordination
ADVANTAGES of informal
employee needs its employees prominent among
organisation
factor employees.

Not applicable Doesn’t offer a

Managers and
Unstructured in all cultures Slow rates of complete
DISADVANTAGES employees are
organization and coming up promotions solution to
hesitant in
creates with a common frustrate motivation
decision making
frustration culture is tough employees problems in
process
different
environments
 WHY AN OLD CONCEPT?
People often work
for money and
after sometime,
Concern of the
lose their
management
motivation.
for employees
Motivating people
makes them
by using theory Z
loyal and
would create a
committed
healthy work
environment
Theory z helps Organizations tend
motivating to do better when
people to stay in they motivate their
the same job by employees on each
providing them level of Maslow's
more than just hierarchy which can
money be done by theory Z
 TOO GOOD TO BE TRUE?
AN IDEAL EXAMPLE- LORD KRISHNA
 Lord Krishna always worked as a member of the team and persuaded others to
do the same.
 He supported and motivated Arjuna
 He empowered Arjuna with knowledge and allowed him to take responsibility
 He believed in avoiding disputes and he tried to mediate between Pandavas
and Kauravas
 Lord Krishna kept calm and cool in adverse conditions also and avoided
disputes till last
 Krishna motivated Arjuna by giving discourse (Bhagwat Gita) which was
without motivation factors like money, fringe benefits, appreciation, and
power

But does such conditions can be fulfilled in every organisation?

Generally companies take up few compatible points from the theory and apply
it
 TRANSPARENCY AND ENGAGEMENT
• Google fosters imagination by
• The aim is to break down barriers and cultivating a culture of openness and
promote cooperation and innovation freedom
• As a result, workers feel motivated as • Finally, culture is about “how things get
a result of the accountability accomplished” and should not be left to
chance; it is much too strong a force to
disregard – and Google has done so
admirably

• Organizations that prioritise • Employees want to be a part of

accountability, in our something with no secret
experience, engage workers motives and where they can
more than those that do not have an open and frank
conversation
FOCUS ON BEHAVIORS
• Successful businesses recognize • High performers in high-
the emotional effect of their engagement organizations are
employees' behavior aware of their effects and operate
• You can't get someone who is a in a constructive and respectful
high performer but still acting manner
poorly

• It simply should not be possible

• The company has equal to achieve top results, ratings,
• weighting between the fact that people pay and potential bonus without
achieve their goals and how they do it considering the impact of your
behaviors
 EMPOWERING

• John Lewis expresses a strong focus • The corporation expresses

on people explicitly that there is a mutual
• They refer to their employees as responsibility by referring to
partners them as partners

• Employees who are given the

opportunity to participate feel
• As a result, they put an emphasis on
encouraged and take personal
including their partners in decision-
responsibility
making and solution creation,
• They are motivated to do
enabling them to have the best
something because they feel they
possible customer experience
can make a difference
EMPLOYEE DEVELOPMENT
• They put an emphasis on employee
growth and internal promotion. • Rather than following scripts,
• Another fascinating growth strategy is employees are expected to solve
the way they inspire their workers problems on the spot and come
(whom they call associates) up with new ideas.

• This instils a sense of inner • Furthermore, in order to

motivation that comes from the fact effectively cope with the constant
that you're progressing and changes, continuous
improving improvement is essential
 PURPOSE

• This airline considers its mission • A sense of mission can have a

to be connecting people with significant impact on how
what matters to them relevant an individual considers
his or her work

• People want to make a

• Employees are emotionally difference, to contribute to
engaged when they have a solid, something greater than
straightforward intent themselves, and it's no longer
enough to "just do a job."
LISTENING

• The company pays attention to • It's a win-win situation: the

its workers' views and considers company continues to learn, and
their suggestions workers feel valued and
engaged with the organization

• Employees who feel heard want • Employee participation is a

to give back, and they want to company's lifeblood
give it their all
 THE EPITOME OF MOTIVATION- ELON
MUSK
His approach to creativity is what sets Elon Due to Elon Musk relying heavily on his
Musk apart. employees at both Spacex & Tesla, he has
Employees should be rewarded for had to manage both teams separately as
attempting to innovate, according to Elon well as promote excellence and innovative
Musk, whether the innovation is successful ideas within those environments.
or not

Elon uses clever wording in emails, The focus on “we” promotes the family
company speeches and media statements as and team spirit which Musk needs in
well as his reward structures. order for these companies to function
Take this email he sent internally in Tesla: as smoothly as possible. Inclusivity in
achievements creates a feeling of
"I think we just became a real car reward to employees
company."
 CONCLUSION
William Ouchi doesn’t Ouchi made necessary
enumerate that the Japanese assumptions, which
culture for business is include the concept of
certainly the best strategy for workers wanting to build
the American companies. happy and intimate work
relationships.

Theory Z workers have a dire These workers have a great sense of

need to be supported by the discipline, order, a sense of
organization they work for and cohesion with the fellow workers,
deeply value the work and a moral obligation to work hard.
environment in which culture, Theory Z aims to develop a
family, social institutions, and workforce that is loyal towards the
traditions are equally important organization throughout its career.
as work itself.
THANKS!