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The History Corner: The Influence of Douglas McGregor

Scott Highhouse
Bowling Green State University

Just as every economist, knowingly or not, pays his dues to Keynes, we are all, one way or another, McGregorian. (Warren Bennis, 1972, p. 140)

Most I-O psychologists recognize the name Douglas McGregor, and they have dutifully memorized the characteristics of Theory X and Theory Y managers, but I suspect that many do not appreciate the influence that McGregor had on organizational psychology. Imagine if, today, I-O psychology had its own Stephen Jay Gould or Steve Levitt—a scholar/author who popularizes behavioral research in a way that captivates both the lay public and the academic community. This will help give you at least some sense of how important McGregor was to postwar organizational research and practice. It is not hyperbole to say that McGregor’s 1960 book The Human Side of Enterprise stands was one of the most important pieces of management literature ever published.

McGregor’s ideas were not new. He was deeply influenced by Abraham Maslow, and he adopted many of the ideas of other leading figures in the human relations school. As Latham and Budworth (2007) noted, however, McGregor articulated these ideas in a way that few others could. Indeed, among managers, McGregor was the most well-known behavioral scientist of his time. Among scholars, people such as Argyris, Haire, Herzberg, Likert, Scanlon, Schein, and many others were profoundly influenced by McGregor’s ideas. McGregor recruited Kurt Lewin to MIT and helped found the Research Center for Group Dynamics. And, he is credited, along with Richard Beckhard, with coining the term “organization development” to describe the application of behavioral science to major organizational change (Weisbord, 1987).

McGregor asserted that it was the assumptions of managers that determined their effectiveness, rather than the characteristics of the managers themselves. Managers needed to believe that people were capable of engaging in work and that workers needed neither a carrot nor a stick to perform their best. As McGregor put it, “The motivation, the potential for development, the capacity for assuming responsibility…are all present in people. Management does not put them there” (quoted in Kleiner, 1996). McGregor rejected his own strict religious education presenting man as inherently evil. The Theory Y manager believes that people are not by nature indolent but are often the product of self-fulfilling prophesies of Theory X managers.

One unfortunate legacy of McGregor’s influence was the uncritical application of his ideas by consultants and organizational leaders. Schein (1975) argued that McGregor’s Theory Y is misinterpreted as much or more than anybody’s work. He noted that Theory Y is a theory of motivation not a theory of how to run a corporation. According to Schein (1975; p. 78-79):

Theory Y does not imply participative management or any other kind of management—it is only a statement about what people are fundamentally like, and what kind of organizational behavior they are capable of, if the conditions within the organization are appropriate.

McGregor himself noted that Theory X and Theory Y are not managerial strategies but are beliefs that guide leaders’ actions. One example of trying to run a corporation based on McGregor’s ideas was Andrew Kay and Non-Linear Systems Inc. Kay was profoundly influenced by McGregor’s 1960 book and set about designing his own Theory Y organization. As I described in my chapter on the history of organizational psychology interventions (Highhouse, 2007), Kay implemented dramatic organizational changes in 1960, even though Non-Linear Systems was doing gangbuster business. Kay even hired Abraham Maslow to be the “resident guru” during the summer of 1961. Three years into the experiment, however, profits declined, layoffs were implemented, and the organizational changes were abandoned. President Kay confessed, “I must have lost sight of the purpose of business, which is not to develop new theories of management” (“Where being nice to workers didn’t work,” 1973, p. 99). The OD field similarly ran with a “one best way” approach to organizational change, based on a faith that fostering autonomy, participation, and authenticity were sufficient to improving organizational functioning. Guion (1973) noted such a trend in Division 14 when he cautioned: “I hope that we do not move in the direction of untested organizational intervention, yet I see us potentially moving in that direction” (p. 6).

McGregor died in 1964 at the young age of 58. He was known as charismatic and laid-back, and he loved to sing old hymns. Antioch College changed its name to Antioch University McGregor to honor McGregor’s presidency from 1948 to 1954.1 McGregor’s ideas have infiltrated our everyday vocabulary, and continue to inspire I-O research (e.g., DeVoe & Iyengar, 2004; Heath, 1999). He should also continue to inspire I-O practice by showing that one can make an enormous impact by promoting a focus on the human side of business.

1 It again changed its name to Antioch University Midwest in 2010

References

DeVoe, S.E., & Iyengar, S.S. (2004). Managers’ theories of subordinates: A cross-cultural examination of manager perceptions of motivation and appraisal of performance. Organizational Behavior and Human Decision Processing, 93, 47–61.

Guion, R. (1973). TIP talks to Bob Guion. The Industrial-Organizational Psychologist, 11(1), 30–31.

Heath, C. (1999). On the social psychology of agency relationships: Lay theories of motivation overemphasize extrinsic rewards. Organizational Behavior and Human Decision Processes, 78, 25–62.

Highhouse, S. (2007). Applications of organizational psychology: Learning from failure or failure to learn? In L. Koppes (ed.), Historical perspectives in industrial and organizational psychology. Mahwah, NJ: Erlbaum.

Kleiner, A. (1996). The age of heretics: Heroes, outlaws, and the forerunners of corporate change. New York, NY: Doubleday.

Latham, G. P., & Budworth, M. (2007). The study of work motivation in the 20th Century. In L. Koppes (ed.), Historical perspectives in industrial and organizational psychology. Mahwah, NJ: Erlbaum.

Weisbord, M. R. (1987). Productive workplaces. San Francisco, CA: Jossey-Bass.
Where being nice to workers didn’t work. (1973, January 20). Businessweek, 99–100.