5.

Theories X & Y

Douglas McGregor, a social psychologist famous in the 1960s developed two contrasting
theories that explained how the manager’s beliefs and behavior about what motivates the
employees affected the management style.
Theory X
This style of management assumes that the team members-
 Dislike their work
 Tend to avoid responsibility and need constant direction
 Have to be controlled, threatened to complete their work
 Have a constant need of supervision at every step

Theory Y

This style of management assumes that the team members-

 Happy to work on their own initiative
 More involved in decision making
 Self motivated to complete the tasks
 View work as fulfilling and challenging
 Solve problems creatively and imaginatively
Advantages of Theory X
1. Some employees thrive on an authoritative management style
2. Focus on achieving the company goals
3. No room for ambiguity, which makes roles and responsibilities clear
Disadvantages of Theory X
1. Some employees do not work well under such strict enforcement
2. Not everyone is motivated by financial gain, so they might not make much of an
effort to achieve more
3. Can be detrimental to employee learning and development
Advantages of Theory Y
1. Much more appealing management style
2. Gives employees freedom and responsibility, which allows them to perform better
3. Encourages teamwork, development and creative problem solving
Disadvantages of Theory Y
1. Not everyone will be comfortable with undefined working boundaries
2. It would be easy to abuse the freedom and trust
3. Can be harder to measure success, as there is less focus on quantifiable metrics

6. Human Relations Theory

Elton Mayo, an Australian psychologist from Harvard University, developed the Human
Relations Theory. He conducted a series of experiments, which are now known as
Hawthorne Studies or Hawthorne Experiments. He concluded that people have unique
preferences and can’t be treated as machines.

Elements of Human Relations Theory

At the core of human relations theory are these six basic propositions:

 A focus on people, rather than upon machines or economics

 The organizational environment is not an organized social context
 Human relations are important in motivating people
 Motivation depends upon teamwork, requiring co-ordination and cooperation of
individuals involved.
 Human relations within teams must fulfill both individual and organizational
objectives simultaneously
 Individuals and organizations desire efficiency by achieving maximum results with
minimum inputs
Advantages of Human Relations Theory
1. Improves productivity of employees.
2. Removes grievance among the employees.
3. Improves Employee Retention.
4. Creates good human relationships.
5. Improves goodwill of company.
Disadvantages of Human Relations Theory
1. Focuses on human theory. It does not include productivity of workforce.
2. Does not show road-map of work.
3. Has more theoretical concept.
4. Has Difficulty of Analysis.
5. Loss of Subjectivity.

7. Classical Management
The classical management theory was introduced during the Industrial Revolution to
improve factory productivity and other businesses. While less common in today's society,
this management type may still benefit some organizations.

The classical management theory is based on the following principles:

 Scientific management should be used to determine the most efficient way to do a
job.
 Employees are selected to perform tasks based on their skills and specializations.
 Operations should be streamlined as much as possible.
 Decisions are made by a single person or by a select few authority figures.
 Productivity is the primary goal.
 Increased profit is given priority.

Advantages of the classical management theory

1. Clear organization hierarchy
Includes three distinct levels of management within an organization. This provides a clear
outline of responsibilities and objectives for each member of management and reduces
confusion as to what a particular manager should focus on.
2. An easy-to-understand division of labor
Tasks are typically easier to understand and employees are given specific projects to
complete that fall within their abilities and specializations. As a result, productivity is often
increased and workers avoid having to multitask to fulfill their duties.
3. Increased productivity through monetary rewards
Organizations that implement this management style often incorporate regular
opportunities for employees to be rewarded for their productivity with incentives. This can
increase an employee's feeling of appreciation through recognition of their
accomplishments as well as make it easier for managers to motivate workers.
4. Single-leader decision making
This can be beneficial for companies that regularly need decisions to be made quickly or
for smaller businesses that rely on a single leader.

Disadvantages of the classical management theory

1. Limited emphasis on employee job satisfaction and human relations.
Focuses primarily on the physical needs of an employee and can overlook their social
needs, which is a vital component for some in their overall job satisfaction.
2. Increased levels of pressure placed on employees.
Primarily concerned with an employee's productivity and output. As a result, employees
can feel increased pressure to complete tasks in a certain period, leading to stress and
discouragement.
3. Restricts the implementation of new ideas and concepts.
This theory is based on the belief that there is one right way to complete tasks for
maximum production. As a result, an organization's ability to grow and implement new
ideas and concepts is often limited.

8. Contingency Management
The core idea of the contingency theory is that there is not one single best way to lead an
organization or make decisions.
Fred Fiedler was the first to popularize the contingency theory concept in 1964.
Contingency theory advocates for a certain flexibility in the management method to
achieve the best results for the organization.

Common Leadership Styles

1. Democratic Leadership

It is a collaborative and consultative leadership style where each team member has an
opportunity to contribute to the direction of ongoing projects. However, the leader holds
the final responsibility to make the decision.

Democratic leadership is one of the most popular and effective leadership styles because
of its ability to provide lower-level employees a voice making it equally important in the
organization.

2. Autocratic Leadership

Autocratic leadership is the direct opposite of democratic leadership. The leader holds all
authority and responsibility. They have absolute power and dictate all tasks to be
undertaken. There is no consultation with employees before a decision is made. After the
decision is made, everyone is expected to support the decision made by the leader. There
is often some level of fear of the leader by the team.

The autocratic type of leadership style can be very retrogressive as it fuels employee
disgruntlement since most decisions would not be in the employees’ interests.

However, autocratic leadership can be an effective approach in cases where the leader
is experienced and knowledgeable about the circumstances surrounding the decision in
question and where the decision needs to be made swiftly.

3. Laissez-Faire Leadership

The laissez-faire leadership approach is empowering to employees who are creative,

skilled, and self-motivated. The level of trust and independence given to the team can
prove to be uplifting and productive and can lead to job satisfaction.

At the same time, it is important to keep such a type of leadership in check as chaos and
confusion can quickly ensue if the team is not organized. The team can end up doing
completely different things contrary to what the leader expects.

According to research, laissez-faire leadership is the least satisfying and least effective.
4. Transformational Leadership

Transformational leadership is all about transforming the business or groups by inspiring

team members to keep increasing their bar and achieve what they never thought they
were capable of. Transformational leaders expect the best out of their team and push
them consistently until their work, lives, and businesses go through a transformation or
considerable improvement.

Transformational leadership is about cultivating change in organizations and people. The

transformation is done through motivating team members to go beyond their comfort zone
and achieve much more than their perceived capabilities. To be effective,
transformational leaders should possess high levels of integrity, emotional intelligence, a
shared vision of the future, empathy, and good communication skills.

5. Transactional Leadership

Transactional leadership is more short-term and can best be described as a “give and
take” kind of transaction. Team members agree to follow their leader on job acceptance;
therefore, it’s a transaction involving payment for services rendered. Employees are
rewarded for exactly the work they would’ve performed. If you meet a certain target, you
receive the bonus that you’ve been promised. It is especially so in sales and marketing
jobs.

Transactional leadership establishes roles and responsibilities for each team member and
encourages the work to be completed as scheduled. There are instances where incentive
programs can be employed over and above regular pay. In addition to incentives, there
are penalties imposed to regulate how work should be done.

6. Bureaucratic Leadership

Bureaucratic leadership is a “go by the book” type of leadership. Processes and

regulations are followed according to policy with no room for flexibility. Rules are set on
how work should be done, and bureaucratic leaders ensure that team members follow
these procedures meticulously. Input from employees is considered by the leader;
however, it is rejected if it does not conform to organizational policy.

Bureaucratic leadership is suitable for jobs involving safety risks or managing valuable
items such as large amounts of money or gold. It is also ideal for managing employees
who perform routine work.

7. Servant Leadership

Servant leadership involves a leader being a servant to the team first before being a
leader. A servant leader strives to serve the needs of their team above their own. It is also
a form of leading by example. Servant leaders try to find ways to develop, elevate and
inspire people following their lead to achieve the best results.
Other scholars believe servant leadership may not be suitable for competitive situations
where other leaders compete with servant leaders. Servant leaders can easily fall behind
more ambitious leaders.

Advantages of Contingency Approach to Management

1. Dynamic in nature. So, it changes according to the situations. it allows managers
to change the policies according to the situation.
2. Helps the manager to enhance their leadership and decision-making skills.
3. Provides options to the employees, that helps them to grow and share their ideas
to the business.
4. Helps to design the organizational structure and plan the information decision
systems.

Disadvantages of Contingency Approach to Management

1. Has a complex approach. The suggestion of the approach is very simple but when
it comes to practical it becomes more complex.
2. Basically, reactive in nature. Sometimes the handling the situations become hard
for the manager.
3. Suffers from inadequately of literature. It is not sufficient to say that ‘a managerial
action depends on the situation.