Organizational Management: the Theory X and Theory Y - Essay Example

Organizational Management: the Theory X and Theory Y Human Resource Management In Human Resource Management, there is the Theory X and Theory Y, which are theories of employee motivation. Douglas McGregor came up with these theories, and they concern workforce motivation, since they describe the different attitudes of employees’ performance. They have found importance in human resource management, organizational development and behavior analysis. In Theory X, the management has an assumption that the employees are innately lazy; thus, will circumvent work whenever they can. In addition, the employees avoid responsibility and have little or no ambition unless there is an enticing incentive program. Tosi and Pilati (2011) add that the employees require close supervision and implementation of all-inclusive systems of control. Effective management requires a hierarchical structure with narrow and constant span of authority at each level. The manager has a negative attitude towards their workforce, since it is the manager’s job to energize the employee and structure work. On the other hand, Theory Y presumes that the workforce is self-motivated, ambitious, exercise self-control, empowerment, self-direction and autonomy and is anxious to acknowledge greater responsibility. Consequently, the workers exhibit creativity at work when given a chance, which subsequently leads to greater productivity. According to Griffin and Moorhead (2011), the manager gives the employees to conduct their responsibilities to the best of their capability, without the hindrance of rules. In this case, satisfaction is the strong motivation for the employees. The manager has a positive attitude towards his employees, which creates enthusiasm for both the manager and the employees. Both theories determine the leadership style that a manager can employ depending on the employees. For example, Theory X shows that a manager can adopt an authoritarian leadership style, which will allow him to give threats of punishment for the lazy employees. However, democratic leadership is more appropriate in Theory Y, since the employees are self-motivated, self-directed and ambitious (Tosi and Pilati, 2011). Moreover, the theories bring out the comparisons and contrasts of the different characteristics that influence work behavior and organizational effectiveness. As a manager, an employee who was lazy and constantly absent from work, I had to design with a working plan and incentive plan to motivate him to work. Failure for the employee to improve meant I give him a compulsory leave without payment as punishment. In the case of a motivated, ambitious and driven employee, I allowed the employee to make the decision regarding the task at hand. In Business Finance, Arbitrage Pricing Theory addresses the overall concept of property pricing. Proper property pricing is essential for the accurate pricing of shares. The Arbitrage Pricing Theory asserts that the expected return from a financial asset can be obtained as a linear utility of several macro-economic factors and theoretical market indices. These factors correspond to a factor-specific beta coefficient and are sensitive to changes (Griffin and Moorhead, 2011). The Arbitrage Pricing Theory allows the analysis of the alternative solutions to the business problems, especially financial and asset problems. A company may obtain additional financial resources from its assets, debentures, preference shares and ordinary shares, whose pricing is dependent on asset pricing. In addition, it allows the formation of financial decisions, for instance, acquisitions and mergers. The company wanted to float ordinary and preference shares in a right issue as a way of raising capital. The proper pricing of the company’s assets was decisive in determining the share price, and subsequently, the capital that could be raised from the rights issue (Oppong, 2011). A major theory in Organizational Behavior was the Scientific Management. The Scientific Management theory was proposed by Fredrick Taylor. It assumes that the process of assigning the right person, the right equipment and tools for work, in which the worker follows a standard operation procedure, as well as financial motivation, ensures that the work is completed competently. Therefore, for a company to maximize its production outcome, it is crucial for the company to develop standard operation procedures for each task. Using the standard operation procedures simplified the process of assigning employees’ task based on their capabilities, for example, an accountant got financial duties and given appropriate accounting tools, as opposed to giving it to an operations employee. The Scientific Management theory addresses the decision making process in the organization in terms of employee work allocation and working conditions. Pfister (2009) affirms that the theory allows the development of a concrete manager-employee relationship, which gives an opportunity to both parties to come up with strategies that will enhance team development. It also tackles the effect of the societal problems, such as long working problems and employee rights, on an individual, societal, organizational and group levels. The Stockholder theory in Business Ethics states that companies are just arrangements by which one group of individuals, the stockholders, loan funds to another group, the managers, to be exploited to achieve specified results. Consequently, the stockholders obtain an ownership interest in the business. The managers are the representatives of the stockholders. The managers are bound by their agency relationship they have with the stockholders; thus, only exploit and invest the resources given as outlined by their stockholders (Griffin and Moorhead, 2011). The Stockholder Theory allows the manager and the stockholder to analyze and come up with the alternative solutions to the various organizational problems. In Organizational Behavior: Managing People and Organizations, Pfister argues that the manager must have appropriate decision-making skills to decide the suitable investment channels for the stockholders’ resources. The company outsourced more funds from the stockholders for an acquisition of three warehouses and a factory. As a manager, it was necessary to involve the stockholders, since they have an interest in owning the company and they need to know about the company’s investments. In Operations Management, the theory of Constraints proposed by Dr Eliyahu Goldratt, assumes that every process has a constraint and the removal or improvement of the constraint results in the improvement of the general process. In order to achieve more profits, a company has to improve its constraints. The theory of constraints provides a methodology of identifying the significant constraint that impedes the achievement of an objective and systematically improving the limiting until it ceases being a constraint. According to Oppong (2011), the identification of the constraints in the organizations, allows the formulation of strategies to eliminate or improve the limiting factor, which requires appropriate decision-making skills. It acknowledges and recognizes constraints that may be as a result of societal problems, and their impact on the workplace at societal, group, individual and organizational levels. The union contracts were prohibiting cross training of employees between companies, and employees of the companies needed skills that were essential in operating new manufacturing machines. To circumvent this, I had to hire a training company that to offer training to employees. References Griffin, R., & Moorhead, R. (2011). Organizational Behavior: Managing People and Organizations. New York: Cengage Learning Oppong, S. (2011). Organizational Management. NewYork: VDM Verlag Dr Mueller e.K. Pfister, J. (2009). Managing Organizational Culture for Effective Internal Control: From Practice to Theory. New York: Springer. Tosi, H., & Pilati, M. (2011). Managing Organizational Behaviour: Individuals, Teams, Organization and Management . London: Edward Elgar Publishing. . Read More