In 1960, Douglas McGregor formulated Theory X and Theory Y referring to two different points of view of the employees. One is negative, Theory X, and the other is positive, Theory Y. Theory X encourages the practice of strict control and supervision, coupled with employees who are averse to organizational changes. Therefore, there is no room for innovation within this theory. In contrast, Theory Y involves managers creating and fostering a work environment that provides opportunities for employees to take initiative and decentralization of authority.
McGregor considers Theory Y to be more valid and reasonable than Theory X. Therefore, he encouraged cordial relationships among team members, responsible and motivating jobs, and everyone's participation in the decision-making process.