Z theory

Theory Z represents a humanistic perspective of management. It is based on Japanese management principles combined with American culture. Theory Z is characterized, among other things, by long-term job security, consensual decision-making, and individual responsibility within a group context. Theory Z breaks away from McGregor's Theory Y.

 

Theory Z was introduced by William Ouchi in the book Theory Z: How American Firms Can Meet the Japanese Challenge (1981). In this book he contrasted the types of American organizations that were rooted in the individualistic tradition versus Japanese organizations that were rooted in the culture of collectivism. He argued that an emerging management philosophy, Theory Z, would allow organizations to enjoy the advantages of both systems.

 

Theory Z organizations have a consolidated set of principles related to the clan culture, which is characterized by the homogeneity of values, customs and objectives.  This culture emphasises the socialisation of team members to achieve alignment of individual and group goals. However, this theory is hybrid, so these organisations also have authority relationships, performance appraisals and promote job specialisation.

 

Ouchi argued that a Theory Z approach to management could lead to higher employee job satisfaction, lower absenteeism and turnover rates, higher quality products or services, and better performance.

 

Richard L. Daft. Vanderbilt University - Theory Z: Opening the corporate door for participatory management