Analysis of Theory Z of Management

Analysis of scheme Z of ManagementTHEORY ZDefinitionIt is a focal point theory positive by William Ouchi, describing the Nipponese placement of precaution characterized by the giveers deep involvement in counselling, laster productivity than the U.S. Management model, and a highly developed system of organizational and sociological rewards. Ouchi contends that this management system can be used anywhere with equal success. supposition Z is an come along to management based upon a combination of American and Japanese management philosophies and characterized by, among other things, long-term job security, consensual decision making, slow evaluation and promotional material procedures, and individual responsibility inwardly a group context. Proponents of Theory Z suggest that it leads to improvements in organizational public presentation. The quest sections highlight the development of Theory Z, Theory Z as an approach to management including each of the characteristics n oted above, and an evaluation of Theory Z. Realizing the historical context in which Theory Z emerged is helpful in understanding its underlying principles. The following section provides this context.DEVELOPMENT OF THEORY ZKnowing the historical context in which Theory Z emerged is helpful in understanding its underlying principles. Theory Z has been called a sociological description of the humanistic organizations advocated by management pioneers such as Elton Mayo, Chris Argyris, Rensis Likert, and Douglas McGregor. In fact, the descriptive phrase, Theory Z. can be traced to the work of Douglas McGregor in the 1950s and 1960s. McGregor, a psychologist and college president, identified a negative set of assumptions about human nature, which he called Theory X, while those he categorised in Theory Y were more(prenominal) positive about human nature as it relates to employees. In McGregors view, managers who adopted Theory Y beliefs would exhibit different, more humanistic, and in conclusion more effective management styles. McGregors work was read widely, and Theory Y became a well-known prescription for improving management practices.But in the mid-seventies and 1980s, more United States industries lost market share to international competitors, particularly Japanese companies. Concerns about the competitiveness of U. S. companies led some to examine Japanese management practices for clues to the success enjoyed by many of their industries. This led to many articles and books purporting to explain the success of Japanese companies. It was in this atmosphere that Theory Z was introduced into the management lexicon. This theory was presented by William Ouchi in his 1981 book, Theory Z How American Management can meet Japanese Challenge. Ouchi is professor of Management at UCLA, Los Angeles, and a board member of some(prenominal) large US organisations.Theory Z was first identified as a unique management approach by William Ouchi. Ouchi contrasted America n types of organizations ( lineament A) that were rooted in the United States tradition of individualism with Japanese organizations (Type J) that drew upon the Japanese heritage of collectivism. He argued that an emerging management philosophy, which came to be called Theory Z, would allow organizations to enjoy many of the advantages of both systems. Professor Ouchi advocated a modified American approach to management that would capitalize on the best characteristics of Japanese organizations while retaining aspects of management that are deeply rooted in U.S. traditions of individualism. Ouchi cited several companies as examples of Type Z organizations and proposed that a Theory Z management approach could lead to great employee job satisfaction, put down rates of absenteeism and turnover, higher quality products, and better overall financial performance for U.S. firms adapting Theory Z management practices.THEORY Z AS AN APPROACH TO heedTheory Z represents a humanistic approa ch to management. Although it is based on Japanese management principles, it is not a pure form of Japanese management. Instead, Theory Z is a hybrid management approach combining Japanese management philosophies with U.S. culture. In addition, Theory Z breaks away from McGregors Theory Y. Theory Y is a largely psychological perspective focusing on individual dyads of employer-employee relationships while Theory Z changes the level of analysis to the entire organization.According to Professor Ouchi, Theory Z organizations exhibit a watertight, homogeneous set of cultural values that are similar to clan cultures. The clan culture is characterized by homogeneousness of values, beliefs, and objectives. Clan cultures emphasize complete socialization of members to execute congruence of individual and group goals. Although Theory Z organizations exhibit characteristics of clan cultures, they retain some elements of bureaucratic hierarchies, such as formal authority relationships, perfo rmance evaluation, and some work specialization. Proponents of Theory Z suggest that the common cultural values should promote greater organizational commitment among employees.EVALUATION OF THEORY ZResearch into whether Theory Z organizations outperform others has yielded mixed results. Some studies suggest that Type Z organizations achieve benefits both in terms of employee satisfaction, motivation, and commitment as well as in terms of financial performance. Other studies conclude that Type Z organizations do not outperform other organizations.Difficulties in the Japanese economy in the 1990s led some researchers to suggest that the widespread admiration of Japanese management practices in the 1970s and 1980s might have been misplaced. As a result, Theory Z has also received considerable criticism. It is unclear whether Theory Z will have a lasting impact on management practices in the U. S. and around the world into the twenty-first century, but by positioning butt joint resear ch at the organizational level rather then the individual level, Ouchi will surely leave his mark on management practice for historic period to come.Management ConceptsMotivation Believes that people are innately self motivated to not only do their work, but also are loyal towards the company, and neediness to make the company succeed.Leadership Theory Z managers would have to have a great deal of trust that their workers could make sound decisions. Therefore, this type of attractor is more likely to act as coach, and let the workers make most of the decisions.Power and Authority The managers ability to exercise power and authority comes from the workers trusting management to take care of them, and allow them to do their jobs. The workers have a great deal of input and weight in the decision making process. troth Conflict in the Theory Z arena would involve a great deal of discussion, collaboration, and negotiation. The workers would be the ones solving the conflicts, while the m anagers would play more of a trey party arbitrator role.Performance Appraisals Theory Z emphasises more frequent performance appraisals, but slower promotions.THE PRIMARY FEATURES OF THEORY Z1. Long-Term utilisationTraditional U.S. organizations are plagued with short-term commitments by employees, but employers using more traditional management perspective may inadvertently incite this by treating employees precisely as replaceable cogs in the profit-making machinery. In the United States, employment at will, which essentially means the employer or the employee can terminate the employment relationship at any time, has been among the dominant forms of employment relationships. Conversely, Type J organizations more often than not make life-long commitments to their employees and expect loyalty in return, but Type J organizations set the conditions to encourage this. This promotes stability in the organization and job security among employees.2. Consensual Decision MakingThe Typ e Z organization emphasizes communication, collaboration, and consensus in decision making. This marks a contrast from the traditional Type A organization that emphasizes individual decision-making.3. Individual ResponsibilityType A organizations emphasize individual accountability and performance appraisal. Traditionally, performance measures in Type J companies have been oriented to the group. Thus, Type Z organizations retain the emphasis on individual contributions that are characteristic of most American firms by recognizing individual achievements, albeit within the context of the wider group.4. Slow Evaluation And PromotionThe Type A organization has generally been characterized by short-term evaluations of performance and quick promotion of high achievers. The Type J organization, conversely, adopts the Japanese model of slow evaluation and promotion.5. Informal Control With Formalized MeasuresThe Type Z organization relies on informal methods of control, but does measure p erformance through formal mechanisms. This is an attempt to combine elements of both the Type A and Type J organizations.6. Moderately specialised Career PathType A organizations have generally had quite specialized career paths, with employees avoiding jumps from functional area to another. Conversely, the Type J organization has generally had quite non-specialized career paths. The Type Z organization adopts a middle-of-the-road posture, with career paths that are less specialized than the traditional U.S. model but more specialized than the traditional Japanese model.7. Holistic ConcernThe Type Z organization is characterized by concern for employees that goes beyond the workplace. This philosophy is more consistent with the Japanese model than the U.S. model.OverviewTheory Z is basically the combination of best aspects of Japanese and American theories. The three theories bring forth three types of firms, which is Type J Firms, Type A firms and Type Z firms. To clearly understa nd the features of theory z an understanding of the theory J and Theory A is necessary.Features of theory J spirit EmploymentCollective decision makingCollective responsibilitySlow promotionImplied control mechanismsNon specialised career PathsHolistic concern of employees.Features of Theory AShort term employmentIndividual decision makingIndividual ResponsibilityRapid promotionExplicit Control mechanismSpecialized career pathsSegmented concern for employeesTheory Z picks the best feature from each and either incorporates it as it is, or slightly modifies the feature. The end result is the Theory Z which is referred to as Best choice for American firms.Features of Theory ZLong-term employmentCollective decision makingIndividual responsibilitySlow promotionInformal ControlModerately specialized career pathsHolistic concern for employeesCONCLUSIONAccording to Ouchi, Theory Z management tends to promote stable employment, high productivity, and high employee morale and satisfaction. Th eory Z is focused on increasing employee loyalty to the company by providing a job for life with a strong focus on the well-being of the employee, both on and off the job.