Z theory

motivational theories - z theory . z theory by William Ouchi

1. MOTIVATIONAL THEORIES – “Z” THEORY

2. Theory Z Theory Z is an approach to management based upon a combination of American and Japanese management philosophies . 'Theory Z' 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

3. William Ouchi   Full name - William G Bill Ouchi  Born – year 1943 He is an  American professor  and  author  in the field of   business management First book in 1981 – “Theory Z:How American management can meet the Japanese challenge”. Second book - “The M Form Society: How American Teamwork Can Recapture the Competitive Edge”. He also came up with his three approaches to control  in an organization's management : Market control Bureaucratic control Clan control

4. HISTORY During 1970s and 1980s , many US industries lost market share to international competitors, particularly Japanese companies Ouchi compared American types of organizations that were rooted in the US tradition of individualism with Japanese organizations that drew upon the Japanese heritage of collectivism This comparison and his observations lead to the formation of theory Z

5. Ouchi proposed that a Theory Z management approach could lead to : Greater employee job satisfaction Lower rates of absenteeism and turnover Higher quality products Better overall financial performance of US firms.

6. Difference between American and Japanese management practices American organizations Japanese organizations Short term employment Lifetime employment Individual decision making Collective decision making Individual responsibility Collective responsibility Rapid evaluation and promotion Slow evaluation and promotion Specialized career paths Non Specialized career paths Segmented concern for employee as an employee Holistic concern for employee as a person

7. Features Long term employment Participative decision making Slow promotions Stable and cohesive work environment Holistic concern Integrated organization

8. Long term employment Workers should be given a long term employment in the organization . It will promote a strong bond between the workers and the organization. The workers get to feel a job security thus leading them to show loyalty towards the organization

9. Participative decision making Workers should be given greater opportunity of participation in the decision making process , particularly in regard to matters which significantly affect them. If final decisions are based on the alternatives suggested by workers, they will develop a sense of belonging to the organization and contribute more enthusiastically to implement these decisions .

10. Slow promotions There should be a limit to internal promotion of employees . If it is done liberally , it could result in a situation where a worker has reached the topmost position and there is no higher position to post him into. So instead of quick promotions to higher level positions , workers should be transferred to similar level jobs at different workplaces.

11. Stable and cohesive work environment The work environment should be stable and cohesive enough for the employees to satisfy their multiple socio-psychological needs. Relationships marked by mutual trust , openness and co operation will be induce workers to feel committed to the organization .

12. Holistic concern This is a type of concern for the employees that go beyond the workplace .

13. Integrated Organization:   Under Theory Z, focus is on sharing of information and ‘ resources rather than on chart, divisions or any formal structure. An integrated organization puts emphasis on job rotation which improves understanding about interdependence of tasks. Such understanding leads to group spirit

14. Limitations Z theory is based on the Japanese management practices which have evolved from that country’s unique cultural setting . As such , it may not be relevant to organizations in different cultural settings There is little by way of research findings to indicate that the firms following the theory of motivation have achieved greater productivity that others It does not provide guidelines as to at what point of time it may be applied in any organization.

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