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Theory Y

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04 - 18 - 2012 Ariel Kramer
Summary

Frank Lorenzo, in 1986, owned one of the largest airline networks in the world. From a small investment in Texas International Airlines, after restructuring it and bringing the company to profitability, Texas Air bought Continental for $154 million. In order to reorganize the corporation as a more viable enterprise, Lorenzo took Continental into bankruptcy. This process caused a walkout by many union workers, so Lorenzo replaced strikers with nonunion workers at much lower wages. Low-cost operator and cut-rate prices was Lorenzo's way to …show more content…

Q: If you ran the airline, would you employ theory X or theory Y? Why?

Theory X and Theory Y were identified by Douglas McGregor. There is a group of people who think, feel and therefore act according to the assumptions of what he called Theory X, and another group moves according to the assumptions of Theory Y. The theories suggest the possibility of managing human productivity in business organizations, as well as view human behavior within them. According to Theory X, humans do not generally like to work, or want to work as little as possible, as such, most workers have to be monitored and threatened with punishment to achieve the objectives of the company. Employees avoid responsibilities, prefer formal orders whenever possible, show little ambition and put safety above all other factors associated with work. On the Other hand, Theory Y highlights the fact that when a favorable environment, the work can be a natural thing that gives pleasure. In this environment, an employee, when enticed with a reward, engages more in carrying out his task. In time, the employee ceases to be just under orders and responsibilities and begins looking for some responsibilities (do not confuse this theory with too much freedom or lack of control; it is just a different way of managing human resources within the organizational environment). X and Y theories are interesting, but we must consider the culture of each company and the context

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