Theory Z

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Theory Z is a management philosophy that stresses employee participation in all aspects of company decision making. It was first described by William Ouchi in his book Theory Z- How Man American Business Can Meet the Japanese Challenge. Theory Z incorporates many elements associated with the Japanese approach to management, such as trust and intimacy, but Japanese ideas have been adapted for use in the United States. In Theory Z organizations, managers and workers share responsibilities; the management style is participative; and employment is long term and often lifelong. Theory Z results in employees feeling organizational ownership. Recent research has found that such feelings or ownership may produce positive attitudinal and behavioral effects or employees. (20) In a Theory Y organization, mangers focus on assumptions about the nature of the worker. Theory Z has been adapted and modified for use in a number of U.S. companies. One adaptation involves workers in decisions through quality circles. Quality circles (also called quality-assurance teams) are small, usually having 5 to 8 members who discuss ways to reduce waste, eliminate problems, and improve quality, communication, and work satisfaction. Such quality teams are a common technique for harnessing the knowledge and creativity of hourly employees to solve problems in companies. Even more involved than quality circles are programs that operate under names such as participating management, employee involvement, or self-directed work teams. Regardless of the term used to describe such programs, they strive to give employees more control over their jobs while making them more responsible for the outcome of their efforts. Such programs often organize employees into work teams 5 to 15 members who are responsible for producing an entire product item. Team members are cross-trained and can therefore move from job to job within the team. Each team essentially manages itself and is responsible for its quality, scheduling, ordering and use of materials, and problem solving. Many firms have successfully employed work teams to boost morale, productivity, quality, and competitiveness. According to the equity theory, how much people are willing to contribute to an organization depends on their assessment of the fairness, or equity, of the rewards they will receive in exchange. In a fair situation, a person receives rewards proportional to the contribution he or she makes to the organization. However, in practice, equity is subjective notion. Each worker regularly develops a personal input-output ratio by taking stock of his or her contribution (inputs) to the organization in time, effort, skills, and experience and assessing rewards (outputs) offered by the organization in pay, benefits, recognition, and promotions. The worker compares his or her ratio to the input-output ratio of some other person- a "comparison other," who may be a co-worker, a friend working in another organization, or an "average" of several people working in the organization. If the two ratios are close, the individual will feel that he or she is being treated equitably. Consider a woman who has a high-school education and earns $20,000 a year. When she compares her input-output ratio to that of a co-worker who has a college degree and makes $30,000, she will probably feel that she is being paid fairly. However, is she perceives that her personal input-output ratio is lower than that of the college graduate, she will probably feel that she is being treated unfairly and will be motivated to seek change. Further, if she learns that the co-worker who earns $30,000 has only a high-school diploma, she may believe she is being cheated by the organization. To achieve equity, the woman could try to increase her outputs by asking for a raise or promotion. She could also try to have the inputs of the "comparison other" increased or the outputs of the "comparison other" decreased. Failing to achieve equity, the woman...
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