The Human Side of Enterprise, Annotated Edition (BUSINESS BOOKS)

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He chose instead to pursue a psychology degree at what is now Wayne State University in Detroit. After two years, he married, dropped out of college, and worked as a gas station attendant in Buffalo, New York. By 1930 he had risen to the rank of regional gas station manager. What caught my eye first in the book was that this was the source of the Theory Y Management Strategy. Douglas McGregor characterised the current management practises as Theory X and in this book he proposed the antidote to the destruction that was waged by Theory X managers.

What are your assumptions (implicit as well as explicit) about the most effective way to manage people?" McGregor held the position of Professor of Management at the MIT Sloan School of Management until 1947, and then became president of Antioch College from 1948 to 1954. He also taught at the Indian Institute of Management in Calcutta. I recently finished reading the classic The Human Side of Enterprise by Douglas McGregor. Below are selected excerpts from the book that I found particularly insightful: When objectives are externally imposed indifference or resistance are the most likely consequences.” In this special annotated edition of the worldwide management classic, Joel Cutcher-Gershenfeld, Senior Research Scientist in MIT's Sloan School of Management and Engineering Systems Division, shows us how today's leaders have successfully incorporated McGregor's methods into modern management styles and practices. The added quotes and commentary bring the content right into today's debates and business models.In the cynical sixties the book got a mixed reception, those who understood and practiced the McGregor philosophy were in the minority and those who were absolutely sure that the McGregor proposition could never happen were the huge majority.

Douglas McGregor, MIT professor and author of the highly influential book "The Human Side of Enterprise," was born in Detroit, Michigan in 1906. While in high school, McGregor worked as night clerk at the McGregor Institute, a family affair originally established by his grandfather, but managed by his father and his uncle to provide temporary accommodation for around 100 transient workers at a time. McGregor played piano there at its regular services. At 17, McGregor briefly considered becoming a lay preacher. When people respond to managerial decisions in undesired ways the normal response is to blame them, rather than managements failure to select the appropriate means of control.”The Human Side of Enterprise” shows us how to make more money by doing less work but, because it sounds too good to be true, we assume that it must be, and therefore disregard it. McGregor’s 1960 book, The Human Side of Enterprise, had a profound influence on education practices. He contributed much to the development of management and motivational theory. He is best known for his Theory X and Theory Y, which splits corporate thinking into two camps. Theory X holds that employees are inherently disinclined to work and needed to be strictly controlled. Theory Y holds that employees should be trusted and empowered. McGregor showed—at a time when labor-management relations were becoming more adversarial—that there was another way to view workers and leadership. The central principle of organization which derives from Theory X is that of direction and control through the exercise of authority - what has been called "the scalar principle." The central principle which derives from Theory Y is that of integration: the creation of conditions such that the members of the organization can achieve their own goals best by directing their efforts toward the success of the enterprise." This is normally the role of the Change Manager; to implement the change that no-one asked for or wants”.

The effectiveness of organisations could be at least doubled if managers could discover how to tap into the unrealised potential present in their workforces.”Yawn. I dunno, I found the majority of McGregor's "findings", especially what is stated early in the book, to be fairly obvious. And there is something yawn-inducing about his academic writing style. Nothing all that eye-opening here, but it's considered a classic in the business/general management sub-genre, so I'm glad I got it out of the way at least. A half a century ago industrial management had, in the threat of unemployment, a form of punishment which made the use of authority relatively effective.

Initially this was going to be a simple review whose purpose was to bring to another generation the astonishing wisdom that McGregor had developed in coining the terms Theory X and Theory Y. The desirable end of the growth process is an ability to strike a balance - to tolerate certain forms of dependence without being unduly frustrated, and at the same time to stand alone in some respects without undue anxiety." On the contrary, Theory Y assumes people “will exercise self-direction and self-control in the service of objectives to which he is committed”. This means that human growth and development is possible at work. Even if the example organisations mentioned in the book belong to the industrial sector, the management and leadership principles can be applied today in sectors that appeared after the publication of the book (1960) like the information or internet industries.

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Team-based organizations are not new. In The Human Side of Enterprise, McGregor cautions that: “Most teams aren’t teams at all, but merely collections of individual relationships with the boss. Each individual vying with the others for power, prestige and position.” He adds: “…the mistaken idea that the effectiveness of the group depends solely on upon the leader. As a matter of fact, the research evidence indicates quite clearly that skilled and sensitive membership behavior is the real clue to effective group operation.” Elaborating, McGregor observes that a successful team has an “informal, comfortable, relaxed atmosphere,” broad participation in discussions, tasks or objectives that are well understood, constructive disagreement, decisions mostly reached by consensus, the chair does not dominate, the group frequently “will stop to examine how well it is doing, “and “members listen to each other!” Looking to the future, McGregor states: “The modern industrial organization is a vast complex of interdependent relationships, up, down, across, and even ‘diagonally.’ . . . It is probable that one day we shall begin to draw organizational charts as a series of linked groups rather than as a hierarchical structure of individual ‘reporting’ relationships.” Soon after graduation, he entered Harvard University where he studied for three years, earning an M.A. and Ph.D. in psychology. It’s interesting to note that the color-blind McGregor chose “The Sensitivity of the Eye to the Saturation of Colors” for his PhD topic. He remained at Harvard for two years as a psychology lecturer.