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MOVING FROM THEORY Y TO THEORY X

Posted by Tim Bryce on January 7, 2015

BRYCE ON MANAGEMENT

– Transforming a company from empowerment to dictatorship.

(Click for AUDIO VERSION)

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Not long ago I wrote on the three fundamental styles of management, “Theories X, Y, Z.” In a nutshell, Theory X represents top-down autocratic rule (e.g., micromanagement); Theory Y represents a bottom-up philosophy where workers are empowered to take on assignments and supervise themselves, and; Theory Z encourages mutual trust between workers and management, and promotes cooperation as opposed to competition.

Locally, I am watching a distributor of manufacturing supplies change its corporate culture from Theory Y to X, and it is a bit disheartening to witness. The distributor is a sales/service outlet for a nationwide chain that has been in existence for 60 years. With the passage of time, a new line of management has emerged which is changing the company to its very roots.

Prior to the latest management regime, the franchise felt empowered, regularly made or exceeded sales quota, and developed a good reputation for service with their customers. Employee morale was good, the staff felt confident and the facilities were kept spotless, particularly the warehouse. On the corporate website they touted their commitment to their customers, such as being highly responsive and offering quality and professional service.

At one time this was true, but over the last year, as the management team changed, policies changed and the company embraced a strong Theory X form of government whereby everyone was managed by some form of metrics. Remarkably, cash flow and customer service was not included. Instead of analyzing sales volume, they focused on product brands sold, number of cold calls made, and telephone calls. There was no interest in product overhead being stored in the warehouse, or length of time. Nor was there concern if there were enough supplies available to adequately accommodate customers within the territory. Veteran sales and support people were demoted to make way for a younger generation with far less experience. Beyond all this, it was made vividly clear to the staff they were to make no decision without the approval of management.

This led to a noticeable decline in morale as employees felt powerless and afraid to make a decision. Consequently, customer service suffered radically. Shipments were sent slowly, sometimes not in accordance with purchase orders. Frankly, employees couldn’t care less. Sales also suffered as the sales staff felt encumbered as to what they could or could not sell. Slowly, a paralysis set in. Not surprising, the employees became apathetic towards their work, the office took on a sloppy appearance, particularly the warehouse, and workers began to move on to other companies.

Whereas employees before felt empowered and in control of their destiny, now they felt useless and their jobs meaningless.

From an outsider’s perspective, it appeared management was setting up the company for failure and takeover by a competitor. The reality though was the young management team honestly believes this bean counter approach to management will work. Maybe they are right, but it is certainly not the type of company I would want to work for. It is very dehumanizing. Then again, young people graduating from college do not know any better and may readily adapt to such a culture. Until the transition is complete, the company will remain in limbo. The question then becomes, how long will their customers accept this? I suspect not for long. Already, sales have slowed radically and customers are transferring to other companies where they are empowered and allowed to make their own decisions.

I’ll be curious to see if the company can survive another year.

Keep the Faith!

Note: All trademarks both marked and unmarked belong to their respective companies.

Tim Bryce is a writer and the Managing Director of M&JB Investment Company (M&JB) of Palm Harbor, Florida and has over 30 years of experience in the management consulting field. He can be reached at timb001@phmainstreet.com

For Tim’s columns, see:  timbryce.com

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Copyright © 2015 by Tim Bryce. All rights reserved.

NEXT UP:  CULTIVATING A CULTURE OF FEAR AND ANGER – The tactics of the left.

LAST TIME:  WELCOMING A NEW CONGRESS  – What to expect over the next two years.

Listen to Tim on WJTN-AM (News Talk 1240) “The Town Square” with host John Siggins (Mon, Wed, Fri, 12:30-3:00pm Eastern); WZIG-FM (104.1) in Palm Harbor,FL; and KIT-AM 1280 in Yakima, Washington “The Morning News” with hosts Dave Ettl & Lance Tormey (weekdays. 6:00-9:00am Pacific). Or tune-in to Tim’s channel on YouTube.

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8 Responses to “MOVING FROM THEORY Y TO THEORY X”

  1. This piece could easily use the title, “A Return to the Dark Ages”. Just out of curiousity, I wonder what this company needed to accomplish which they thought such a change would accomodate? I cannot think of anything other than paranoia. I have witnessed such a shift but the rationale given at the time had to do with getting a better handle on “parallel projects” which were initiated by various sects of the company in various parts of the world. In other words, there was a lot of duplicity of effort which added greatly to the corporate overhead. Reining that in did take a rather top-end down approach and, even in that situation, brought on a lot of negative morale and reaction from the employees. Certainly, as Americans, we can empathize to a great degree with these employees given the current political climate in our country and the way in which our current POTUS issues decrees and ignores the Constitutional process–all contributing to low morale and high overhead. ~WB

    Liked by 1 person

  2. sirchristiantheheck@reagan.com said

    I’d love to know what company you’re referring to so I can NOT shop there anymore. (grammar intentionally corrupted)

    Like

  3. Tim Bryce said

    An L.W. of Rochester, New York wrote…

    “Theory Y Management is based on trust and respect. Theory X is based on fear and control. My guess it’s easier to teach students how to measure and monitor through reliance on metrics. But learning how to humanize management relationships to foster an environment of cooperation, responsibility and accountability is a harder learn. Are any MBA programs teaching it? It requires that the organization focus on attributes of the employees. Look for candidates with high EQ, humility, empathy, and a participatory spirit.”

    Like

  4. […] MOVING FROM THEORY Y TO THEORY X […]

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  5. Tim Bryce said

    A P.M. of Chicago, Illinois wrote…

    “I’m a Ronald Reagan style of management fan too. I like your article and the attitude it demonstrates. But here is my two cents woth on what might be happening.
    I’ve seen what you describe actually work. But the objective was to scrub the existing culture (throw the deck of cards in the air) and build another. In both cases where I know it worked, those who executed the tactic were knowingly or not, only temporary: when everything was just about destroyed, the savior came in and hopefully, got things going again and hopefully began to develop a new culture; what you are seing might be a calculated risk by someone: “Follow the money” or in this case, maybe where it is coming from.

    As to company culture, I know a company where the original owners 45 years ago, are long gone and left the company bankrupt. A new team bought the place and got it going again; believe it or not, the original culture has survive two bankrupcies and is still intact although the company has been doing well for at least a decade. My point is that culture seems to be almost impossible to change; it seems that it almost has to be blown”

    Like

  6. Tim Bryce said

    A J.H. of Chicago, Illinois wrote…

    “It is troubling to hear that the company in question has left out engaging their most precious asset (the employees) in the change process. Few leaders would actively destroy their company. From my experience, leaders just don’t know how to implement change well. In this case, it is also a culture change. Culture changes fail if the people doing the work are not considered during the process. You end up with a confused mess, regardless of whether the change we the right thing to do or not. I worry that the employees and management are past the point of no return based on what you have mentioned. It seems like they are in a time of chaos, not managed change. Worst of all, it sounds like there is little to no communication on why the change is occurring and much is left to hear-say and distrust. With no understanding of why something is changing it is almost impossible to sustain organized change. I hope the company figures out the importance of the people who are going through the change and that communication and vision matter.”

    Like

  7. […] “Why Do We Tolerate Incompetence?” “Your Duties as an Employee” “Moving from Theory Y to Theory X” “Business Writing” “Engaging Your Workers” “Music in the […]

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