Theory Z

William Ouchi

What is Theory Z?

Theory Z management tends to promote stable employment, high productivity, and high employee morale and satisfaction.

Pros and Cons

Pros: Employees feel more respected and important because they can do there part in the company and they know they will be rewarded for it. This creates a competitive work environment, which will increase the work that the employees produce.

Cons: Once the rewards stop flowing to the employees the level of performance will drop. Although a competitive environment produces more work output, it can also create conflict.

Examples of Theory Z in the workplace

Centralized Or Decentralized?


Managers Perspective

management is usually content with its employees with the theory Z management method because it improves organizational performance for its employees, therefore increasing productivity for the business overall.

Employee Perspective

Employees are generally happy with this theory because theory Z management tends to give employees stable employment and they are trusted by their managers. Also, this theory assumes that workers will be participating in the decisions of the company to a great degree which will make the employees happy because they have a say towards what they are doing.