Theory Z

By Arun Dey Pd 8-9

Dr. William G. Ouchi

The meaning of theory Z is to reduce employee turnover, increasing commitment, improving job satisfaction, increasing productivity.

Manager and Employee perspectives

Managers: management is usually pleased with its employees. Managers improve organizational performance for its employees, therefore they increases productivity for the business.


Employees:Employees are usually happy with this theory because theory Z management gives employees a stable employment. Employees also participate in the decisions of the company.

it is Decentralized

Examples of Jobs that Use Theory Z is Disney, Stop and Shop, and Starbucks

Pros and Cons

Pros: Employees feel more respected and important because they can do their 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.