Alfred Sloan raised some questions related to the issue of whether successful managers are born or made.

our studies ranged widely within their companies as we sought to learn more about the way in which theories and practices within different organizations influence the making of managers.

It seems clear to me that the making of managers, in so far as | they are made, is only to a rather small degree the result of management’s formal efforts in management development. It is to a much greater degree the result of management’s conception of the nature of its task and of all the policies and practices which are constructed to implement this conception.

The reason is that we have not learned enough about the utilization of talent, about the creation of an organizational climate conducive to human growth.

What are your assumptions (implicit as well as explicit) about the most effective way to manage people?” From the answer to this question flow the answers to the questions Mr. Sloan raised in our discussion about the making of managers, as well as answers to many other questions which perplex and confound management as it seeks to achieve more successfully the economic objectives of enterprise.

Every professional is concerned with the use of knowledge in the achievement of objectives: the engineer as he designs equipment, the medical practitioner as he diagnoses and prescribes for the ills of his patients, the lawyer or the architect as he serves his clients.

Progress in any profession is associated with the ability to predict and control, and this is true also of industrial management. One of the major tasks of management is to organize human effort in the service of the economic objectives of the enterprise.

Consider such everyday acts as making an appointment, signing a purchase agreement, placing a longdistance call, asking a subordinate to prepare a report, making a hotel reservation, mailing a letter.

The social sciences are a rich resource today for management even though they have not reached full maturity.

every manager quite naturally considers himself his own social scientist.

Every managerial act rests on assumptions, generalizations, and hypotheses—that is to say, on theory.

A manager, for example, states that he delegates to his subordinates. When asked, he expresses assumptions such as, “People need to learn to take responsibility,” or, “Those closer to the situation can make the best decisions.” However, he has arranged to obtain a constant flow of detailed information about the behavior of his subordinates, and he uses this information to police their behavior and to “secondguess” their decisions.

Another common way of denying the importance of theory to managerial behavior is to insist that management is an art. This also precludes critical examination of the theoretical assumptions underlying managerial actions by placing reliance on intuitions and feelings, which are by definition not subject to question.

With respect to physical phenomena, control involves the selection of means which are appropriate to the nature of the phenomena with which we are concerned.

A “good” individual incentive plan may bring about a moderate increase in productivity (perhaps 15 per cent), but it also may bring a considerable variety of protective behaviors—deliberate restriction of output, hidden jigs and fixtures, hidden production, fudged records, grievances over rates and standards, etc.

Certainly the typical incentive plan is of limited effectiveness as a method of control if the purpose is to motivate human beings to direct their efforts toward organizational objectives.

When we fail to achieve the results we desire, we tend to seek the cause everywhere but where it usually lies: in our choice of inappropriate methods of control. The engineer does not blame water for flowing downhill rather than up, nor gases for expanding rather than contracting when heated.

Effective prediction and control are as central to the task of management as they are to the task of engineering or of medicine.

It is obvious, therefore, that the more professional the manager becomes in his use of scientific knowledge, the more professional he must become in his sensitivity to ethical values.

One approach to these problems is to see all restrictions on management as unreasonable and to fight blindly against them. This was fairly typical of industrial management a generation or two ago. The other approach is to become more sensitive to human values and to exert self-control through a positive, conscious, ethical code. It is this latter approach which characterizes the concept of the “social responsibility” of management about which we hear so much today.

Here, as elsewhere in our society, the price of freedom is responsibility.

it is becoming clear that the traditional principles fall considerably short of being like the laws of physics.

unity of command (the principle that each member of an organization must only have one boss)

hatever the organization chart may show, the typical middle-level manager in the modern industrial organization finds that his behavior is controlled not by one but by several “superiors.”

Underlying the principles of classical organization theory are a number of assumptions about human behavior which are at best only partially true.

If there is a single assumption which pervades conventional organizational theory it is that authority is the central, indispensable means of managerial control.

Persuasion, in its many forms, represents another means of social control. In the sales field, where authority and physical coercion are clearly inappropriate, we place major reliance on this type of influence.

Most professionals—lawycrs, doctors, architects, engineers—simply rely on “the authority of knowledge.” Their relationships with clients represent an extreme form of authoritarianism in which “help” is conceived in completely unilateral terms.

The success of any form of social influence or control depends ultimately upon altering the ability of others to achieve their goal or satisfy their needs. The modification may be an enhancement of this ability (for example, through the offer of a product, the pro- . vision of professional advice, or the promise of a reward) or a curtailment of it (for example, through a disciplinary action, a jail sentence, the termination of employment, or the threat of a punishment).

Unless I perceive that you can somehow affect my ability to satisfy my needs, you cannot influence my behavior.

The effectiveness of authority as a means of control depends first of all upon the ability to enforce it through the use of punishment.

This phenomenon of decreased dependence in social relationships is not confined entirely to industry. Consider, for exa’ ple, what has happened in the last fifty years in the United States to the position of the wife in the marital relationship, or of the dider adolescent child in the family. We have tended to recognize more readily in these relationships the effect of lessened dependence upon the appropriateness of authority as a means of social control. The significance of the parallel change in the employment relationship—within management or between the worker and management—-has been less well understood.

The use of commands and orders within the higher levels of management is relatively rare. This was not true fifty or even twenty-five years ago.

Some people are strongly motivated toward the managerial role because they perceive it as an escape from dependence. Their reliance on authority, their attempted escape, tends in fact to be self-defeating.

Industry, on the other hand, is the economic organ of society, of all of us. Its ultimate purpose is to serve the common good. There is no superhuman source of authority; there is no sound basis for expecting the individual to sacrifice his personal goals or needs for the organization (except possibly under crisis conditions), and there is no successful way to enforce this expectation if it does exist.

In the social, economic, and political milieu of the United States today the management of industry is becoming unable to rely on authority as the sole, or even the primary, method of accomplishing organizational objectives through pcople. Its dependence downward is too great to permit this unilateral means of control.

Each of us is born into a relationship of relatively complete dependence. As infants and small children we would not survive unless we were taken care of completely.

The parent, for example, may at times be a playmate, at other times a tcacher, at other times an arbitrator, at other times a protector. The parent’s bchavior and the forms of influence he utilizes shift appreciably as the conditions demand different roles.

At times he may be in the role of the Icader of a group of subordinates; at other times he may be a member of a group of his pecrs. Sometimes he is in the role of teacher; at other times he may be a decision maker, a disciplinarian, a helper, a consultant, or simply an observer. When he is helping a subordinate to analyze a problem and decide how to deal with it, the methods he uses to influence the subordinate will be quite different than when he is dealing with a disciplinary problem. The very nature of the relation shifts as the circumstances change.

Performance appraisal programs, for example, often require the superior to occupy simultaneously the role of judge and the role of counselor to a subordinate.

Behind every managerial decision or action are assumptions about human nature and human behavior.

t was not until the development of the theory of relativity during the present century that important inconsistencies and inadequacies in Newtonian theory could be understood and corrected.

At the core of any theory of the management of human resources are assumptions about human motivation.

We have now discovered that there is no answer in the simple removal of control—that abdication is not a workable alternative to authoritarianism.

Some of these assumptions were outlined in the discussion of motivation in Chapter 3. Some others, which will hereafter be referred to as Theory Y, are as follows:

The average human being learns, under proper conditions, not only to accept but to seek responsibility.

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.

in the management of the human resources of industry, the assumptions and theories about human nature at any given time limit innovation.

Perfect integration of organizational requirements and individual goals and needs is, of course, not a realistic objective.

this principle, we seek that degree of integration in which the individual can achieve his goals best by directing his efforts toward the success of the organization.

these opportunities for “self-actualization” are the essential requirements of both job satisfaction and high performance.

need to develop in one’s occupation as a source of personal growth. The second group operates as an essential base to the first and is associated with fair treatment in compensation, supervision, working conditions, and administrative practices. The fulfillment of the needs of the second group does not motivate the individual to high levels of job satisfaction and... to extra performance on the job.

consequences. Theory Y assumes that people will exercise selfdirection and self-control in the achievement of organizational objectives to the degree that they are committed to those objectives.

Authority is an inappropriate means for obtaining commitment to objectives. Other forms of influence—help in achieving integration, for example—are required for this purpose.

innovation, in contrast to a refurbishing and patching of present managerial strategies, requires first the acceptance of less limiting assumptions about the nature of the human resources we seek to control,

operation of a managerial strategy based on Theory Y. The concept of “management by objectives”

cation of Theory Y. Its purpose is to encourage integration, to create a situation in which a subordinate can achieve his own goals best by directing his efforts toward the objectives of the enterprise.

Step 1. Determining the Major Requirements of the Job. Evans suggested to Harrison that he would like him to give some intensive thought to the nature of his job in the light of his experience so far. He asked him to list what he felt to be his major responsibilities, using the formal position description in his possession if he wished, but not limiting himself to it.

The difficulty we are likely to have in discussing your ideas is that if I disagree with you, you'll feel you have to accept what I say because I’m your boss. I want to help you end up with a list that we are both completely satisfied with, but I can’t help if you simply defer to my ideas or if I don’t express them for fear of dominating you. So try to think of me as a colleague whose experience and knowledge are at your disposal—not as your boss. I’m certain we can resolve any differences that may come up.”

The critically significant factor in these discussions was not their content, but the redefinition of roles which took place.

he did not want to occupy the conventional role of boss, but rather, to the fullest extent possible, the role of a consultant who was putting all of his knowledge and experience at Harrison’s disposal in the conviction that they had a genuinc common interest in Harrison’s doing an outstanding job.

he began to perceive his own subordinates not as “hands,” but as resources, and to use them thus.

However, a position description is likely to become a strait jacket unless it is recognized to be a broad set of guidelines within which the individual literally makes his own job.

This is the planning phase, but again the process is one in which the subordinate is encouraged to take responsibility for his own performance.

The important theoretical consideration, derived from Theory Y, is that the acceptance of responsibility (for self-direction and self-control) is correlated with commitment to objectives.

Accordingly he spent several hours helping Harrison to think through his strategy for determining the needs of the company with respect to personnel administration.

I want you to feel free to seek help if you want it. There are ways in which I believe my experience can be useful to you. Suppose we leave it that we'll get together on your initiative as often as you wish— not for you to report how you are doing, but to discuss any problems which you would like my help on, or any major revisions in your plans.”

The development of a competent department which would provide leadership and professional help to all levels of management with respect to this function.

Second, Evans recognized that if the best learning was to occur, he must curb his natural tendency to step in and guide the project.

A week later Harrison brought the following notes to a discussion with Evans.

The most important point with respect to management by integration and self-control is that it is a strategy—a way of managing people.

The tools for building this managerial philosophy are attitudes and beliefs about people and about the managerial role, not manuals and forms.

Managers who have undertaken to manage by integration and self-control report that the strategy is time-consuming. Roles cannot be clarified, mutual agreement concerning the responsibilities of a subordinate’s job cannot be reached in a few minutes, nor can appropriate targets be established without a good deal of discussion. It is far quicker to hand a subordinate a position description and to inform him of his objectives for the coming period.

This approach does not tack a new set of duties on top of the existing managerial load. It is, rather, a different way of fulfilling existing responsibilities—of “running the job.”

The problem of judging performance for administrative purposes is further complicated by the fact that any individual’s performance is, to a considerable extent, a function of how he is managed.

This difficulty with the appraisal interview is well illustrated by a common dilemma. If the superior attempts to communicate his Criticism in the form of abstractions and generalities, he is likely to be asked to be more specific, to give illustrations. The subordinate feels that the generalizations do not give him a sufficient basis for correcting his behavior. lf, on the other hand, the superior attempts to communicate in terms of concrete illustrations, he is likely to find himself on the defensive as the subordinate attempts to show that there were extenuating circumstances surrounding any illustration which he brings up.

to practice psychotherapy. Moreover, the situation of the -pprakal interview, in which the superior is in the role of a judge, is the poorest possible one for counseling. The effective counseling relationship is one in which the counselor is a neutral party who neither criticizes nor praises, and whose concern is solely for the health and well-being of the client.

human behavior in the setting of industry today. Certainly, the strategy of management by integration and self-control is more appropriate for intelligent adults and is more likely to be conducive to growth, learning, and improved performance.

t is unnecessary for the superior to make the judgments we have customarily relied upon to administer economic rewards (except possibly with respect to a few individuals whose performance is outstanding).

ture furnishes the major economic rewards, but that our attempts to get greater “productivity” through the use of small increments of economic reward within such a structure have not been particularly effective.

esearch groups in several companies have developed methods of measurement for selection and for promotion with respect to a limited number of positions which have given management substantial help.

The research involves the determination by statistical means of a large number of “items”

Plans are frequently made with respect to his career which may have profound effects upon his most important goals and needs. Yet he is likely to have no voice in these plans and to remain in complete ignorance of them until after the decision has been reached.

The matching of individuals to jobs—at least at managerial levels—cannot be a mechanical process