Douglas M. McGregor

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.

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.

When the Detroit Department of Public Works handed the McGregor Institute a large subsidy to increase its facilities, McGregor decided to resume his studies while also working part-time at the much expanded Institute. He completed a B.A. in 1932 from Wayne State University, while also organizing soup kitchens for the unemployed and helping to manage the Institute.

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.

In 1937 he took the short trip down Massachusetts Avenue to help set up the Industrial Relations Section at the Massachusetts Institute of Technology (MIT).  McGregor became Executive Director of the MIT Industrial Relations Section, which years later was renamed the Institute for Work and Employment Research (IWER). IWER still exists today and is housed in the MIT Sloan School of Management.

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.

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.

In The Human Side of Enterprise McGregor was among the first scholars to emphasize influence as key to managerial leadership, commenting: “The power to influence others is not a function of the amount of authority one can exert. It is, rather, a function of the appropriate selection of the means of influence which the particular circumstances require…. relinquishing authority is seen as losing the power to control. This is a completely misleading conception.” He adds that there was a dynamic between the views of managers and workers. Where the workforce is held in low esteem (theory X), he comments, “they will have relatively limited expectations concerning the possibility for achieving their own goals and so reciprocate by holding management in low esteem.”

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.”

As practical guidance McGregor advises: “The next time you attend a . . . meeting, . . . [t]une your ear, to listen for assumptions about human behaviour, whether they relate to an individual, a particular group, or people in general.” This focus on underlying assumptions, particularly theory X and theory Y, is his enduring contribution. In taking this approach, the onus is put on managers and leaders. As he notes: “…top management wants its subordinates to be concerned with the business as a whole; but the actual rewards and punishments (from the type of structure, from performance criteria, from policies and control systems, and from the behavior and attitudes of his boss and his peers) may well have the opposite effect. Learning will occur, but not growth in the desired direction.” Ultimately, McGregor concludes: “The limits on human collaboration in the organizational setting are not limits of human nature but of management’s ingenuity in discovering how to realize the potential represented by its human resources.”

While McGregor is often viewed as a proponent of Theory Y, MIT Emeritus Professor Ed Schein clarified that perception in his introduction to McGregor’s posthumous (1967) book entitled The Professional Manager: “In my contacts with Doug, I often found him to be discouraged by the degree to which Theory Y had become as monolithic a set of principles as those of Theory X—an over-generalization that Doug was fighting….” Instead, in The Human Side of Enterprise McGregor urges managers to reflect on their own assumptions and come to their own conclusion. The book was voted the fourth most influential management book of the 20th century in a poll of the Fellows of the Academy of Management.

McGregor died at the age of 58 in Massachusetts. In 1994, the School of Adult and Experiential Learning at Antioch College was renamed the McGregor School in his honor.