The Human Side of Enterprise, Annotated Edition (BUSINESS BOOKS)

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There are at least four major variables now known to be involved in leadership: (1) the characteristics of the leader; (2) the attitudes, needs, and other personal characteristics of the followers; (3) characteristics of the organization, such as its purpose, its structure, the nature of the tasks to be performed; and (4) the social, economic, and political milieu...This is an important research finding. It means that leadership is not a property of the individual, but a complex relationship among these variables." They are as true today as they were when Douglas McGregor wrote The Human Side of Enterprise nearly fifty years ago. N2 - What makes a good manager? Though we can probably all point to someone we think of as a good manager, what precisely makes them so good at their job is a complex question – and one central to good business organization. Management scholar Douglas McGregor’s seminal 1960 book The Human Side of Enterprise is perhaps the most influential attempt to answer that question, and provides an excellent example of strong evaluative and reasoning skills in action. The majority of assumptions and ideas presented about Theory Y stood the test of time. What didn’t stand the test of time is the writing format (the vocabulary used is not the same as the one used today in organizations) and the fact that Douglas refers to managers as if they were all men. My takeaways from the book are a long list of ideas and mental models about management that are perfectly synthesized by Douglas. Some of them are not new, but again it is surprising that they were written in 1960.

It is one of the favourite pastimes of management to decide, from within their professional ivory tower, what help the field organisation needs and then to design and develop programs for meeting these needs.

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The effectiveness of organisations could be at least doubled if managers could discover how to tap into the unrealised potential present in their workforces.” Even if the example organisations mentioned in the book belong to the industrial sector, the management and leadership principles can be applied today in sectors that appeared after the publication of the book (1960) like the information or internet industries.

When objectives are externally imposed indifference or resistance are the most likely consequences.” This is normally the role of the Change Manager; to implement the change that no-one asked for or wants”. 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. Having said that, there exist books about people management, leadership and personal development that suit today’s organizations better; that’s why I would recommend reading this book if you simply want to learn more about the history of management theory. 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.”So began Douglas McGregor in this 1960 management classic. It was a seemingly simple question he asked, yet it led to a fundamental revolution in management. Today, with the rise of the global economy, the information revolution, and the growth of knowledge-driven work, McGregor's simple but provocative question continues to resonate-perhaps more powerfully than ever before. In the cynical sixties the book got a mixed reception, those who understood and practiced the McGregor philosophy were in the minority and those who were absolutely sure that the McGregor proposition could never happen were the huge majority.

Management is severely hampered today in its attempts to innovate with respect to the human side of enterprise by the inadequacy of conventional organization theory...It is not important that management accept the assumptions of Theory Y. These are one man's interpretations of current social science knowledge, and they will be modified...It is important that management abandon limiting assumptions like those of Theory X, so that future interventions with respect to the human side of enterprise will be more than minor changes in already obsolescent conceptions of organized human effort."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. The central principle of organization which derives from Theory X is that of direction and control through the exercise of authority - what has been called "the scalar principle." 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." The desirable end of the growth process is an ability to strike a balance - to tolerate certain forms of dependence without being unduly frustrated, and at the same time to stand alone in some respects without undue anxiety."