Theory Z

The theory Z of management is a very new approach to management. It has not yet withstood the test of time and it is not certain therefore to evolve into a fully developed theory of management.

Theory Z was popularized in the early 80's by Willian Ouchi. During this time a great deal of attention was being given to the success of Japanese Companies in America and in world trade and differences between American and Japanese management practices.

Ouchi studied succeeding American firms in order to determine why and how they continued to be successful when other companies were losing ground. He found that most American companies followed a set of business practices which he called type A (A standing for American). The typical Japanese company followed a different set of practices called J (J standing for Japanese). But the highly successful American firms followed neither type A or type J management. Rather they used a modified approach that capitalised on the various strengths of type J model and also used type A method when cultural factors dictated.

Ouchi attributed the success of these companies to their use of the modified approach. He concluded that a flexible management position incorporating the strengths of both American and Japanese models would lead to successful competition. This approach he called the Theory Z of management.

Some Aspects of Japanese Management

•    The practice of management always reflects the culture of a society. Japanese management has certain aspects which are predominantly borrowed from their culture.

•    Japanese managers place much more emphasis on generating harmony at all levels of the firm.

•    Japanese managers more than those from other cultures to a great extent tend to place group goals ahead of individual goals. Unlike American firms they do not overemphasize the big positions in the company.

•    Japanese management is characterised more by consultation than by direct order. Even low level officers help in formulating policies. (This however, results in slow decision making).

•    Japanese managers rarely reject any contrzbutions by subordinates flatly because to do so is impolite and a threat to their culture of harmony.

•    The Japanese worker usually signs for life with a company. Labour turnover is very low in Japanese firms. Companies try hard to keep their workers happy.