Theory assumptions:

That a manager who fits into the Theory X groups leans toward an organizational climate of close control, centralized authority, automatic leadership and minimum participation in decision making. This manager accepts this combination of characteristics because of certain assumptions about behaviour.

Theory X assumptions, according to McGregor are as follows:

1. Average people dislike work and will avoid it as much as possible.

2. Most people must be threatened or forced to make the effort necessary to accomplish organizational goals.

3. Average individual is basically passive and prefers to be directed rather than to assume any risk or responsibility. Above all else, people prefer security.

A Theory Y manager operates on the basis of vastly different assumptions, believing that effective organizational climate has looser, more general supervision, greater decentralization of authority, less reliance on coercion and control, a democratic style of leadership, and greater participation in decision making. The assumptions on which this type of organizational climate is based are:

1. Work is as natural as play or rest and therefore not avoided.

2. Self motivation and inherent satisfaction in work will be forthcoming in situations where the individual is committed to organizational goals. That coercion is not the only form of influence that can be used to motivate.

3. Commitment is a crucial factor in motivation and is a function of the rewards coming from it.

4. Average individuals learn to accept and even to seek responsibility, given the proper environment.

5. Contrary to stereotypes, ability to be creative and innovative in the solution of an organization's problems is widely, not narrowly, distributed in the population.

6. In modern organizations, human intellectual potentialities are just partially realized.

McGregor presented these two theories as alternatives and pretended to impartiality. Yet undoubtedly, McGregor himself believed whole heartedly in Theory Y.

There is impressive evidence for Theory Y. In most jobs, most workers, even those hostile to boss and organization, want to like their work and look for achievement. In most jobs even the most alienated workers manage to find something that gives them satisfaction. Studies which were later undertaken on the two theories found out that Theory Y is not by itself adequate. This brought a lot of criticism of Abraham Maslow and Waren Bennis.