Douglas McGregor: Human Side of Enterprise

To some, the preceding analysis will appear unduly harsh. Have we not made major modifications in the management of the human resources of industry during the past quarter century? Have we not recognized the importance of people and made vitally significant changes in managerial strategy as a consequence? Do the developments since the twenties in personnel administration and labor relations add up to nothing? There is no question that important progress has been made the past two or three decades. During this period the human side of enterprise has become a major preoccupation of management. A tremendous number of policies, programs, and practices which were virtually unknown thirty years ago have become commonplace. The lot of the industrial employee-be he worker, professional, or executive-has improved to a degree which could hardly have been imagined by his counterpart of the nineteen twenties. Management has adopted generally a far more humanitarian set of values; it has successfully striven to give more equitable and more generous treatment to its employees. It has significantly reduced economic hardships, eliminated the more extreme forms of industrial warfare, provided a generally safe and pleasant working environment, but it has done all these things without changing its fundamental theory of management. There are exceptions here and there, and they are important; nevertheless, the assumptions of Theory X remain predominant throughout our economy. Management was subjected to severe pressures during the Great Depression of the thirties. The wave of public antagonism, the open warfare accompanying the unionization of the mass production industries, the general reaction against authoritarianism, the legislation of the New Deal produced a wide "pendulum swing." However, the changes in policy and practice which took place during that and the next decade were primarily adjustments to the increased power of organized labor and to the pressures of public opinion. Some of the movement was away from "hard" and toward "soft" management, but it was short-lived, and for good reasons. It has become clear that many of the initial strategic interpretations accompanying the "human relations approach" were as naïve as those which characterized the early stages of progressive education.