WILLIAM OUCHI'S THEORY Z

William Ouchi's Theory Z

William Ouchi's Theory Z

Introduction

The most pernicious management problem in the world is also the most significant. It's the problem of designing public school systems that can educate young people for the unprecedented global society that awaits them when they come of age. If we take that problem seriously, then we need to pay attention to the research and thinking of William G. Ouchi. Bill Ouchi, age 62, is the Sanford and Betty Sigoloff Professor in Corporate Renewal at the UCLA Anderson School of Management, and a long-standing expert in organizational design. (Ouchi, 1984) Although he has single-mindedly pursued the reform of public school management for 25 years, Professor Ouchi (pronounced “oh-chee”) is still best known for introducing the principles of Japanese management to Western business audiences. His best-selling book Theory Z: How American Business Can Meet the Japanese Challenge (Addison-Wesley, 1981) made him famous as an advocate of such then exotic approaches as team-based management, lifelong career paths, and consensual decision making. (Ouchi, 2003) This paper discusses William Ouchi''s Theory Z.

Discussion

Ouchi's Theory Z is often referred to as the 'Japanese' management style. Ouchi's Theory Z advocates a combination of the best of theory Y and modern Japanese management, placing a large amount of freedom and trust with workers, and assumes that workers have a strong loyalty and interest in team-working and the organization. In theory Z, Ouchi describes the art of Japanese management and shows how it can be adapted to American companies. He takes readers behind the scenes at several U.S. corporations making the Theory Z change and shows step-by-step how the transition works. Ouchi also examines the corporate philosophies that have become blueprints for Theory Z success, and looks at the evolving culture of “Z” people in society.

Theory Z suggests that involved workers are the key to an increase in productivity and it offers several ways to manage people so that they can work together more effectively. American workers work as hard as any, increased productivity does not come from working harder. Productivity is believed to be a problem of social or managerial organization. Employees need long-range incentives to coordinate efforts. (Ouchi, 2009) Theory Z states that productivity and trust go hand in hand. Japanese workers trust that their sacrifices will be repaid in the future and equity will be restored. Theory Z also points to the notion of subtlety; relationships between workers need to be considered; teams based on seniority loose subtlety and productivity declines. Intimacy is a thread of Japanese life; it is also found in the work setting. In American life it is found in the family, friendships, and the church; it is threatened by industrial life. Theory Z states that productivity is dependent on trust, subtlety, and intimacy. (Ouchi, 2003)

Japanese organization includes lifetime employment; promotions are from within and employees remain until mandatory retirement age. Termination does not take place for anything less than a major criminal offense. Rapid turnover in American companies results in formality and ...