Economic theory x and theory y

Thus the optimal path must converge to the OSS. Consequently, the only way that employees can attempt to satisfy their higher level needs in their work is by seeking more compensation, so it is quite predictable that they will focus on monetary rewards.

For a given quantity of a consumer good, the point on the demand curve indicates the value, or marginal utilityto consumers for that unit. As indicated by Benhabib and Nishimura ait is possible [3] to consolidate equations 1.

The opportunity cost of an activity is an element in ensuring that scarce resources are used efficiently, such that the cost is weighed against the value of that activity in deciding on more or less of it. Due to restrictions on data, little research has been conducted at the industrial level.

Therefore, the local stability is not established. Theory of the firmIndustrial organizationBusiness economicsand Managerial economics People frequently do not trade directly on markets. Note that production specialization occurs at points A and B.

A term for this is "constrained utility maximization" with income and wealth as the constraints on demand. Happy to work on their own initiative.

Theory X and Theory Y

These included decentralization of decision-making authority, delegation, job enlargement, and participative management. Management is responsible for organizing the elements of productive enterprise-money, materials, equipment, and people in the interests of economic ends.

The most substantial reason for this is that when neoclassical optimal growth models structural models are converted to reduced-form models, based on the constant-returns-to-scale assumption pertaining to the production functions of each sector, objective function V does not become strictly concave, and the planar portion that includes the OSS exists in the surface of the function V.

The business community's and general public's form or version or. Performance appraisals and remuneration are usually based on tangible results, such as sales figures or product output, and are used to control staff and "keep tabs" on them. The following lemma is applied in the proof of the local stability.

Performance Appraisals — Having the employee set objectives and participate in the process of evaluating how well they were met.

However, McGregor asserts that neither approach is appropriate because the assumptions of Theory X are not correct.

Theory X & Theory Y

A history of Turnpikes The turnpike theory is originated in two famous papers. Other factors can change demand; for example an increase in income will shift the demand curve for a normal good outward relative to the origin, as in the figure.

Welfare economics Public finance is the field of economics that deals with budgeting the revenues and expenditures of a public sector entity, usually government. Theory Y The higher-level needs of esteem and self-actualization are continuing needs in that they are never completely satisfied.

McGregor's research suggested that when work was better aligned with human needs and motivations, employee productivity would increase. If properly implemented, such an environment would result in a high level of motivation as employees work to satisfy their higher level personal needs through their jobs.

There are four main stages in the succession planning process, which involve transition movement of new roleinitiation, selection, and education.

It provides a mathematical foundation of industrial organizationdiscussed above, to model different types of firm behaviour, for example in an solipsistic industry few sellersbut equally applicable to wage negotiations, bargainingcontract designand any situation where individual agents are few enough to have perceptible effects on each other.

Have to be controlled, forced and threatened to deliver work. Theory Y Management Implications If Theory Y holds, the firm can do many things to harness the motivational energy of its employees: Has no ambition, wants no responsibility, and would rather follow than lead. Refer to Levhari and Livitan These are represented in theoretical and empirical forms as in the neoclassical and endogenous growth models and in growth accounting.

At the respective foundations of the two outlooks lie, above all, liberal optimism and conservative pessimism about the native mental and moral capacities of most men—all ordinary men—or "the many.

According to Ronald Coasepeople begin to organize their production in firms when the costs of doing business becomes lower than doing it on the market. Under Theory X, people use work to satisfy their lower needs, and seek to satisfy their higher needs in their leisure time. McKenzie has extended the neighbourhood turnpike theorem and the global asymptotic stability stability to the case where the objective function is not strictly concave.

The hard approach results in hostility, purposely low-output, and hard-line union demands. Analysis often revolves around causes of such price stickiness and their implications for reaching a hypothesized long-run equilibrium.

More Management Theory (Exam 1) STUDY. PLAY. Motivation. Economic benefit of organization. Theory X Assumptions. Dislikes work and attempts to avoid it No ambition, wants no responsibility Would rather follow than lead Self-centered, does not care about organizational goals Resists change.

In this updated and revised edition of Post Keynesian Macroeconomic Theory, Paul Davidson explains how and why contemporary macroeconomic textbooks fail to incorporate Keynes's liquidity and financial analysis framework to explain the importance of money and financial markets in the real world of experience.

This important text develops Keynes's analytical framework for both closed and open. Management > Theory X and Theory Y. Theory X and Theory Y. In his book, The Human Side of Enterprise, Douglas McGregor proposed two theories by which to view employee avoided descriptive labels and simply called the theories Theory X and Theory of these theories begin with the premise that management's role is to assemble the factors of production, including people.

Description: Theory X and theory Y follow different methodologies of keeping people motivated. Theory X follows an authoritarian approach to motivate people. One of the key assumption in this approach is that the average employee doesn't like work and will do anything to avoid it.

Theory Z is a name for various theories of human motivation built on Douglas McGregor's Theory X and Theory Y. Theories X, Y and various versions of Z have been used in human resource management, organizational behavior, organizational communication and organizational development.

Ten important differences between theory x and theory y are discussed in this article, in a detailed manner.

Difference Between Theory X and Theory Y

Theory X assumes that an employee dislikes work, while theory Y persupposes that work is natural for employees.

Economic theory x and theory y
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Theory X and Theory Y