William Ouchi's "Z" theory

William Ouchi's Theory Z

It suggests that individuals do not decouple their human condition from that of staff and that the humanization of working conditions increases the productivity of the company and at the same time the self-esteem of the employees

The “Z theory” also called “Japanese method”, is an administrative theory developed by William Ouchi and Richard Pascale (collaborator), who, like McGregor when contrasting their theory Y to a theory X, contrasted it with a “theory A ”.

Basically Ouchi considers that there are three types of , the type A that assimilated the American companies, the type J that assimilated the Japanese firms and the type Z that have a new culture, the Z culture. This new Z culture is full of characteristics little applied in companies from the West of the time and rather includes certain characteristics common to those of Japanese companies.

Theory Z is participatory and it is based on human relationships, it aims to understand the worker as an integral being who cannot separate his work life from his personal life, for this reason he invokes certain special conditions such as trust, teamwork, employment for life, close personal relationships and making strategic collective, all of them applied in order to obtain a greater performance of the human resource and thus achieve greater business productivity, it is about creating a new humanistic business philosophy in which the company is committed to its people.

But why is this golden understanding so affiliated between company and employees? because Ouchi firmly believes that a job is more than that, it is the structural part of employees' lives, it is what allows them to live where they live, eat what they eat, dress what they wear, it defines their old age ..., then , if this job is fully developed within an organization (as in theory Z), the person joins it and creates a sense of belonging that leads them to give everything possible to achieve business objectives, with which productivity would be practically assured.

Fundamental principles of Theory Z

There are three basic principles of Ouchi's theory:

  • Trust
  • Attention to human relations
  • Close social relationships

How to develop company culture Z

Ouchi identified the following thirteen steps to transform the organization into a Z company:

  1. First understand the Type Z of organization and the role that participants have to play in the transformation.
  2. Re-evaluate the philosophy established in the organization about to transform.
  3. Define the new philosophy to implement and involve the board of directors of the new direction to take.
  4. Begin implementation by creating structures and incentives.
  5. Develop personal ties between the participants of the new organization.
  6. Re-evaluate progress up to this point.
  7. Participate the union in the process.
  8. Stabilize the number and categories of employees.
  9. Establish the work (slow) evaluation and promotion of workers.
  10. Expand and generalize the careers of workers.
  11. Final implementation up to this point.
  12. Promote the participation and dedication of workers to the organization.
  13. Promote fully immersive dedication among employees. This includes all aspects of their social and family life.

Much has been said about the Z culture and Japanese companies, but it has also been seen how the paternalism that the implementation of a Z culture entails can affect a person's life, in Japan people fall into serious depressions when they lose their jobs and culturally unemployed people are rejected. Nothing is good if it is taken to the extreme and this theory has some positive aspects and others that are not so, everyone will judge.

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I am a dreamer and in my dreams I believe that a better world is possible, that no one knows more than anyone, we all learn from everyone. I love gastronomy, numbers, teaching and sharing all the little I know, because by sharing I also learn. "Let's all go together from foundation to success"
william ouchi