Theory Z is a management philosophy that stresses employee participation in all aspects of company decision making.

It was first described by William Ouchi in his book Theory ZHow Man merican !usiness "an Meet the #apanese "hallenge. Theory Z incorporates many elements associated with the #apanese approach to management$ such as trust and intimacy$ but #apanese ideas ha%e been adapted for use in the &nited 'tates. In Theory Z organi(ations$ managers and workers share responsibilities) the management style is participati%e) and employment is long term and often lifelong. Theory Z results in employees feeling organi(ational ownership. *ecent research has found that such feelings or ownership may produce positi%e attitudinal and beha%ioral effects or employees. +,-. In a Theory / organi(ation$ mangers focus on assumptions about the nature of the worker. Theory Z has been adapted and modified for use in a number of &.'. companies. One adaptation in%ol%es workers in decisions through 0uality circles. 1uality circles +also called 0uality-assurance teams. are small$ usually ha%ing 2 to 3 members who discuss ways to reduce waste$ eliminate problems$ and impro%e 0uality$ communication$ and work satisfaction. 'uch 0uality teams are a common techni0ue for harnessing the knowledge and creati%ity of hourly employees to sol%e problems in companies. 4%en more in%ol%ed than 0uality circles are programs that operate under names such as participating management$ employee in%ol%ement$ or self-directed work teams. *egardless of the term used to describe such programs$ they stri%e to gi%e employees more control o%er their 5obs while making them more responsible for the outcome of their efforts. 'uch programs often organi(e employees into work teams 2 to 62 members who are responsible for producing an entire product item. Team members are cross-trained and can therefore mo%e from 5ob to 5ob within the team. 4ach team essentially manages itself and is responsible for its 0uality$ scheduling$ ordering and use of materials$ and problem sol%ing. Many firms ha%e successfully employed work teams to boost morale$ producti%ity$ 0uality$ and competiti%eness. ccording to the e0uity theory$ how much people are willing to contribute to an organi(ation depends on their assessment of the fairness$ or e0uity$ of the rewards they will recei%e in e7change. In a fair situation$ a person recei%es rewards proportional to the contribution he or she makes to the organi(ation. Howe%er$ in practice$ e0uity is sub5ecti%e notion. 4ach worker regularly de%elops a personal input-output ratio by taking stock of his or her contribution +inputs. to the organi(ation in time$ effort$ skills$ and e7perience and assessing rewards +outputs. offered by the organi(ation in pay$ benefits$ recognition$ and promotions. The worker compares his or her ratio to the input-output ratio of some other person- a 8comparison other$8 who may be a co-worker$ a friend working in another organi(ation$ or an

8a%erage8 of se%eral people working in the organi(ation. If the two ratios are close$ the indi%idual will feel that he or she is being treated e0uitably. "onsider a woman who has a high-school education and earns 9,-$--- a year. When she compares her input-output ratio to that of a co-worker who has a college degree and makes 9:-$---$ she will probably feel that she is being paid fairly. Howe%er$ is she percei%es that her personal input-output ratio is lower than that of the college graduate$ she will probably feel that she is being treated unfairly and will be moti%ated to seek change. ;urther$ if she learns that the co-worker who earns 9:-$--- has only a high-school diploma$ she may belie%e she is being cheated by the organi(ation. To achie%e e0uity$ the woman could try to increase her outputs by asking for a raise or promotion. 'he could also try to ha%e the inputs of the 8comparison other8 increased or the outputs of the 8comparison other8 decreased. ;ailing to achie%e e0uity$ the woman may decide to lea%e the organi(ation. !ecause almost all the issues in%ol%ed in e0uity theory are sub5ecti%e$ they can be problematic. Managers should try to a%oid e0uity problems by ensuring that rewards are distributed on the basis of performance and that all employees clearly understand the basis for their pay and benefits. <sychologist =ictor =room described e7pectancy theory$ which states that moti%ation depends not only on how much a person wants something but also on the person>s perception of how likely he or she is to get it. person who wants something and has a reason to be optimistic will be strongly moti%ated. ;or e7ample$ say you really want a promotion. nd$ let>s say because you ha%e taken some night classes to impro%e your skills$ and moreo%er$ ha%e 5ust made a large$ significant sale$ you feel confident that you are 0ualified and able to handle the new position. Therefore$ you are moti%ated to try to get the promotion. In contrast$ if you do not belie%e you are likely to get what you want$ you may not be moti%ated to try to get it$ e%en though you really want it.