Theory E aims at creating the economic value to improve the wealth of the shareholders. The main emphasis under theory E is the systems and structures of an entity. For the concept to succeed top management and financial support is required. The change in theory E is planned by the management. Theory O is mainly concerned with enhancing the capability of people in the organization. Theory O requires the employees to be committed to achieving the firm’s objectives. The change in theory O is not planned by the management but it emerges from the business needs (Beer and Nohria, 2001).
Organizational management is the process of adjusting the system, structure, and daily processes of a company to improve its performance (Peiterse, Caniels, and Homan, 2012). Theory E is a concept of organizational management since it focusses on changing the structures and system of an entity to increase the shareholders’ wealth. Theory O is related to organizational management since it is concerned with improving the day-to-day procedures of a firm. Additionally, the two theories are linked to organizational management since they incorporate the concept of change within the organization.
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Theory X outlined that most of the employees are lazy, irresponsible, and do not have much to contribute towards the success of an entity. Theory X and E are related since the management plays a crucial role in ensuring that workers adhere to the company’s policies and procedures. Therefore, an organization would not succeed without monitoring the employees when theory X and E are applied. Theory Y and O are related since the two concepts advocate for the management’s appreciation of the role played by the employees in enabling an entity to attain its objectives. Additionally, theory Y and O are related since they focus on nurturing the staff rather than maximizing the shareholders’ wealth.
Theory E can be used to manage change by changing the structures and processes of an organization. Change is inevitable in an entity that seeks to grow and to achieve an increase in profitability, new processes of handling business activities must be adopted (Peiterse, Caniels, and Homan, 2012). Theory O focusses on the employee and it can be utilized to manage change since it empowers the employees to contribute their ideas of enhancing business operations. Theory X can be utilized for change management in an environment where workers are resistant to change. Theory Y is applicable in a business setting in which staff and management advocate for change. Theory E and O can be managed sequentially by starting with E to change the entity’s structure and system and then followed by O where employees are allowed to participate in the change process (Beer and Nohria, 2001). On the contrary, theory E and O cannot be managed sequentially in an organization governed by leaders who do not allow the employees to participate in the decision-making process. Additionally, there should be a strong relationship between the managers and the workers for theory X and Y to be managed sequentially.
A single manager cannot implement both theories simultaneously because of the leader’s motive. A manager would either be inclined towards increasing the shareholders’ wealth or building a strong relationship with the employees. Therefore, out of the two objectives, the manager must give one a priority to attain the organization’s objectives.
References
Beer, M., and Nohria, N. (2001). Breaking the Code of Change . retrieved 27 th July, 2018 from
http://www.humanviewpoint.com/images/Change_-_Theory_E,O_for_website.pdf
Lawter, L., Kopelman, R.J., and Prottas, D.J. (2015). McGregor 's Theory X/Y and Job
Performance: A Multilevel, Multi-source Analysis. Journal of Managerial Issues , 27(1-4), 84-101.
Pieterse, J.H., Caniëls, M.C.J., Homan, T (2012). Professional discourses and resistance to
change, Journal of Organizational Change Management , Vol. 25(6), 798 – 818.
