Management styles vary because of training, cultural expectations and the manager’s personality. The core differences in management styles reflect beliefs about the most effective way of controlling productivity and costs. Theories of management compare attitudes, behaviors and long-term outcomes from groups with common behavior characteristics. The field of organizational psychology focuses on theories of management to understand and improve the way people work together.

Theory X

Douglas McGregor first proposed dividing management styles into Theory X and Y in 1960 while working at MIT’s Sloan School of Management. The Theory X management bases its style on scientific management principles originating from the work of Frederick Taylor in the 1930s. Theory X managers think that people need control and direction from management. Proponents of Theory X management believe that employees cannot be trusted to work hard without constant supervision and threats. Therefore, Theory X managers must provide detailed instructions and supervise each activity.

Theory Y

A Theory Y management style advocated by McGregor believes that people want to work and be productive. Proponents support the idea that workers should be fairly compensated and that managers consider the needs of workers in assigning tasks and providing benefits. Theory Y managers take advantage of employee’s self direction to get work accomplished and see their role as a facilitator who removes barriers, rather than a Theory X disciplinarian.

Theory Z

Because of interest and appreciation of the productivity of Japanese companies in the 1980s, management theorists studied the style used to motivate and interact with Japanese workers. In 1981, William Ouchi created the Theory Z management style that combined Japanese and key American management strategies. According to Ouchi, Theory Z management style expects employee involvement in all aspects of organizational decision making. The theory emphasizes trust, long-term relationships and encourages employees to take independent action guided by an overall company mission or philosophy.

Theory W

Projects within organizations might use unique management styles because of the time-constrained nature of the effort and the skill of the workers. Barry Boehm, writing about managing software development projects for IEEE, suggests a management style focused on meeting the disparate interests of several groups of stakeholders including senior management, workers and customers through negotiation. The manager, operating under Boehm's Theory W, helps each stakeholder better understand the needs, abilities and strengths of other constituents.