As an element of developing a business culture, the owner or management of a business must select an approach to managerial communication that best serves the needs of the business. Theory Y, formalized by Douglas McGregor in 1960, suggests that leadership does not only work in a one-way flow from the top down, but rather that distributed leadership can achieve organizational goals just as well in the right circumstances. This core tenet of Theory Y informs the nature of functions of managerial communication

Y Versus X

In addition to distributed leadership, Theory Y also holds a certain optimism regarding essential human nature. Human beings can exhibit self-direction and creativity in problem solving and, when given an environment that supports it, seek greater responsibility while increasing commitment to the organization. Theory X, also put into explicit terms by McGregor, takes a pessimistic view of human nature. Theory X assumes basic human laziness as a fact and assumes productive work comes about as a result of threat and tight control.

Implications for Communication

The implications for managerial communication under Theory Y come in several forms. Rather than seeking to control information and, by proxy, understanding, formal leaders should seek to maximize employee understanding of tasks and goals in order to facilitate creative problem solving and self-directed activity. The maximizing of employee understanding implicitly distributes leadership by distributing problem solving responsibility to multiple levels of the organization, rather than concentrating it into a few hands. In ideal circumstances, Theory Y-based communications should encourage collaborative efforts and, by proxy, distributed learning within the organization.


Manufacturing processes, which often depend on segmentation and task specialization to achieve efficiency, do not lend themselves to Theory Y-based communication strategies except at the managerial level. The very segmentation and specialization that creates efficiency also limits the value of maximizing employees’ knowledge of tasks and goals beyond their specific role.

Managing in the Information/Knowledge Economy

As the United States continues it transition into a post-industrial society with an information and knowledge economy, Theory Y becomes even more relevant. An information and knowledge economy relies on the ability of employees to expand their understanding and skill sets, while using creativity and collaboration to complete a variety of shorter-term projects. The control and constricted information flow common to an industrial economy stands to hamper operations in an information and knowledge economy.

Generation Y

As Generation Y enters the workforce, it brings with it an unprecedented comfort with and understanding of technology, which can serve it well in an information economy. Generation Y also brings new assumptions about organizational culture. Among other things, members of this generation expect a more open, collaborative work environment with opportunities for advancement and knowledge expansion, the very things advocated by Theory Y. Businesses employing a Y hierarchy of managerial communication can conceivably expect higher levels of productivity from Generation Y than businesses using the more authoritarian Theory X approach.