Z-theory by william ouchi

The Z theory suggests that individuals do not separate their condition as human beings from that of employees 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 «theory Z» 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, they contrasted it with a «theory A ».

Basically Ouchi considers that there are three types of company, 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. It is full of characteristics little applied in western companies of the time and rather includes certain characteristics common to those of Japanese companies.

The Z theory is participatory and 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 it invokes certain special conditions such as trust, teamwork, employment life, close personal relationships and collective decision-making, all of them applied in order to obtain a greater performance of human resources and thus achieve greater business productivity, it is about creating a new humanistic business philosophy in which the company find yourself committed to your people.

But why this aura of understanding so filial 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, define their old age… then, if this job is developed entirely 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.

Theory Z = Culture Z. Ouchi's theory Z seeks to create a new business culture in which people find a comprehensive work environment that allows them to self-improve for their own good and that of the company

Fundamental principles of theory Z

There are three basic principles of Ouchi's theory:

Trust Attention to human relationships (Subtlety) Close social relationships (Intimacy)

The five common factors of companies Z

Training of all your employees, from top to bottom and vice versa. There is a constant, comprehensive training plan. Its policy leads to a reduction in staff turnover. It has adapted to a slower process for staff evaluation and promotion. The objectives and the policies that the company has defined, in its application of Philosophy Z, must be completely consistent.

How to develop the culture of company Z

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

Understand first the Type Z of organization and the role that the participants have to play in the transformation. Reassess the philosophy established in the organization about to transform. Define the new philosophy to implement and involve the board of the new direction to take. Begin implementation by creating the structures and incentives. Develop personal ties between the participants of the new organization. Re-evaluate progress up to this point. Participate the union in the process. Stabilize the number and categories of employees. Establish the (slow) system of evaluation and promotion of workers. Expand and generalize the careers of workers. Final implementation up to this point. Promote the participation and dedication of workers to the organization.Promote fully enveloping dedication among employees. This includes all aspects of their social and family life.

Common goals: working as a team, sharing the same goals, enjoying what is done and satisfaction with the task accomplished are characteristics of the Z culture that open up the possibilities of improving performance at work.

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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Finally, we suggest the following video in which Dr. Luis Yucra reviews the main elements that make up the concept of Theory Z.