A classic way to describe leadership styles is by applying Douglas McGregor's (1969) Theory X and Theory Y. Douglas McGregor assumes that an organization and its leaders can have different views on the skills and the motivation of the members of the organization. These potential views can be described as Theory Y and Theory X.

Theory Y:

Theory Y presumes that people like work, and that the employees will exercise self-direction and self control. According to this theory, employees will be motivated by responsibility and actively seek new challenges and goals. Employees are therefore seen to exhibit great work morale, and to exhibit a behavior that will not call for constant supervision by the nearest manager. Employees will therefore be able to achieve the organization's goals rather autonomously, without constant supervision, coercion, punishment and control.

Theory X:

On the other hand, Theory X presumes that employees inherently dislike work. Likewise this theory presumes that employees shirk responsibility, and that employees will seek formal rules and directions whenever possible. According this theory, managers must therefore be coercive, controlling and willing to punish unwanted behaviors.

Douglas McGregor does not see these different theories as mutually exclusive. Managers may exert both leadership styles, and will most likely not practice one of these styles exclusively. Modern managers will probably have to demonstrate capabilities within each leadership style.

Douglas McGregor coupled his theories to the work of Abraham Maslow , where he compared the higher needs put forward by Abraham Maslow to a Theory Y leadership style, and lower needs to the Theory X leadership style. This posits that people seeking higher needs such as e.g. self-actualization, may be motivated by a Theory Y leader, whereas people not having higher order needs related to worklife in general, may be motivated by a Theory X leadership style.

Therefore, the use of either Theory X or Y should be balanced with the needs and wants of the employees. This also highlights the potential problems of using this theory internationally. People from different countries and cultures may want different leadership styles, and may not be willing to accept leadership styles normally used on similar workgroups and occupations in other countries.

Differences in work related values across cultures have been competently diagnosed by theorists such as Geert Hofstede and Fons Trompenaars.