William Ouchi spent years researching Japanese companies under the great Japanese
economic boom of the 1980s. In this period, Japanese companies were by far the
most productive in the world, and hence very interesting to western management
During his research, William Ouchi identified several characteristic traits
of Japanese leadership, which formed the basis for the formulation of a new
leadership style – Theory Z. Therefore, Theory Z is also oftentimes described
as the so-called Japanese Management Style.
In short, Theory Z stresses the importance of a caring and benevolent relationship
between leaders and followers, and presumes that workers will get motivated
by a strong social relationship with the company. Loyalty to the company will
increase by providing a job for life, in which the company takes genuine interest
in the well-being of the employee.
This leadership style is also comparable with Paternalistic
Leadership that is oftentimes the most accepted leadership style
in Asian countries, in which social relations between leaders and followers
play a significant role for employee motivation.
Just as for Douglas
McGregor’s Theory X & Y, it is very important always to
acknowledge that it is the followers needs that should determine which leadership
style to adopt, and that every leader must adapt his/her leadership style to
the local cultural context. Therefore it may not be easy to implement Theory
Z in a western cultural setting, because western employees may have completely
different needs for leadership than e.g. the Japanese workforce.
When wanting to understand cultural differences between national and organizational
cultures, current or prospective leaders may benefit from understanding the
research performed by scientists such as Geert
Trompenaars and Edgar
Schein, who all conducted extensive research on both national and
organizational culture, and on how potential cultural differences may affect leadership.