The belief that employees are capable of self-direction,

Solution

• Theory X, proposed by Douglas McGregor, assumes employees inherently dislike work, avoid responsibility, and require close supervision with external control or threats to be productive. • Theory Y, in contrast, views work as a natural activity, suggesting employees can show initiative, creativity, self-motivation, and self-control when properly empowered and aligned with organizational goals. It assumes people seek responsibility and thrive when their higher-order needs (such as esteem and self-actualization) are fulfilled. • Theory Z (by William Ouchi) focuses on trust, teamwork, and long-term employment. • ERG Theory (Alderfer) classifies needs into Existence, Relatedness, and Growth. • Two-Factor Theory (Herzberg) distinguishes between hygiene factors and motivators. Thus, the statement corresponds to Theory Y.