Managing resources efficiently and effectively is the fundamental objective for an organization that aims to maximize individual and social prosperity. Therefore, management theory is constantly developing. In the 20th century, several management theories such as scientific management, administrative management, behavioral management, etc. were proposed. As we increasingly realize that humans are a crucial element of the organization and vital in influencing overall organizational performance, Douglas McGregor who studied how workers behavior influences manager's leadership, proposed Theory X and Y (Waddell et al. 2007). No doubt this conventional concept is still correct in the 21st century, however, the business environment is significantly different around the world and human values ​​and beliefs are totally different compared to the 20th century. The purpose of the essay is to critically discuss the value and relevance of McGregor's idea for managers in the 21st century. Behavioral management is the study of leadership style and method of motivation influences workers' behavior and attitudes (Waddell et al. 2007). McGregor studied Maslow's hierarchy of needs and found that human needs can be classified into five levels which are safety, physiological, belonging, esteem and self-actualization needs and uses them in the analysis of human behavior in relation to organization management (Kermally, 2005). It is essential to take into account how workers feel, behave and react in their work as a successful company, dominated by how members of the organization cooperate together. McGregor published two sets of hypotheses, Theory 58-78, accessed 25 March 2011, .Schein, EH 1975, 'In Defense of Theory Y', Organizational Dynamics, vol. 4, no. 1, pp. 17-30, accessed March 24, 2011, Business Source Complete, EBSCOhost database. Waddell, D, Jones, G and George, J 2007, 'Evolution of Management', Contemporary Management, 1sted, North Ryde, NSW: McGraw -Hill, c2007, Australia, pp. 41-67. Wynne, B & Nord, W 1978, 'THEORY Y ASSUMPTIONS IN A NON-THEORY Y WORLD', interfaces, vol. 8, no. 2, pp. 61-66, consulted March 25, 2011, Business Source Complete, EBSCOhost database.