Notes on Business Psychology

Presented To: Madam Muneeza Butt

Prepared By:

ARIF Masood – (Roll NO # 50)

BS (Accounting & Finance) - 3rd Semester Department Of Commerce

Contents OF Notes
Lecture # 1 (Page 3-5)
Psychology – Definition with short history. Business Psychology – Definition with concise. Describing Terms o o H u m a n Be i n g Hum an Nature

Defining Psychology and characterizing four of its main points o o o o S c i e n t i f i c S t u dy Behaviour I n d iv i du a l M e n t a l Pr o ce s se s

Lecture # 2-5 (Page 5-7)
Goals OF Psychology o o o o D e s c r i b in g W h a t H a p p e n s E x p l a in i n g W h a t H a p p e n s Predicting What Will Happen C o n t r o l l in g W h a t H a p p e n s

Lecture # 6, 7 (Page 7-8)
THE Process OF Research o o E x p l a in i n g P r o c e du r a l s e q u e n ce o f R e se a r c h P r o ce s s D e s c r i b in g t e rm s o f De t e r m i n i sm a n d H y p o t h e s i s

Scientific METHOD o o S u b je c t i v i t y Objectivity

Lecture # 8 (Page 9-10)
Standardization Operationalization Variance


o o

I n d e p e n de n t V a r i a b l e D e p e n de n t V a r i a b l e


Scientific study of human behavior, mental processes, and how they are affected and/or affect individuals or group's physical state, mental state, and external environment is termed as Psychology. Its goal is to describe, understand, predict, and modify behavior. Beginning of Psychology can be dated as early as Hippocrates in 400BC, or even before. German physiologist Wilhelm Wundt is generally considered the founder of psychology as a scientific discipline. He established the first laboratory for experimental psychology in 1879 at the University of Leipzig in Leipzig, Germany.

Business Psychology
Business Psychology deals with emotions of different characters of an organization or business society circle which includes producers, employers as well as customers. Business Psychology which is also known as Organizational or Industrial Psychology concerns the application of psychological theories, research methods, and intervention strategies to workplace issues. Business psychologists are interested in making organizations more productive while ensuring workers are able to lead physically and psychologically healthy lives. Other relevant concerns include personnel psychology, motivation and leadership, employee selection, training and development, organization development, organizational behavior, workplace and family issues. Business psychologists who work for an organization are most likely to work in the HR (human resources) department. However, many I/O psychologists pursue careers as independent consultants or applied academic psychologists.

o Human Being
Human Being is the common name given to any individual of the species Homo sapiens and, by extension, to the entire species. Subject of a psychologist analysis is most often an individual and that individual may be a newly born infant, teenager, college student, Athlete etc

o Human Nature
Human nature is the fundamental nature and substance of humans. It may also be the range of human behavior that is believed to be invariant over long periods of time and across very different cultural


contexts. Some define human nature as “the psychological attributes of humankind that are assumed to be shared by all human beings”

Definition of Psychology with description
Psychology is the study of nature of experience & behaviour, human and animal, normal and abnormal, individual and social. OR The Scientific study of behaviour of individuals and their mental Processes. o Scientific Method
Scientific method is a body of techniques for investigating phenomena and acquiring new knowledge, as well as for correcting and integrating previous knowledge. It is based on gathering observable, empirical and measurable evidence subject to specific principles of reasoning, and the collection of data through observation and experimentation, and the formulation and testing of hypotheses. We draw conclusions on factual basis which we get from observations and experimentations. The essential elements of a scientific method are operations, observations, models, and a utility function for evaluating models.


Oper ation: Some action done to the system being investigated. Ob serv ation: What happens when the operation is done to the system? Model : A fact, hypothesis, theory, or the phenomenon itself at a certain moment. Ut ility Function : A measure of the usefulness of the model to explain, predict, and control, and
of the cost of use of it.



In general behaviour is said to be manner in which one behaves. In terms of psychology the aggregate of the responses or reactions or movements made by an organism in any situation are referred as behaviour. Behavior can be conscious or unconscious, overt or covert, voluntary or involuntary. Any action\response of individuals\organisms to adjust into their environment which they perform behind their mental process will


be their behaviour. Aggression, Crying, touching are usual behaviour examples which we observe in daily life. Psychologists examine how differently individuals behave in different conditions. Different human beings can obviously behave differently in similar conditions since every human being has unique reasoning ability, justification, resistance and willingness.



Subject of any psychological study often happens to be an individual. This individual could be anyone from an infant child to teenager and old man. Subject could be a college student, any illiterate person, a house wife or any farmer. Individual might be studied in his natural habitat or in controlled condition of research laboratory.

o Mental Processes
Performance of the some composite cognitive activity like an operation that affects mental contents, the process of thinking and the cognitive operation of remembering are referred as mental processes. These are the activities which are performed un-intentionally most of the times. In other words we can say these activities take place as private or internal events. Thinking, planning, reasoning and dreaming are all common examples of mental processes.

GOALS of Psychology
Psychology is the scientific study of behaviour & mental processes as psychology attempts to explain, predict and ultimately improve quality of life of people in specific and the whole world in general. It can improve quality of life of common person by working on his problems like loose temperament, aggression e.g. After the observations are made by psychologists they decide to apply positive or negative reinforcement on the subject in order to solve his problem. Basic goals of psychology are as following.

o Describing WHAT Happens
First task of psychology is to make accurate observations about behaviour. Psychologists typically refer to such observations as their data.

Θ Behaviour Data
Behavuiour data are reports of observations about the behaviour of individual or organizations and conditions under which the behaviour occurs. In data collection one must choose an appropriate level of analysis and device to measure the behaviour in order to ensure the objectivity of data. Observer could


mould the observation by his subjective point of view like biasness and prejudice, which will obviously hamper the accuracy of concluded observations. Therefore it is essential to prevent such subjective factors and keep objectivity while collecting data. Behaviour data can be measured or analyzed by qualitative method in which we use some standardized devices and instruments to analyze behaviour.

o Explaining WHAT Happens
Explanations in psychology usually recognize that most of behaviour is influenced by a combination of factors; some factors operate without individual such as genetic makeup motivation, intelligence & level of self esteem. Other factors however operate externally such as a biker trapped in a traffic jam gets frustrated and hostile which shows aggressive attitude of him. So, internal factors could be genetic makeup motivation and external factors could be anything like fear resulting from some dangerous situation around or aggression being created after getting trapped in traffic jam.


Predicting WHAT will happen

Predictions in terms of psychology are the statements about a livelihood that certain behaviour will occur or that a given relationship will be found. Understanding the causes behind different behaviour often enables the researchers and psychologists to make an accurate prediction of future behaviour. For example its not necessarily must that any specific child is not speaking up in class just because of class’s environmental pressure. It must be kept in mind that whenever observation is made, it should be objective. Scientific predictions must be worded precise enough to enable them to be tested and then rejected, if NO evidence is found in their support. Scientific prediction is based on understanding of events related to one and another. It suggests that mechanism links these observations and events.

Θ Causal Prediction
Causal Prediction specifies the conditions under which behaviour will change to improve a causal prediction as a researcher would create systematic variations in environmental condition and will observe the responses which occur as result of those variations. For example, observing the responses of a baby child when he faces a monkey of different sizes at different distances. Studying the level the anxiety and fear of child in different situations and then building predictions on basis of those observations. Similarly, observing the changes in nature and mode of conversations of two teenagers when a stranger come and stand near by them. Changes when the stranger is of their age group, younger or older to them. When stranger is a male and when is a female. Experimentation and observation help the researcher\psychologist to make a stronger and firm prediction.


o Controlling WHAT Happens
Once the psychologist had observed, explained and predicted the specific event\subject of study, he comes to final and most important stage of controlling what happens on basis of his past experiences and observations. Controlling behaviour means molding it the right way or the way psychologist wants it. Managing, molding, maintaining, stopping or influencing forms of behaviour is actually controlling it. There are many techniques practiced to control behaviour but the basic is that one should first create conditions under which the behaviour could be controlled or worked on. Ability of convincing subject or controlling behaviour is of crucial importance since it enables psychologists of helping people and improves their quality of life. For example ability of psychologist to help his patient in controlling his aggression or solving any problem is of key importance.

THE Process of Research
Research is a human activity based on intellectual investigation and aimed at discovering, interpreting, and revising human knowledge on different aspects of the world. Research can use the scientific method, but need not do so. Research Process in psychology can be divided into two categories that usually occur in sequence. 1. Forming an Idea. 2. Testing It. Process typically begins when observation believes; information and general knowledge lead some of thinking about a different phenomenon.

Θ Direct Observation Θ Un-assured questions Psychological varies are an attempt to understand that how brain, mind behaviour and environment function and how they may be related.

A philosophy espousing that ev ery ev ent in the univ erse is caused and controlled by natural law . More precisely , all behav ior and observ able events hav e causes. So, the idea that all events phy sical, mental or behav ioral are results of or is determined by specif ic causal factors. Causal factors are limited to that ind iv id ual env ironment or within the person. When a theory is prepared in psychology it is generally accepted both to account for known facts and to generate new ideas and hypothesis.


Hypothesis is a tentative idea & testable statement about the relationship between cause and consequences. A hypothesis consists either of a suggested explanation for a phenomenon or of a reasoned proposal suggesting a possible correlation between multiple phenomena. The scientific method requires hypothesis to be testable. Hypothesis are often stated as “IF then prediction” specifying certain outcome from specific conditions. Theories are of fundamental importance for generating new hypothesis. To test hypothesis researchers rely on scientific methods.

Scientific METHOD
Scientific method is a general set of procedures for gathering evidences in ways that lemmatize sources of err and yield dependable conclusion. Although procedures vary from one field of inquiry to another, identifiable features distinguish scientific inquiry from other methodologies of knowledge. Scientific researchers propose hypotheses as explanations of phenomena, and design experimental studies that test these hypotheses for accuracy. These steps must be repeatable in order to predict dependably any future results. Theories that encompass wider domains of inquiry may bind many hypotheses together in a coherent structure. This in turn may assist in the formation of new hypotheses, as well as in placing groups of hypotheses into a broader context of understanding.

o Subjectivity
Subjectivity is judgment based on individual personal impressions and feelings and opinions rather than external facts. It must minimize in data collection and analysis phase of scientific research. Procedural safeguard are used to increase objectivity. Secrecy is banned from research procedure because all data and methods must be opened for public verifiability. Other researchers must have opportunity to inspect, criticize, replicate or disapprove the data and methods, if they found it unsupportive. This practice, called full disclosure, also allows statistical measures of the reliability of these data to be established.

o Objectivity
Objectivity of any research describes the degree to which the diagnosis is independent of the investigator. When different people observe different events, they usually don’t see the same thing. An observer bias is an error due to personal motive and expectations of viewers. At times people see and hear what expect rather than what is. The biases of observer act as filters through which something are noticed as relevant and significant and others are ignored as irrelevant and not meaningful. While practicing Objectivity Expectations, Biased ness must be avoided. Practicing remedy in psychology means an effort to minimize researcher or observer biases. Researcher relies on standardization and operationalization.


A standard is that which has been selected as a model to which objects or actions may be compared. While doing data collection it is necessary to have some standard so that observations could be compared with that in order to draw conclusions. Procedure of setting standards is termed as standardization. It means using uniform consistent procedure in all phases of data collection. All features of the test or experimental situation should be sufficiently standardized so that all research participants experience same experimental conditions. It means asking questions and scoring responses according to pre-established rules. Having results printed or recorded helps to ensure their comparability across different times and places and with different participants and researchers.

Operationalization is the process of defining a concept as the operations that will measure the concept (variables) through specific observations. In terminology of Psychology operationalization is used as part of the scientific method. For example, a psychologist may wish to measure "anger." Its presence, and the depth of the emotion, cannot be directly measured by an outside observer because anger is intangible. Rather, other measures are used by outside observers, such as facial expression, choice of vocabulary, loudness and tone of voice. If a psychologist wants to measure the depth of "anger" in various persons, the most direct operation would be to ask them a question, such as "are you angry", or "how angry are you?” This operation is problematic, however, because it depends upon the definition of the individual. One person might be subjected to a mild annoyance, and become slightly angry, but describe themselves as "extremely angry," whereas another might be subjected to a severe provocation, and become very angry, but describe themselves as "slightly angry." In addition, in many circumstances it is impractical to ask subjects whether they are angry. Since one of the measures of anger is loudness, the psychologist can operationalize the concept of anger by measuring how loudly the subject speaks compared to their normal tone.

Any factor which has the potential to influence another factor in a research study or any characteristic that can assume multiple values or can vary in participants. Variables can include age, gender, body weight, alcohol consumption, attitude and many, many other attributes. Related terms included Independent and Dependent variables. In simple words variable is any factor which can vary in amount. In experimental setting, researcher often wishes to demonstrate cause & affect relationship between two types of variables.

o Independent Variable

Independent Variable is a factor that researcher manipulates its functions as the causal part of the relationship.

o Dependent Variable
Dependent Variable is a factor which is effect part of relation. This is – what the experiment measures. If researcher claims about cause & effect are correct the value of dependent variable will depend on value the value of independent variable.



Class Lectures Introduction to Psychology

Submitted By:

ARIF Masood.


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