Notes on Business Psychology

Presented To: Madam Muneeza Butt

Prepared By: ARIF Masood – (Roll NO # 50)

BS (Accounting & Finance) - 3 rd
Semester

Department Of Commerce
 Contents OF Notes

Lecture # 1 (Page 3-5)

P s y c h o l o g y – D e f i n i t i o n w i t h s h o r t hi s t o r y .
B u s i n e s s P s y c h o l o g y – D e f i ni t i o n w i t h c o n c i s e .
Describing Terms

o Human Being
o Human Nature

D e f i n i n g P s y c h o l o g y a n d c h a r a c t e r i z i n g f o u r o f i ts m a i n p o i n ts

o Scientific Study
o Behaviour
o Individual
o Mental Processes

Lecture # 2-5 (Page 5-7)

Goals OF Psychology

o Describing What Happens

o Explaining What Happens
o Predicting What Will Happen
o Controlling What Happens

Lecture # 6, 7 (Page 7-8)

THE Process OF Research

o Explaining Procedural sequence of Research Process

o Describing terms of Determinism and Hypothesis

Scientific METHOD

o Subjectivity
o Objectivity

Lecture # 8 (Page 9-10)

Standardization
Operationalization
Variance

o Independent Variable
o Dependent Variable

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 “NOTES ON BUSINESS PSYCHOLOGY”

Psychology

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”

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 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.

Θ Operation: Some action done to the system being investigated.

Θ Observation: What happens when the operation is done to the system?
Θ Model: A fact, hypothesis, theory, or the phenomenon itself at a certain moment.
Θ Utility Function: A measure of the usefulness of the model to explain, predict,
and control, and of the cost of use of it.

o Behaviour

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

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being has unique reasoning ability, justification, resistance and willingness.
o Individual

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.

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 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.

o 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

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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.

o DETERMINISM

A philosophy espousing that every event in the universe is caused and

controlled by natural law. More precisely, all behavior and observable
events have causes. So, the idea that all events physical, mental or
behavioral are results of or is determined by specific causal factors. Causal
factors are limited to that individual environment 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.

o 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

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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.

Standardization

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

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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
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.

Variable

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

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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.

___________________

Notes: Class Lectures

en.wikipedia.org
Alleydog.com
Introduction to Psychology
hds.canberra.edu.au

Submitted By: ARIF Masood.

(Roll.No.50)

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