The Relationship between Business and Psychology - Research Paper Example

PSYCHOLOGY IN BUSINESS 2008 Psychology in Business Introduction The word psychology is of Greek origin, “psyche” – soul, “logos” – learning, and literally means the science about human soul. Psychology is a very young and at the same time old field of human knowledge. As independent science it exists hardly a century, however we may be sure that the key problems of psychology embarrassed people long before. Due to this there are two psychologies. Psychology as a system of scientific knowledge is known to few people, chiefly those who are directly involved into experimental or theoretical research of psychological phenomena. Psychology as a system of life experience is familiar to each human being (Franzoi, 1996). Social psychology stands apart among all other branches of psychological science. The combination of these two words itself is an indicator of the specific place of this science. Having emerged at the interface between two other sciences – sociology and psychology – social psychology still preserves its independent status. There are various reasons for it but the principle among them is existence of a certain set of social phenomena that cannot be explained either within psychology or within sociology. Sociology studied the society in general, psychology studied processes that took place inside human brains, but none of them was interested in influence of people on each other or influence of group on people. Social psychology is “…the scientific discipline that attempts to understand and explain how the thought, feeling, and behavior of individuals are influenced by the actual, imagined, or implied presence of others” (Allport, 1985, p.3). In other words this branch of psychology studies the logic of social behavior of separate people or groups and thus helps to define reasons or forecast their behavior under certain circumstances. Due to this social psychology can be effectively applied to nearly all spheres of human life and work. The management of employee relations is one of the most important spheres of modern business. Knowledge of the basic principles of social psychology can be very helpful in understanding major driving-forces of people’s behavior, their motivation, etc. These include the principle of social construction of reality, the persuasiveness of social influence, several motivational and processing principles. There are three major motivational principles in social psychology: People always strive for mastery, which means they try to comprehend and forecast events in the social world in order to obtain encouragement. They enjoy feeling experienced and effective and will do their best to obtain these feelings. And on the contrary they are likely to avoid situations that exclude obtaining them. People are apt to seek connectedness, i.e. they look for support, love, and acceptance from those who surround them. Due to this groups they care about and value usually make people behave in a manner to liking from representatives of such groups. People value “me and mine” that means they wish to see themselves – as well as other people and groups they like – in a positive light. It makes people collect and remember information in the support of this positive motivation, and neglect or simply miss information that proves the opposite (Smith and Mackie, 1995). Processing principles defined by social psychology direct our cognitive efforts determining the logic of people’s understanding others and themselves: Conservatism is one of the dominant human features. People are slow to change their views, and this equally concerns separate individuals or groups. Accessibility of information means that most readily accessible information has the biggest influence on people’s thoughts and behavior. Superficiality v. Depth principle means that usually people do not put much effort into dealing with information unless specially motivated. In this case they will process information at depth (Smith and Mackie, 1995). The social construction of reality is another fundamental principle of social psychology. Each individual’s vision of reality is a complex construction consisting of cognitive, affective, and social components, i.e. any perception is a complex process, not a simple mental act. And finally, the pervasiveness of social influence is an irrefrangible axiom of social psychology. Allport’s definition of this science quoted above contains a very good explanation of this principle: “…the thought, feeling, and behavior of individuals are influenced by the actual, imagined, or implied presence of others". As a rule people do not recognize this influence (Franzoi, 1996). Each of these principles can help management deal more successfully with many aspects of the employee relations practice. Main Discussion Motivation is a driving-force of human behavior but often it is very difficult to distinguish real motives of some or other behavior. The motivational principles of social psychology identify major sources of human motivation, which can be helpful in several ways. Knowledge of these principles facilitates identification of causes of any behavior that in its turn allows fast and effective influencing it. Providing the stuff with effective motivation is perhaps one of the most difficult tasks for managers. Money incentives often seem to be the only alternative that effectively motivates people. However, knowledge of the motivational principles will allow choosing more rational and effective motivating people: people get pleasure from feeling competent and this feeling is usually the best reward. In a company, whether it is small or large, employees differ in their degree of power over one another with the manager at the top of organizational chart. Psychological definition of leader is the following: “The person who exerts the most influence on group behavior and beliefs” (Franzoi, 1996, p. 539). So the manager is a leader of company but sometimes he/she does not fulfill his/her obligations toward his stuff. There are three types of leadership identified in social psychology each of them having its advantages and drawbacks. Authoritarian style presupposes short and clear orders, planning beforehand, chill manner of speech, emotions are not taken into consideration, the manager stands apart all other group, and his voice is always decisive. Democratic style implies instructions in form of proposals, friendly style of conversation, punishment and encouragements are accompanied with pieces of advice, the manager is part of the group and his voice is not always decisive. And laissez faire style presupposes conventional speech, absence of punishment or encouragement, no cooperation, leader lets it all hang out and stands apart from the rest of the group but his voice is not decisive at all (Franzoi, 1996). A good manager should be capable of choosing a proper style of leadership but the choice will hardly be successful without knowledge of the psychological principles. The leader is usually in charge of making decisions, information handling, proper discipline, and many other things. Handling information the leader should observe the principles of its accessibility together with Superficiality v. Depth principle. The leader can use the effect of readily available information to additionally motivate people. Any decision as a rule has proponents and opponents. Due to this the process of decision-making is pregnant with conflicts and social dissonance, which are accepted as an inalienable side effects of the process. And once more the knowledge of psychological principles can help avoid negative outcomes of decision-making. The pervasiveness of social influence principle describes the phenomenon of unrecognizable group pressure on individuals that can be used in the employee relations practice to reduce the number of dissatisfied. This principle also makes the leader keep in mind the opinion of majority during making decisions, because precisely democratic-style leaders who take into consideration opinion of the group achieve better results than leaders who neglect position of majority (Smith and Mackie, 1995). Racial or sexual prejudice and stereotyping plays a very important role in relations between people. These psychological phenomena belong to the best explored. Prejudice is “… a negative attitude directed toward people simply because they are members of a specific social group” (Franzoi, 1996, p 386). A person who is prejudiced toward some group usually ignores any individual qualities of its members and forms his opinion based exceptionally upon his negative predisposition. Prejudice leads to discrimination that is “… a negative action toward members of a specific social group” (Franzoi, 1996, p. 986). As a rule prejudice is not based upon the person’s own experience as well as stereotyping, however, absence of knowledge about their roots creates an illusion that it is true. However, the prejudice and stereotyping can be explained from the standpoint of social psychology. In accord with the third motivational principle people tend to see themselves and people who belong to the same group (ethnic and cultural in this case) in a positive light. Logically, the attitude toward other groups will be neutral at best. There are two types of social contacts: activity and communication that significantly differ from each other. Activity usually results in creation of a product either material or ideal (thought, statement, formula, etc.) while communication, as a rule, produces no visual results. The result of communication is reciprocal influence of those who communicate (Franzoi, 1996). A lot of animals and even some plants are capable of communicating with representatives of their specie – human being is not the only creature that possesses this capability. However, only human beings have such complicated communicative device as language and communicate consciously. Literally, communication is the keystone of human life and civilization. Business and employee relations are by no means exclusions from this rule: communication is an unalienable feature of any business relations. Business communication is a part of common activity and its principle aim is ensuring quality of products. Chief executive communicates with chiefs of departments, they communicate with other employees, employees communicate with each other – each of these types of communication is very important for effective functioning of the system. But very often people forget that communication is a complex system that has its own rules and interior logic. Due to this the main aim of any communication – persuasion – often remains unachieved. Basic knowledge of psychology of communication may help always achieve positive results. Communication consists of several interrelated and equally important components. Communicative component or communication in narrowest sense is information exchange between partners, transmission and perception of knowledge, ideas, feelings, and emotions. The essence of interactive component of communication is action exchange or organization of interpersonal activity intended to help in performing some common task. And the last perceptive component of communication is the process of reciprocal perception, cognition and understanding between those who communicate. This component is a base for establishing further interpersonal relations (Franzoi, 1996). Knowledge of basic psychological principles is no doubt helpful in choosing style and manner of communication and proper recognition of the partner. The communicator should not forget that conservatism – unwillingness to change established views – is one of the prevailing features of human beings. Besides there are a number of characteristic features of psychological nature that may either facilitate or complicate the communication process. Among them are absence or presence of feedback, communicative obstacles, different levels of information exchange, etc. Bilevel nature of interpersonal communication is a very important feature of the process. Verbal level is major in information exchange and language is the main instrument on this level. Non-verbal communication is absolutely different but hardly less important. Appearance, gestures, mimics, poses, tenue, eye contact, and many other silent manifestations of feelings, emotions, moods of people allow making conclusions about their perception of what is going on. There are more than 20 thousand facial expressions and each of them expresses different feelings, and even more gestures that sometimes may even substitute verbal communication (Ekman, 1993). Non-verbal communication is a very important part of business relations, especially during negotiations. In case there is a discrepancy between verbal and non-verbal sources of information – a person claims about his sureness with incertitude written on his face – we usually rely precisely on non-verbal source. In the beginning of 1980’s during business negotiations a salesman constantly took pictures of his partners. Soon after the negotiations began and the sides had a preliminary discussion of price terms the salesman named his price that was precisely the boundary price his customers could afford. All attempts of the customers to reduce it failed. The contract was signed and soon after that the customers received an album with photos taken during the negotiations and subscripts indicating the price proposal for each picture. Facial expression, gestures and poses of the customers vividly demonstrated the boundary price they were ready to agree to. Smile is a universal mean of non-verbal communication. As a rule it is a manifestation of goodwill or sympathy and a lot of people think that it is applicable to any situation. However, psychological researches demonstrated that smile, as any other mean of non-verbal communication, may express different, sometimes directly opposite feelings and emotions. It can be wry, forced, pleasant, scornful, ironic, etc.; sometimes one and the same smile can be interpreted in different ways – just remember the smile of Mona Lisa, the work of Leonardo da Vinci. In business and employee relations the feeling of resistance may easily spoil the organized and stable scheme of work or crumb a good bargain. However, negative attitude toward certain people not always can be explained by racial or sexual prejudice or stereotyping, especially when we deal with people of the same race and culture. There is a specific branch of social psychology that investigates the sources of conflicts as well as suggests resolution strategies. This knowledge is extremely important for managers who have to control and organize work of numerous employees resolving conflicts between them. There are a lot of examples how incapability to compromise led to collapse of economically stable companies. Due to this the manager’s competence to find a resolution to difficult conflict is sometimes more important than his other professional qualities. Correspondingly, knowledge of psychology of the conflicting sides and ability to classify and forecast development of the conflict implied in this knowledge are literally priceless. Earlier on scientists considered that conflicts are an evidence of ineffective functioning of the company and poor management. Nowadays, after decades of research, majority of experts incline to an opinion that even in best-managed companies conflicts are not only unavoidable but also desirable when properly controlled and managed. The most general definition of conflict can be formulated as follows: it is a clash of interests of different social groups or separate individuals. There are an immeasurable number of causes that may lead to conflicts so it is impossible to classify all of them. However, historical experience and social practice allow outlining several problems that often cause conflict situations (Shellenberg, 1996). There are several classifications of conflict situations depending upon their duration, difficulty, current, and other factors. But the most logical way of classification is dividing all conflicts into two big groups: interpersonal and in-personal. In-personal conflicts are caused by inner psychological factors that clash with each other. For example, a person wants to spend more time with his/her family but the job takes a lot of time. Apparently, these conflicts are difficult to control and manage. Interpersonal conflicts between individuals or departments can be found in any organization. There is an opinion that the main cause of interpersonal conflicts is difference in characters. However, thorough analysis of causes of such conflicts demonstrate that real sources for majority of organizational conflicts are prose – struggle for narrow resources, plant space, exploitation of equipment, manpower, etc. Conflicts between chiefs and subordinates are also very popular, when the first consider that the second do not work to the best of their ability while the second think that they are given immoderate demands. Other sources of interpersonal organizational conflicts may include intimate interdependence between tasks performed by different employees/departments (for example, the chief executive blames the marketing department in low sales, the marketing department blames personnel department in engaging unqualified employees), difference in tasks (when one department is interested in introducing new products while another department is not), insufficient communication, and sometimes psychological incompatibility (Thomas, 1973). Since majority of conflicts have material not psychological causes they can be successfully resolved. Unfortunately there is no panacea strategy that would effectively resolve all conflicts as well as there is no particular strategy that would fit all conflicts due to struggle for narrow resources, for example. Each separate conflict requires individual approach and separate strategy, although an effective strategy employed to resolve one conflict might be successfully used to cope with another conflict (Shellenberg, 1996). There are two approaches to managing conflicts: organizational and interpersonal. Organizational methods include clear formulation of requirements, rights and duties, scope of work of each employee and department, the principle of unity of command, formulation of common goals and informing the stuff about overall policy, strategy and perspectives of the company (for example, “McDonald’s” employees are convinced that the goal of their work is to feed all Americans, quickly and tasty), and the proper system of encouragement and motivation (Thomas, 1973). The letter means establishing such criteria of effectiveness that would exclude and clash of interests. For instance, if safety engineers are rewarded depending upon the quantity of safety rules violation (the more the better), it will inevitably lead to constant conflicts with all other departments. Obviously, organizational methods focus mainly upon preventing and managing conflict situations. Interpersonal methods help to find a proper solution using either manager’s authority or his mediation gift. Research vividly proved that any organizational conflict can be resolved if the manager is aware of applicable techniques. Psychologists defined the principles for managers to follow in resolving conflicts: Finding out the essence of the conflict and identification its real source; Tracking the development of the conflict and developing a strategy for its resolution; Resolving the conflict that includes: taking into consideration material goals of each conflicting side, their emotional condition, psychological characteristics, and dynamics of the conflict development (Shellenberg, 1996). Mediation and arbitration may be very effective in resolving conflicts, especially if the manager belongs to one of conflicting sides. In this case mediators or arbitrators have to stick to the same principles in order to find an objective solution. Well-being of any organization depends upon harmonic and stable work of all employees and departments. Apparently, conflicts rock the boat but in some case the manager simply can’t properly control his company and organize employee relations even if there are no conflicts. And once again the explanation of such situations can be found in psychology. Conclusion There is hardly any other branch of human knowledge that would be as beneficial to the management of employee relations that psychology. Neither economics nor any other exact or descriptive science is applicable to finding the logic of human relations in the complex system of big company – it is the scope of social psychology. Knowledge of even basic principles of social psychology will help avoid a lot of problems. The importance of the psychological principles in the management of employee relations is due to several reasons. First and the most, psychology reveals and classifies those hidden motives, feelings, and reasons that are impossible to discover with the help of any other science. Moreover, it also provides people with powerful and reliable instruments of persuasion, motivation, and even pressure. The principles of social psychology can be effectively applied to any aspect of employee relations practice, including motivation, leadership, communication, negotiations, information handling, decision making, and others. Psychological research in field of conflicts, their sources and resolution strategies is really priceless. It explains the nature of organizational conflicts providing managers with knowledge that allows finding an objective and quick solution to seemingly irresolvable conflicts and their effective management. And finally, social psychology includes a real manual for those managers who have problems with defining the style of their work. Even not being a natural born leader and lacking God-given charisma a person can become a manager and effectively regulate relations and work of his stuff upon a condition he/she is aware of main psychological principles of leadership. Employee relations are human relations as well and no other field of human knowledge except psychology can properly explain them. References Allport, G. The historical background of social psychology,” In: G. Lindzey and E. Aronson (Eds.), Handbook of social psychology,Vol.1, New York: Random House, 1985; pp 1-46. Ekman, P. “Facial expression and emotion,” American Psychologist, 48, 1993; pp 384-392. Fast, J. Body Language. New York, 1970. Franzoi, S. Social Psychology. Toronto: Brown and Benchmark, 1996 Shellenberg, J. Conflict Resolution: Theory, Research, and Practice. State University of New York Press, 1996. Thomas, K. Management of conflict. Los Angeles, 1973 Smith, El. and Mackie, D. Social Psychology. Worth Publishers, 1995 Read More