Psychology plays a part in every aspect of leadership, especially when it is applied to employees and customers To keep employees and customers happy, psychology is usually employed. Psychology is also employed when companies go to a global clientele and they are working with people of different cultures.
Another area where psychology is important is in the hiring of new employees. Dynamic leaders must understand what the company needs are and then find ways to screen candidates in order to find the best talent for all positions. Some companies rely on psychological concepts and testing to help them define whether the potential employee has the characteristics needed for the position.
There are many concepts that use psychology as a base. As an example, Naisbitt and Aburdene (1990) spoke about the fact that most organizations need to capitalize on the benefits of diversity. The reason they must do this is because the way that diverse groups are able to work together will directly impact the productivity that can be expected from the employees. Psychological models will be important to use beaus they reinforce work with others and place building relationships as the most important aspect of dynamic leadership. As an example, Goethals (2005) understood that the model of psychodynamics used by Freud, was useful in studying leadership. In using Freuds theory, he learned that when someone is able to blindly obey a leader, it is because they had an "instinct to submit to authority" (Goethals, 2005, p. 99) and the leader had to assert their authority for it to happen.
Another model that is important is the social-cognitive model. This model emphasizes the concepts of social identity and its interaction with a group. Many people find their social identity through interaction with their own groups or teams. This model emphasizes two specific processes that people go through to find their social identity" a0