Business Psychology and Organizational Behaviour
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Business Psychology and Organizational Behaviour

Eugene McKenna

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eBook - ePub

Business Psychology and Organizational Behaviour

Eugene McKenna

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About This Book

Business Psychology and Organizational Behaviour introduces principles and concepts in psychology and organizational behaviour with emphasis on relevance and applications. Well organised and clearly written, it draws on a sound theoretical and applied base, and utilizes real-life examples, theories, and research findings of relevance to the world of business and work.

The new edition of this best-selling textbook has been revised and updated with expanded and new material, including: proactive personality and situational theory in personality; theory of purposeful work behaviour; emotional and social anxiety in communication; decision biases and errors; and right brain activity and creativity, to name a few. There are numerous helpful features such as learning outcomes, chapter summaries, review questions, a glossary, and a comprehensive bibliography. Illustrations of practice and relevant theory and research also take the reader through individual, group, and organizational perspectives.

This is an essential textbook for undergraduates and postgraduates studying psychology and organizational behaviour. What is more, it can be profitably used on degree, diploma, professional, and short courses. It's also likely to be of interest to the reflective practitioner in work organizations.

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Learning outcomes
Nature of psychological perspective ~ Different approaches
Nature of organizational behaviour
Historical perspective ~ Scientific managementClassical bureaucracyPrinciples of organizationIndustrial psychology in the UKHuman relations movementNeo-human relationsSystems approachContingency approach
Contemporary issues
Research methodology ~ Characteristics of the scientific methodTechniques and settingsEthical issues
Framework and issues
Chapter summary
Further reading
After studying this chapter you should be able to:
  • Assess the role played by psychology in the analysis and solution of organizational problems.
  • Draw a distinction between the different traditions or schools of thought in psychology and assess their significance.
  • Explain what is meant by the multidisciplinary nature of organizational behaviour, and comment on the standing of psychology as a contributory discipline.
  • Examine the different approaches used by theorists and practitioners in the study of organizational behaviour over time.
  • Assess the changes in the external environment that have brought about fundamental changes to organizational functioning in recent years.
  • Identify the role of research in the social sciences and examine the significance of the scientific method.
  • Examine the different techniques available to the researcher when investigating issues or problems in organizations, and acknowledge the significance of ethics.


This opening chapter sets out initially to explain the nature of both the psychological and organizational behaviour perspectives. Subsequently, as we reflect on the application of concepts from psychology and organizational behaviour, a historical view will be taken. The final section is devoted to research methodology, which reflects the need to be rigorous and systematic in the way evidence relating to behaviour is collected. Therefore, the discussion will unfold as follows: (1) nature of psychological perspective; (2) nature of organizational behaviour; (3) historical perspective; (4) contemporary issues; and (5) research methodology.


The study of psychology provides valuable knowledge and insights that help us to understand the behaviour of people in business organizations and settings. As a consequence, the manager is provided with pertinent information about human behaviour when faced with human problems in a business and management context. The contribution that psychology has made to the solution of many human problems encountered in business is signifi-cant. It has resulted in better management of human resources; improved methods of personnel selection, appraisal, and training; improved morale and efficiency of operations; a reduction in accident rates; and better working conditions.
Despite these claims to success, it should be stated that psychology is not a panacea for all the human problems associated with business. For example, there are occasions when the outcome of the application of personnel selection techniques is less than perfect. Likewise, a programme to raise the level of morale in a company may, for a variety of reasons, fail to meet the expectations of the management, even though the results provide grounds for optimism.
In the study of human behaviour the psychologist is concerned with a repertoire of behaviour that is both observable (e.g. walking and talking) and unobservable (e.g. feeling and thinking). Animal behaviour has also captured the interest of psychologists.

Different approaches

The development of psychological thought has been influenced by the different traditions associated with the study of behaviour. These traditions are often referred to as “perspectives” or “models of man”. The major perspectives can be classified as: (1) the psychoanalytical approach; (2) the behaviourist approach; (3) the phenomenological approach; and (4) the cognitive approach.


The psychoanalytical approach, initiated by Freud, ignores or shows little interest in certain areas of contemporary psychology (e.g. attitudes, perception, learning) because of a prime preoccupation with providing help for neurotic patients. This approach, which is discussed in Chapter 2, gave a major impetus to the early development of modern psychology.
In psychoanalysis, the therapist takes note of what the patient has to say, and perceives emotional reactions and signs of resistance to the treatment. In a discussion with the patient the therapist interprets the information obtained from the analysis session. The central thrust of this approach is that people’s behaviour can be investigated in a non-experimental way, that behaviour is determined by some unconscious force, and that behavioural difficulties or abnormalities in adult life spring from childhood. In work situations it is not uncommon to find that one individual reacts differently from another in deep emotional terms in response to a given stimulus and this could be attributable to different complex experiences embedded in the unconscious (Fotaki, Long, & Schwartz, 2012). For example, apart from rational economic and financial justifications underpinning a takeover bid by one company for another, one can envisage a situation developing whereby unconscious forces in the minds of key players emerge and are related to mastery, control, and dependency on the part of the predator and the takeover target.


Behaviourism is the approach to psychology that is confined to what is objective, observable, and measurable. This approach, which featured prominently in psychology until the 1950s, advocated a scientific means of studying behaviour in carefully controlled conditions. The use of animals in many behaviourist experiments may be influenced partly by the fact that they are less complicated than humans, with a lower propensity to rely on previous experience when faced with a stimulus. Behaviourism, which is discussed in connection with learning in Chapter 6, provided psychology with a number of valuable experimental methods.
However, the preoccupation with behaviour that can be observed and measured objectively has obvious weaknesses. These are primarily associated with the neglect of the processing capacity of the human brain. Factors such as subjective feelings, expectations, plans, and thought processes are ruled out because they do not lend themselves to scientific analysis in the same way that observable behaviour does. In a sense, behaviourism may be seen as a mechanistic view of people, with the emphasis on the inputs and outputs from the “machine” but with little regard to the functioning of the internal mechanics.


The phenomenological approach amounts to a humanistic reaction to behaviourism. An example is the view that individuals strive for personal growth, and an illustration of this is Maslow’s self-actualization as the ultimate level in his hierarchy of needs discussed in connection with motivation in Chapter 4. The emphasis of the phenomenological approach is essentially on people’s experience rather than their behaviour. For instance, even though on occasions we all share common experiences, each person perceives the world in his or her own distinctive way. Our unique perceptions – and action strategies based on them – tend to determine what we are and how we react. In the process the individual utilizes previous experience, needs, expectations, and attitudes. Finally, in the phenomenological approach, unlike the psychoanalytical approach, unconscious processes are not systematically explored, but it is reasonably effective in treating the less severe mental disorders (Eysenck, 2009).


The cognitive approach, which focuses on the internal mental states and processes of the individual (e.g. perception, learning, memory, and reasoning), has been dominant in psychology since the 1970s and is recognized as a major school of thought. This approach to psychology, which has a fair amount in common with the phenomenological approach, is adopted throughout the book, where a cognitive view is acknowledged (e.g. perception and decision making). It seeks to explain features of human behaviour that are not directly observable.
Cognitive psychologists have made a major contribution to the development of the growing field of neuro-psychology and cognitive neuroscience. Over the last decade there has been a significant amount of activity in cognitive neuroscience. This is the area of cognitive psychology in which brain imagery is used in conjunction with behavioural measures in order to increase our understanding of the cognitive processes associated with doing a particular task (Eysenck, 2014). Cognitive psychology has also made a very useful contribution to the development of cognitive therapy. The latter addresses thought processes connected with anxiety and depression and, when combined with behaviour therapy, forms cognitive behavioural therapy (CBT), discussed in Chapter 16 with respect to stress reduction strategies.
Research carried out into the prominence of widely recognized schools in psychology detected the following trends (Robins, Gosling, & Craik, 1999):
  • Psychoanalytical research has been initially ignored by mainstream scientific psychology over the past several decades.
  • Behavioural psychology has declined in prominence and it gave way to the ascension of cognitive psychology during the 1970s.
  • Cognitive psychology has sustained a steady upward trajectory and continues to be the most prominent school.


A number of the concepts examined in this book fall within the boundaries of organizational behaviour, a subject that refers to the study of human behaviour in organizations. It is a field of study that endeavours to understand, explain, predict, and change human behaviour as it occurs in the organizational context (Wagner & Hollenbeck, 2014). Apart from the focus on the individual, organizational behaviour is also concerned with the relationship between the individual and the group, and how both interact with the organization. The organization is also subjected to analysis, as is the relationship between the organization and its environment.
The primary goal of organizational behaviour is to describe rather than prescribe – that is, it describes relationships between variables (e.g. motivation and job performance), rather than predicting that certain changes will lead to particular outcomes. An example of a prediction is that the redesign of a job (e.g. job enrichment) in a particular way will lead to an increase in job satisfaction and motivation to work, which in turn will give rise to better performance on the job.
Organizational behaviour, as a social science rather than a natural science, encounters difficulties when identifying, defining, measuring, and predicting relationships between concepts because it deals with phenomena (e.g. the human condition) that are more complex than phenomena that constitute the physical world. It adopts a multidisciplinary perspective, but it should be said that psychology as a discipline makes the greatest contribution (Miner, 2003). The multidisciplinary perspectives are outlined in Table 1.1. The development of organizational behaviour has been associated with the growth of large organizations over the past century, although a preoccupation with issues related to organization and management has been around for centuries.
Table 1.1 Organizational behaviour disciplines
Discipline Focus

Psychology Individual, group, organizational development, occupational psychology techniques
Sociology Organizational analysis
Anthropology People's relationship with their environment (e.g. culture)
Political science Activity connected with the acquisition of power, engaging in political activity, existence of vested interests, conflict generation and resolution, coalition formation
Economics Economic policy, firm as an economic entity, nature of labour markets, human resource planning
Industrial engineering Time and motion study and work measurement
Medicine Occupational stress and employee well-being
The way ...

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