In which ways do you think psychology is important in the business world?

Expert Answers
litteacher8 eNotes educator| Certified Educator

Psychology is very important to the business world.  There are many practical applications of psychology in the business world.  I will describe a few for you here.  These three are especially important in tough times.

Motivation Motivation is the reason people do things.  If we better understand why they do things, we can make them do what we want them to do.  For businesses, it is very important to understand how to motivate people and understand them, so you can encourage behaviors you want and discourage behaviors you don’t want.

Consumer psychology Companies exist to sell products.  Their main goal is therefore to figure out what makes people want to buy their product, or why people are not buying it.  This has direct applications in marketing, but also in product development.

Organizational Behavior Psychology helps us understand how individuals act, and we can apply those rules to organizations because they are made up of individuals.  Although organizational behavior is strongly based on principles of psychology, it is more of a hybrid field utilizing business and psychology knowledge.

thorsten1970 | Student

Psychology is very important in process of business negotiations, persuasion and promotion of own interests in discussions with the counterparty, in convincing a partner in the rightness of defending  interests. It is also important aspect of psychology in making business decisions(planning of business strategy, participating in any projects, attracting investments etc.). In addition, psychology plays an important role in personnel management.