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

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Kale Emmerich eNotes educator | Certified Educator

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Psychology is fundamentally important in the business world for many reasons, but most of all, psychology is important simply because businesses are made of people, and psychology is the key to understanding people. Within an organization, psychology helps with Human Resources issues such as deciding who would be the best fit for a position or team, the best ways to resolve interpersonal conflict, and how best to motivate or improve work ethic. A solid understanding of psychology can seriously improve a company’s inner workings.
Outside the company, businesses utilize psychology in order to create more effective marketing and encourage sales. By using psychology, they can understand consumer trends and gain an understanding of tendencies that will improve their sales numbers to generate revenue. This is the entire concept behind modern supermarkets—psychology and human tendencies are leveraged to create more selling opportunities.

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Lynnette Wofford eNotes educator | Certified Educator

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Business success depends, for the most part, on skills...

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litteacher8 eNotes educator | Certified Educator

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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.