This is the 2007 version. Click here for the 2017 chapter 15 table of contents.

Industrial/Organizational Psychology

In today's society we have a formalized version of the group that works together, as if one body, under the control of a powerful leader. It is called a corporation. At its worst, a business might resemble a sinister charismatic movement, with goals and firings at the whim of its leader, demonization and dirty tricks aimed at opponents, and (among key personnel) loyalty to the corporation even if it harms innocent people. Some of the largest corporations in America were like this during the 1800s and early 1900s.

In the most recent 100 years, corporations have been tamed in key respects. Monopoly laws keep corporations from eliminating competition. Financial and accounting regulations force a degree of transparency in bookkeeping. Market forces, now including social media, provide a potent incentive to play be the rules and be perceived as a good citizen. Ironically, these limiting forces have allowed corporations to become more successful, efficient, and consequently larger than ever, sometimes truly global in scope. Wal-mart, for example, has a budget larger than most nations in the world. Today businesses and corporations have a profound influence on international relations. It has been said that the U.S. never went to war with a nation that had a McDonalds restaurant. The truth underlying that statement is that nations with interdependent economies have a strong incentive to maintain peaceful relationships.

Several branches of psychology deal directly with businesses and corporations. Organizational psychology specializes in the analysis of leadership, decision-making, and control of organizations. Human factors and engineering psychology examine the interface between humans and technology. Consumer psychology is devoted to analyzing the needs and desires of consumers, and personnel psychology aims to keep employees healthy, happy and productive.

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