Koliso Perspective: The Psychology of Business—More than a Catchy Tagline

When most people think of psychologists, two prominent images come to mind: the white-coated research psychologist in a laboratory studying rats in a maze or attaching electrodes to someone’s head and the analytical psychologist providing clinical insights to a patient on a couch or interpreting subconscious behavior.

Applied psychologists are different. We’re basically scientists trained to apply psychological methods and frameworks to real world issues and problems.

The founder of applied psychology is not Sigmund Freud but Hugo Münsterberg, a German who immigrated to the United States and taught at Harvard in the beginning of the twentieth century. Münsterberg applied psychology to fields as diverse as legal testimony and confessions, engineering, teaching and business.

The International Association of Applied Psychologists (IAAP), of which Koliso co-founder David is a member, is the oldest international professional psychological society. How do applied psychologists look at solving real world issues?

Let’s consider traffic management. The IAAP has a whole division of members devoted to traffic and transport psychology. As trained scientists, applied psychologists look at the interactions between the traffic system, the behaviors of individuals and groups and the social rewards and expectations attached to driving. This has led to insights into the seven E’s of traffic psychology: education, enforcement, engineering, exposure, environment, emergency responsiveness and evaluations*. Education factors in variables such as in-car versus written examinations. Engineering examines effective signage and the response times needed to react to different road conditions. Enforcement looks at different kinds of controls and fines associated with good and bad driving.

As you can see, psychologists have a much wider influence on traffic management than simply investigating things such as driver road rage.

In the world of business, applied psychologists look at much more than just choosing the right candidates for jobs (traditional research type “test and tell” work) or helping employees deal with workplace stress (traditional counseling type roles).

Business is a series of interactions not just for the benefit of one person or the other, but voluntarily entered into for the benefit of both parties. It’s a system where motivations, expectations, the environment and the way the work is engineered play a significant part in the value of the exchange and how satisfied each party will be.

At different times the psychology of business focuses on the employees of the business, their customers and their community. It can include everything from recruitment, selection, training, performance appraisal, job satisfaction, motivation, engagement, productivity, work behavior, stress at work, reactions to change and effective management.

Applied psychologists are most effective in organizations where human capital is greatly valued: technology jobs, service industries, professional practices and other places where highly skilled employees are central to the business. Applied psychologists are trained to be methodical in their approach, look for predictable outcomes, and evaluate their success with measurable evidence.


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* Porter, Bryan E.. Handbook of traffic psychology. London: Academic Press, 2011.