What Is Business Psychology?

There are more than 2.5 million businesses actively trading in the Australian economy, employing over 12 million people. But, according to forecasting data, only 25 per cent of new businesses will make it to 15 years in operation or more.

Why? What sets the lasting endeavours apart from the rest?

There’s no silver bullet for long-term business success, but there is one underlying and often forgotten factor that is a major determinant of whether an enterprise will thrive or barely survive. We’re talking about human behaviour. There is an art and science to knowing what makes employees tick.

There’s a field for it too and it’s called business psychology. If you’re interested in a career that fuses the science of human behaviour with practical business application to improve outcomes for employees and organisations, this may be the pathway for you.

But what is business psychology and how does it fit into the business world?

Below, we explore the integral role of psychology in business management and operations, why it’s important, the benefits of employee wellbeing in the workplace, and how to combine psychology and business to gain a competitive edge.

What is business psychology?

Business psychology combines insights into human behaviour with progressive business strategies to enhance the effectiveness of both employees and organisations. It’s worth noting there are core differences between business and organisational psychology.

Business psychology does not require registration and does not have a specific job title, but its practices can be implemented by a number of business professionals. On the other hand, organisational psychologists hold specific roles and require registration.

Business psychology takes a big picture approach, applying psychological principles to areas like corporate strategy, market performance, business operations and stakeholder relationships. By contrast, organisational psychology tends to hone in on employee welfare and organisational structure.

Broadly speaking, business psychology seeks to bolster team wellbeing, improve workplace culture, streamline business efficiencies and amplify productivity.

Why is business psychology important?

The connection between employee psychology and workplace performance is well documented. A recent survey by the Australian Psychological Society (APS) confirmed that employee wellbeing and a supportive work culture are not just ethical imperatives for forward-thinking businesses but critical to productivity and job satisfaction.

Amidst rapidly advancing tech, tumultuous global trade agreements, climate change concerns and supply chain disruptions, the business landscape is facing a multitude of challenges. A fortified team is integral for organisations that want to not only withstand them but turn these challenges into opportunities.

In addition to gaining strategic advantage, the implementation of business psychology practices in the workplace can be beneficial in a number of areas, including:

• Improved employee wellbeing and productivity: Understanding the psychological factors that impact employee morale, motivation and overall performance can prevent potential resourcing issues, create a more positive work environment and increase overall productivity.
• Strong leadership: Managers can improve their leadership effectiveness by understanding different leadership styles and their impact on employees and organisational culture.
• Inclusion and diversity: Business psychology can provide frameworks to understand, navigate and foster a strong sense of inclusion and diversity within the workplace.
• Conflict resolution and effective communication: Cognitive psychology frameworks can be transformative in resolving workplace conflicts and promoting effective collaboration among employees.
• Data-driven HR practices: Integrating psychological research with data analytics to develop evidence-based HR practices can help organisations navigate workplace challenges and proactively build the most effective teams.
• Customer behaviour analysis: Some organisations will apply business psychology to help interpret customer behaviour and inform marketing or wider business strategy.
• Change resilience: Psychological insights can be applied to manage organisational or individual resistance and anxiety associated with change, and equip businesses to prepare for and adapt to change more effectively.

How is business psychology used in organisations?

For any organisation, understanding human behaviour is key to achieving organisational goals and maintaining a healthy work environment. Whether it’s employees, stakeholders or customers, every organisation needs to harness human psychology to build strong businesses.

For this reason, business psychology has a range of applications in organisations across a number of industries, including technology and IT, finance and banking, education, hospitality and tourism, non-profit, government and more.

So how does psychology help in business? There are a number of key areas it can be applied in the workplace, including:

• Talent management and recruitment: Cutting-edge hiring managers, HR departments and recruitment agencies can employ business psychology practices to identify what kind of new recruit or additional resources a team may need. They can also use them to design assessment methods that identify candidates whose values and personality traits align with company culture.
• Training and development: Business psychology can be used to develop and implement science-based training programs tailored to the professional growth needs and individual learning styles of the team as well as the strategic goals of the organisation.
• Employee engagement and performance: People and culture teams can leverage business psychology principles to develop strategies that help boost team engagement, morale, job satisfaction and overall performance.
• Mental health initiatives: HR teams can utilise business psychology to develop and implement strategies that focus on mental health, stress management, wellbeing, collaboration and resilience-building among team members.
• Change and crisis management: Employing psychology-driven tactics can be highly effective in facilitating smooth transitions through periods of major change and helping teams deal with unforeseen crises such as redundancies or unprecedented events like COVID-19.

How can learning business psychology advance my career?

As the spotlight on mental health in the workplace continues to get brighter and competition in the business landscape becomes more fierce, expertise in the use of psychology in business will be an increasingly valuable asset.

Professionals who understand the complexities of human behaviour will be better placed to secure higher-paying positions with earning potential well into the six figures.

Advanced postgraduate qualifications like a Master of Business Psychology can open doors to a number of sought-after professional pathways and help you stand out from growing competition.

Who should study business psychology?

With an advanced business lens, the degree is designed for professionals who want to understand the power of psychology when it comes to driving positive change for individuals and organisations.

This pathway is not for aspiring registered psychologists, but for those who want to master the art and science of human behaviour to drive organisational outcomes and champion workplace wellbeing.

Students may already have a psychology degree and wish to pursue an alternative career pathway from being a registered psychologist, but still use their psychology knowledge.

Alternatively, students may also have studied business or had business experience and want to upskill in psychology to enhance their role.

Not sure if this degree is for you? Get in touch with our friendly team via our website.

Which career pathways can benefit from business psychology?

Master of Business Psychology graduates will be well-equipped to thrive in a number of roles, including:

• Human Resources Advisor
• Behavioural Strategy Consultant
• Customer Research and Insights Specialist
• People and Culture Manager
• Organisational Development Specialist
• Business or Career Coach
• Employee Experience Manager
• Strategy Consultant
• Recruitment Specialist
• Corporate Headhunter
• Organisational Change Specialist
• Leadership Coach

Each of these positions can be hired in either an in-house or agency setting, or be self-employed on a consultant or contractor basis.

The need for business psychology

The business world is on the precipice of an avalanche of change. AI is transforming the way we work, communicate and live; globalisation is facilitating new frontiers of expansion as trade policies and economic tensions cause turbulence; and employees are redefining what workplace success and fulfilment actually look like.

Businesses of all shapes and sizes need teams that are engaged, motivated, collaborative, creative and resilient in the face of challenges. A strong understanding of human behaviour is essential to achieve this.

Professionals with expertise in business psychology are needed to nurture employee wellbeing, improve team engagement and satisfaction, and take overall business performance to the next level.

Drive organisational outcomes with ECU Online

ECU Online’s Master of Business Psychology combines cutting-edge expertise in human psychology with industry-leading business strategy to equip graduates with the specialist skills needed to drive real organisational outcomes.

Students will learn what drives human behaviour in the workplace and how to apply psychological theories to businesses, enabling them to shape a positive workplace culture through psychology. You will know how to empower people, teams and organisations to succeed through a range of methods, including applying interventions and mechanisms, developing talent and driving change management.

ECU Online is a top business school - the course is fully accredited by the Association to Advance Collegiate Schools of Business (AACSB) International. Designed for modern working professionals, the accelerated degree can be completed in as little as 20 months and is 100% online, making it entirely flexible to your schedule. A Graduate Certificate of Business Psychology (Online) is also available for students who need a pathway to entry.

Navigate complex and competing needs to drive organisational outcomes and champion workplace wellbeing with ECU Online’s Master of Business Psychology.

To find out more, reach out to one of our Student Enrolment Advisors on 1300 707 760, email future.student@studyonline.ecu.edu.au or download a brochure.