Shareholders, Managers, Government, Employees, Customers, Suppliers

Business Management
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Institutional Affiliation
Business Management
Business is multidimensional and people are common across all of its areas. All the stakeholders (shareholders, managers, government, employees, customers, suppliers) are all composed of people. Any area that involves people, psychology becomes automatically involved as well. Therefore, psychology affects all business aspects. After the interview with a professor in management who have specialized in international business, it is evident that psychology plays a significant in the field since it helps them to understand the human behaviour processes and reasoning to create good interpersonal and communication relationships (Dr. Feng; Dr. Stiles).
Due to the various big things such as trade deficits and globalization, the business environment is widening making its management even more complex (Dr. Feng). However, understanding the psychology of all the stakeholders will enhance an effective and efficient management. For example, the shareholders are the ones who come up with the investment vision in terms of objectives, missions and goals. Understanding their psychology helps the managers to understand the objectives of the business (is it a profit or non-profit, does it have any social objective?). Consequently, shareholders are the ones who decide what to purchase based on their psychological perspectives and values. Some shareholders do not invest in certain sectors of an industry such as alcohol, understanding why they do not like it will enable the managers to make effective decisions.
Employees form the complex part of business thus their psychology is hard to explain due to the various levels of hierarchy. Business have supervisors and reportees who should be considered. Consequently, there are top, middle and lower management levels that need to be considered as well. These various levels are different with distinct needs and motivations. The top level is concerned with the control of the labor force, it needs to be organized and efficient. Supervisors or the top level managers should have the ability of understanding how people are likely to react to various changes and policies in the organization. Secondly, they should be good leaders. Therefore, understanding the psychology of the lower levels enables the top managers to lead their juniors or teams to success. The middle level management is the complex one since it coordinates with both the top and lower levels. They are also supposed to ensure that the guidelines issued by the top level are followed. Middle management is involved with conflict management as well as negotiations and it requires proper incentives to be effective (Zhang & Bartol, 2010). The lower management level is also complex because it is the one the runs the business....