The Psychology of Business

The modern world is dominated by global businesses and corporate houses and any large scale enterprise requires a systematic understanding of employee and consumer demands, both material and non-material. The performance of business organizations depends on the performance of employees and the needs and expectations of the consumers, and so the ‘human’ factor is central to the success of any business. In recent years, say from the last part of the 20th century, there have been several changes in our understanding of human nature as it relates to work and performance in organizations and the primary focus in now on communication, leadership skills, and employee satisfaction. All these factors are important in enhancing the overall performance of any business organization. The psychology of business is thus primarily the psychology of employees and the psychology of consumers and it’s the organization that is responsible for maintaining the balance between consumer demands and employee demands. The Psychology of Employees - First let us talk about the psychology of employees. Any business house is operated by a number of employees and some of them are part of the higher management and are also considered as partners of business. The major elements that should be part of understanding the psychology of employees would be 1. Communication – Employee communication and understanding of business goals is an integral part of success and it is the duty of the management of an organisation to maintain direct and clear communication procedures through video conferences or seminars and presentations that would clearly state the mission and vision of the company. The communication between management and the other employees is thus a key aspect of employee or personnel psychology 2. Leadership – Any human resource manager or career counselor would focus first on developing leadership skills and leadership is an integral part of business because our inner leadership skills help us to break the mould and do something different and pioneering. Leadership skills in employees are important as team leaders in an organization are required to motivate other employees to attain certain company objectives. Leadership is thus closely related to motivation as a highly motivated individual will also be more likely to show leadership skills 3. Satisfaction – Employee satisfaction is an important aspect of business and we hear of several companies declaring large pay packages and incentives to retain the best talent. Job satisfaction, material satisfaction in terms of salary and bonuses, and social satisfaction with regard to the work ambience are essential aspects of business and all businesses will have to pay specific attention to employee social, financial and emotional satisfaction. Fulfilling the needs of employees should be the primary focus of companies and this could be in accordance with Maslow’s hierarchy of needs in which it has been suggested that financial security, personal safety would be very important to humans followed by emotional need for social contact and connection and then we have esteem needs for social status and reputation. Employee psychology is thus based on these three major factors or elements of business and all businesses should pay considerable attention to employee communication, leadership and motivation and employee satisfaction as essential aspects of psychology of business that can in turn enhance performance. The Psychology of Clients/Consumers – Apart from employees, the consumers or customers are an integral aspect of business and the business management or corporate heads will have to understand the needs of customers as well in order to expand their business potential. Consumer psychology is based on several elements and this has a direct relation to whether businesses will thrive in a competitive global environment. Consumer psychology is shaped by the following related factors.

1. Innovation – Consumers are ever curious and eager to buy new products and services and their own expectations and satisfaction tend to drive business innovation. Innovation is the direct result of consumer necessities and any innovative or novel product immediately gets consumer attention. The apple iPod or iPhone attracted consumer attention with the novelty so innovation as it relates to business has a direct impact on consumer psychology.

2. Branding – Brands indicate social status and many individuals prefer to buy branded products as these products promise quality and enhances social prestige. Women spend thousands on Gucci or Chanel products simply they want to be seen with designer clothes, shoes and accessories. Designer brands apart, regular brands for food products let’s say Kellogs or Nestle are company names which are perceived as brands signifying quality. Consumers are not just interested in innovation and innovative products but they are also interested in familiarity and thus innovative products of renowned/familiar brands or companies are the most successful in the market. Psychologically we are seekers of novelty and we are also seekers of familiarity and a certain amount of routine. Thus both these needs have to be balanced in case of consumer expectations and only then businesses can be successful. Brands are synonymous with company reputation and increase consumer confidence.

3. Performance – Company performance in terms of stock market indications, annual reports, projections of company profits improve consumer confidence and in business performance drives performance. Thus if a company’s prospects are bright and company growth is projected, the business halo effect works immediately and further improves business. When employee psychological factors should be considered to enhance company performance, performance in turn is a factor to meet consumer psychological demands. So business performance is a two way process, it is driven by consumer expectations and drives employee contribution. Thus consumer psychology which is based on demands and expectations for products and services are guided by these following factors of the extent of innovativeness of a company, the brand or reputation of the company and the performance of the business organization. Employee psychology which in turn is also based on demands and expectations of employees highlights the extent to which they have communication facilities and the extent to which employees are motivated or satisfied in their jobs. Thus the psychology of business has two distinct branches – that which deals with employee interests and that which deals with consumer interests and although these can at times overlap, the elements are distinct and I have tried to differentiate between the key elements of consumer business psychology and employee business psychology. Thus any composite organizational business psychology will consist of both these aspects of employee personal development through human resource management consisting of elements of motivation/leadership, communication and satisfaction; and expansion of consumer base through organisational goal achievements through performance, innovation and branding. Apart from the elements discussed here, business psychology involves a whole gamut of psychological aspects considering needs of consumers, employees and the organization in general and this is also closely related with advertising, marketing, and business orientation and objectives of a company. In fact business psychology should also include company strategies as basic elements of an organizational psychology as well. Thus business psychology is comprehensive including consumer needs and employee needs and although these needs may encompass organizational needs, a distinct organizational psychology could well be drawn out from this and I will take this up in a latter discussion of this ongoing series in psychology.

Wall Street Plunges As Oil Price Jumps

City traders are braced for a white knuckle ride when markets reopen tomorrow morning, after Wall Street plunged 400 points late on Friday. Fresh fears emerged that the credit crunch will drag America deep into recession. Oil prices jumped by $10 a barrel in a day, to close above $139, after remarks by Israel appeared to threaten military action against Iran; and investors took fright at the impact of yet higher energy costs for the gas-guzzling American economy. 'Everybody here is on tenterhooks,' said Brian Bethune, chief US financial economist at consultancy Global Insight. 'It was like throwing a grenade into the pigeons in Trafalgar Square.' He said Wall Street had become too complacent about the prospects for economic recovery and Friday's sell-off marked a reality check. But the extraordinary $10 jump in the oil price also underlined fears that the market has been boosted by huge flows of speculative cash and is destined for a dramatic correction. One of America's leading auto industry experts is calling on Congress to act to prevent a market crash. 'We have seen this before,' said David Cole, head of the Centre for Automotive Research in Detroit. 'In the late 1970s the price ran up to previously unimaginable heights and once it reached a peak it came crashing down, way below the levels traded before prices started to rise.' Cole believes that a sudden price fall could cause as much economic turmoil as the rapid rise seen over the past year. 'When prices collapsed in the late Seventies all investment in alternative fuel technology ceased and essentially led the auto industry to the mess it is in today,' Cole says. 'The same would happen if prices fell below $50 a barrel today. The whole cycle would repeat itself.' Cole, with the support of leading US auto industry executives, is expected to call on Congress to set a lower limit for the price of oil. 'If we set a floor of $50 a barrel the investment the big auto manufacturers are making in alternative technologies will be protected,' he said. 'If not they will fail.'

Economists Worry as Consumers Spend Rebate Checks on Food and Gas

The U.S. economy only saw a .02 percent bump after consumers began receiving their "economic stimulus" checks last month. That’s because for most folks, rising gas and food prices have turned them into "stretch the budget to the next payday" checks. The Bush administration had hope that giving people back a little bit more of their own money ($110 billion in total) might give a much needed boost to the tanking U.S. economy. However, in the past few months, $4 a gallon gas and sharply rising food costs have forced those who fantasized about buying that big-screen TV to consider how they need to focus instead on keeping a roof over their heads. "In the economic grand scheme of things, I'm not quite sure that's what they intended us to spend our money on — inflation — but that's where ours went," said Brandi Dobbins to reporters. Dobbins wasn’t alone. Countless stories were shared of people who had initially thought about spending their economic-boost checks on vacations or high-tech toys, but then realized they needed to pay overdue bills or stock up on necessities. Chris Benton, 40, a network manager, told reporters, "I just put mine right in the bank," saying he’d originally wanted to buy some luxuries but changed his mind. "I'd like to buy a Blu-ray disc player," said Benton. "But with gasoline prices the way they are, I decided to hold on to it." Economists say they’re worried. United States economist Joseph LaVorgna from Deutsche Bank told reporters at ABC he was surprised by how much of consumers’ checks are going to be spent on energy costs. "It's not going to give you the bang for the buck as originally envisioned," said LaVorgna to reporters. "The odds of it having a longer-lasting impact on the economy are less. People were [originally] not planning to use so much of it on energy and food." There are, of course, some people who decided to either throw caution to the wind or defended their splurges as altruistic attempts to boost the economy. Sales at electronics stores saw a mild up tick during the month of April. Best Buy has been offering a "rebate check" deal, in which 10% of the check’s value is added to the total and transferred to a gift card redeemable at the store if the entire check is cashed there. "[Customers] are spending those checks on home theaters, big-screen TVs, desktop and laptop computers, and digital cameras," said Jesse Guzman, who works at a Best Buy store in Tennessee. But Guzman himself is not spending his rebate at the store where he works. "I have kids who need their wisdom teeth removed," said Guzman to reporters. "That's where mine is going." One economist, Diane Swonk from Mesirow Financial in Illinois, says that people deciding to spend their windfalls on basic living expenses is a sign of "a very stressed consumer." However, other economic experts say the picture isn’t as dire as it might seem, and predict that the U.S. will not even slide into a full recession. Only time will tell. In the meantime, folks remain grateful that they’re getting the money, even while worrying about how far it may go. "Honestly, I think it's kind of silly that the government is paying us money when it's having such a hard time paying its own bills," said graphic designer Sara Jackson, to ABC. "But shoot, who's going to turn down money when they give it to you?"

Investment Property Insurance

In the evaluation and the selection of investment proposals, the decision-maker (the finance manager) is exposed to different degrees of risks. This is extremely important in the case of Investment Property Insurance. Risk exists because of the uncertain future and the inability of the decision-maker to make an accurate forecast of future events. Several events affect the happening of future activities. Such events may be events influencing the level of business activity, events influencing all companies in an industry and events influencing only a company.

The riskiness of an investment proposal arises when there are variations in the future returns of such a proposal, and when it is difficult to make a certain and accurate estimate of the same. Uncertainty results where the future course of events is unpredictable. It is the uncertain events which give rise to the riskiness of investment proposals. In a capital budgeting decision, the concept of risk assumes vital importance.

Several techniques are available by means of which the riskiness of the investment proposals can be measured, incorporated into the proposal and thus handled in an effective manner. These techniques help in reducing the amounts of risks involved in projects and enable the decision-maker to make a fairly perfect evaluation of capital budgeting proposals.

There is the risk-adjusted discount rate technique. Under this method, a risk-adjusted discount rate is used, which is actually a composite discount rate. This risk-free rate recognizes the time preference for money, whereas the risk premium rate takes into consideration the riskiness of future cash flows. This rate accounts for risk by varying the discount rate. Accordingly, a higher rate may be used for riskier projects whereas a lower rate may be used for less risky projects. The advantages of this technique is that it is simple to understand and easy to calculate. It incorporates the risk-premium rate in the cost of capital and facilitates scientific evaluation of proposals.

Term Life Insurance - When It's The Best For You

Like a number of things in life, term life has benefits over other policies. There are also disadvantages. A deeper understanding of this policy (Its benefits and disadvantages) will help you decide if it's the best for you or not. Let us take a good look at its benefits before we go further...

It is a more affordable alternative at a period in your life when you have a great need for life insurance coverage but have financial difficulties.

Furthermore, a policy with a convertibility feature makes you have the best of any policy. If you are less than forty-five, you can use it when you need substantial coverage but have little money to spare and then change over to permanent life insurance once your finance improves.

Now let us also look at its disadvantages and features with policies that help cancel such disadvantages...

You'd have to pass away for a death benefit to be given. There's no form of cash value like for whole life insurance. Please note, if you pass on an hour after the expiration of your policy, your beneficiaries will NOT be get any benefit. But then that's really what insurance is all about: Protection from something you pray never happens. Term life is pure insurance and should be seen as such.

Also, you run the risk of not having any life coverage when you need it most in your life. This is because you'd have to apply again at the end of the period you bought. Many folks are considered uninsurable when they reapply and so are forced to stay without any kind of protection.

To cancel out this drawback look for a policy that can be converted to permanent life policies and/or request for guaranteed renewal to ensure you can easily renew your term life insurance coverage.

Finally...

If you think term life is really the best policy for you visit trusted quotes sites and obtain/compare quotes. Requesting quotes from a minimum of five quotes sites raise the chances that you would receive more quotes. Moreover, you know that because the likelihood of receiving lower term life insurance quotes is proportional the range of quotes you get, the more companies you obtain quotes from, the higher your chances.

Here are great pages for life insurance quotes...

Life Insurance For Retirement Age Baby Boomers

We were all told to buy term life insurance because it was cheaper. The logic was that we could buy a pure type of protection for a set amount of time and pay less. By the end of the term of the policy, our kids would be educated and on their own, our mortgage would be paid off, and we would have plenty of money in the bank to self insure ourselves. The only thing is, that plan did not play out for many of us.

Maybe a breadwinner went through a period of unemployment and had to take out a second mortgage or home equity loan. Maybe the kids did not complete college on schedule and found themselves back in their old bedrooms. Many baby boomers are not only still caring for their kids, but they now have grandkids and a spouse in the home. Many others are finding that their retirement plans were cut back because the company they worked at found itself in financial difficulty.

But older people know their family may face expenses when they pass away. Funeral costs alone can cost tens of thousands of dollars in burial and transportation. And if not all debts are paid off, those will have to be settled too. Unanticipated medical costs can plague a family for years after a loved one dies.

Of course, it is much cheaper and easier to buy life insurance when you are young and healthy. Older people, and people who have developed some health problems will have a harder time qualifying for some of the life insurance policies that are promoted to 35 year olds. But many life insurance companies recognize that they have a huge market in the baby boomers, and they are eager to serve it. So they have developed life insurance which is easier to apply for, and which does not have such strict underwriting requirements.

It may not be realistic to look for life insurance with a huge face value for an older or less healthy person. However, if you anticipate that a ten to twenty-five thousand dollars would come in handy in case you died, you can certainly find a life insurance company that is willing to work with you!

Bike Insurance Important Protection For Riders

For the large contingent of motorcycle riders in the UK, bike insurance offers crucial cost protection for both the equipment and the rider. Riders who race motorbikes, or who ride a bike for transportation, need to protect the investment in their bike, while also having access to affordable health costs if injury occurs from an accident.

While there are many customized coverage options available to bike riders, three particular covers are important to riders. Riders who buy expensive bikes, and want to protect their investments, are concerned with insurance for their equipment. Bike protection offers similar benefits to other auto protection. Coverage includes collision protection and payment for damage or repairs covered by the plan. Some plans also include breakdown recovery service in the event the bike breakdown in a remote location.

Other bike insurance seekers are more concerned with rider protection. Some bikers need coverage for both themselves and their bikes. However, some bikers that do not necessarily have as much invested in their bikes, are more concerned with having adequate coverage for personal injury. Additionally, bikers who race or ride bikes as a profession might need protection against loss of earnings or income, if they rely on their bikes to make money.

Thirdly, bikers need legal or liability protection. Some insurers include a certain amount of motor legal protection with all plans. Legal motor protection helps protect the rider from liability or legal issues that arise from accidents or other situations where the rider is at fault.

Finding a service provider that offers the need protection benefits, with great service and claims response, at a reasonable cost, are all important to bike insurance customers. Insurers that respond quickly to claims, with little to no hassle, who also provide great customer support, are often more beneficial than the cheapest insurers. Riders can still find great service at reasonable rates from insurers that specialize in bike insurance.

Many factors can affect the cost of bike insurance. The value of the bike and the riding history of the rider, are important factors. The more risk of payout to the insurer, the more expensive the premiums. Thus, riders with a spotty record and a history of lots of claims can expect to pay more.

The age of a bike is also relevant. Some companies offer certain promotions or varying rates and coverage that are affected by the bike's age. One great option for some riders is the ability to combine bike insurance with motor insurance, or other insurance products. Some insurance specialists offer discounts on combined products in order to attract more business from existing customers and spread the risk. Joint coverage is also available.

A bike insurance customer needs to consider his or her needs based on activities the bike is used for. A casual weekend rider has different protection requirements than a sport rider or every day rider. A specialist bike insurance company has products and benefits available to protect for a variety of customers and needs. Service and support are keys to long-term satisfaction from coverage.