Sunday, August 27, 2023


The American Psychological Association (APA) characterizes Industrial-Organizational (I-O) Psychology as the scientific study of human behavior in organizations and the workplace. It focuses on deriving principles of individual, group, and organizational behavior and applying this knowledge to the solution of problems at work.

The field of industrial-organizational psychology emerged during the applied psychology movement, which was an aspect of the school of functionalism. Functionalism opposed the idea of elementism propagated by the school of structuralism. The functionalists argued that breaking down consciousness into smaller elements leads to losing the essence of experience. 

Instead of understanding the content of consciousness, the functionalists emphasized on the functions of consciousness. They were interested in answering the question of how does consciousness help in adapting to the environment. In this way, functionalism emphasized on the utilitarian aspect of consciousness.

The philosopher and psychologist William James is regarded as the major precursor to the beginning of functionalism. James propagated the philosophy of pragmatism. Pragmatism is the doctrine that the validity of an idea is measured by its practical consequences. According to pragmatism, the worth of an idea is determined by its practical applications.

William James

The idea of pragmatism became the cornerstone of functionalism. All the later functionalists stressed on the philosophy of pragmatism, which made functionalism to be concerned with utilities of consciousness and behavior.

Due to the emphasis on the utility of consciousness and behavior, the school of functionalism became interested in understanding the applications of psychology to everyday issues. This gave rise to the applied psychology movement.

The applied psychologists took psychology from an academic and laboratory setup to real-life settings and practical issues. They took psychology towards understanding behaviors in schools, factories, advertising agencies, courthouses, and mental health centers. It is this shift in psychology that led to the emergence of industrial-organizational psychology.

The pioneering works of two psychologists, namely, Walter Dill Scott and Hugo Munsterberg, are considered to have led to the beginning of industrial-organizational psychology. 

Walter Dill Scott completed his Ph.D. under Wilhelm Wundt. His interests shifted towards applied psychology after he returned to America. Scott was intrigued by the idea of using psychology to make advertisements more effective. He became the first person to apply psychology to advertising.

Walter Dill Scott

In 1903, Scott published his book - The Theory and Practice of Advertising. This is considered to be the first book on this topic. Scott argued that advertisements should involve factors like emotions, sympathy, and sentimentality. According to him, these factors heighten suggestibility, which makes advertisements more effective. These factors began to be used widely in advertisements, and are used even today.

Scott, later, shifted his attention towards the application of psychology in personnel selection and management and became the first person to do so. In order to select the best employees, especially salespersons, business executives, and military personnel, Scott developed rating scales and group intelligence tests. He used these scales and tests to measure the characteristics of people who were already successful in these occupations. Scott believed that intelligence should be defined in practical terms like judgment, quickness, and accuracy. According to him, these are characteristics that are needed to perform well on the job.

After the First World War, Scott formed his own consulting company - Imaginatively, the Scott Company. He formed this company to provide consulting services related to personnel selection and work efficiency to corporations. In doing so, Scott became the founder of the first psychological consulting company.

Around the same time as Walter Dill Scott, the psychologist, Hugo Munsterberg made pioneering efforts in applied psychology, including industrial-organizational psychology. Like Scott, Munsterberg completed his Ph. D. under Wilhelm Wundt. Later, William James recruited Munsterberg to be the director of the Harvard Psychology Laboratory. 

After spending some time there, his interests began to shift towards the practical applications of psychological principles. He strongly propagated the idea of psychology being applied to understanding real-life issues. In this regard, Munsterberg worked extensively in the areas of mental illness, legal matters, and the workplace.

Hugo Munsterberg

Munsterberg began his work related to industrial psychology in his article published in 1909, called Psychology and the Market. This article is about the application of psychology to vocational guidance, advertising, personnel management, employee motivation, and job performance.

In 1912, Munsterberg published the book Vocation and Learning and in 1913, he published the book Industrial Efficiency. These two books are often considered the beginning of what later became known as industrial psychology. In these books, Munsterberg wrote about personnel selection, work efficiency, marketing, and advertising.

Musterberg suggested that to make personnel selection better the skills for performing a task should be defined, and then the person’s ability to perform that task be determined. Munsterberg also suggested that the mental and emotional abilities of workers should be matched with their positions, to increase job efficiency, productivity, and satisfaction. For this, he suggested the use of proper psychological techniques that include mental tests and job simulations. Apart from this, Munsterberg also emphasized the role of individual differences in personnel and selection and job assignments.

The contributions of Walter Dill Scott and Hugo Munsterberg gave emphasis on the applications of psychology to organizations and the workplace. It drew the attention of psychologists to how psychology can be used to study behavior in organizations. It broadened the scope of psychology.

Along with personnel selection, work efficiency, and advertising, which were the major contributions of Scott and Munsterberg, psychologists began to study more complex aspects of organizations such as the social-psychological work climate, employee attitudes, communication patterns, organizational structure, power and politics in organizations, etc.

Realizing the significance of psychology in organizations, the APA, in 1945, founded its Division 14, which was called the Industrial and Business Psychology Division. In 1962, Division 14 of APA was renamed from the Industrial and Business Psychology Division to the Industrial Psychology Division. In 1973, this was renamed to the Division of Industrial and Organizational Psychology. In 1982, Division 14 of APA was again renamed as the Society for Industrial and Organizational Psychology. It promotes the science, practice, and teaching of industrial-organizational psychology.

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