A systematic study of behaviour in the natural settings is called naturalistic observation. It is very critical to the development of scientific knowledge. Behaviours which otherwise cannot be observed in experimental settings can be studied through naturalistic observation. The researcher takes a passive role and simply records what occurs.
For example, a bird-watcher may observe the behaviours of birds in a forest. A social psychologist may observe how a crowd is formed, and how people behave in a crowd. Psychologists interested in studying animals may observe the social behaviour of monkeys. In each case, the researcher does not intervene in the phenomenon.
The advantage of naturalistic observation is obvious. We get a real picture of what people do in their natural habitat. The major limitation of this method is that the researcher cannot control any of the factors of interest. Too many extraneous factors influence the phenomenon. In order to observe an event, the researcher will have to wait until the appropriate event takes place. If people know that they are watched, they may alter their behaviour, which may not be truly representative of their natural set of behaviors.
Therefore, many researchers take recourse to laboratory observation, in which the investigator observes the behaviors of interest under controlled laboratory conditions.