Operant conditioning is the use of consequences to modify the occurrence and form of behavior. Operant conditioning is distinguished from classical conditioning (also called respondent conditioning, or Pavlovian conditioning) in that operant conditioning deals with the modification of "voluntary behavior" or operant behavior. Operant behavior "operates" on the environment and is maintained by its consequences, while classical conditioning deals with the conditioning of respondent behaviors which are elicited by antecedent conditions. 
Operant conditioning is the main training method of dogs.  
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Reinforcement and punishment, the core tools of operant conditioning, are either positive (delivered following a response), or negative (withdrawn following a response). This creates a total of four basic consequences, with the addition of a fifth procedure known as extinction (i.e. no change in consequences following a response) 
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It's important to note that organisms are not spoken of as being reinforced, punished, or extinguished; it is the response that is reinforced, punished, or extinguished. Additionally, reinforcement, punishment, and extinction are not terms whose use is restricted to the laboratory. Naturally occurring consequences can also be said to reinforce, punish, or extinguish behavior and are not always delivered by people. 
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Reinforcement is a consequence that causes a behavior to occur with greater frequency.  
Punishment is a consequence that causes a behavior to occur with less frequency.  
Extinction is the lack of any consequence following a behavior. When a behavior is inconsequential, producing neither favorable nor unfavorable consequences, it will occur with less frequency.  
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FEARS IN DOGS 
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The first three months of a puppy's life are the period when sociability outweighs fear. Therefore this is the primary and most important time for puppy socialization. Socialization is the developmental phase between 3 weeks and 12 weeks that a puppy goes through.  
During the imprinting phase (3 to 6 weeks), puppies emerge on their own from the litter. They venture into the surrounding environment. This emergence from the litter is a gradual and continual learning experience. During this stage of development puppies learn basic behavioral patterns specific to dogs. While playing, they practice different body postures, learning what the postures mean and how they affect their mother and litter mates. They learn what it is like to bite and be bitten, what barking and other vocalizations mean and how to make and use them to establish social relationships with other dogs. Such learning and activity tempers their own biting and vocalizing. From the age of five weeks, the mother teaches her puppies basic manners. They learn to be submissive to her leadership and what behaviors are acceptable. If necessary, she growls, snarls, or snaps at them as a form of discipline. When weaning the litter, for instance, the mother will discipline her puppies so that they will leave her alone. Because the mother disciplines them in a way that they clearly understand, after a few repetitions, the puppies will respond to a mere glare from her. If a pup has not learned to accept leadership (and discipline) in its early interactions with dogs, its training will be more difficult. Puppies that are removed from the nest too early tend to be nervous, more prone to barking and biting, and less responsive to discipline. Often they are aggressive with other dogs. Generally speaking, a puppy taken away from it’s mother and litter mates before seven weeks of age, may not realize its full potential as a dog and companion. To maximize the mental and psychological development of puppies, they must remain in the nest with their mother and litter mates until at least seven weeks of age.  
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From 8 to 12 weeks of age, puppies go through a fear imprinting stage. During this time, it is crucial to carefully introduce a pup to a variety of stimuli every day, and to ensure that the experiences are positive. This is also a good time to start training the pup in basic behaviors.  
Socializing your dog is a very important aspect toward having a well-adjusted, well-behaved pet. Even if you don’t particularly enjoy taking your dog places, it’s still important to get him out of the house, off your property and into the outside world. 
Being a well-socialized dog means being your pet should be comfortable with many things in life. In order to avoid behavior problems such as excessive barking, separation anxiety, fear, aggression and many more, your dog should be socialized with people, other dogs, bicycles, joggers, noises, trash cans and as many more things as you can possibly think of. 
How does socialization relate to the problems mentioned above? For example, dogs who are comfortable with people, dogs and bikes are less likely to bark excessively when normal neighborhood happenings occur near your house. Dogs who are thoroughly socialized are far less likely to have confidence-related problems such as separation anxiety, fear or aggression. 
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When taking your dog out for socialization, it is important to handle situations correctly. Remember that whenever you pet a dog, you’re praising a dog (positive reinforcement). Therefore, if your dog is afraid of something he’s seeing, be sure not to pet him while he’s acting afraid or is awaiting your reaction. Instead of feeling soothed, your pet is likely to feel you are reinforcing his fear, as if you’re saying, “Good boy, be afraid!” In a well meaning attempt to calm their dog's fears, many people end up actually reinforcing the dog's fearful behavior. In effect, the owner inadvertently trains the dog to be more fearful. Be careful not to reinforce your dog's fearfulness by offering reassurance. Our protective instincts cause us to reassure the dog by talking soothingly, petting or even picking up the dog for a hug. These actions flagrantly reward the dog for fearful behavior. It is best to act cheerful or just completely ignore your dog when he acts fearful. Let him learn by his own experience that there is nothing to be afraid of. Save your praise and reassurance for times when your dog acts with confidence.  
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What is "functional" or "disfunctional" when it comes to fears in dogs? 
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That is mainly for us to decide.   
Surely you don't want to be your hunting Labrador to be afraid of gun shots, so we would call this a disfunctional fear. The same applies to the sounds of fireworks, thunder and lightning and city traffic. But you would want your dog to be careful in traffic, and that requires a certain amount of fear or a lot of training.  
An example: my Labrador Bas was about four months old when I took him to the countryside for a stroll in the woods. Near the parking lot he discovered a horse in the field, and before I could do anything about it Bas was om his way to that "big dog" to sniff his backside. The horse however didn't appreciate this gesture and kicked Bas. I can still hear the sound. Bas screamed, didn't seem to be able to walk, and crawled towards me, the "Alpha male". Now I could have done two things. 1. I could have taken Bas in my arms and comfort him, and 2. I could try the "nothing's the matter" approach, and if that wouldn't work I still could take him to the vets. So I said to Bas, who was still acting disabled, "Come-on boy! Let's go for a walk!" and I moved away from him. Bas looked at me, got up, and walked with me as if nothing had happened, wagging his tail. In the future he wouldn't be afraid of horses, but he would stay out of the reach of their legs. This is functional fear.   
Labrador puppies are adorable and almost anyone seems to be enchanted by them. But not everyone loves puppies or dogs in general. It is a good thing that your puppy knows that. So if your dog is walking free in the park and jumps at a person who kind of pushes or kicks him aside, not in a violent way of course, then you, the "Alpha male",  act like nothing's the matter. Next time, or the time after, your dog will be more careful in approaching strangers. You can even stage this situation, because your "NO!" may be less effective than the direct negative reinforcement from the "stranger".    
By operant conditioning you can channel the fearful behavior of your dog, and you should start with it as soon as your puppy comes to live with you. Don't wait until your dog is "old enough" in your opinion. The distinction between socialization and desensitization is an important one because desensitization demands that you as an owner take an active role in controlling your puppy’s experience in new environments. Exposing your puppy to the world teaches him what to expect in certain situations and what you expect him to do. Desensitization takes place when we introduce the puppy to a variety of people, places, and animals and teach them how they should act. This means that you have to be the judge of which fears are functional or disfunctional, and which fears you want to reinforce or not.   
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Note: if you are afraid of something, like fireworks or city traffic, then you are probably not the right person to help your dog to overcome that particular fear, because every human emotion, like fear, joy, sadness, anger, has its own scent, and a dog who knows you will be able to tell the difference between these scents (emotions). This in itself can be a reinforcement.   
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Sources:  
- Dog Psychology, by Jack Vanderwyk 
- Wikipedia 
- FreeDogTrainingInfo.com 
- Perfect Paws 
- The Dog Squad