Supply Chain Psychological Contract Breach: An Experimental Study across National Cultures

Supply disruptions are commonplace in today's global supply chain environment. The sheer magnitude of daily transactions makes it inevitable that there will be disruptions, further exacerbated by differences in cultural norms and attitudes that add a layer of complexity to managerial response. In this research, we examine the impact of national culture on individuals' responses to supply disruptions due to psychological contract breach. Using data from controlled experiments conducted with 158 subjects in China and 125 subjects in the U.S., we evaluate changes in decision-making behaviors and assessments of attitudinal outcomes regarding trust and repurchase intentions. Our results show post-breach behavioral differences based on national culture, but find that these differences are short-term in nature. Additionally, cultural differences show up in both of the attitudinal outcomes assessed in this research. Following a psychological contract breach, individuals from the U.S. express less trust in their supply chain partner and less willingness to work with that partner again in the future as compared to individuals from China. Our research suggests that managers and scholars interested in the cultural influences on the response to supply disruption will benefit from further research and understanding focusing on the intersection of psychological contract breach and cultural distance.

[1]  J. Andrew Petersen,et al.  Marketing Communication Strategies and Consumer Financial Decision Making: The Role of National Culture , 2015 .

[2]  Marina Dabic,et al.  Cultural differences affecting decision-making style: a comparative study between four countries , 2014 .

[3]  C. Craighead,et al.  Justice served: Mitigating damaged trust stemming from supply chain disruptions , 2014 .

[4]  David J. Ketchen,et al.  Resource gaps and resource orchestration shortfalls in supply chain management: : the case of product recalls , 2014 .

[5]  Özalp Özer,et al.  Trust, Trustworthiness, and Information Sharing in Supply Chains Bridging China and the U.S. , 2014, Manag. Sci..

[6]  Kenneth K. Boyer,et al.  The relative impact of attribute, severity, and timing of psychological contract breach on behavioral and attitudinal outcomes , 2013 .

[7]  Mary Jo Bitner,et al.  Decoding Customer–Firm Relationships: How Attachment Styles Help Explain Customers' Preferences for Closeness, Repurchase Intentions, and Changes in Relationship Breadth , 2013 .

[8]  Ulrich Wilhelm Thonemann,et al.  Managers and Students as Newsvendors , 2012, Manag. Sci..

[9]  A. Diamantopoulos,et al.  Guidelines for choosing between multi-item and single-item scales for construct measurement: a predictive validity perspective , 2012 .

[10]  Catholijn M. Jonker,et al.  Cultural Differentiation of Negotiating Agents , 2012 .

[11]  Rebecca Walker Naylor,et al.  Using Behavioral Experiments to Expand Our Horizons and Deepen Our Understanding of Logistics and Supply Chain Decision Making , 2011 .

[12]  Judith M. Whipple,et al.  Global supply chain design considerations: Mitigating product safety and security risks , 2011 .

[13]  Rodney W. Thomas.  When Student Samples Make Sense in Logistics Research , 2011 .

[14]  Michel Tremblay,et al.  The Influence of Psychological Contract Breach on Temporary Workers’ Commitment and Behaviors: A Multiple Agency Perspective , 2011 .

[15]  Elliot Bendoly,et al.  RIGOR IN BEHAVIORAL EXPERIMENTS: A BASIC PRIMER FOR SUPPLY CHAIN MANAGEMENT RESEARCHERS , 2011 .

[16]  Enno Siemsen,et al.  The usefulness of behavioral laboratory experiments in supply chain management research , 2011 .

[17]  C. Stevens,et al.  QUESTIONS TO CONSIDER WHEN SELECTING STUDENT SAMPLES , 2011 .

[18]  M. Rungtusanatham,et al.  THE VIGNETTE IN A SCENARIO-BASED ROLE-PLAYING EXPERIMENT , 2011 .

[19]  R. Henry,et al.  MAKING SENSE OF SUPPLY DISRUPTION RISK RESEARCH: A CONCEPTUAL FRAMEWORK GROUNDED IN ENACTMENT THEORY , 2011 .

[20]  Carl Marcus Wallenburg,et al.  Commitment and Trust as Drivers of Loyalty in Logistics Outsourcing Relationships: Cultural Differences Between the United States and Germany , 2011 .

[21]  Rosalind Searle,et al.  Trust in the employer: the role of high-involvement work practices and procedural justice in European organizations , 2011 .

[22]  Stacey R. Fitzsimmons,et al.  Psychological Contracts across Cultures , 2010 .

[23]  Simon S. K. Lam,et al.  Psychological contract breaches, organizational commitment, and innovation-related behaviors: a latent growth modeling approach. , 2010, The Journal of applied psychology.

[24]  Gert Jan Hofstede,et al.  Cultures and Organizations: Software of the Mind, 3rd ed. , 2010 .

[25]  Ronald Fischer,et al.  Commitment across cultures: A meta-analytical approach , 2009 .

[26]  K. B. Hendricks,et al.  An Empirical Analysis of the Effect of Supply Chain Disruptions on Long‐Run Stock Price Performance and Equity Risk of the Firm , 2005 .

[27]  R. Lewicki,et al.  Reparing Relationships Within and Between Organizations: Building A Conceptual Foundation , 2009 .

[28]  Barbara Gray,et al.  Repairing relationship conflict: how Violation types and culture influence The effectiveness of restoration Rituals , 2009 .

[29]  Niro Sivanathan,et al.  Getting Off on the Wrong Foot: The Timing of a Breach and the Restoration of Trust , 2008 .

[30]  Kevin Zheng Zhou,et al.  Relational ties or customized contracts? An examination of alternative governance choices in China , 2008 .

[31]  Madeleine E. Pullman,et al.  UNRAVELING THE FOOD SUPPLY CHAIN: STRATEGIC INSIGHTS FROM CHINA AND THE 2007 RECALLS* , 2008 .

[32]  P. Bordia,et al.  Behavioural Outcomes of Psychological Contract Breach in a Non-Western Culture: The Moderating Role of Equity Sensitivity , 2007 .

[33]  Hao Zhao,et al.  THE IMPACT OF PSYCHOLOGICAL CONTRACT BREACH ON WORK‐RELATED OUTCOMES: A META‐ANALYSIS , 2007 .

[34]  J. H. Davis,et al.  An Integrative Model of Organizational Trust: Past, Present, and Future , 2007 .

[35]  Aleda V. Roth,et al.  Decision Sciences Research in China: A Critical Review and Research Agenda - Foundations and Overview , 2006, Decis. Sci..

[36]  Subhash Sharma,et al.  National culture and industrial buyer-seller relationships in the United States and Latin America , 2006 .

[37]  Robert J. House,et al.  In the Eye of the Beholder: Cross Cultural Lessons in Leadership from Project GLOBE , 2006 .

[38]  Daphna Oyserman,et al.  High Power, Low Power, and Equality: Culture Beyond Individualism and Collectivism , 2006 .

[39]  G. Zsidisin,et al.  Managing Supply Risk with Early Supplier Involvement: A Case Study and Research Propositions , 2005 .

[40]  Kevin B. Hendricks,et al.  Association Between Supply Chain Glitches and Operating Performance , 2005, Manag. Sci..

[41]  Eric T. Bradlow,et al.  Promises and Lies: Restoring Violated Trust , 2004 .

[42]  Rachel Croson,et al.  The boundaries of trust: own and others' actions in the US and China , 2004 .

[43]  David A. Johnston,et al.  Effects of supplier trust on performance of cooperative supplier relationships , 2004 .

[44]  Kevin B. Hendricks,et al.  The effect of supply chain glitches on shareholder wealth , 2003 .

[45]  Kevin Au,et al.  Cultural variation and the psychological contract , 2003 .

[46]  K. Wheeler.  Cultural values in relation to equity sensitivity within and across cultures , 2002 .

[47]  G. Hofstede.  Culture′s Consequences: Comparing Values, Behaviors, Institutions and Organizations Across Nations , 2001 .

[48]  A. Leung,et al.  Challenges to the psychological contract in Hong Kong , 2001 .

[49]  Sandra L. Robinson,et al.  The development of psychological contract breach and violation: a longitudinal study , 2000 .

[50]  Paul A. Fadil,et al.  Ethical Decision Making in Multinational Organizations: A Culture-Based Model , 1999 .

[51]  Chong Ju Choi,et al.  A Note on Countertrade: Contractual Uncertainty and Transaction Governance in Emerging Economies , 1999 .

[52]  Allan J. Kimmel.  IN DEFENSE OF DECEPTION , 1998 .

[53]  Joseph P. Cannon,et al.  Understanding the Influence of National Culture on the Development of Trust , 1998 .

[54]  M. Gelfand,et al.  Converging measurement of horizontal and vertical individualism and collectivism , 1998 .

[55]  R. Hertwig,et al.  Is deception acceptable , 1997 .

[56]  David A. Ralston,et al.  The impact of national culture and economic ideology on managerial work values : a study of the United States , Russia , Japan , and China , 2005 .

[57]  E. Morrison,et al.  WHEN EMPLOYEES FEEL BETRAYED: A MODEL OF HOW PSYCHOLOGICAL CONTRACT VIOLATION DEVELOPS , 1997 .

[58]  Steven E. Finkel,et al.  Causal Analysis With Panel Data , 1995, SAGE Research Methods Foundations.

[59]  I. Png,et al.  Returns Policies: Make Money by Making Good , 1995 .

[60]  F. Fukuyama.  Trust: The Social Virtues and the Creation of Prosperity Penguin London , 1995 .

[61]  Denise M. Rousseau,et al.  The contracts of individuals and organizations , 1993 .

[62]  C. Hampden-Turner,et al.  Riding the Waves of Culture. Understanding Cultural Diversity in Business (3rd ed) , 1993 .

[63]  D. Rousseau.  Psychological and implied contracts in organizations , 1989 .

[64]  John O. Summers,et al.  Checking the Success of Manipulations in Marketing Experiments , 1986 .

[65]  Paul D. Allison,et al.  Event History Analysis : Regression for Longitudinal Event Data , 1984 .

[66]  P. Allison.  Event History Analysis , 1984 .

[67]  G. Hofstede.  Cultural dimensions in management and planning , 1984 .

[68]  J. Rotter.  Interpersonal trust, trustworthiness, and gullibility. , 1980 .

[69]  N. Luhmann.  Trust and Power , 1979 .

[70]  J. Rotter.  Generalized expectancies for interpersonal trust. , 1971 .