People, performance and transition: A case study of psychological contract and stakeholder orientation in the Toyota Australia plant closure

Abstract

Operations managers often manage in times of change that exert pressure on values and methods usually developed during more stable eras. With increasing global volatility, companies open and close plants because of demand shifts, cost and reshoring considerations, and government-induced and market forces. Impacts of plant closures on local communities, employees, suppliers, and other stakeholders have been documented, but plant closure processes have not been extensively studied. This paper describes an engaged research study of Toyota Australia's manufacturing closure processes. We apply psychological contract theory, particularly of contract breach, to examine the "respectful" approach Toyota used to close its assembly operation in Melbourne. We examined the role that stakeholder theory plays in describing managerial motivations. Toyota allocated resources beyond typical expectations to prepare its workforce for their post-Toyota careers and lives. During the 4-year transition process, employee performance, and engagement improved, supporting propositions that reserves of employee goodwill can come into play when a psychological contract breach occurs. Further, leadership actions can moderate the negative impacts predicted by that theory, beyond outcomes that more transactional views would predict. Our study offers an elaborated model of psychological contract breach that future researchers can apply to plant closures and related operational contexts.

For the many not the few: introducing just transition for supply chain management

“…Supply chain management research is important for the just transition discourse to understand how to include the lived experiences of lower-tier suppliers, such as miners, into transitions (Hale et al, 2021). And more important for our field, just transition is vital for supply chain management to understand how to create dynamic, socio-ecological systems so future disruptions, which will require new capabilities, skills and knowledge, can be managed better (Samson and Swink, 2023).…”

“…To tackle this, supply chain management must become socio-ecological systems ensuring harmonic integration with natural resources (Gualandris et al, 2023). Supply chain management is, therefore, expected to reshape its processes and practices to be culturally and context specific (Samson and Swink, 2023). Yet, despite efforts, instrumental and traditional supply chain assumptions lack a shared vision for socio-ecological systems (Gualandris et al, 2023).…”

Introduction to the special issue on mobility, climate change, and economic inequality

“…Adopting a systems view can preempt this. Samson and Swink (2022) discuss the closure process of Toyota Australia's plant in Melbourne and its subsequent results. They adopt an engaged research approach and apply psychological contract theory to provide an indepth examination of this closure process.…”

Improving Lean Clinics (Lean Healthcare): A Voice of Employee Approach to Reduce Waiting Times

“…Consisting of skilled employees, usually from the same department, the team strives to produce innovative solutions to operational problems, raise quality standards, and boost overall workplace productivity (Li, 2022). Regular meetings and activities are held by a Quality Circle, which allows employees to share their insights on workplace processes, identify problems, and propose solutions (Samson & Swink, 2023;Goyal et al, 2022). The primary aim is to promote active participation, overcome hierarchical boundaries, and encourage collaborative efforts among employees, ultimately resulting in continuous improvement within the workplace (Malik et al, 2023).…”