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

Abstract

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.

Responses to Supplier‐Induced Disruptions: A Fuzzy‐Set Analysis

“…This finding suggests that cognitive processes are crucial microfoundations for explaining heterogeneity in organization‐level supply chain disruption management, thus adding empirical evidence to a growing stream of literature on managerial cognition in the general management (Helfat & Peteraf, ; Maitland & Sammartino, ) and SCM literature (Kaufmann et al., ; Stanczyk et al., ). Our research on the cognitive microfoundations of responses to supplier‐induced disruptions complements prior studies that investigate the social and psychological implications of supply chain disruptions, such as perceptions of justice (e.g., Wang et al., ) and psychological contract breaches (e.g., Eckerd et al., ).…”

“…A separate stream of literature on supply chain disruptions has explored the strategies for preemptively reducing disruption risks (Kleindorfer & Saad, ; Speier, Whipple, Closs & Voss, ; Zsidisin & Smith, ), the capabilities to recover from supply chain disruptions (Blackhurst, Dunn & Craighead, ; Craighead et al., ), and the performance effects of supply chain disruptions (Hendricks & Singhal, ,b). Furthermore, researchers have recently begun to explore the role of individual‐level factors in responses to supply chain disruptions, such as psychological contract breaches (Eckerd, Boyer, Qi, Eckerd & Hill, ; Eckerd, Hill, Boyer, Donohue & Ward, ) or perceptions of justice (Wang et al., ).…”

Influence of National Cultures on Operations Management and Supply Chain Management Practices—A Research Agenda

“…Their results revealed that contractual governance is more suitable for individualistic and low uncertainty avoidance cultures, whereas relational governance is more suitable for collectivist and high uncertainty avoidance societies. Eckerd et al (2016) examined the behaviors of US and Chinese buyers following a post-psychological contract breach, which is "when an individual perceives insufficient fulfillment of obligations believed due from the contract partner" (p. 69).…”

Bluffs, Lies, and Consequences: A Reconceptualization of Bluffing in Buyer–Supplier Negotiations

“…The questionnaire's first items served as a manipulation check, inquiring about the participant's perception of the counterpart's honesty (a = .89) and of the counterpart's ethicality (adapted from Pelletier & Bligh, 2006; a = .90). To assess H2 through H5, subsequent items then asked participants whether they were angry with their counterpart and with themselves (adapted from Gelbrich, 2010;Johnson, Matear & Thomson, 2011; a = .94 and a = .89 respectively), and how willing they were to negotiate with their counterpart in the future (adapted from Eckerd, Boyer, Qi, Eckerd & Hill, 2016). All items used 7-point Likert-type scales.…”