Toward Relationship Resilience: Managing Buyer‐Induced Breaches of Psychological Contracts During Joint Buyer–Supplier Projects

Abstract

This research examines buyer–supplier relationship resilience associated with a psychological contract breach by the buying organization. Our study covers the span of buyer‐induced negative events from prebreach to postrepair. Specifically, we investigate the role of the nature of the interorganizational and interpersonal relationships in preventing initial trust loss (prebreach) and the effectiveness of different repair processes (penance and regulation) in promoting subsequent trust repair (postbreach). The effects are analyzed on two levels: interorganizational and interpersonal. We use social exchange theory to derive the study's hypotheses and a scenario‐based role‐playing experiment to test them. The results suggest that effective interorganizational trust repair can help to transform the nature of an interorganizational buyer–supplier relationship from adversarial to collaborative. Furthermore, initially adversarial interpersonal ties exacerbate the extent of interorganizational trust loss in collaborative interorganizational buyer–supplier relationships, while collaborative interpersonal ties help prevent initial interorganizational trust loss. Our study makes three contributions. First, it extends the psychological contract literature by investigating purchasing managers’ mitigation strategies in response to a buyer‐induced negative event. Second, it accounts for the role of interpersonal ties in buyer–supplier relationship resilience. Third, it underscores the effectiveness of trust repair mechanisms, such as penance and regulation, in actually improving buyer–supplier relationship resilience after a psychological contract breach.

Who Cares? Supplier Reactions to Buyer Claims after Psychological Contract Over‐Fulfillments

“…Thus, rather than examining whether a reward claim may be acceptable for the supplier, we investigate when such claiming mechanisms should be effectively used. Based on a review of the SCM literature, specifically the psychological contract (e.g., Blessley et al., ; Kaufmann et al., ) and supplier development (e.g., Krause, Scannell & Calantone, ; Terpend, Tyler, Krause & Handfield, ) literatures, we propose two types of claiming mechanisms: economic and social reward claims. Both types differ in terms of their beneficiary (i.e., the buyer versus both firms in the NPD dyad), the parties required to expend effort (i.e., one‐sided versus two‐sided) and the time dimension (i.e., short‐term versus long‐term) (Kumar, Heide & Wathne, ).…”

“…To support this, we consider individuals in the boundary‐spanning role as those primarily responsible for managing interorganizational relationships and making the decisions pertaining to those relationships (Zaheer, McEvily & Perrone, ). This approach is characteristic of behavioral experimental research in the field (Bachrach & Bendoly, ) and has been frequently used in prior SCM research, for example, to assess perceptions of interpersonal trust, interorganizational trust, supply chain risk, and psychological contract violation (e.g., DuHadway, Carnovale & Kannan, ; Hill et al., ; Kaufmann et al., ). However, we acknowledge the limitations associated with relying on individuals’ sentiments to mirror that of a firms’ members collectively.…”

“…In this context, perceived obligations of the psychological contract can be transactional/economic in nature, such as helping one another if time, cost, or quality goals are in danger, or relational/social in nature, such as developments in how the parties communicate or collaborate with one another (Blessley et al., ). Each party in the exchange has their own expectations about the degree to which these behaviors should be exhibited, and there are certainly instances where those expectations are exceeded and lead to favorable outcomes for the perceiver (Kaufmann, Esslinger & Carter, ; Lawson, Petersen, Cousins & Handfield, ).…”

An experimental test of green management information system effects on carrier selection: weigh station and tollbooth bypass technology adoption

“…For example, Thomas et al (2010) studied the effects of buyer induced time pressure on suppliers. Kaufmann et al (2018) examined the resilience of buyer-supplier relationships when faced with a psychological contract breach. Thomas et al (2013) tested the effects of negotiation strategies on knowledge sharing proclivity in buyer-supplier interactions.…”

Managing Buyer‐Supplier Conflicts: The Effect of Buyer Openness And Directness On A Supplier's Willingness to Adapt

“…Comparative tests did not reveal any differences between these conditions in terms of participant characteristics. Table S2 shows the industry breakdown of the sample (Kaufmann, Esslinger, & Carter, 2018).…”