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

Abstract

Buyer–supplier engagement leads to numerous opportunities for unexpected positive benefits to occur. How these events come about and are managed (i.e., what entities are responsible for the outcomes and how the benefits are shared) remains an under‐investigated phenomenon in the supply chain literature. This research uses attribution theory and a systems thinking perspective to investigate a supplier's experience of psychological contract over‐fulfillment followed by a buyer claim. We hypothesize that a supplier's reaction to a buyer's claim depends on whether the type of claim (economic versus social) fits with the locus of causality the over‐fulfillment is attributed to: (1) the buying organization (buyer‐only attributions), (2) the buyer and the supplier jointly (dyad attributions), or (3) a third party in the buyer's innovation network (buyer‐network attributions). Results from a multi‐stage scenario‐based experiment suggest that following the supplier's experience of psychological contract over‐fulfillment, the supplier's trust toward the buyer is highest for dyad attributions, while the supplier's appreciation for the buyer's network is highest with dyad and buyer‐network attributions. Once the buyer claims value, however, the influence of attributions diminishes. While social reward claims had almost no impact on relational outcomes, economic reward claims significantly harm the supplier's perceptions of the buyer. Regardless of the type of claim, the locus of causality was largely irrelevant for the supplier's reaction to the buyer's reward claim. Our study contributes to the supply chain psychological contract literature by investigating positive over‐fulfillments of the psychological contract, as opposed to previous literature that has focused on negative breaches. We also extend attribution theory by introducing a novel supply chain‐specific attribution for the locus of causality, and we establish boundary conditions of attribution theory in the face of supply chain‐typical claiming mechanisms. For managers, locus of causality for a positive event seems to be irrelevant once claiming sets in.

Decomposing Social Sustainability: Signaling Theory Insights into Supplier Selection Decisions

“…To test our hypotheses, three behavioral experiments were developed. The use of behavioral experiments continues to expand among scholars who study the behavior of actors in supply chain exchange relationships (e.g., Esslinger, Eckerd, Kaufmann, & Carter, 2019;Mir, Aloysius, & Eckerd, 2017). In experiment 1, we examine the direct effects of a supplier's investments in employee welfare and philanthropic efforts on a buyer's purchase intent, and we supplement these experimental findings with subjects' post hoc qualitative responses to provide deeper insights.…”

Thinking alike or not: Performance implications of transactional psychological contract congruence in buyer–supplier new product development projects

“…However, what is not known is how PC (in)congruence between two partners in a joint task context affects task performance. The current literature does not clarify which type of PC incongruence-the buyer-higher or the supplier-higherhas a greater influence on task and relational performance (Eckerd et al, 2013;Esslinger et al, 2019;Mir et al, 2016). We fill these gaps by comparing the performance outcomes of a joint NPD project in different TPC incongruence situations (buyer-higher vs. supplier-higher).…”

“…However, insufficient attention has been accorded to the study of PC as a governance mechanism in NPD projects. Given the unique and strong motivational effects of PCs in buyer-supplier relationships, a few SCM studies have begun to examine PCs in buyer-supplier relationships (Eckerd et al, 2013;Esslinger et al, 2019;Hill et al, 2009;Mir et al, 2016). However, this scholarship has focused on the negative outcomes resulting from PC violations and post-violation remedies, with no studies to date focusing on the (in)congruence of PCs (Eckerd et al, 2013;Hill et al, 2009;Kaufmann et al, 2018).…”

“…The uncertain nature of a joint NPD transaction, coupled with time and cost pressures to deliver a high-quality design, makes it challenging for a formal contract to fully specify desired behaviors ex ante (Yan et al, 2018). When unexpected issues emerge during the NPD process, buyer and supplier members often resort to psychological contracts (PCs)-beliefs about the nature of a buyer(supplier) team's self-obligations based on perceived mutual intentions throughout a buyer-supplier NPD project-to determine project commitment (Esslinger et al, 2019;Rousseau, 1989). A transactional PC (TPC) is composed of short-term, specific, calculative obligations based on contractual performance specifications (Cuyper et al, 2008;DiFonzo et al, 2020).…”

I Wasn’t Expecting That! The Relational Impact of Negotiation Strategy Expectation Violations

“…The locus of causality can be internal to an organization (e.g., a failure by the supplier) or external (e.g., a plant's destruction by a tornado), with internal loci of causality typically leading to higher attributions of responsibility (Timmer & Kaufmann, 2019;Weiner, 2018;Wowak et al, 2016). Stability involves the perceived variation or longevity of a causal event and is often studied alongside the locus of causality (Esslinger et al, 2019;Harvey et al, 2014;Heider, 1958;Weiner, 1985Weiner, , 2018, examining whether the event's cause is static or dynamic over time (Timmer & Kaufmann, 2019). "Perceptions of causal stability help shape a person's expectations for future outcomes, and these expectations can soften or amplify the emotional response to a trigger event" (Harvey et al, 2014;Weiner, 1985, p. 131).…”