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Collectivist values, exchange ideology and psychological contract preference.

Abstract The psychological contract describes a set of individual perceptions concerning the terms of the exchange relationship between individuals and their organizations. While this concept has substantially advanced our knowledge about how individuals relate to their organization, as organizations globalize and workforce diversity increases, it is important to understand how individuals with different cultural value orientations think about these relationships. Our purpose in this study was to isolate, insofar as possible, the effects of the individual level value of cultural collectivism. In this paper, we present evidence from two studies that examine the relationship between the cultural value of collectivism and the preferences that individuals have for firms exhibiting different psychological contract forms. First, we demonstrate experimentally that collectivist orientation has an impact on fundamental beliefs about the nature of exchange. Then, in the second study, we show that collectivist value orientation had its effect on preferences for the psychological contract through beliefs about social exchange. In so doing, we go beyond the simple demonstration of the effects of cultural values to describe the causal chain through which these values operate. Our results suggest that effective management in multicultural organizations ultimately requires a clear understanding of the process whereby values influence beliefs about employment relationships, which has implications for both theory and practice.

Keywords Collectivism * Psychological contract ? Exchange ideology

1 Introduction

Our understanding of the employment relationship has been significantly advanced by the concept of the psychological contract (Robinson 1996; Rousseau 1995), which describes a set of individual perceptions concerning the terms of the exchange relationship between individuals and their organizations (Argyris 1960; Schein 1965). While initial conceptualizations of the psychological contract noted the importance of culture (e.g., Levinson et al. 1963), contemporary research has until very recently neglected this influence and has largely been conducted in a single (individualist) cultural context (Zhao et al. 2007).

As a result of the globalization of firms and migration trends influencing the cultural composition of workforces around the globe (e.g., Putnam 2007), organizations increasingly need to consider variation in the manner in which employees with different value orientations engage with them and they engage with employees. The psychological contract provides a broad platform with which to understand these relationships as it is fundamentally concerned with the perceptions and expectations that individuals have about their employers' obligations.

Recently, the psychological contract concept has been examined in different countries (Hui et al. 2004), and differences in perceptions of psychological contracts as they exist in various societies have been documented (Rousseau and Schalk 2000). Some indirect evidence of cultural differences in the psychological contract has been presented (Sanchez-Burks et al. 2000; Westwood et al. 2001) and the dominant form of the psychological contract in various cultures has been identified (Thomas et al. 2010). Most recently, Ravlin and colleagues show, based on a theory of the cognitive and motivational mechanisms through which culture influences the psychological contract (Thomas et al. 2003), that individual cultural value orientation influences perceptions of the psychological contract through an intermediate construct labeled exchange ideology (Ravlin et al. 2012). The purpose of our present study was to extend this line of research in the following ways:

1. Using an experimental approach, we more closely examined the causal relationship between collectivist value orientation and exchange ideology.

2. We demonstrated the linkage between collectivist values and preference for firms with relational or transactional psychological contracts using a participant choice method. In addition to evaluating the psychological contract as an outcome using an alternative method {preference for as opposed to perception of the exchange relationship), this connects the psychological contract literature with the long standing literature on organizational choice (e.g., Feldman and Arnold 1978; Schneider et al. 1995; Vroom 1966).

3. Finally, instead of assuming that individuals from different cultures will vary on some psychological dimension which in turn accounts for between-culture differences in their attitudes and behavior (see Brockner et al. 2000), we more directly address the causal chain by examining the intermediate effect of exchange ideology on the collectivist value orientation to behavioral intent link. Prior studies have not established such causal linkages, and most do not examine mediating effects.

We focused on the collectivist value orientation for two reasons: first, most psychological contract research has to date been conducted within an individualist context, which has assumed an individualistic balanced exchange relationship, and second, we expected that a collectivist value orientation would be more likely to generate norm-consistent behavior (Bond 1986; Bontempo and Rivero 1992; Markus and Kitayama 1991).

2 Theoretical Background

2.1 Form of Psychological Contracts

While there is infinite variety in the form psychological contracts take, differences in the content of these perceptions tend to cluster around the extent to which they are transactional versus relational (Rousseau 1989, 1995). Transactional contracts are characterized by limited involvement of the parties, and emphasize specific, short term, monetary obligations. The identity of the parties is irrelevant. Transactional relationships derive legitimacy from legal/rational or pragmatic principles (Brown 1997; Suchman 1995). This pragmatic legitimacy is outcome based: such calculative relationships are explicitly designed to provide tangible positive outcomes for both parties. In contrast, relational contracts emphasize broad, long-term socio-emotional obligations, such as commitment and loyalty, consistent with collective interest (McLean Parks and Schmedemann 1994), and have a pervasive effect on personal as well as work life. The socio-normative relationship characteristics of the relational contract tend to be based in moral legitimacy, implying a felt moral obligation to "do the right thing" for relationship partners, regardless of immediate personal outcomes. Moral responsibility is the underlying motive for meeting relationship obligations, as opposed to accountability for specific outcomes (Hofstede 1980).

2.2 Cultural Values

As noted previously, the vast majority of research regarding the psychological contract has been conducted in an individualist context (for exceptions see Restubog et al. 2007; Zagenczyk et al. 2015) and is thus presumably dominated by individualistic logic. In fact, the very notion of a contract with regard to the employment relationship may reflect an individualist orientation (Rousseau and Schalk 2000). However, scholars note that within individualist (collectivist) cultures, about 40 % of the population holds collectivist (individualist) values (Triandis and Suh 2002). That is, while cultural value orientations are shaped by the societal context in which individuals' schemas are developed, it is possible for an individual to hold more than one culturally-based meaning system, even if they are in conflict (see Shore 1996). Thus, in order to more fully understand the role of the psychological contract in different cultural contexts, and given that collectivist and individualist value orientations are conceptually separate dimensions at the individual level (Oyserman et al. 2002), we focused on investigating the role of the collectivist cultural value orientation in depth. (1)

In this paper, we limit our discussion to the effect of individual cultural profile. While the psychological contract resides within individuals, we recognize that firm-and societal-level factors help to frame it. However, our purpose is to isolate (insofar as possible) individual-level effects of the cultural value orientation of collectivism. As discussed previously, while culture itself is a group-level construct, these values exist at the individual level within the knowledge systems or schemas of individuals.

Collectivism is the tendency to view the self as interdependent with selected others, to be concerned about consequences of behavior for the goals of the in-group, and to be willing to sacrifice personal interests for group welfare. Individuals derive their social identity from common origins such as ancestry or race and are motivated by a desire to be similar to others and to avoid standing out as different. Relationships are idealized as eternal and decisions are made by consensus (Triandis 1995). Cognitions that focus on norms, obligations and duties guide much of behavior, and there is an emphasis on relationship formation even when the advantages to the individual are unclear. There is strong in-group favoritism and conflict is expressed as out-group hostility (Triandis et al. 1988). With regard to the individual-organization relationship, those with collectivist value orientations should attend to the attributes of the organization, as opposed to their personal attitudes, in determining their level of commitment (Boyacigiller and Adler 1991; Lincoln and Kalleberg 1985). In contrast, people with individualist value orientations, with whom most psychological contact research has been conducted, may engage in very different cognitive processing patterns (Nisbett et al. 2001).

While some recent research has addressed the idea that individuals in collectivist, as opposed to individualist, societies might form systematically different perceptions of their relationship with their organization (e.g., Hui et al. 2004; Westwood et al. 2001) or differ in response to contract breach (Kickul et al. 2004; Lo and Ayree 2003), these studies have not focused specifically on the cultural value of collectivism at the individual level, nor have they identified the process through which cultural values have influence. It is this process to which we turn next.

2.3 Mechanisms of Cultural Influence

Our predictions regarding how cultural values influence the psychological contract are guided by concepts of social cognition and motives in social exchange. That is, we suggest that the cultural value profiles of individuals act both as processors of information and as sources of influence on preferences and behavior. Consistent with this approach, Thomas et al. (2003) proposed that the mechanisms of cultural influence on the form of the psychological contract could be described as falling into two related domains, cognitive and motivational. The cognitive domain involves cultural variation in perception and interpretation of signals from the organization and in behavioral scripts associated with an individual's relationship to the organization. The motivational domain involves how culturally different self-concepts influence what is desirable and thus, preferred outcomes and ways of behaving (Fiske and Taylor 1984). Although cognitive and motivational influences cannot be fully separated (for example, the active maintenance of goals in memory has both cognitive and motivational aspects), there is some utility in initially describing them in isolation.

First, culturally-different individuals learn different sets of values (Erez and Earley 1993), which develop into cognitive frameworks or schemas that are used to help organize and process information about various situations, in this case, their relationship with their employer (Fiske and Taylor 1984). Different priorities for what stimuli deserve attention (selective attention), and the meaning we attach to these perceptions (encoding), are formed by gradual internalization of prevailing cultural patterns (storage, retrieval; Markus and Kitayama 1991; Miller et al. 1990).

Organizational sources signal commitments and obligations to employees through such things as overt statements, expressions of policy, and references to history or reputation. How individuals interpret these messages influences the psychological contract more than the messages actually sent (Montes and Zweig 2009; Rousseau 1995). Regardless of the actual content of organizational messages, values influence what is perceived under conditions of uncertainty or ambiguity (e.g., Ravlin and Meglino 1987), and of course, not all aspects of the employee-organization relationship can be clearly articulated (Rousseau 1995). Further, consistency effects may influence individuals to discard information that does not fit well with their cultural schemas (Fiske and Taylor 1984). Under such conditions, collectivists should be likely to interpret information in relational terms because existing mental structures indicate that these orientations are consistent with what is likely or what ought to happen between employee and employer. This approach to psychological contract formation is consistent with research that notes that pre-employment beliefs about careers have a significant impact on what individuals expect from their future employers (DeVos et al. 2009) and that different dominant forms of the psychological contract have been identified in different societies (Thomas et al. 2010).

Second, motivational implications of differing self-concepts arise from culturally different individuals seeking to fulfill motives aligned with their cultural values as they engage in social exchange. Motives address the question of what one wants or prefers. Motives to maintain a positive self-image appear to be universal. However, what constitutes a positive self-view depends on how the self is construed. For example, those with interdependent selves (collectivists) derive a positive self-image from belonging, fitting in, occupying one's proper place, maintaining harmony, receptivity to others, and restraint of personal needs or desires (Markus and Kitayama 1991). Because of the mechanisms through which they have influence, we expect that cultural values will not only affect the perceptions that individuals have of their psychological contract but also their preferences as employers for organizations that exhibit characteristics indicative of particular psychological contract types.

Individuals high in collectivist value orientations are motivated to create long-term moral obligations by keeping relationships open and dynamic (Tse et al. 1988; Yang 1993). They tend to locate themselves in a large in-group that affects many areas of their lives (Triandis 1988), and extend their definition of in-group to a network of interdependency (Goodwin and Tsang 1991). Relational contracts are thus more consistent with the goal orientations of collectivists, while those low in collectivist value orientations are more likely to see their motives reflected in transactional contracts because of a lower preference for developing long-term, dynamic relationships. Thus, both cognitive and motivational channels of cultural influence point to cultural differences in the preferences that individuals have for characteristics in the psychological contract.

Hypothesis 1: Collectivist value orientation will be positively related to preference for firms exhibiting a relational psychological contract.

In addition to attending to specific aspects of organizational messages and preferences for certain contract terms (cognitive and motivational effects of cultural value orientations), individuals also hold beliefs about the fundamental nature of exchange relationships regarding both what it is (cognition) and what it should be (preference). These beliefs, called exchange ideology, are proposed to vary according to more foundational cultural values, and are similarly driven by the cognitive and motivational influences of these values. Relationship norms for collectivists are likely to exert a powerful, unified influence on perceptions of how one should behave (Bontempo and Rivero 1992) and these norms are founded in communal sharing (Fiske 1991; Triandis 1995). Communal sharing involves an exchange relationship in which individuals contribute what they can and freely take what they need from the common pool of resources. Alternatively, relationship norms for those low in collectivist value orientation are more likely to be based on what Fiske (1991) calls market pricing (Triandis 1995). This refers to exchange relationships based on a function of market prices or utilities where exchanges are made in proportion to what is contributed. In other words, resources are shared according to a quota proportionate to some standard. Individuals low in collectivist value orientation are more likely to expect quid pro quo responses in social exchange and have less of a long-term orientation (Erez and Earley 1993; Triandis 1988). While Blau (1964) argued that this type of balance in exchange relationships is expected, more recent scholarship has noted that relationships may depart substantially from such balance (Ballinger and Rockmann 2010), and it is generally well accepted that not all relationships with organizations may be perceived as balanced (Shore and Barksdale 1998). Furthermore, we suggest that an expectation of balance may be a particularly individualistic assumption that is based on an equity or market-pricing norm.

A classification of exchange ideologies by Eisenberger et al. (1987) is instructive in this regard. Based on the notion that partners in an exchange relationship may differ with regard to the most effective ways to strengthen the relationship, they designed a study to assess the acceptance of the norm of reciprocity, defined as a universal ethic requiring equality between the amounts of help received and returned (Gouldner 1960), and the relative desirability of giving versus receiving in social exchange. Their study yielded two independent factors, which they labeled creditor ideology and reciprocation wariness. Creditor ideology indicates a belief that it is appropriate and efficacious to obligate people by giving rewards of greater value than previously received. Creditors do not rest easily when a debt has been repaid and they quickly look for new opportunities to create an imbalance (Greenberg and Westcott 1983). In connection to research on the psychological contract, Coyle-Shapiro and Neuman (2004) found some moderating effects of creditor ideology on the relationship between employer and employee obligations, but did not examine potential mediation of cultural effects by exchange ideology.

Reciprocation wariness involves cautiousness in reciprocating for fear of advantage being taken. High wariness individuals do not believe in giving a great deal in a social relationship (Eisenberger et al. 1987). These dimensions of creditor ideology and reciprocation wariness are conceptually somewhat similar to the equity sensitivity construct that identifies individual variation in the need for or sensitivity to equity in exchange (King and Miles 1994). Research indicates that equity sensitivity influences individuals' attitudes toward their organization (Kickul and Lester 2001), and the importance of equity's influence on judgments of fairness has been consistently found to be lower for collectivists than for individualists (Kim et al. 1990; Leung and Bond 1984). More directly, Restubog et al. (2007) found that equity sensitivity interacted with psychological contract breach to decrease organizational citizenship and increase workplace deviance behaviors.

Other attributes of collectivism beyond lower sensitivity to balance in exchange support the idea that collectivists may hold a fundamentally different norm for exchange than individualists. The basic motive structure of collectivists reflects receptivity and adjustment to the needs of others, while those low in collectivist value orientations are more likely to be motivated by internal needs, rights and capacities (Markus and Kitayama 1991). In terms of economic exchange, these individuals may pursue short-term self-interest regardless of the implications for others (Triandis et al. 1988), while those higher in collectivist values are concerned with making a long-term relational investment in such exchanges (Ting-Toomey 1994). In sum, it seems clear that individuals with a collectivist value orientation are likely to have fundamentally different beliefs about what is right and fair in an exchange as opposed to more frequently studied populations. A creditor ideology is consistent with long-term relational investment whereas reciprocation wariness is inconsistent with a communal conceptualization of exchange. These arguments lead to our second set of hypotheses.

Hypothesis 2: Collectivist value orientation will be related to reciprocation wariness, such that:

(2a) Collectivist value orientation will be positively related to a creditor exchange ideology.

(2b) Collectivist value orientation will be negatively related to reciprocation wariness.

One of our goals in this study was to evaluate an intermediate mechanism through which cultural values operate. Exchange ideology has been found to mediate the relationship between cultural values and the perception that individuals have of their existing relationship with their employer (Ravlin et al. 2012). Because exchange ideology exists at a level more proximate to the phenomenon of interest, it is logical to suggest this construct as an intermediate step between individual cultural values and the preference for establishing a relationship with firms that exhibit a particular psychological contract type as well. We expect that fundamental cultural values engender beliefs and motives regarding exchange, which in turn influence both perceptions and interpretations of organizational messages and goal orientations with regard to a specific exchange--the psychological contract. Individuals' beliefs about exchange relationships allow individuals to make sense out of their complex relationship to the firm. Supporting this perspective is evidence suggesting that beliefs about what constitutes appropriate interaction patterns can be more influential than ethnicity on some outcomes. For example, in a study of Anglo-and Mexican-Americans, relational style (task versus interpersonal) was more influential than ethnicity in participants' preference for work groups (Sanchez-Burks et al. 2000). Other research also points to the mediating role of exchange relationships. For example, Song et al. (2009) found that social exchange (conceptually similar to exchange ideology) partially mediated the effect of executive leadership style and organizational culture on affective commitment and task performance and, as noted previously, Ravlin and colleagues (2012) provide evidence in a correlational study of the mediating effect of exchange ideology on the relationship between culture and perceptions of an existing psychological contract.

Here, we expect that exchange ideology serves as a conduit through which cultural values influence preferences for a firm that exhibits a particular psychological contract type. Given that our research focuses on collectivist value orientation, the exchange ideology we expect to play this mediating role is creditor ideology. This line of thinking leads to our final prediction.

Hypothesis 3: Exchange ideology will mediate the relationship between cultural value orientation and the preference for employers, such that creditor ideology will mediate the influence of collectivist orientation on the preference for employers exhibiting a relational psychological contract.

3 Method

To test our hypotheses we conducted two studies to isolate, in so far as possible, the effect of the individual cultural value of collectivism on the preference that individuals have for organizations with different psychological contracts. A graphic representation of the two studies is presented in Fig. 1. Study 1 was an experiment to establish the causal linkage between collectivist orientation and exchange ideology. Study 2 was a scenario-based study that evaluated the mediating effect of exchange ideology in the relationship between collectivist value orientation and participants' preference for organizations exhibiting characteristics consistent with different types of contract. This study also included a pilot test of the effectiveness of the scenarios in representing transactional and relational psychological contracts.

3.1 Study 1

In this study, we sought to provide validation for the causal relationship between collectivist orientation (independent variable) and exchange ideology (mediating variable) as the first link in the mediation chain using an experimental design. We used a priming technique to cue either collectivist or individualist orientation, and then measured the endorsement of exchange ideologies (creditor ideology and reciprocation wariness). Priming cultural orientation creates an experimental analog of chronic differences between cultural groups by temporarily focusing participants' attention on (increasing the salience of) different culture-relevant cognitive content (Oyserman and Lee 2008). This is a common approach used in the field of social cognition to create state-based analogs of trait-like phenomena. As all individuals have schemas regarding individualist and collectivist identity, this method temporarily focuses respondents' attention on individualist or collectivist self-construal. In many people one identity may be dominant (Markus and Kitayama 1991) or chronically accessible, maintained by frequency of use (Higgins 1996); however, the ability to make other aspects of identity salient through priming is well established (e.g., Hong et al. 2000). We predicted that participants in the collectivist orientation priming condition would be more likely to endorse a creditor ideology and less likely to endorse reciprocation wariness than those in the individualist orientation priming condition. It is only through experimental methods such as those used in this study, in which participants are randomly assigned to cultural orientation conditions, that causal links can be established, particularly as we extend this to a mediated relationship (e.g., Spencer et al. 2005; Stone-Romero and Rosopa 2008).


3.1.1 Participants

In order to provide for the widest possible individual-level variation in the value orientation of collectivism we conducted this experiment with a sample drawn from both Canada (individualist society) and China (collectivist society). That is, while our interest was in collectivist value orientations as contained within individual schemas, our ability to tap into these values was enhanced by ensuring that our sample had the opportunity to have internalized various levels of this culturally-based value orientation. Whether or not participants were representative of the modal cultural profile of the country was not material in this context. One hundred and five individuals drawn from university student populations participated in exchange for partial course credit. Fifty-eight were from a large Canadian university and 47 were from a large Chinese university. The results from eight participants from the Canadian sample and three participants from the Chinese sample were discarded because they failed to follow the priming instructions (e.g., failed to write anything or wrote non-relevant responses, such as "I can make an instant decision for my life once I have got sufficient information"). Two additional participants from the Chinese sample were discarded because they failed to complete the study. The usable sample consisted of 92 participants, 50 (17 male and 33 female) in the Canadian sample and 42 (17 male and 25 female) in the Chinese sample. The Canadian participants' mean age was 21.52 years (SD = 1.57), and the Chinese participants' mean age was 20.33 years (SD = 0.87). There were no statistically significant differences in gender composition or age between the two samples.

3.1.2 Procedure

We used an adapted version of the Similarities and Differences with Family and Friends task (SDFF) developed by Trafimow et al. (1991, Study 1) to cue cultural orientation. Participants were randomly assigned to experimental condition. In the collectivist priming condition, participants were instructed to write down "at least three things you have in common with your family and friends and that they expect you to do in your life". In the individualist priming condition, participants were instructed to write down "at least three things that make you different from your family and friends and that you expect yourself to do in your life?" The original task only asks participants to "think of" similarities or differences with family and friends, but "not to write anything" (Trafimow et al. 1991. p. 651). We adapted this task to ask for written statements in order to insure that participants had clearly understood and followed the instructions, which could influence the salience of the priming effect. As noted previously, this procedure also allowed us to discard data from the 11 subjects who failed to comply with the task instructions. The characteristics of participants in each experimental condition were as follows: Individualist Prime = 28 Canadian, 20 Chinese, 17 male, 31 female; Collectivist Prime = 22 Canadian, 22 Chinese, 17 male, 27 female. Following the priming task, participants completed the exchange ideology scales and demographic information. Canadian participants completed the survey in English, and Chinese participants completed the survey in Chinese. The Chinese version was translated from the original English version into Chinese by native speakers following Brislin (1970)'s back translation procedure.

3.1.3 Measures

Exchange Ideology. Exchange ideology was measured with a six-item scale from Ravlin et al. (2012). This scale had been reduced from Eisenberger et al.'s (1987) original 23-item instrument by selecting items that loaded most heavily on each factor. Three items from each sub-dimension measured what the authors call creditor ideology and reciprocation wariness. The scale items are presented in Appendix 1. Participants responded by indicating their agreement with each of the six items on a seven-point Likert-type scale, anchored by 1 = strongly disagree and 7 = strongly agree. The internal consistency reliabilities, as indicated by Cronbach's alpha, were 0.61 and 0.63 for creditor ideology and reciprocation wariness respectively in the Canadian sample, 0.77 and 0.55 in the Chinese sample, and 0.73 and 0.59 in the combined sample. The low internal consistency for the reciprocation wariness scale was a bit disappointing and much lower than the 0.84 achieved in Study 2 ahead. This was possibly the result of the low social desirability of some of the items in this scale and the more positive pro-social outlook of the younger participants in this study. However, this variable does not play a central role in our studies, thus mitigating this concern to some extent.

3.1.4 Results and Discussion

We conducted a 2 (Individualist/Collectivist Orientation Experimental Conditions) by 2 (Chinese/Canadian) analysis of variance (ANOVA) to test the effect of priming and country on endorsement of exchange ideology. Consistent with our prediction, the main effect of priming condition was significant (F(1, 88) = 13.01, p < 0.01), indicating that participants in the collectivist orientation priming condition (those who wrote about similarities they shared with their family and friends) endorsed a higher level of creditor ideology than their counterparts in the individualist orientation priming condition (those who wrote about differences they had with family and friends). Consistent with the conceptualization of exchange ideology as a societal norm, Chinese participants endorsed higher levels of creditor ideology than their Canadian counterparts (F(1, 88) = 25.48, p < 0.01). There was no interaction between priming condition and country on creditor ideology (F(1, 88) = 0.16, p = 0.69), indicating that country did not moderate the relationship between collectivist orientation and creditor ideology. Also, there was no significant difference in reciprocation wariness between the two experimental conditions (F(1, 88) = 0.06, p = 0.80) or between the two country groups (F(1, 88) = 0.01, p = 0.95), possibly due to the low social desirability of this variable and related low variation. The interaction effect was also non-significant (F(1, 88) = 0.30, p = 0.57). As predicted, the combined sample also indicated that participants in the collectivist orientation priming condition endorsed higher creditor ideology than their counterparts in the individualist orientation priming condition ([M.sub.col] = 5.50, [M.sub.ind] = 4-81, t(90) = 3.64, p < 0.00). Again, there was no significant difference in reciprocation wariness between the two experimental conditions ([M.sub.col] = 2.77, [M.sub.ind] = 2-71, r(90) = 0.31, p = 0.76). A graphical representation of these results is presented in Fig. 2.

As shown, the results of this study support the predicted relationship between collectivist orientation, experimentally manipulated at the individual level, and the exchange norm of creditor ideology. In this case, the collectivist value orientation of individuals was primed, providing a methodological check on the results of Study 2 (ahead) and the opportunity to make a clear causal inference.

3.2 Study 2

This study was designed to test the mediating effect of exchange ideology on the relationship between the individual cultural value of collectivism and psychological contract preference. It examined the employment preferences of people with differing cultural value orientations and exchange ideologies for one of two companies. These company contexts were described as representing either a transactional or relational psychological contract. That is, we wanted to see if individuals with different levels of collectivist value orientation and different dominant exchange ideologies would find companies that presented information indicative of relational or transactional psychological contracts more appealing as an employer. To do this, we designed websites for two fictitious information technology (IT) companies. The websites were designed to present companies with transactional and relational orientations regarding their obligations to employees. We asked participants questions about the attractiveness of each as an employer and measured their collectivist value orientation and exchange ideology.


3.2.1 Participants

In order to insure as wide a variation as possible on the predictor variable we included participants from both the US and China in the sample for this study. Sixty-five MBA students from a large southeastern US university and 43 MBA students from a large university in Hong Kong participated in exchange for partial course credit or a gift card. Two participants from the US sample were excluded from the analysis because they failed to complete the study. The remaining 106 participants consisted of 41 men and 21 women, and one who did not report gender in the US sample, and 19 men and 24 women in the HK sample. The mean age was 30.42 years (SD = 5.62) and the average full time work experience was 8.01 years (.SD = 5.85) in the US sample, and the mean age was 30.26 years (SD = 3.89) and the average full time work experience was 7.94 years (SD = 3.32). There was a higher percentage of female participants in the Hong Kong sample ([[chi].sup.2.sub.(1)] = 4.99, p < 0.05), but the two samples did not differ in age or full-time work experience.

3.2.2 Procedure

Participants first browsed the website descriptions of the two IT companies, called Independent Cybertech and Undivided Technologies, which were designed to represent a transactional or a relational psychological contract respectively (see Appendix 2 for company descriptions). These websites were created by examining a number of existing recruitment sites on the web, and using similar approaches in presenting information. A pilot study, described ahead, indicated that the descriptions of the firms were effective in manipulating the perception of the companies as representing environments indicative of a transactional or a relational psychological contract. After reading the descriptions, participants were asked to indicate which company they preferred as an employer. They then completed an online questionnaire containing the exchange ideology scales and demographic information. The US participants completed the survey in English, and the HK participants chose between English and Chinese versions for their own convenience. The Chinese version was translated from the original English version into Chinese by native speakers and followed Brislin (1970)'s back translation procedure. Age, gender, level of education and full-time work experience were measured and included as control variables in the analysis.

3.2.3 Pilot Study

In order to assure the efficacy of the scenarios presented in the websites, a pilot study with a sample of 148 MBA students from a large southeastern US university was conducted. Participants were asked to view the two websites and rate their perceptions of the companies with regard to the transactional and relational aspects of the psychological contract. The psychological contract was measured as participants' perceptions of employer obligations related to the transactional and relational factors. The measure consisted of a 13-item scale reported in Ravlin et al. (2012). Participants responded as to the extent to which the company appeared to provide the attribute on a seven-point Likert-type scale anchored by 1 = strongly disagree and 7 = strongly agree. A sample transactional item was "Compensate me based on what I do for company name. "A sample relational item was "Protect my wellbeing." The complete list of items is presented in Appendix 3. The internal consistency reliabilities of the scale were 0.66 for transactional contract in Independent Cybertech, 0.83 for relational contract in Independent Cybertech, 0.82 for transactional contract in Undivided Technologies, and 0.85 for relational contract in Undivided Technologies. Consistent with the intent of the scenarios, participants rated Independent Cybertech significantly higher on transactional psychological contract ([M.sub.IC] = 5.35, [M.sub.UT] = 4.98, t(146) = 4.20, p = 0.00), and lower on relational psychological contract ([M.sub.IC] = 3.49, [M.sub.UT] = 5.60, t(146) = 18.40, p = 0.00) than Undivided Technologies, thus indicating that the two company websites presented contexts that were interpreted as representing either a transactional or a relational psychological contract.

3.2.4 Measures

Company Preference. Participants were asked to indicate their preference for the companies as an employer with two questions, "Of the two companies, which would you be more likely to apply to for a job," and "If they both offered you a job, which company's job would you be more likely to accept." All participants choose the same company on both questions. Therefore the two responses were collapsed into a single measure.

Exchange Ideology. Exchange ideology was measured with the same scales used in Study 1 (based on Eisenberger et al. 1987). The internal consistency reliabilities, as indicated by Cronbach's alpha, were 0.87 and 0.81 for creditor ideology in the US and HK samples respectively, and 0.67 and 0.78 for reciprocation wariness in the US and HK samples respectively. Cronbach's alphas were 0.85 and 0.84 for creditor ideology and reciprocation wariness respectively in the combined sample. These very reasonable reliabilities stand in some contrast to those obtained in Study 1, and may also reflect the level of work experience and average age of the participants in this study.

Collectivist Value Orientation. Collectivist value orientation was measured with the collectivism dimension of the Horizontal and Vertical Individualism and Collectivism scale which combines both horizontal and vertical aspects of collectivism (Singelis et al. 1995; Triandis 1995). Participants responded by indicating their agreement with each of the 16 items on a seven-point Likert-type scale anchored by 1 = strongly disagree and 7 = strongly agree. The internal consistency reliabilities, as indicated by Cronbach's alpha, were 0.77 in the US sample, 0.70 in the HK sample, and 0.74 in the combined sample. Our primary interest in this study was the mediating relationship between collectivist cultural orientation and the preference for a firm indicative of a transactional or relational psychological contract through exchange ideology. Therefore, we combined the two samples, coded country as a categorical variable, included country as a control variable and also tested its moderating effect.

3.2.5 Results

Means, standard deviations and correlations among the independent and control variables are presented in Table 1.

To test Hypothesis 1 we conducted a logistic regression on participants' preferences for company as a function of their collectivist orientation, which indicated a significant main effect. Consistent with our prediction in Hypothesis 1, participants with higher collectivist value orientations were more likely to prefer Undivided Technologies over Independent Cybertech (Wald [chi square] = 4.87, p < 0.05). Age, gender, education level, full time work experience and country background were controlled (the complete results are presented in Table 3, Equation 1).

To test Hypothesis 2, we regressed creditor ideology and reciprocation wariness on collectivist value orientation separately while controlling for demographics. Results indicated that collectivist value orientation was significantly and positively related to creditor ideology ([beta] = 0.46, p = 0.00), but not related reciprocation wariness ([beta] = -0.10, p = 0.28). Thus Hypothesis 2a was supported. Multiple regression results are shown in Table 2.

To provide a complete picture of the hypothesized mediation model, we further provide results on the relationship between exchange ideology (mediator) and company preference (dependent variable). We tested participants' company preferences as a function of their exchange ideology using logistic regression (Equation 2, Table 3) and expected to find that creditor ideology and reciprocation wariness would predict company preference. Consistent with our expectations, participants with higher creditor ideology were more likely to prefer Undivided Technologies over Independent Cybertech (Wald [chi square] - 11.68, p < 0.01), and participants with higher reciprocation wariness were less likely to prefer Undivided Technologies over Independent Cybertech (Wald [chi square] = 4.60, p < 0.05). Twenty-five of the US participants (39.7 %) and 15 of the HK participants (34.9 %) showed a preference for working at Independent Cybertech. The main effect of country was not significant, indicating that participants from the two country groups showed a similar pattern of company choice. Next, we tested whether country moderated the effect of exchange ideology on company preference in Hayes and Matthes' (2009) SPSS macro. Results revealed that country did not interact with either creditor ideology (Wald [chi square] = 0.23, p = 0.63) or reciprocation wariness (Wald [chi square] = 0.94, p = 0.33) in determining company preference. Age, gender, education level and work experience were controlled in the analyses and none significantly predicted the choice of company. Thus, we combined the two samples and calculated the means of exchange ideology for participants who preferred Independent Cybertech and participants who preferred Undivided Technologies. T-tests revealed that those who preferred Undivided Technologies as an employer exhibited higher creditor ideology ([M.sub.UT] = 5.28, [M.sub.IC] = 4.50, t(104) = 4.11, p < 0.01), and lower reciprocity wariness ([M.sub.UT] = 2.52, [M.sub.IC] = 3.01, t(104) = -2.16, p < 0.05) than those who preferred Independent Cybertech (see Fig. 3).

As shown in Fig. 3 individuals with higher creditor ideology preferred the organization that exhibited a relational psychological contract and those high in reciprocity wariness had a stronger preference for a company with a transactional psychological contract.

Finally, to test the mediation model as proposed in Hypothesis 3, we first conducted a logistic regression (Equation 3, Table 3) on participants' preferences for company as a function of their collectivist orientation and exchange ideologies, while controlling for demographics. Results indicated that collectivist orientation (Wald [chi square] - 0-34, p - 0.56) no longer predicted company preference after exchange ideologies were entered into the equation. Creditor ideology (Wald [chi square] = 9.46, p < 0.01) and reciprocation wariness (Wald [chi square] = 4.50, p < 0.05), on the other hand, significantly predicted company preference, and the predictions were consistent with the results reported in the previous paragraph. These results provided initial evidence for mediation. Complete logistic regression results are shown in Table 3.


To further confirm the proposed mediation, we used bootstrapping (Preacher and Hayes 2008) to estimate the indirect effect of collectivist value orientation on psychological contract preference through exchange ideology in the combined sample. Since reciprocation wariness was not significantly related to collectivist orientation, we only tested the mediating effect of creditor ideology in bootstrapping. Company preference was entered as the dependent variable, collectivist orientation as the independent variable, creditor ideology as the mediator, age, gender, education, full-time work experience, and country as controls in the Preacher and Hayes SPSS macro. This generated a 95 % bias-corrected bootstrap confidence interval for the indirect effect using 5000 bootstrap samples in logistic regression. Results indicated that the total effect of collectivist value orientation on company preference (total effect = 0.87, p = 0.03) became non-significant when creditor ideology was included in the model (direct effect = 0.31, p = 0.49). The indirect effect through creditor ideology was significant, with a point estimate of 0.74 and a 95 % BCa (bias-corrected and accelerated) bootstrap CI of 0.23-1.59. That is, creditor ideology fully mediated the effect of the collectivist value orientation of participants on their preference for a firm exhibiting a relational psychological contract. Thus, in combination with Study 1, this study provided a test of the relationship from cultural value orientation through exchange ideology to psychological contract preference, and also indicated that country had no moderating effect on the tested link.

4 Discussion

4.1 Findings

The studies we present here investigated the influence of collectivist value orientation on the preference that individuals have for employers exhibiting a particular type of psychological contract. Furthermore, we provide additional experimental support for the mediating relationship of exchange ideology on this relationship. The psychological contract describes the expectations that employees have about the nature of their relationship with their employer and has most often been investigated with regard to employee perceptions of this relationship. Here, we extend this research to connect with the literature on organizational choice to show how cultural values influence employee preferences for a particular type of relationship with their employer. We have long known that potential employees find organizations that they view as instrumental to achieving their personal goals to be more attractive (Vroom 1966). Culturally based values not only reflect the goals of individuals but also prescribe the behavior required to achieve those goals (Erez and Earley 1993). In this study, we show that believing that an organization will contribute to the achievement of individual goals is dependent, in part, on the extent to which the organization is perceived as meeting expectations about an exchange relationship that is consistent with individual value orientations.

In contrast to the majority of research on the psychological contract the studies presented here focus on the cultural value of collectivism. Some prior studies have examined differences in perceptions of the psychological contract and responses to contract breach in collectivist countries (e.g., Restubog et al. 2007; Zagenczyk et al. 2015). However, this research has not unbundled cultural values from other aspects of national context, and has not focused on how specific dimensions of cultural orientation have influence. Nor has it examined the values based pre-employment expectations about exchange relationships that individuals bring to the organization.

Collectivist value orientation is a central cultural dimension in this regard because of its specific characteristics relative to relationships with organizations (Boyacigiller and Adler 1991; Lincoln and Kalleberg 1985). In our research, as predicted, we found that collectivist value orientation was positively related to preferences for relational aspects of the psychological contract, but not transactional aspects. Second, we found empirical support for the causal relationship between collectivist orientation and fundamental normative beliefs about exchange in social interactions that has been previously theorized but not tested (e.g., Fiske 1991; Foa and Foa 1974). That is, collectivist value orientation was positively related to creditor exchange ideology, but negatively related to reciprocation wariness. Finally, as opposed to simply assuming that cultural values influence behavioral choice, we provide evidence for a mechanism through which collectivist value orientation and more proximate beliefs about exchange have influence. Specifically, creditor ideology fully mediated the effect of collectivist value orientation on individuals' preference for employment with firms indicating a relational versus a transactional contract environment. This study conceptually replicated the mediation effect found in the Ravlin et al. (2012) correlational study, albeit using preferences for a particular type of psychological contract, as opposed to perceptions of the existence of a particular relationship with an employer as the outcome variable. Thus by examining the linkages among constructs this study provides significant support for the nomological net proposed between individuals' collectivist value orientations, dominant exchange norms, and their preferred psychological contract.

4.2 Limitations

These results must of course be interpreted within the boundaries of the limitations of these studies. Our sample demonstrated the expected variation on the cultural value dimension of interest (collectivism). However, different results might be obtained in studies of individuals from different countries beyond those sampled here and with different dimensions of cultural variation. For example, the causal chain found here for collectivist values may or may not hold in other cultural contexts. That being said, our results are consistent with the finding of a mediating role for reciprocity perceptions between contract fulfillment and commitment found in a Finnish context (Parzefall 2008). We are cognizant of the limitations and potential abstraction of our study design and the use of students as participants, and tried to mitigate these through elements of the designs. Study 2 presented scenarios on websites that were consistent with eliciting a sense of mundane realism (Enzle and Schopflocher 1978) and were designed to be similar to actual company websites and similar to each other in all respects except for the fact that they conveyed different types of psychological contracts as indicated in the pilot study. Also, the sample in this study was on average over 30 years of age, almost all were employed full time, and had on average more than 8 years full-time work experience. Study 1, on the other hand, examined a fundamental psychological process unlikely to be influenced by the fact that the sample was comprised of students (Locke 1986).

The specific cultural dimension on which we focused our study is limiting in that we only examined collectivist value orientation. However, this focus provides an important contrast to the dominant individualist context of studies of the psychological contract. As a result, study findings do not depend on an assumption that collectivists process information in the same way as do individualists (Nisbett et al. 2001). This orientation is consistent with a very different set of expectations for exchange relationships with organizations than has typically been studied. Given the increased cultural diversity experienced in organizations of all types a deeper understanding of the psychological contract relative to collectivist employees seems critical. For example, Thomas and Au (2002) found that individuals with collectivist value orientations respond very differently than do individualists to low job satisfaction, which is often an indicator of unmet employee expectations regarding their relationship with the organization.

Despite the limitations noted, we are confident that our results have significant implications for both theory and practice. It is clear that aspects of individual-level cultural variation affect preferences for the psychological contract both in its form and in terms of expectation for exchange balance. Here, a broad cultural value dimension was shown to operate through fundamental normative beliefs proximate to the outcome of interest. This is an important step toward understanding more about how culture manifests its influence on this important framework for understanding the employment relationship. Effective management practice ultimately requires a clear understanding of the process whereby values influence beliefs about employment relationships, which was the focus of our inquiry. By recognizing the process through which values operate organizations are more likely to design processes and structures that reflect both organizational and employee goals.

4.3 Implications

These results have implications for both employees and organizational agents regarding the improvement of cross-cultural interactions in organizations. Both must recognize that systematic differences in cultural value orientations will, operating through cognitive and motivational channels, affect the extent to which the terms of the exchange relationship are understood, which in turn influences potential employees' perception of the attractiveness of firms. Employees may have expectations of firm obligations based at least in part on their normative beliefs about exchange relationships in general. And, the extent to which the firm presents an image that is consistent with these normative beliefs is an important influence on firm attractiveness. Furthermore, organizational agents cannot assume that culturally different employees' interpretation of organizational messages will be consistent with how they themselves would perceive the exchange. Explicit discussion clarifying the terms of the employee-firm relationship may be required to better manage the formation of the psychological contract. One component of such explicit discussion should address the issue of cross-cultural differences in normative exchange beliefs, and a communication of the value-based foundation of the organization's approach to exchange with employees. Not only should this approach provide a realistic preview (e.g., Wanous 1989) for prospective employees, but also increase perceptions of procedural and interactional justice (Zapata-Phelan et al. 2009).

This problem is of course most important in organizations in which there is the opportunity for variation in the cultural value orientations of employees. Given the increased permeability of national boundaries to migration, the globalization of business, and the shortage of talent in many industries variability in cultural value orientations may today be the norm rather than the exception. Thus, tailoring organizational messages with an eye toward meeting the value-based expectations of employees may be an increasingly important strategy.

4.4 Conclusions

These findings suggest alternative options, however, to both clarifying a realistic message regarding the employee-organization exchange and to tailoring the organizational profile to meet expectations. Because the employee-employer relationship plays out on multiple levels, differing exchange perspectives may be confronted at these different levels. The supervisor-subordinate relationship could provide a key mechanism for adapting to culturally different subordinate exchange norms. Perceived supervisor support (Eisenberger et al. 2002) and leader-member exchange (Dulebohn et al. 2012) both are potential avenues whereby the organization can maintain its primary approach to employment (i.e., relational or transactional) while at the dyadic level adjusting exchange to better meet expectations.

These implications may be particularly important for firms operating in knowledge-based competitive structures such as the IT firms depicted in our scenarios. Violations of employee expectations regarding the nature of exchange with the organization have been found to result in low employee contributions, low organizational commitment, and neglect or exit from the company (Zhao et al. 2007). All of these outcomes are undesirable for a firm attempting to compete in today's global, knowledge-based economy (Ashworth 2006; Horwitz et al. 2003; Thompson and Heron 2005). The effective management of individuals who have very different value-based expectations about and preferences for their relationship with employing organizations is therefore critical to organizational success. Understanding cultural variation in the psychological contract offers a useful approach to this management challenge.

DOI 10.1007/s11575-015-0275-2

Published online: 11 January 2016

Acknowledgments This paper was supported by a grant to the first author from the Social Science and Humanities Research Council of Canada, and by a grant to the second author from the Center for International Business Education and Research.

Appendix 1

Items measuring exchange ideology

Reciprocation wariness

1. The most realistic policy is to take more from others than you give.

2. It generally pays to let others do more for you than you do for them.

3. In the long run, it is better to accept favors than to do favors for others.

Creditor ideology

1. If someone does something for you, you should do something of greater value for him or her.

2. If someone goes out of their way to help me, I feel as though I should do more for them than merely return the favor.

3. If someone does you a favor, you should do even more in return.

Appendix 2

Sample company descriptions for Study 3 Independent Cybertech People at Independent Cybertech value:

* Dedication to every client's success.

* Innovation and entrepreneurial spirit.

* Performance above the expected.

Compensation program

At Independent Cybertech, your pay will be strongly influenced by the results you deliver and by our overall business performance. Cash compensation opportunities include base pay and a performance bonus. When you perform at the highest level, you will have an earnings opportunity that will place you among the best-paid employees in the marketplace.

Performance bonus

The individual performance bonus ensures you receive the appropriate recognition and financial rewards aligned to your performance. Your performance bonus is based on how much you contribute to the company's success, and how closely your annual objectives are met in key areas.

Undivided technologies

Undivided Technologies and its employees share company values that are the foundation for all that we do:

* Customer service: dedicated to the satisfaction of every customer.

* Trustworthiness and integrity: trust and organizational responsibility in all that we do.

* Commitment: to our employees, our customers and our shareholders

Our commitment to you

Undivided Technologies fosters an environment where employees can grow and develop during their careers. When you join Undivided Technologies we hope that it will be for the long term. We have a culture in which our members are recognized and rewarded for their individual and team accomplishments. We care about the wellbeing of our employees and support them at work and in their outside of work activities. We provide a state of the art working environment and maintain our commitment to you as long as you are making a contribution to the Undivided Technologies family.

In addition to a very competitive salary we offer a wide range of employee benefits. Two of our unique benefits are Undivided Technologies University and Club Undivided.

Appendix 3

Items measuring transactional and relational psychological contract

Transactional contract 1

1. Compensate me based on what I do for company name.

2. Share resources with employees who deserve them.

3. Treat me appropriately with regard to my rank in the company name organization.

4. Share company name's positive outcomes with employees if they have contributed to them.

5. Evaluate my contribution compared to that of others, and treat me accordingly.

6. Pay as much attention to my contributions as anyone else's.

7. Compensate me based on what other companies do for similar employees.

Relational contract

1. Create a sense of community among employees.

2. Protect my well-being.

3. Support me in matters outside of work.

4. Look out for me no matter how well or poorly company name is doing.

5. Be responsible for me.

6. Employ me as long as I make a useful contribution.


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(1) Triandis (1995) suggested that at the individual level the terms allocentrism and idiocentrism should be substituted for collectivism and individualism respectively. While more accurate, this terminology has not been widely adopted. Therefore, consistent with convention, we use the terms collectivism (or collectivist orientation) and individualism (or individualist orientation) to refer to both levels of analysis.

David C. Thomas [1] * Elizabeth C. Ravlin [2] * Yuan Liao [3] * Daniel L. Morrell [4] * Kevin Au [5]

[mail] David C. Thomas

[1] Segal Graduate School of Management, Simon Fraser University, Vancouver, Canada

[2] Department of Management, Moore School of Business, University of South Carolina, Columbia, USA

[3] Department of Managing People in Organizations, IESE Business School, Barcelona, Spain

[4] Department of Management and Marketing, Middle Tennessee State University, Murfreesboro, USA

[5] Department of Management, The Chinese University of Hong Kong, Hong Kong SAR, China
Table 1 Means, standard deviations and correlations
among independent and control variables in Study 2

                            Mean     SD       1

Collectivist orientation    4.85    0.57
Creditor ideology           4.98    1.01    0.41 **
Reciprocation wariness      2.71    1.17   -0.18
Age                        30.35    4.97   -0.01
Work experience             7.98    4.96   -0.06

                             2        3         4

Collectivist orientation
Creditor ideology
Reciprocation wariness     -0.11
Age                         0.05   -0.22 *
Work experience             0.06   -0.18     0.91 **

N = 106. Gender was controlled as a categorical variable
and education level controlled as an ordinal variable

* p < 0.05, ** p < 0.01

Table 2 Multiple regression
results in Study 2

                             [beta]      t

  Age                        -0.09    -0.39
  Gender                      0.04     0.48
  Education level            -0.09     0.48
  Work experience             0.16     0.67
  Country                     0.19     1.98 ([dagger])
  Collectivist orientation    0.46     4.97 **
Constant                               1.36

                             [beta]      t

  Age                        -0.18    -0.77
  Gender                     -0.12    -1.27
  Education level            -0.12    -0.16
  Work experience            -0.05    -0.22
  Country                     0.36     3.69 **
  Collectivist orientation   -0.10    -1.09
Constant                               3.95 **

DV reciprocation wariness
N = 106

([dagger]) p = 0.05, ** p < 0.01

Table 3 Logistic regression in
Study 2

                               B      SE B      Wald

Equation 1
  Age                         0.13    0.11     1.32
  Gender                      0.02    0.44     0.00
  Education level             0.03    0.42     0.01
  Work experience            -0.14    0.11     1.70
  Country                    -0.44    0.47     0.89
  Collectivist orientation    0.87    0.39     4.87 *
Constant                     -6.26    3.40     3.39

Equation 2
  Age                         0.17    0.14     1.16
  Gender                      0.22    0.49     0.21
  Education level             0.03    0.47     0.00
  Work experience            -0.24    0.14     3.00
  Country                    -0.65    0.55     1.39
  Creditor ideology           0.95    0.28    11.68 **
  Reciprocation wariness     -0.48    0.22     4.60 *
Constant                     -6.06    4.10     2.19

Equation 3
  Age                         0.16    0.14     1.38
  Gender                      0.26    0.49     0.27
  Education level             0.01    0.47     0.00
  Work experience            -0.23    0.14     2.70
  Country                    -0.74    0.57     1.65
  Collectivist orientation    0.27    0.46     0.34
  Creditor ideology           0.90    0.29     9.46 **
  Reciprocation wariness     -0.48    0.22     4.50 *
Constant                     -6.72    4.28     2.47

DV = company preference
N = 106

* p < 0.05. ** p < 0.01
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Author:Thomas, David C.; Ravlin, Elizabeth C.; Liao, Yuan; Morrell, Daniel L.; Au, Kevin
Publication:Management International Review
Article Type:Report
Date:Mar 1, 2016
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