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Collectivist Values, Exchange Ideology and Psychological Contract Preference

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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.

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Notes

  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.

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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.

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Authors and Affiliations

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

    David C. Thomas

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

    Elizabeth C. Ravlin

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

    Yuan Liao

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

    Daniel L. Morrell

  5. Department of Management, The Chinese University of Hong Kong, Hong Kong SAR, China

    Kevin Au

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  1. David C. Thomas
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  2. Elizabeth C. Ravlin
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  3. Yuan Liao
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Correspondence to David C. Thomas.

Appendices

Appendix 1

Items measuring exchange ideology

Reciprocation wariness

  1. 1.

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

  2. 2.

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

  3. 3.

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

Creditor ideology

  1. 1.

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

  2. 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. 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. 2.

    Share resources with employees who deserve them.

  3. 3.

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

  4. 4.

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

  5. 5.

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

  6. 6.

    Pay as much attention to my contributions as anyone else’s.

  7. 7.

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

Relational contract

  1. 1.

    Create a sense of community among employees.

  2. 2.

    Protect my well-being.

  3. 3.

    Support me in matters outside of work.

  4. 4.

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

  5. 5.

    Be responsible for me.

  6. 6.

    Employ me as long as I make a useful contribution.

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Thomas, D.C., Ravlin, E.C., Liao, Y. et al. Collectivist Values, Exchange Ideology and Psychological Contract Preference. Manag Int Rev 56, 255–281 (2016). https://doi.org/10.1007/s11575-015-0275-2

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