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www.egosnet.org/os DOI: 10.1177/0170840610380811
Organization
Studies
31(11): 1437–1458
ISSN 0170–8406
Copyright © The
Author(s), 2010.
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Psychological Contracts across Cultures
David C. Thomas, Stacey R. Fitzsimmons, Elizabeth C. Ravlin,
Kevin Y. Au, Bjørn Z. Ekelund and Cordula Barzantny
Abstract
This paper explores the relationship between national culture and individuals’ psycho-
logical contracts. Predicted relationships were drawn from prior theory that identified
cognitive and motivational mechanisms through which culture manifests its influence.
The dominant forms of psychological contracts were evaluated against predictions
based on the national-level cultural values of vertical and horizontal individualism and
collectivism in four countries. Results of interviews with 57 participants indicated that
French interviewees (vertical individualist) described their psychological contracts as
primarily exploitive, Canadians (horizontal individualist) as primarily instrumental,
Chinese (vertical collectivist) as primarily custodial and Norwegians (horizontal
collectivist) as primarily communitarian. Exploration of the conditions under which
patterns deviated from those predicted by the theory indicates potential areas for future
theoretical development.
Keywords: culture, psychological contract, cross-cultural
Since its original conceptualization (Argyris 1960; Schein 1965), the psycho-
logical contract has been used to help explain many aspects of the employer-
employee relationship, such as job satisfaction and employee contributions
(Robinson 1996), organizational commitment (Robinson and Morrison 2000:
Robinson and Rousseau 1994) and neglect or exit (Turnley and Feldman 1999).
The psychological contract provides a broad platform for understanding these
phenomena because it refers to the perception of the terms of the fundamental
exchange relationship between the employee and employer.
Recently, interest has emerged regarding how the psychological contract can
help us understand the differences in employer-employee relationships across
cultures (for a review, see Schalk and Soeters 2008). To date, two multiple-
country studies (along with several two-country studies) have begun to shed
light on this topic. Rousseau and Schalk (2000) compiled detailed descriptions
of the psychological contracts in 13 countries, and the Psycones (2006) project
conducted an analysis of the psychological contracts in six European countries
and Israel. Both projects were ambitious, taking numerous country-level and
organization-level factors into account when considering the content of each
country’s most common psychological contract. However, neither project draws
on theory to identify how or why country-level variables predict the content of
psychological contracts. Therefore, they do not provide a systematic way to
David C. Thomas
Simon Fraser
University, Canada
Stacey R.
Fitzsimmons
Simon Fraser
University, Canada
Elizabeth C. Ravlin
University of South
Carolina, USA
Kevin Y. Au
The Chinese
University of Hong
Kong, China
Bjørn Z. Ekelund
University of Agden,
Norway
Cordula Barzantny
Groupe ESC Toulouse
Business School,
France
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1438 Organization Studies 31(11)
predict the psychological contract outside of the countries covered by these
projects. In this study we use both qualitative and quantitative methods to
explore cultural variation in psychological contracts. Our predictions are based
on a theory that identified cognitive and motivational mechanisms through
which culture influences employee expectations about their relationship to their
employer (see McLean Parks and Smith 1998; Thomas et al. 2003). As a basis
for further theory development, we also examine the conditions under which the
predicted patterns did not emerge.
Psychological Contracts
First emerging in the 1960s (Argyris 1960; Schein 1965), the term psychological
contract refers to a set of individual beliefs or perceptions concerning the terms
of the exchange relationship between the individual and the organization. These
terms could include performance requirements, job security, training, compensa-
tion, or career development (Rousseau 1989). The concept has attracted increased
attention recently because of a belief that employment relationships are undergo-
ing a period of dramatic change and because of a perception that contract
violations are becoming more commonplace (Morris et al. 2006; Robinson and
Rousseau 1994).
The psychological contract manifests itself in individuals’ mental representa-
tions of their relationships with their organizations (Rousseau 1998a; Thomas
et al. 2003). Because psychological contracts are mental representations, or
schemas, having to do with mutual obligations, they help employees and
employers make sense out of a complex employment relationship (Shore and
Tetrick 1994; Weber and Glynn 2006). Although employees and employers
may each have their own understanding of what has been agreed upon, we take
an approach, consistent with most research on psychological contracts (Guest
2004), that considers the psychological contract only from the employee’s per-
spective. That is, regardless of any agreement in fact between the individual
and the organization, each individual employee has a unique perception of what
the organization is obligated to provide them and what they owe the organiza-
tion in return. Thus, the individual’s perception of the contract is its essence
(McLean Parks et al. 1998).
Forms of Psychological Contracts
Psychological contracts may take an infinite variety of forms. However, certain
aspects of psychological contracts are often grouped to form categories (Rousseau
1995). By far the most common categories are transactional and relational
(Rousseau 1989). Transactional aspects of psychological contracts emphasize
specific, short-term, monetary obligations such as payment for services provided
by employees. Contracts of this type require only limited involvement of the par-
ties, and the identities of the parties are irrelevant. Relational psychological con-
tracts, on the other hand, emphasize broad, long-term, socio-emotional obligations
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Thomas et al.: Psychological Contracts across Cultures 1439
such as commitment and loyalty, and the identity of the parties to the contract is
an important consideration. These types of contracts are pervasive and affect
personal and family life as well as work life.
Although few studies have strayed from this dichotomization of psychological
contracts (for exceptions see Janssens et al. 2003; McLean Parks et al. 1998;
Sels et al. 2004), McLean Parks and Smith (1998) showed that by relaxing two
fundamental assumptions underlying most psychological contract models, a
richer categorization of the organizational exchange resulted. Specifically, they
proposed that individuals might be motivated by something other than self-
interest, and that exchanges might be regulated by norms other than a balanced
(quid pro quo) relationship. They combine transactional and relational charac-
teristics with symmetric and asymmetric power distributions, resulting in four
types of contracts. Instrumental contracts are transactional and the parties have
symmetric power. Exploitive contracts are also transactional, but the power
between the parties is asymmetric. Communitarian contracts are relational with
symmetric power, and custodial contracts are relational with asymmetric power.
As discussed ahead, this typology closely matches both the cultural domains
proposed here and their characteristic norms for social exchange.
A Model of Cultural Influence
In this article, we propose that national culture – or the characteristic profile of a
society with regard to values, attitudes, norms and beliefs (Lytle et al. 1995) –
influences how individuals perceive and manage the exchange relationship with
their employers. Although societal-, organizational- and individual-level attributes
may all influence the form a psychological contract will take (Rousseau 1995;
Raja et al. 2004; Sahay & Walsham 1997), our focus is on understanding the
individual-level mechanisms through which national culture influences the psy-
chological contract. We first describe these mechanisms, and then define the
cultural profiles of societies and match them against the typology of exchange
relationships presented previously.
According to the theory underlying this investigation (Thomas et al. 2003),
individuals are embedded in specific national-level cultures and internalize the
profiles of these cultures. They are affected by and express these profiles
through individual-level cognitive and motivational mechanisms. First, from the
cognitive perspective, mental representations affect how people process infor-
mation about situations such as their relationships with their employers.
Individuals from different cultures learn different sets of values (Erez and Earley
1993), which develop into cognitive frameworks (schemas) used to help organ-
ize and process information (Fiske and Taylor 1984; Pelled and Xin 2000).
Different priorities for what stimuli deserve attention and the different meanings
we attach to these stimuli are formed by gradually internalizing prevailing cul-
tural patterns (Markus and Kitayama 1991; Miller et al. 1990). Research indi-
cates that both perceptions of events (e.g. Bagby 1957) and attributions made
about their causes (Ting-Toomey 1988) vary across cultures.
Second, from the motivational perspective, social exchanges between indi-
viduals and their organizations are fundamentally tied to how people view
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1440 Organization Studies 31(11)
themselves and their relationships to others and thus to their motivation for
behaviour. The self-concept acts as an information processor that selects, inter-
prets and evaluates the meaning of action through its contribution to personal
self-worth and well-being (Erez and Earley 1993). Motives to maintain a posi-
tive self-image are probably universal. However, what constitutes a positive
self-view depends on how the self is construed. People in different cultures have
been shown to have very different conceptions of self and interdependence with
others (Markus and Kitayama 1991). Motives linked to the self assume different
forms depending on the concept of self being enhanced or verified. That is,
individuals seek to fulfil motives aligned with their differing cultural values.
In sum, the mechanisms of cultural influence at the individual level fall into
these cognitive and motivational domains: In the cognitive domain, cultural varia-
tion influences perception and interpretation of signals from the organization with
regard to the psychological contract. In the motivational domain, culturally differ-
ent self-concepts influence what is desirable with regard to exchange relationships
with employers. Together, these mechanisms help to explain the mechanics of
cultural influence. However, conceptualization of the process through which
national culture has its influence only partly addresses the question of possible
cultural variation in the psychological contract. The ability to understand and
explain differences is also dependent on our ability to map specific aspects of cul-
ture to corresponding characteristics of psychological contracts. Thus, based on
these mechanisms, we may be able to infer what attributes of psychological con-
tracts are likely manifested when embedded in specific cultural contexts.
Cultural Dimensions
Culture consists of systems of values, attitudes, beliefs and behavioural meanings
that are shared by members of a social group (society) and that are learned from
previous generations. Individualism and collectivism are perhaps the most useful
and powerful dimensions of cultural variation in explaining a diverse array of
social behaviour (Earley and Gibson 1998; Triandis 1995). Despite being con-
ducted at different times, with different samples and using different methods, the
major studies of national variation in value orientations (e.g. Hofstede 1980;
Kluckhohn and Strodtbeck 1961; Schwartz 1994; Trompenaars 1993) all have
findings that feature the cultural dimensions of individualism and collectivism.
This convergence suggests that these dimensions are broad cultural constructs
that encompass more basic elements (Triandis 1995). These cultural dimensions
are particularly appropriate in this context because they can be described funda-
mentally in terms of the way individuals construct their self-concepts (Markus
and Kitayama 1991), which, as described previously, influence psychological
contract perceptions through motives derived from the self-concept.
Triandis (1995) further describes vertical and horizontal orientations as funda-
mental cultural differences in the self-concept. The vertical dimension of self
accepts inequality, while the horizontal dimension emphasizes that people should
be similar on most attributes, especially status. Status relationships are important
here because social status relates to social power in exchange relationships. That
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Thomas et al.: Psychological Contracts across Cultures 1441
is, the extent to which status differences exist determines the degree to which
people either concede to, or have social responsibility for, others. These status
differences influence people’s expectations concerning the nature of social
exchange (Leung 1997; Thomas and Au 2002), especially with regard to recipro-
cation (McLean Parks and Smith 1998). Therefore, the inclusion of vertical and
horizontal dimensions of culture is of particular importance in understanding the
exchange relationship between individuals and the organization.
This distinction between vertical and horizontal individualism and collectivism
results in a map of four different cultural profiles. According to this map, vertical
collectivists see themselves as part of an in-group (interdependent self-concept),
but perceive members of the in-group to be different in terms of status; horizontal
individualists see the self as autonomous and people as generally equal. Vertical
individualists have an independent self-concept and perceive differences in status
relationships. Horizontal collectivists have an interdependent self-concept and
see people as generally equal. Several empirical studies have established these
broad dimensions as central components of culture (e.g. Oishi et al. 1998;
Singelis et al. 1995; Soh and Leong 2002). Moreover, the polarity that emerges
from Schwartz’s (1994) sophisticated mapping of cultures falls neatly along
the broad cultural dimensions of vertical and horizontal individualism and col-
lectivism (Smith and Bond 1999).
Mapping Culture to Psychological Contract Types
Based on the cognitive and motivational mechanisms that have been theorized
to drive the relationship between the cultural values of individualism (independ-
ent self-concept) and collectivism (interdependent self-concept) and psycho-
logical contract perceptions (Thomas et al. 2003), we can identify specific forms
of exchange relationships (McLean Parks and Smith 1998; Hirschman 1970;
Turnley and Feldman 1999) that are consistent with particular cultural dimen-
sions (Triandis 1995). A graphic representation of these relationships is pre-
sented in Figure 1. Just as cultures contain aspects of all cultural dimensions,
psychological contracts also contain aspects of all four theoretically derived
exchange patterns, although the patterns are rarely equally weighted (McLean
Parks et al. 1998). Thus, although no psychological contract is a pure form of
any exchange relationship, the map in Figure 1 represents our expectations about
which form will be dominant within each cultural context.
Based on our theory of cultural influence through individual-level mecha-
nisms, we proposed that each of the four types of psychological contract drawn
from McLean Parks and Smith (1998) would be typical for individuals from
countries represented by the four categories of cultural value orientations. That
is, we proposed that exploitive psychological contracts would be dominant in
vertical individualist cultures, instrumental contracts in horizontal individualist
cultures, custodial contracts in vertical collectivist cultures, and communitarian
contracts in horizontal collectivist cultures. The essential features of each type of
exchange relationship, as adapted from McLean Parks and Smith (1998), are
described as follows.
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1442 Organization Studies 31(11)
Instrumental contracts are transactional and are characterized by participants
of equal status. They are predicated on self-interest and a balanced reciprocity
norm. They are of finite and usually short duration and their terms are highly
specific and quantifiable. Parties are usually unwilling to go beyond the contract
and the parties to the contract may change without changing the contract terms.
Violations of the contract will occur when they make sense economically, since
there is not a strong need or desire to preserve the relationship.
Proposition 1: In horizontal individualist cultures such as Canada, psychological
contracts will be described predominantly in terms of instrumental exchange.
Exploitive contracts are also transactional, but participants are of unequal
status. Like instrumental contracts, they are grounded in the individualistic
dimension of self-interest and have similar features. However, power asym-
metries can encourage the misuse or even abuse of power and the balanced
reciprocity norm can, at the extreme, move toward negativity. That is, higher-
power parties can be exploitive or coercive and lower power parties may be
unable to enforce contract terms. Ensuring compliance requires strong norma-
tive control through third parties. The terms of the contract tend to be precise and
clearly delineated and parties to the contract may change without changing the
contract terms.
Proposition 2: In vertical individualist cultures such as France, psychological
contracts will be described predominantly in terms of exploitive exchange.
Communitarian contracts are relational and the parties have generally equal
status. Collective norms of reciprocity prevail and the parties expect to interact
for an indefinite period of time. These contracts include socio-emotional bene-
fits, and a relationship with the collective is a motivating factor. They are char-
acterized by diffuse obligations and long-term commitments and focus on
preserving and enhancing the collective’s well-being. Reciprocity is generalized,
IndividualistCollectivist
Vertical
Horizontal
CANADA
NORWAY
CHINA
Custodial psychological contracts Exploitive psychological contracts
Communitarian psychological contracts Instrumental psychological contracts
FRANCE
Figure 1.
Proposed relationships
between cultural
orientations and the
psychological contract.
Coordinates are
based on Schwartz’s
multi-country study
(personal
communication
2007; see Schwartz
and Sagiv 1995).
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Thomas et al.: Psychological Contracts across Cultures 1443
with a collective ‘others-oriented’ focus. In communitarian contracts there is a
greater likelihood that participants will go beyond the requirements in order to
maintain and enhance the relationship. These contracts are more likely to be
governed by trust, which develops over time through repeated interactions. If
this trust is violated it is not easily recovered.
Proposition 3: In horizontal collectivist cultures such as Norway, psychological
contracts will be described predominantly in terms of communitarian exchange.
Custodial contracts are relational contracts between parties of unequal status
and asymmetrical power. Custodial contracts are grounded in a generalized
reciprocity norm and others-oriented motivation. They are based on socio-
emotional ties and are likely to permeate many aspects of the participants’ lives.
These paternalistic relationships are custodial on the one hand and dependent on
the other, wherein the lower-power party is particularly dependent on the higher-
power participant (see for example Westwood et al. 2001). These contracts are
dynamic and parties make adjustments when contingencies arise.
Proposition 4: In vertical collectivist cultures such as China, psychological
contracts will be described predominantly in terms of custodial exchange.
In addition to developing the map of predominant psychological contract
types against cultural characteristics, an important objective of this study was an
exploration of conditions under which individual psychological contracts devi-
ated from these expected patterns. Thus our study sought broad descriptions of
the psychological contract across four countries, how this relationship was
understood, and situations in which the expected contract relationships did not
occur. This allowed for a second phase of analysis in which non-conforming
psychological contract patterns were examined. The results of this exploration
of the psychological contract across four countries are presented ahead.
Method
Sample
A theoretical sampling approach was used to identify interview participants for
this study in that they were drawn from four countries that typify the cultural
variability hypothesized to drive the four types of psychological contracts. The
countries were chosen based on their characteristic value orientations along the
vertical/horizontal and individualist/collectivist dimensions (Singelis et al.
1995), as illustrated in Figure 1. According to scores on these dimensions
(Hofstede 1980, confirmed with Schwartz’s country-level data collected in the
1990s; Schwartz 2007, personal communication), France typifies a vertical indi-
vidualist society, while China is a vertical collectivist one. Canada is a horizon-
tal individualist society, and Norway is horizontal and collectivist. Between
12 and 17 participants were interviewed from each country, for a total of 57
participants. Demographic characteristics are presented in Table 1. Our intent
was to sample with as much variation as possible on country-level cultural val-
ues, while minimizing variability on individual-level variables. However, some
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1444 Organization Studies 31(11)
individual-level variability was unavoidable. These between-group differences
were taken into consideration when examining the qualitative results, and were
controlled in all quantitative analyses. Specifically, the entire Chinese sample
was male, almost all of the French participants were managers, and the Canadian
sample included some employees from private organizations in addition to
employees from a large regulated organization. All of the French, Chinese and
Norwegian interviewees were employees of a single large, regulated organiza-
tion within each country. Participants from all four countries were middle-level
managers or non-managerial professionals involved in commercial enterprises,
with most involved in engineering or the technology sector.
Study Context
Since this study included interviewees from four very different contexts, it is
important to understand how these unique contexts (i.e. characteristics other
than national culture) might have influenced participants’ perceptions of their
psychological contracts. While a country’s culture remains stable during short-
term changes in economic conditions, such short-term conditions could affect
employees’ expectations of their employers at the time of the interview. The
interviews all took place between 2001 and 2004, when all four economies were
experiencing growth. In Table 2 we present descriptions of the country and
organizational contexts. At the time of this study the Chinese and Norwegian
companies were both shifting policies to be more consistent with the support of
transactional relationships, similar to the Canadian and French firms. Therefore,
the effect of differences in country-level cultural values could have been diluted
to some extent.
Study Design
Most studies of psychological contracts have used a questionnaire design but
have had some difficulty finding stable factors across diverse populations
(Janssens et al. 2003). Particular features or terms of psychological contracts,
such as high pay or training opportunities, sometimes indicated a relational and
sometimes a transactional contract, depending on the context and meaning of
Canada China France Norway
Interviews (n) 12 14 17 14
Average age a35.2 (6.1) 32.5(6.6) 40.2 (6.8) 44.4 (4.7)
Average years of education a18.5 (1.8) 15.4 (1.8) 17.4(1.4) 15.9(2.8)
% female 70 0 29.4 35.7
Average years of work
experience a
13.5(6.0) 10.6(7.0) 16.3(6.3) 18.9(6.3)
Occupation (% in each)
Administrative 10 7.1 0 7.1
Manager 50 35.7 94.1 28.6
Professional (non-manager) 30 35.7 0 35.7
Technical/production 10 14.3 5.9 28.6
Other 0 7.1 0 0
a. Standard deviations in parentheses.
Table 1.
Interviewee
Demographics
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Thomas et al.: Psychological Contracts across Cultures 1445
these features (Barksdale and Shore 1997). Since this study considered four
different populations, with broadly disparate economic and political contexts, an
interview design was more appropriate because participants had the opportunity
to explain not only the features of their own psychological contracts but also the
meaning behind those features. In this way, the study was not limited to either
a pre-designed list of features or to assumptions about how participants from
different cultures might perceive those features.
The interviews were semi-structured and lasted between a half hour and an
hour. Six required questions drawn from the theory informing this study were
developed into an interview protocol that was followed in every interview.
Interviewees were asked the following about their current employer: (1) what
Sample Country Context Organization Context
Canadian – Experiencing a strong
and growing economy
for several years in a
row.
– Organizations from
telecommunications, engineering,
federal government and banking
industries.
– Most were large (200+)
organizations. Two organizations
had fewer than 100 employees.
– Both public and private
organizations
Chinese – Experiencing rapid
economic growth.
– Changing to
capitalistic system,
with most
organizations
undergoing drastic
policy changes.
– Human resources policies were
revised in 1999 such that
promotions and benefits were to
be allocated based on merit
instead of seniority.
– State-owned company that is
listed on the New York and Hong
Kong stock exchanges.
– Has competitors within the
telecommunications industry.
– Approximately 105,000
employees.
French – Experiencing a strong
and stable economy.
Growth is slower than
in Canada, China or
Norway.
– A few years prior to
interview study, the
35-hour work week
was legislated, and
France adopted the
Euro currency.
– Organization was in period of
global growth through
acquisitions.
– Privatized from state ownership in
1988. Approximately 160,000
employees.
– The French government’s stake
was recently reduced to less than
50% of shares, although it
retained a significant share of
ownership.
Norwegian – Experiencing a strong
and growing economy,
based largely on high
oil prices for export.
– Founded in 1905. Approximately
25,000 employees. Company still
had strong ties to Norwegian
government.
– Merged with another company
one year prior to interview study.
Participants came from both pre-
merger companies. No differences
in perspective were found
between these two groups.
– Layoffs, previously unusual at this
company, followed the merger.
Table 2.
Country- and
Organization-Level
Context Descriptions
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1446 Organization Studies 31(11)
their employer promised them, (2) what obligations were required in return,
(3) how they came to understand these promises and obligations, (4) whether
their employer always met these obligations, and if not, what had occurred,
(5) who was in control of what had occurred and (6) what they did in response
and why. Follow-up or probing questions encouraged elaboration by asking,
‘What next?’, ‘How did that feel?’, ‘Anything else?’ and ‘Please, continue’.
Interviews were done in the native languages of the participants, by the author
local to each country, except that the Norwegian interviews were conducted in
English, which was the official language of the firm involved. The interviews
were translated in their entirety from the audiotapes by competent bilinguals not
involved in the interviews, resulting in 210 pages of single-spaced text. Audible
pauses and laughter were included in the transcriptions. All interview transcripts
were analyzed by the same author in an effort to minimize bias (Alvesson 2003).
This author was not present during any of the interviews, so coding was free of
bias stemming from privileged information about one group over the others. The
analysis was facilitated by the use of NVivo software, which allows text to be
categorized and cross-referenced by category against interviewee demographics.
In this case, the categories were the four types of psychological contract, and the
demographics were country, age and gender.
Phase 1
Analysis
In order to examine the four specific propositions, categories were pre-defined by
the theory described previously (Hesse-Biber and Leavy 2006). First, we divided
each interview according to the six interview questions listed previously. Next, all
of the texts describing the contract terms (topics 1 and 2) were categorized as
exploitive, communitarian, custodial or instrumental. When deciding how to cat-
egorize each piece of text, we consistently looked for markers, which are discern-
ible clues that indicate which pattern is present (Miles and Huberman 1994). We
developed these markers from the first few interviews analyzed, and used them to
categorize all interviews, to ensure consistency. For example, in order to code a
section of text as ‘exploitive’ our markers were descriptions of having little or no
control over the negotiation process because of lack of power, along with feeling
not well looked after by the company, as in the following passage:
‘I am a little upset because I was in Paris, and they moved me to Toulouse without offer-
ing me a promotion – just a lateral position in a different department. And now, if I want
a promotion I have to move back to Paris. It is ridiculous. But it’s the policy here.’
(France #10)
When categorizing text as ‘custodial’, our markers were descriptions of having
little or no control over negotiating with the company, and yet trusting the
company to look out for the employee’s best interests, as in the following: ‘I just
hope my suggestions will be appreciated and accepted by my boss. The respect
from my boss and the recognition of my good work is my reward’ (China #15).
Markers and exemplary quotations for each contract pattern are presented in
Table 3.
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Thomas et al.: Psychological Contracts across Cultures 1447
Text that did not describe psychological contract terms was disregarded, while
text that fit into two or more categories was categorized in all that applied.
Consistent with the principle that most psychological contracts contain aspects
of all four exchange relationships, the overall description often fitted best into
one category, while individual sentences or remarks were sometimes also placed
in other categories. One-quarter of the interviews (16 interviews) were re-coded
by a second coder, with 87% inter-coder reliability. Throughout the coding proc-
ess, we kept a journal where we recorded interesting passages, trends or patterns
to explore later. Coding length ranged from several words to several paragraphs,
based on natural breaks in participants’ dialogue.
Once all of the interviews were categorized, each category (exploitive, com-
munitarian, custodial or instrumental) was calculated as a percentage of that
interview’s total description, based on word counts. This method controls for
varying wordiness across interviews. For example, assume person A and person
B each used 250 words to describe their contracts in instrumental terms. If that
Instrumental Markers: equal control over negotiations, distanced relationship
’So, when I hired on, you know, I promised a fair day’s work for a
fair day’s pay’. – Canada #8
‘There was nothing that was explicitly promised besides salary, long
hours and … the fact that I show up when I say that I’m going to
show up is very much appreciated’. – Canada #5
Exploitive Markers: lack of control over negotiations, feeling not well-looked
after by the company
‘Now that I realize all the tasks I have to do, and the fact that many
times I have to work evenings and weekends and put in a lot of
personal effort, I should be rewarded accordingly. I feel like a victim.
I don’t feel that promises were kept right now’. – France #23
‘When you ask for an achievable promotion, you expect to have it.
However, managers sometime hide behind the big enterprise and will
pretend that it won’t work. And most of the time, we never know why
we cannot have the promotion’. – France #7
Communitarian Markers: equal control over negotiations, long-term relationship
‘Of course it’s important to have money to pay your bills and your
family, but my main relationship with my company is to be in a good
environment for working ... and also for social contact at work. Every
day you go to work, I have a good feeling’. – Norway #1
‘I feel responsibility in the relationship to my other colleagues to
have a sort of social life, to do something in some evenings and to
have lunch together with them’. – Norway #12
Custodial Markers: lack of control over negotiations, trusting the company to
look out for the employee’s best interests
‘My boss won’t give me the promotion immediately. But I know my
boss will consider it and compare my performance with others’, and
then make the decision’. – China #9
‘I didn’t talk much in the interview. I feel the job description is kind
of different from my actual daily work. I told my boss that I expected
to concentrate in the management information systems field. After I
started working there, they assigned me the task of investment
planning, because there was nobody responsible for that before. I
found that investment planning is exciting work’. – China #10
Note: Grammar mistakes are left as spoken in English by the Norwegian and Canadian interviewees.
The Chinese and French quotations were translated into English using corrected grammar.
Table 3.
Markers and
Exemplary Quotations
for Four Patterns
of Psychological
Contracts
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1448 Organization Studies 31(11)
represented person A’s entire description, while person B used another 5500
words to describe his contract in exploitive terms, then person A’s instrumental
proportion is 250/250 = 100%, whereas person B’s instrumental proportion is
250/(250 + 5500) = 4%. These percentages were entered into an SPSS database
so that we could conduct analyses of covariance (ANCOVA) controlling for
demographic between-group differences. This quantification of the interviews
provided a method for supporting the results derived from careful reading and
re-reading of the interview content (Hesse-Biber and Leavy 2006), but is only
appropriate when the constructs being described are similar in terms of complex-
ity, as is the case with descriptions of the psychological contract. A coding sum-
mary is presented in Table 4.
Results
We first tested for differences in the average word count of psychological contract
description by country, and found no significant differences (F = 2.39, p = ns),
lending confidence to the comparability of descriptions across the four country
groups. Although all four psychological contract categories were mentioned by
participants from all four countries (with the exception that no custodial relation-
ships were described by Canadian interviewees), within each country a different
type of description was dominant. Table 4 presents the mean percentage of each
interview devoted to each psychological contract type across countries.
Canadian interviewees were most likely to describe their employee-employer
relationships as instrumental, Chinese as custodial, French as exploitive, and
Norwegians as communitarian. To ensure that these results were not confounded
by demographic differences, we used analysis of covariance (ANCOVA) to test
for differences between country groups on each type of psychological contract,
controlling for age, education, gender, salary, occupation and years of employ-
ment. Significant differences were found between countries for the percentage
of interviews devoted to describing communitarian (F = 5.07, p < .01), custodial
(F = 5.45, p < .01), exploitive (F = 5.53, p < .01) and instrumental (F = 5.75,
p < .01) relationships.
Canada China France Norway
Instrumental
# of interviewsa 9 (75%) 3 (21%) 4 (24%) 6 (43%)
average %.b67% 9% 7% 26%
Exploitive
# of interviews 1 (8%) 4 (29%) 12 (71%) 3 (21%)
average % 5% 20% 49% 8%
Communitarian
# of interviews 4 (33%) 2 (14%) 2 (12%) 12 (86%)
average % 28% 3% 4% 64%
Custodial
# of interviews 0 (0%) 13 (93%) 10 (59%) 1 (7%)
average % 0% 68% 39% 3%
TOTAL
# of interviews 12 14 17 14
a. Number and percentage of interviews containing text categorized in each psychological contract
pattern.
b. Average percentage of interview descriptions categorized in each pattern, by word count.
Table 4.
NVivo Coding
Summary
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Thomas et al.: Psychological Contracts across Cultures 1449
Phase 2
Analysis
In order to better understand why psychological contracts sometimes deviated
from the expected patterns, we conducted the following exploratory analysis.
First, we identified all instances from Phase 1 where text was categorized in
patterns other than those proposed as the dominant pattern (Figure 1). Instances
referring to the same story were combined to avoid double-counting. We identi-
fied 45 instances of text coded with these unexpected contract patterns. Next,
through careful reading of the surrounding text, we identified the condition
underlying each unexpected categorization. The description of each underlying
condition was coded close to the text, meaning that codes emerged from the
data, in contrast to pre-defined codes. For example, one Norwegian employee
described how her contract pattern changed from communitarian to exploitive after
she came back from maternity leave to find out she would be working for people
who used to be her peers. She saw this as a breach of contract by the organiza-
tion, so the text describing her condition was coded as ‘post-breach relationship
change’. This approach required multiple iterations between coding and analysis.
Specifically, we coded all deviation instances in half the interviews within each
country, in order to develop a list of conditions underlying the unexpected
patterns. Then, we coded the other half of the interviews using the conditions
that emerged within the first half. Also, any new conditions that emerged from
the second half were then used to code the first half. Because we were searching
for common underlying conditions of unexpected patterns, not the full range of
possibilities, conditions were included in the final set only if they emerged from
one half and were then supported within the other half. We found a total of 11
conditions supporting unexpected psychological contract patterns after the first
half had been coded, and following the iterative analysis three conditions were
confirmed in the final set.
Results
Based on our analysis, psychological contract patterns generally deviated
from the patterns we expected under the following three conditions: when
employees’ initial expectations differed from their realized expectations;
when a breach of an expected relational pattern was perceived as unfair and
the psychological contract became more transactional post-breach; and when
relationships with individuals within the company were more important than
the relationship with the organization as a whole (Table 5). We describe each
condition in turn.
First, initial expectations differed from later expectations when the socializa-
tion process had not moulded realistic perceptions of the psychological contract.
Often employees were young when they started working for these organizations,
and their expectations of their relationships to their organizations were initially
unrealistic. For example, one Canadian initially expected a communitarian rela-
tionship with his organization. He admits his perception of work life was influ-
enced by his previous experience with a company that was largely communitarian,
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1450 Organization Studies 31(11)
along with business magazines that paint overly rosy pictures of company life.
Later, he changed his expectations to an instrumental pattern:
‘So I started with a lot of expectations based on my prior employment history ... it was
never explicitly stated that I would be given training or exposure to the financing side of
the business, but it was certainly implied at the interviews … You have to deal with the
Condition 1: Initial expectations
‘When I was brought on board, ... it was a job description that was fairly loose which I have
learned I will never do that again, very loose actually. So he did sort of make promises of, you
know, where I would fit in the organization. However … I remember within about six months
of being there, I said I really want to put this on paper because I really want to know what we
should do’.
– Canadian #2 described her initial psychological contract expectations in communitarian
terms. Only later did her perceptions change and her description conform more closely to the
instrumental terms we expected.
‘At the beginning I was expecting a better job – only something that would look good on my
resume. I wanted to start somewhere. I was not expecting a life long relationship with an
employer, and a few months at a good company was what I was looking for. I guess I was
willing to take more risk back then’. – French #21 described psychological contract in
instrumental terms (as opposed to the exploitive terms we expected) because he was not
initially looking for a longer-term employment contract.
Condition 2: Post-breach relationship change, when pattern was originally relationship-
oriented and breach is perceived to be unfair
‘At 23 years old, my first employer fired me overnight. In fact, they had fired everybody for an
unknown reason. Most of us were there for no more than six months. Then I started seeing the
marketplace and the workforce differently. You don’t get too involved or too emotionally
attached to a company because you don’t know when they will fire you or eliminate your
position for no reason. Today, I don’t put my heart in a company but my loyalty for the time
being’.
– French #14 described psychological contract in largely instrumental terms (as opposed to the
exploitive terms we expected), after he experienced this firing. Previously, he spoke about
having a strong ‘moral engagement’ with the company, which is an unwritten duty to maintain
loyalty to the organization over the long term.
‘It’s not been a culture for very big variations in salary, for instance, so sort of people have
been very loyal to the company, but I think that’s probably changed a bit after the manning
reduction. Sort of, you get, you see, X company was probably looked upon as an employer you
could have for a lifetime. Sort of, if you were loyal to the company, the company would be
loyal to you sort of, and I think that view has changed now’.
– Norwegian #14 described her psychological contract in somewhat exploitive terms after the
manning reduction. This sort of reduction was unusual for this company. Prior to the reduction,
she had described her relationship in communitarian terms, as expected.
Condition 3: Individual relationships more important than relationship with organization as
a whole
‘The manager may consider personal relationships when making pay or promotion decisions. ...
As a result, people just care about their own interest, and stop giving suggestions to improve
our company’s operation’.
– Chinese #18 described his psychological contract in entirely exploitive terms (as opposed to
the custodial terms we expected), in part because a poor relationship with his manager tainted
his relationship with the organization as a whole.
‘To me, my employer is the two people that I work for, and I try to promote them as much as I
possibly can because they want to grow, they want to succeed, and basically, like if you look at
the bottom line, I’m feeding off them because the more they make, the more I make. So that’s
my view of this whole scenario, that the better they are doing, the better I am doing, but again,
it may not work for everyone because there is a specific work relationship’.
– Canadian #4 described her psychological contract in both instrumental (expected) and
communitarian (unexpected) terms. The communitarian relationship stemmed from her close
relationship with her two supervisors. When she spoke about her relationship with the company
as a whole, she described it in instrumental terms.
Table 5.
Conditions under
Which Non-dominant
Psychological Patterns
Occurred, and
Exemplary Quotations
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Thomas et al.: Psychological Contracts across Cultures 1451
day-to-day realities and so I’ve realized sometime not to be too rose-coloured glasses
about how my career is going to go’. (Canada #9)
The second condition for deviation was the occurrence of perceived breaches
of the psychological contract by the employer. Perceived breaches did not
always lead to shifts in the psychological contract pattern. These occurred only
when the original pattern was relational (communitarian or custodial) and the
perceived breach was perceived to be unfair. Post-breach pattern shifts occurred
only in the direction of relational patterns to transactional patterns. That is,
perceived breaches of contract led employees who had originally described their
relationships as communitarian or custodial to shift to instrumental or exploitive
patterns, respectively. Employees who described their original patterns as instru-
mental or exploitive did not shift their descriptions post-breach. In cases when a
breach was seen as fair, employees maintained their original psychological
contract patterns post-breach. As an example of a post-breach pattern shift
resulting from an unfair contract breach, a Chinese participant initially expected
management to care about employees’ morale, consistent with the custodial
pattern. However, when management failed to exhibit the expected level of care,
the participant perceived an unfair breach in the relationship that shifted his
perception of the psychological contract to an exploitive pattern.
‘When I decided to work for Company X, I wrote the president a letter talking about my
suggestions towards our accounting department. However, I haven’t heard back from
him. I think the feedback from the management would encourage employees’ morale …
As a result, people just care about their own interest, and stop giving suggestions to
improve our company’s operation’. (China #18)
The third condition for deviation was that individual relationships sometimes
overshadowed the importance of employees’ relationships with the organization
as a whole. This condition affected both relational and transactional patterns. For
example, a French employee described a primarily communitarian pattern with
the company because of his close relationship with his manager:
‘Every time I propose something to my manager, he listens. It’s a mutual and amicable
exchange. I think this kind of communication and relationship helps us. Both of us … I
want to grow with my work. I don’t care about the salary at this moment. The company
first. What can I bring to them and what can they bring to me is what really matters’.
(France #14)
Discussion
This study examined dominant psychological contract patterns, based on coun-
try-level cultural value orientations. These patterns were proposed by a theory
of the cognitive and motivational influences of culture on the psychological
contract (McLean Parks and Smith 1998; Thomas et al. 2003). Results supported
our predictions about how the dominant form of the psychological contract
would vary among individuals from France, Canada, China and Norway.
Consistent with the dominant cultural value orientations of these four countries
(Schwartz, 1994; Singelis et al. 1995), we found that French interviewees (vertical
individualist) perceived their psychological contract as primarily exploitive,
Canadians (horizontal individualist) as primarily instrumental, Chinese (vertical
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1452 Organization Studies 31(11)
collectivist) as primarily custodial and Norwegians (horizontal collectivist) as
primarily communitarian.
The second phase of our analysis examined the conditions in which psycho-
logical contract patterns deviated from those predicted by cultural values. We
found that psychological contracts generally deviated from the expected pat-
terns when initial expectations were unrealistic, when a breach of an expected
relational contract pattern was perceived as unfair and the contract became more
transactional post-breach, or when the relationship with the immediate supervisor
defined the perceived contract with the organization as a whole. Ahead, we
relate our findings back to theory, by discussing how these conditions affect
employees’ mental representations (schema) of the exchange relationship with
their organizations.
First, the finding that initial expectations about work were sometimes unre-
alistic indicates that expectations about work may not develop primarily or
entirely from societal values. This finding has implications for the cognitive
mechanism linking culturally based schemas with psychological contracts at
work. Just as societal values are stored within cultural self-schemas, we also
have self-schemas that help us process information about other important
domains in our lives, such as work-domain self-schemas (Markus et al. 1985).
The mis-match between initial and long-term expectations about work implies
that work-domain self-schemas can sometimes develop independently from
cultural self-schemas, because all interviewees within this condition later
adjusted their expectations to conform to the dominant pattern. This finding
reinforces realistic job preview findings (e.g. Meglino and DeNisi 1987;
Premack and Wanous 1985) by suggesting the importance for organizations of
communicating a realistic picture of the employee-organization relationship. It
is also consistent with changes in psychological contract perception observed
at different stages of organizational socialization (DeVos et al. 2003).
In contrast to those with initially unrealistic job expectations, one Norwegian
employee was unique in describing early socialization into both societal values
and work-domain expectations. As expected, he described his relationship with
his company in entirely communitarian terms.
‘You are trained by your family, your mother and father, and what to expect and not to
expect … and I’m in the same business, more or less, as my father. … So during my
childhood I would see what he could expect. I expect more or less the same. I think
Norwegian. I have a very developed sense of equalness and fairness so we wouldn’t
accept that a colleague was treated in a very bad way, even if we ourselves developed on
that. So it’s a real socialized country in that manner’. (Norway #3)
Thus, the cognitive mechanism proposed by Thomas et al. (2003) may be
most influential when employees internalize a work-domain self-schema in
addition to the cultural self-schema. Together, the schemas influence perception
and interpretation of signals from the organization.
The second condition for deviations from the dominant psychological con-
tract is the most complex, because psychological contract breaches did not
always lead to pattern shifts. Specifically, psychological contracts did not shift
post-breach when the contracts were initially transactional, or when the breach
was seen as fair. There are two possible ways to interpret this finding. It could
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Thomas et al.: Psychological Contracts across Cultures 1453
indicate that psychological contract patterns are sticky, and resistant to change.
That is, initial perceptions of the psychological contract tend to endure until the
situation forces a reevaluation (see Rousseau 1995). This makes sense when
interpreted through the lens of the psychological contract as identification with
the organization. That is, the psychological contract can be seen as a cognitive
extension of the self (see Rousseau 1998b), in that individuals form psycho-
logical contracts in part to enhance their relatively stable self-concepts.
Alternatively, the cross-cultural nature of this study could have driven the
relational-to-transactional direction of post-breach pattern shifts. That is, rela-
tional psychological contracts (typical of collectivist cultures) may be more
sensitive to some types of contract breach than are transactional contracts. If
relational contracts reinforce interdependent self-concepts while transactional
contracts reinforce independent self-concepts, the former depends more on
long-term socio-emotional bonds among colleagues and supervisors than does
the latter. Breaches of contract were potentially more influential in relational
contracts because of sensitivity to unmet relational obligations (see Thomas
et al. 2003) and a subsequent shift to more transactional perspectives. This shift
would be consistent with maintaining cognitive balance (Heider 1958). Overall,
the first interpretation implies that shifts in the psychological contract reflect
shifts in the self-concept, while the second implies that people may shift from
relational to transactional patterns to maintain consistent self-concepts. Future
research could test these two interpretations, in order to allow us to better
understand the motivational mechanism described in Thomas et al. (2003).
Finally, psychological contract patterns sometimes deviated from the dominant
patterns because a relationship with one other individual – usually a supervisor –
defined the relationship with the organization as a whole. This finding serves as
a reminder that organizational agents are another source of information about the
nature of the exchange with the organization. These individuals are only one of
many possible sources of organizational messages that will be interpreted through
a cultural lens. Thus, a potentially useful path for future research is to consider
culture as a context through which the various sources of information about the
employee-employer relationship are interpreted (e.g. Guest 2004).
Limitations and Recommendations for Future Research
The results of this study should be considered with regard to several limitations.
The analyzing author was not present during any of the interviews. While this
avoids privileging one set of interviews over others, the analyst may have
missed some meanings as a result. While care was taken in selecting respond-
ents, results from a 57-person sample can only approximate the variability that
might exist in the psychological contract and should thus be interpreted with that
limitation in mind. The conditions that sometimes predicated deviation from the
dominant psychological contract patterns suggest a need to consider both devel-
opmental aspects of the psychological contract and their temporal stability. Also,
even though there is some evidence that the psychological contract remains
largely stable despite broad organizational changes (Snell 2002), characteristics
of organizations can be important determinants of the psychological contract,
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1454 Organization Studies 31(11)
Alvesson, Mats
2003 ‘Beyond neopositivists, romantics,
and localists: A reflexive approach to
interviews in organizational research’.
Academy of Management Review
28: 13–33.
Argyris, Chris
1960 Understanding organizational
behaviour. Homewood, IL:
The Dorsey Press.
Bagby, James W.
1957 ‘Dominance in binocular rivalry in
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Finally, the results of our analysis of deviations from expected patterns in Phase
2 are open to interpretation and will hopefully encourage additional research, in
particular with regard to post-breach pattern shifts.
Conclusion
Previous research described the different forms of psychological contracts in
different countries (e.g. Rousseau and Schalk 2000), highlighting the need to
understand variation in psychological contracts across cultures. For example,
psychological contract relationships previously thought to be universal are now
understood to be contingent on context (Wang et al. 2003). This study advances
our knowledge of the psychological contract by exploring theoretically driven
cultural variation in the psychological contract (Thomas et al. 2003). It also
identifies three conditions in which psychological contract patterns deviated
from the dominant pattern for a country. Managers should find it useful to under-
stand systematic cultural variation in the psychological contract as a basis for
managing more effectively in an increasingly global business environment (Cyr
and Schneider 1996). By being better able to predict employee expectations of
exchange relationships, employers will be better equipped to effectively com-
municate organizational messages, and to avoid perceived contract breaches.
The organizational outcomes of meeting culturally based expectations of the
exchange relationship are likely to be higher employee satisfaction, more
employee loyalty, and less turnover (Robinson and Morrison 2000; Robinson
and Rousseau 1994; Turnley and Feldman 1999).
Acknowledgements
A prior version of this paper was presented in September 2002 at the CHRM/
CIBER Conference at the University of Illinois. This research was supported by
a grant from the Social Science and Humanities Research Council of Canada.
Additional support was provided by the Centre for Global Workforce Strategy
at Simon Fraser University.
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David C. Thomas is Professor of International Management and Director of the Centre
for Global Workforce Strategy at Simon Fraser University, Vancouver, Canada. He is the
author of eight books and numerous journal articles on cross-cultural interactions in
organizational settings. His book, Cross-cultural management: Essential concepts, was
the winner of the R. Wayne Pace HRD Book of the Year award for 2008. He is currently
the Associate Editor of the International Journal of Cross-Cultural Management and
serves on the editorial boards of the Journal of World Business, Journal of Organizational
Behavior, and European Journal of Cross-Cultural Competence and Management.
Address: Segal Graduate School of Business, 500 Granville St., Faculty of Business
Administration, Simon Fraser University, Vancouver, British Columbia, CanadaV6C
1W6.
Email: dcthomas@sfu.ca
Stacey R. Fitzsimmons is a PhD candidate in international business at Simon Fraser
University, Canada, with a specialization in cross-cultural management. Her dissertation
examines antecedents and outcomes specific to bi- and multi-cultural individuals, in
order to understand the unique skills and abilities they bring to the global workplace.
Elizabeth C. Ravlin is Associate Professor of Organizational Behavior and Management on
the faculty of the Moore School of Business, University of South Carolina. She received
her PhD from Carnegie Mellon University. Dr Ravlin currently serves on the editorial board
of the Journal of Management, and has also served on the boards of the Academy of
David C. Thomas
Stacey
R. Fitzsimmons
Elizabeth
C. Ravlin
at University of Victoria on January 14, 2016oss.sagepub.comDownloaded from
1458 Organization Studies 31(11)
Management Journal and the Academy of Management Review. Her research examines
multicultural interactions, interpersonal and team processes, work values, and status influ-
ences in organizations. Her publications have appeared in such journals as Journal of
Applied Psychology, Personnel Psychology, Journal of Management, and Journal of
Organizational Behavior.
Kevin Au is Associate Professor of Management at the Chinese University of Hong
Kong. He serves as associate director of the MBA programme and the CUHK Centre for
Entrepreneurship. His research interests are international management, social network,
entrepreneurship, and cross-cultural research methodology. He has published more than
40 articles and book chapters in academic outlets and served on the editorial boards of
several academic journals. Recently, he embarked on two large-scale projects related to
entrepreneurship, one on family businesses around Asia and the other a longitudinal study
of start-ups in mainland China.
Bjørn Ekelund, MBA and psychologist, is managing director of Human Factors Norway
and a PhD candidate in Global Management at University of Agder, Norway. He has 25
years of consulting experience, focusing on combining practice with the academy, push-
ing both areas for mutual benefit. His main areas of work are cross-cultural management,
cooperation between people with different mindsets and training other consultants to use
business-oriented psychological concepts like cultural intelligence, team assessments and
the diversity icebreaker.
Cordula Barzantny is Associate Professor of International and Cross-cultural Management
at Groupe ESC Toulouse Business School in France, where she lectures MBA and
Executive classes on International and European Management. Cordula obtained her
doctorate at the University of Social Sciences Toulouse I. Prior to entering academia her
professional career was in finance, accounting and management control with SIEMENS
Group. Her main research interests are in cross-cultural management, multicultural teams
and workgroup diversity, as well as global leadership and the sharing of knowledge in
international organisations. She is a visiting scholar at various universities and business
schools around the world and also consults multinational companies.
Kevin Au
Bjørn Ekelund
Cordula
Barzantny
at University of Victoria on January 14, 2016oss.sagepub.comDownloaded from
