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Psychological Contract Violation: A Bridge between Unethical Behavior and Trust

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Formation of intentional relationships which increase the organizational restrictions has confirmed a challenging struggle for managers. The corporation survey of supply chain revealed that the offender of firm communicates the most undersized area of their supply chain. There are some other problems faced by an organization, including the problems of trust, psychological contracts and the ethics. All these problems are considered as main features of buyer and seller relationships and provide a basis of present study. Generally, there are some incidences in the organization for the study that are unwritten but exciting on the significant performance variables. Organization's commitment regarding the contentment of their promises, known as psychological contract, is one of the classifications that should be examined. Therefore, present study attempts to investigate the mediating role of experience of psychological contract violation (EPCV) on the relationship between unethical behavior (UEB) and trust (TRS). For this purpose, study utilized the data of 179 operational managers of manufacturing industry of Thailand. Study applies structural equational modeling (SEM) approach for investigating the empirical results. Study used measurement model for testing the reliability and validity of each item and construct. Structural model is used for testing the proposed hypotheses of the study. Path analysis is conducted for examining the direct and indirect effects of the variables. Results of the study shows that EPCV significantly mediates the negative relationship between UEB and TRS.
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Sys Rev Pharm 2020;11(7):54-60
A multifaceted review journal in the field of pharmacy
54 Systematic Reviews in Pharmacy Vol 11, Issue 7, July-Aug 2020
Psychological Contract Violation: A Bridge between
Unethical Behavior and Trust
Yuris Danilwan1, Dewi Budhiartini Yuli Isnaini2, Ikbar Pratama3
1Politeknik Adiguna Maritim Indonesia (POLTEK AMI) Medan
2Faculty of Economics Management, Universitas Amir Hamzah, Medan, Indonesia
3School of Accountancy, College of Business, Universiti Utara Malaysia, Sintok, Malaysia.
Corresponding author: yurisdanilwan1959@gmail.com
ikbar.p@gmail.com
ABSTRACT
Formation of intentional relationships which increase the organizational
restrictions has confirmed a challenging struggle for managers. The corporation
survey of supply chain revealed that the offender of firm communicates the most
undersized area of their supply chain. There are some other problems faced by an
organization, including the problems of trust, psychological contracts and the
ethics. All these problems are considered as main features of buyer and seller
relationships and provide a basis of present study. Generally, there are some
incidences in the organization for the study that are unwritten but exciting on the
significant performance variables. Organization’s commitment regarding the
contentment of their pro mises, known as psychological contract, is one of the
classifications that should be examined. Therefore, present study attempts to
investigate the mediating role of experience of psychological contract violation
(EPCV) on the relationship between unethical behavior (UEB) and trust (TRS). For
this purpose, study utilized the data of 179 operational managers of manufacturing
industry of Thailand. Study applies structural equational modeling (SEM) approach
for investigating the empirical results. Study used measurement model for testing
the reliability and validity of each item and construct. Structural model is used for
testing the proposed hypotheses of the study. Path analysis is conducted for
examining the direct and indirect effects of the variables. Results of the study shows
that EPCV significantly mediates the negative relationship between UEB and TRS.
Keywords: Experience of psychological contract violation; Unethical behavior;
Trust; Thailand
Correspondence:
Yuris Danilwan
Politeknik Adiguna Maritim Indonesia (POLTEKAMI) Medan
Email: yurisdanilwan1959@gmail.com
INTRODUCTION
Inter organizational supportive behaviors i.e., collective
arrangements are strongly linked with the supplier’s trust.
Alternatively, unethical business performs negatively
affects this trust and disturb the long-term business
dealings because unethical behaviors encourage negative
promotion, considerable penalties and eventually
decreased sales and revenue [1]. When the trust of
supplier damage due to the unethical behavior of the
buyers, then supplier start searching another business
opportunity and start conversing negative information
about buying firm with other suppliers [2]. [3] indicated
that orally commended penalty is not organized by a party
holding control because control is resulting from the
society.
Formation of intentional relationships which increase the
organizational restrictions has confirmed a challenging
struggle for managers [4]. The corporation survey of
supply chain revealed that the offender of firm
communicates the most undersized area of their supply
chain which shows beyond the problems of coordination
and structure, there are some other problems that are face
by an organization, including the problems of trusty,
psychological contracts and the ethics [5]. All these
problems are considered as main features of buyer and
seller relationships and provide a basis of present study.
Existing studies investigated the psychological and
cognitive characteristics of handling the buyer-supplier
relationship [6]. The area of buyer and seller relationship
still under the discussion of researchers as they less
focused on those activities which break down the trust [7]
and [8]. Psychological contract is another reason of trust
break down which is defined as emotional experience of
dissatisfaction, prevention and annoyance, attached with
feelings of dissatisfaction [9], [10] and [11]. In a buyer-
seller relationship, the seller endorses regular
expectations from the buying firm. Similarly, buying firm
also have some expectations from the supplier, which
results dissension between parties if not full fill and thus
leads to the violation of psychological contracts [6].
Basically, psychological contract violation is an emotional
experience, if occurs, then parties do not want to be in
contract as it breaks the trust among the buyer-seller
relationship [12] and [13].
This paper, therefore, contributes to the existing literature
by examining the violation of psychological contract
between a buyer and a supplier. The study used
psychological contract violation as a mediating variable
for examining the effects of unethical behavior on the trust
within a partnership. Author defines trust as a dependence
of firm on the other entities that are engaged to willingly
recognize their moralities [1] which suggests that
psychological contract survives between the buyer and
supplier and a supposed destruction of psychological
contract occur by obvious unethical acts that fail to defend
the right of others [14]. Present study, therefore, examined
this occurrence, and pursue to define the role
psychological contract violation on the relationship
between ethics and trust.
Remaining paper is arranged as follow: section two shows
the review of existing literature and construction of
hypotheses, section three is about data and methodology,
section four represent empirical findings of the data,
section five is about the conclusion and discussion of the
study.
Danilwan et al. / Psychological Contract Violation: A Bridge between Unethical Behavior and Trust
55 Systematic Reviews in Pharmacy Vol 11, Issue 7, July-Aug 2020
Literature Review
This section presents the review of existing literature and
construction of hypothesis
Unethical behavior (UEB) and Trust (TRS)
Literature revealed many studies which investigated the
empirical relationship between ethical behavior and trust
of consumers. [15] examined the relationship between
ethical behavior of managers and the trust of customers.
For this purpose, the study utilized the data from Mexico,
Canada and US. Results of the study revealed the positive
influence of manager’s ethical behavior on building the
trust of consumers. [15] examined the influence of ethical
leadership behaviors on the trust of the followers. For this
purpose, study utilized the data from 547 employees of
European business corporation and revealed the positive
relationship between ethical leadership behavior and the
trust of followers. [16] also found the positive association
between ethical leadership and the trust of consumers. In
the literature of buyer and seller relationship, ethical
disputes are regularly investigated from the perspective of
purchasing management. [17] examined the impact of
sellers’ ethical behavior on buyer’s trust. Study revealed
the positive relationship between these two variables.
Similarly, [18] showed the positive association between
sellers’ ethical behavior and buyers’ trust. [19]
investigated the relationship between business ethics and
the trust of clients. For this purpose, the study utilized the
data of manufacturing industry of Nigeria. Study indicated
the positive influence of business ethics on the trust of
clients. [20] indicated that unethical business behavior is
very common among managers show deceitfulness in
their behavior so for earning the profit. This behavior
negatively affects the trust of customers. [21] worked on
the UEB and showed the negative influence of UEB on the
trust of customers. In the summary of above literature, it
is proposed that most of the studies focused on the ethical
behavior. Unethical behavior is still under the discussion
of researchers. However, after reviewing the above
literature, it is proposed that:
H1 “There is negative relationship between unethical
behavior and trust”
Unethical behavior (UEB) and experience of
psychological contract violation (EPCV)
[22] examined the influence of UEB on the violation of
psychological contract. For this purpose, the study utilized
the data of Belgium and Finland. Study applies OLS model
and revealed the negative association between UEB and
the violation of psychological contract. [23] empirically
tested the relationship between psychological contract
violation and the intention of customers regarding the
reuse of online merchant websites. Study further test that
either this relationship is strengthening by the perceived
structural assurance or not. author utilized the data of 234
respondents and showed that perceived structural
assurance significantly moderated the negative
relationship between psychological contract violation and
customer’s intention regarding the reuse of merchant
websites. [24] done a valuable work. The study
investigated the moderating role of organizational ethical
climate on the relationship between UEB and the violation
of psychological contract. For this purpose, the study
utilized the data from 234 respondents. Study applied OLS
regression models and reveled the positive effects of UEB
on the violation of psychological contract. Study further
showed that this relationship is moderated through the
ethical climate of any organization. [25] indicated the
positive relationship between UEB and the psychological
contract violation. Results of this study is based on the data
of 253 respondents. After reviewing the above literature,
it is proposed that:
H2: “There is positive relationship between unethical
behavior and the experience of psychological contract
violation
Experience of psychological contract violation (EPCV)
and trust (TRS)
[26] examined the moderating role of TRS and EPSV on the
association between realistic leadership and
organizational deviancy. For this purpose, the study
collected the data from 545 lecturers of 10 state
universities of turkey. Results of the study showed the
negative relationship between realistic leadership and
organizational deviancy. Results of the study further
showed that this relationship is significantly moderated by
the TRS and EPCV. [27] investigated the empirical
relationship between PCV and TST by utilizing the data of
236 managers of Indian textile firms. Study applied OLS
regression model and found the significant relationship
between PSV and TST. [28] examined the influence of PSV
on TRS. In this regard, the study collected the data from
210 enterprises of china. Study applied SEM and showed
the negative relationship between PSV and TST. Similarly,
[29] also revealed the negative relationship between PCV
and TST. Thus, it is assumed that:
H3: “There is negative relationship between experience of
psychological contract violation and trust”
Mediating role of EPCV
EPCV may occur in the deficiency of true destruction. It is
not challenged in the appearance of actual destruction.
Present study evaluates that “whether a supplier
perceives unethical activities to have occurred or not”.
present study also considers the associated feelings of
supplier i.e., abuse, irritation, annoyance and
disappointment. Present study considers the probability
of occurrences where the supplier observes the buyer to
be engage in unethical activities. However, the supplier
does not involve in the abusive feelings. This rare set of
conditions may appear for different reasons i.e., perhaps
during the period of buyer-seller relationship, the
accepted criticism was the main reason behind this
destruction. The supplier may have perceived an unethical
behavior but assumes it an inconsequential matter and do
not feel it a violence [30] and [31]. Thus, this situation shed
a light on the ethics-psychological contract relationship.
Therefore, present study considers EPSV as a mediating
variable which explains that “why unethical behaviors
result in a decreased level of trust”. So, it is proposed that:
H4: experience of psychological contract violation
mediates the relationship between unethical behavior and
trust”
Methodology
Sample and data collection
The study collected the data from the 179 operation
managers of manufacturing industries of Thailand. Data
are collected through a questionnaire, which is designed
after the detailed study of literature. The area of present
study is “behavior”. Thus, different items related to
marketing, organizational behavior, and operation
management are included into the questionnaire.
Questionnaire is based on 5-type Likert scale, starts from
1=strongly disagree to 5= strongly agree. Questionnaire is
comprising of two sections i.e., section A and section B.
Danilwan et al. / Psychological Contract Violation: A Bridge between Unethical Behavior and Trust
56 Systematic Reviews in Pharmacy Vol 11, Issue 7, July-Aug 2020
Section A contains the information regarding the
demographics of the respondents i.e., information about
gender, salary, age, and qualification. While section B
contains different items related to modeled variables.
Questionnaire are voluntarily filled by the respondents as
nobody was forced to respond.
Description of variables
Unethical behavior (UEB)
Study uses UEB as an independent variable (IV) which is
measured through 7 items of deceitfulness. Deceitfulness
is defined as a dishonest behavior i.e., convincing the
people to believe in something that is not true.
Trust (TRS)
TRS is used as a dependent variable (DV) of the study.
Study measures trust with the 6 items of benevolence,
which is defined as an act of kindness.
Experience of Psychological contract violation (EPCV)
Study uses EPCV as a mediating variable (MV) of the study
which creates a link between UEB and TRD. EPCV is
defined as emotional experience of dissatisfaction,
prevention and annoyance, attached with feelings of
dissatisfaction. Questionnaire consists of 5 items of EPCV.
Econometric techniques
Study analyzes the data by using the software of SPLS,
which uses variances-based technique of partial least
square that explicates the measurement error and provide
more accurate results as compare to OLS regression.
Moreover, SPLS is helpful in the case of small data files.
Study applies structural equational modeling (SEM) for
the empirical estimation of results. SEM is comprising of
two models i.e., measurement model and structural model.
Measurement model tests the reliability and validity of the
data through confirmatory factor analysis (CFA). While
structural model is used for estimating the standardized
coefficients. Structural model is obtained with the help of
bootstrapping process. Finally, study conducted path
analysis for estimating the direct and indirect effects of
independent variable (UEB) on the dependent variable
(TRS).
Econometric models
Study uses following econometric models for testing the
proposed hypotheses of the study:
Models for Direct Effects
1. TRS = β0 + β1(UEB) ------------------------------------------
(1)
2. EPCV = β0 + β1(UEB) ----------------------------------------
--- (2)
3. TRS = β0 + β1(EPCV) -----------------------------------------
--------(3)
Model for Indirect Effect
4. TRS = β0 + β1(UEB) +β2 (EPCV) ---------------------------
--------------------(4)
Where: TRS is trust, UEB is unethical behavior, EPCV is
Experience of Psychological contract violation, β0 is
intercept, β1- β2 are coefficients, and µ is normally
distributed error term/residuals”.
Empirical Results
This section presents the empirical results to analyze the
mediating impact of UEB on TRS through EPCV.
Descriptive statistics
Table 1 shows the results of descriptive statistics of study
variables. Table shows the mean, standard deviation,
minimum and maximum values of survey items. Result
shows that survey is based on 17 items. Out of which, the
response of eight items vary from one to five, response of
3 items vary from one to four, items of three items vary
from two to five and the response of two items vary from
two to four. Mean value in table 1 shows the average
response of participants, varies from 2.235 to 3.994.
Values of standard deviation show the dispersion of the
data, varies from 0.224 to 1.996. Mean and standard
deviation of UEB1, UEB2, UEB3, UEB4, UEB5, UEB6,
EPCV1, EPCV2, EPCV3, EPCV4, EPCV5, TRS1, TRS2, TRS3,
TRS4, TRS5, TRS6 is 3.364, 3.546, 3.905, 3.347, 3.459,
3.994, 3.385, 3.455, 3.634, 3.562, 3.395, 3.356, 2.948,
3.432, 3.553, 2.235, 2.562 and 1.223, 1.299, 0.224, 1.453,
0.443, 1.774, 0.355, 0.566, 1.335, 0.567, 1.949, 1.356,
0.456, 1.345, 1.996, 0.678, 0.836 respectively
Table 1: Descriptive Statistics
Items
Mean
Min
Max
UEB1
3.364
1
5
UEB2
3.546
1
4
UEB3
3.905
1
5
UEB4
3.347
2
5
UEB5
3.459
1
5
UEB6
3.994
1
4
EPCV1
3.385
1
5
EPCV2
3.455
2
5
EPCV3
3.634
1
5
EPCV4
3.562
1
4
EPCV5
3.395
1
5
TRS1
3.356
2
5
TRS2
2.948
2
4
TRS3
3.432
1
5
TRS4
3.553
1
5
TRS5
2.235
2
4
TRS6
2.562
1
5
Measurement Model
Figure 1 shows the measurement model of the study.
Measurement model of the study comprises on three
latent variables i.e., UEB, EPCV and TRS. UEB is the
independent, TRS in the dependent and EPCV is the
mediating variable of the study. Measurement model is
based on confirmatory factor analysis (CFA) which is used
for testing the reliability and validity of different item and
constructs. Measurement model tests the convergent
validity of each item and construct, reliability and internal
consistency of each construct, and construct validity.
Danilwan et al. / Psychological Contract Violation: A Bridge between Unethical Behavior and Trust
57 Systematic Reviews in Pharmacy Vol 11, Issue 7, July-Aug 2020
Figure 1: Measurement Model
Convergent validity of items
Table 2 shows the values factor loadings of each item of
the construct. Values of factor loading are used to test the
convergent validity of each item. According to the rule, the
value of factor loading must exceed from 0.4. In present
case, the value of factor loading for each item exceeds from
0.4 i.e., the loading value of UEB1, UEB2, UEB3, UEB4,
UEB5, UEB6, EPCV1, EPCV2, EPCV3, EPCV4, EPCV5, TRS1,
TRS2, TRS3, TRS4, TRS5, TRS6 is 0.934, 0.884, 0.784,
0.998, 0.821, 0.987, 0.824, 0.862, 0.937, 0.8844, 0.733,
0.632, 0.849, 0.841, 0.998, 0.836, and 0.819 respectively.
So, it is concluded that convergent validity is present in
each item.
Table 2: Factor Loadings
ENT
PSKAP
PSN
UEB1
0.934
UEB2
0.884
UEB3
0.784
UEB4
0.998
UEB5
0.821
UEB6
0.987
EPCV1
0.824
EPCV2
0.862
EPCV3
0.937
EPCV4
0.884
EPCV5
0.733
TRS1
0.632
TRS2
0.849
TRS3
0.841
TRS4
0.998
TRS5
0.836
TRS6
0.819
Composite reliability & Validity, Discriminate Validity
and Correlations
In Table 3 (Panel A) Cronbach’s Alpha tests the reliability
and internal consistency of the data. According to the rule,
the value of Cronbach’s alpha must exceed from 0.4 in
order to satisfying the condition of reliability. In present
case, the value of Cronbach’s alpha exceeds from 0.4 i.e.,
the value of Cronbach’s alpha for UEB, EPCV and TRS is
0.994, 0.873 and 0.883 respectively. So, it is concluded
that the data of each construct is reliable. Composite
reliability tests the construct validity of the data.
According to the rule, the value of composite reliability
must exceed from 0.5 in order to satisfy the condition of
construct validity. In present case, the value of CR exceeds
from 0.5. i.e., the value of CR of UEB, EPCV and TRS in
0.863, 0.925, 0.885 respectively. Hence, it is verified that
construct validity is present in the data. Average variance
extracted (AVE) tests the convergent validity of each
construct. The value of AVE must exceed from 0.5 for
satisfying the condition. In present case, the value of AVE
exceeds from 0.5 i.e., the value of AVE for UEB, EPCV, and
TRS is 0.863, 0.973 and 0.825 respectively. So, it is
concluded that convergent validity is also present in each
construct.
Table 3 (Panel B) shows the results of discriminate
validity. The study used Former-Larker criterion for
testing the discriminate validity of the data. Former-
Larker criteria measures the discriminate validity of the
data with the help of correlation table. According to this
criterion, the diagonal values of the correlation table must
exceed from the remaining values. In present case, the
diagonal values i.e., 0.993, 0.942 and 0.893 (shown in
bold) exceeds from 0.673, 0.715 and 0.773 (remaining
values of the table). Thus, it is verified that discriminate
validity is present in the data.
Table 3 (Panel C) shows the results of correlation matrix.
Correlation matrix is used to test the problem of
multicolinearity in the data. Table shows that the value of
correlation between EPCV and UEB is 0.11, the value of
correlation between TRS and UEB is 0.09, the value of
correlation between TRS and EPCV is 0.17. Result reveals
that there is not any problem of multicolinearity in the
data as all the values are less than 0.5.
Table 3: Composite Reliability & Validity, Discriminate
Validity and Correlations
Panel A: Composite Reliability and Validity
Variables
Cronbach's
Alpha
Composite
Reliability
Average Variance
Extracted (AVE)
UEB
0.994
0.863
0.863
EPCV
0.873
0.925
0.973
TRS
0.883
0.883
0.825
Panel B: Discriminate Validity
Variables
UEB
EPCV
TRS
UEB
0.993
EPCV
0.673
0.942
TRS
0.715
0.773
0.893
Panel C: Correlations
Variables
UEB
EPCV
TRS
UEB
1
EPCV
0.11
1
TRS
0.09
0.17
1
Danilwan et al. / Psychological Contract Violation: A Bridge between Unethical Behavior and Trust
58 Systematic Reviews in Pharmacy Vol 11, Issue 7, July-Aug 2020
Structural Model
Figure 2 shows the structural model of the study which is
obtained through the process of bootstrapping. This model
deals with the issue of multicollinearity. Further,
structural model comprises on the path analysis which is
used to obtain the direct and indirect effect of independent
variable on the dependent variable.
Figure 2: Structural Model
Path analysis
Table 4 shows the results of path analysis which is used to
analyze the mediating impact of UEB on TRS through
EPCV. The table is comprising of two panels. Panel A shows
the direct impact of variables whereas panel B shows the
indirect impact of variables.
In panel A, path coefficient of model 1 (UEBTRS) reveals
the significant and negative relationship between UEB and
TRS at the level of 1%. Result shows that 1-unit increase in
UEB tends to reduce TRS by 0.4573 units. Thus, H1 “there
is negative relationship between unethical behavior and
trust” is accepted by the study. Path coefficient of model 2
(UEBEPCV) is also significant at the level of 1%, showing
that 1-unit increase in UEB tends to increase EEPCV by
0.2793 units. So, H2 “there is positive relationship between
unethical behavior and the experience of psychological
contract violation” is also supported. Path coefficient of
model 3 (EPCVTRS) also showing the negative and
significant association between EPCV and TRS. For
instance, 1-unit increase I, EPCV tends to reduce TRS by
0.2564 units. hence, H3 “there is negative relationship
between experience of psychological contract violation
and trust” is also accepted.
In panel B, the coefficient of model 4 (UECEPCVTRS)
is significant at the level of 5%, showing that EPCV
significantly mediates the relationship between UEB and
TRS. Comparing the outcomes of model 4 with model 1, the
coefficient of UEB is reduces from 0.4573 to 0.3655,
showing that 1-unit increase in UEB tends to reduce TRS
by 0.3655 units. The H4 experience of psychological
contract violation mediates the relationship between
unethical behavior and trust” of the study is accepted.
Table 4: Path Analysis
Models
Original Sample (O)
Standard Deviation (STDEV)
P Values
Decision
Panel A: Direct Effects
UEBTRS
-0.4573***
0.152
0.000 ***
Accepted
UEBEPCV
0.2793***
0.265
0.000 ***
Accepted
EPCVTRS
-0.2564***
0.173
0.000 ***
Accepted
Panel B: Indirect Effects
UEBEPCVTRS
-0.3655**
0.044
0.067 *
Accepted
Note: “***, ** and * shows the significance at the level of 1%, 5% and 10% respectively”
Conclusion and Discussion
Inter organizational supportive behaviors i.e., collective
arrangements are strongly linked with the supplier’s trust.
Alternatively, unethical business performs negatively
affects this trust and disturb the long-term business
dealings because unethical behaviors encourage negative
promotion, considerable penalties and eventually
decreased sales and revenue. When the trust of supplier
damage due to the unethical behavior of the buyers, then
supplier start searching another business opportunity.
Supplier converse negative information regarding buying
firm with other suppliers which leads the violation of
psychological contract. Psychological contract is another
reason of trust break down which is defined as emotional
experience of dissatisfaction, prevention and annoyance,
attached with feelings of dissatisfaction. This paper,
therefore, contributes to the existing literature by
examining the violation of psychological contract between
a buyer and a supplier. The study used psychological
contract violation as a mediating variable for examining
the effects of unethical behavior on the trust within a
partnership. For this purpose, the study collected the data
from 179 operation managers of manufacturing industries
of Thailand. Study applied structural equational modeling
approach for examining the empirical results.
Measurement model is used for testing the reliability and
validity of different item and constructs. Structural model
is used for testing the proposed hypothesis of the study.
Study conducted path analysis for testing the direct and
direct effects of the variables
Results of the study revealed the interesting findings: first,
the study shows the negative and significant relationship
between URB and TRS. Results are consistent with [17],
[19], [20], [21] & [21] Secondly, results of the study
showed EPCV significantly mediates the negative
relationship between URB and TRS. Results are consistent
with [30], [26] & [25].
Present study has some limitations: firstly, this study is
conducted on the manufacturing industries of Thailand,
future researchers may conduct replica of this study on
different industries. Secondly, future researchers may
conduct cross-industry comparison while conducting
replica of this study. third, future researchers may explore
some other aspects to extend this buyer-seller
relationship examination i.e., future researchers can
investigate that how does the buyer assess the ethicality
of his behavior”? “how ethical does a buyer perceive the
supplier to be”? Further, future researchers can also
explore the factors that contributes in the violation of
psychological contract.
Danilwan et al. / Psychological Contract Violation: A Bridge between Unethical Behavior and Trust
59 Systematic Reviews in Pharmacy Vol 11, Issue 7, July-Aug 2020
The outputs acquired from the analysis provide important
and interesting implications for the management of
relationship between supplier and buyer. First, the study
empirically explains the importance of PCV (psychological
contract violation) as mediator variable to association
between TRT and UEB. The results given in this study have
important and practical implications. Participants in
supplier and buyer relationship should be familiar not
only of activities of company’s legislatures, but also for
acuities upheld by partner company. The study shows that
these acuities are significant driver of the feelings of PCV
and TRT levels. Secondly, study also indicates that there is
a positive association between TRT and perceived UEB. It
is of vital importance for buyers understanding that levels
of TRT may be diminishing independent of EPCV of
suppliers. A firm of buyer cannot rely solely on the
suppliers’ signs of hindrance and disenchantment as
indicator that of how having the trust on supplier perceive
buyers to be. Findings are generalized to all the supplier
and buyer company interested in maintaining mutually
rewarding association with other companies.
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... Liu et al. (2017) found that organizational ethical values are shaped through established contractual terms; moreover, psychological contracts which are the full set of beliefs between employers and employees, as the most important implied terms in contracts (Middlemiss 2011), play an important role in restraining immoral psychology. Hence, moral disengagement can be considered a phenomenon where contractors breach psychological contracts (Danilwan et al. 2020). Similar to moral disengagement, psychological contracts breach is spawned by organizational contextual factors and can lead to some undesirable behaviors, such as environmentally irresponsible behaviors (Paillé and Raineri 2015;Kraak et al. 2017). ...
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