An empirical investigation into the effect of psychological contract breach on expatriate failure

2017-05-26T07:06:42Z (GMT) by Perera, Liyanage Hasuli Kumarika
In the expatriate management literature, studies have rarely moved beyond examining maladjustment as a primary reason for expatriate failure. This thesis proposes that an expatriate’s idiosyncratic and subjective belief of the employer’s failure to fulfill one or more of its perceived obligations, referred to as psychological contract breach (PCB), has significant bearing on expatriate failure. Although there is a plethora of studies on the attitudinal and behavioural aftermath of an employee’s perception of PCB, there are a number of shortcomings in this body of research and limited knowledge of how expatriate employees, in particular, respond to a perception of PCB. As such, this thesis set out with the aim of exploring the underlying theoretical process through which perceived PCB affects expatriates’ job performance and turnover intentions, which are the key constituents of expatriate failure examined in this study. The goal was to develop and empirically examine a model that clarifies the process of the effects of expatriate-perceived PCB. To achieve this goal, a mixed methods research was undertaken, with two studies carried out sequentially to investigate the proposed conceptual model and research hypotheses. The initial qualitative study explored the experiences of and varying reactions to PCB through semi-structured interviews with 18 expatriate employees based in Malaysia. The data revealed many of the hypothesised reactions captured in the conceptual model as well as new ones that had not been previously anticipated, such as the sensemaking cue of attribution of intentionality and the behavioural outcomes of professional performance and counterproductive work behaviour. Furthermore, the data provided interesting insights regarding expatriates’ tendency to withdraw professional performance and engage in counterproductive work behaviour, rather than neglect task performance, in response to PCB. Different work motivations – intrinsic motivation, identified regulation, and external regulation – emerged from the data as protective buffers of task performance against PCB. The subsequent quantitative study used the information from the qualitative inquiry to revise the conceptual model, which was then tested in a cross-sectional survey of 253 expatriates in Asia. While conventional understanding is that PCB is typically reciprocated negatively by employees, the current research showed that PCB and ensuing feelings of psychological contract violation were both positively and negatively related to expatriates’ work engagement, task performance, professional performance, counterproductive work behaviour, and turnover intention. The direction of these relationships largely depended on expatriates’ perceptions of PCB as uncommon versus the norm. Positive conative and behavioural consequences existed when PCB was strongly perceived as common, typical, or expected. Negative conative and behavioural outcomes ensued when PCB was believed to uncommon, unexpected, or surprising. These findings imply that PCB may not always result in detrimental expatriate behaviour, in contrast to what has been suggested in the extant PCB literature on employees working on home soil. Together, contextual factors in sensemaking, especially ‘the perceived norm of breach’, and motivational states play a critical role in shaping positive or negative expatriate behaviour, following PCB. The contributions to research and implications for practice are discussed against the backdrop of the study’s limitations.