Academic journal article Journal of International Business Research

Self-Regulative Changes in Psychological Contracts over Time: A Case of Japanese Pharmaceutical Company

Academic journal article Journal of International Business Research

Self-Regulative Changes in Psychological Contracts over Time: A Case of Japanese Pharmaceutical Company

Article excerpt

INTRODUCTION

In Japanese companies, it is generally accepted that an employee makes a career-long commitment to his employer upon entrance to a company, and it is expected that the employer will not discharge the employee (Abegglen, 1958). Abegglen (1958) called this mutual expectation "lifetime commitment." In Japan, important mutual expectations such as "lifetime commitment (p. 11)" are preserved without written/regal contracts.

Although such mutual expectations have historically been safeguarded at a cost to each party, there are discrepancies in the mutual expectations of today's Japanese companies. For example, in a large-scale survey of Japanese companies (Japan Institute for Labor Policy & Training, 2008), it was found that there are several discrepancies between employees' expectations toward their employer and the employer's beliefs about those expectations. For example, many employees expect "high pay" (67.3%), "support from my boss" (47.4%), and "adequate allocation" (42.3%) from their employer. However, they did not think that their employer fulfills all of these expectations. In the surveyed sample, relatively few employees responded that their employer provided the following items: "high pay" (5.0%), "support from my boss" (17.6%), and "adequate allocation" (12.2%).

What do employees do in this situation? Some previous studies regard employees not only as passive one affected by their environment but as active agents that take self-regulative reaction (Bandura, 1989). This means that employees are motivated to take action to decrease the gap between their expectations and the current state of affairs when they recognize inconsistencies. Recently, many organizational behavior studies have focused on these actions; they are called self-regulation studies (Adams, 1965; Brief & Hollenbeck, 1985; Frayne, 1991; Frayne & Geringer, 2000; Latham & Budworth, 2006; Lyons, 2008). However, there have been few self-regulation studies of the cognitive gaps in employment relationship.

In this paper, we examine employees' responses toward the differences in mutual expectations from the perspective of psychological contracts. In particular, we will investigate employees' self-regulative actions concerning gaps between the level of employers' fulfillment and employee's expectation.

REVIEW OF EXISTING RESEARCHES

Psychological Contract Defined

Rousseau defined psychological contracts as "an individual belief regarding the terms and conditions of a reciprocal exchange agreement between the focal person and another party" (1989, p. 123). Rousseau did not view psychological contracts as involving the perspectives of two interconnected parties. Instead, she conceived of them as an individual-level, subjective phenomenon. In other words, agreement in psychological contracts "exists in the eye of the beholder" (p. 123). This holds true irrespective of whether or not the contract is legal/written or unwritten. All types of promises are deemed psychological contracts. In other words, a psychological contract can be an employee's feeling of expectation to make particular contributions in exchange for particular benefits (Schalk & Roe, 2007). As Rousseau (1995) said, once a psychological contract is established at a certain point in time, there seems to be a mental model that provides cues to employees with regard to the types of events they can expect and how they should interpret them.

In previous studies, the components of psychological contracts are often classified into theoretically and statistically meaningful typologies. Although several typologies have been suggested, distinction between transactional and relational contract has dominated the research (Conway & Briner, 2005). Transactional contracts involve highly specific exchanges that are narrow in scope and take place over a finite period. Relational contracts, in contrast, are broader, more ambiguous, and open-ended, and they occur over a long term. …

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