Context Matters: The Influence of Organizational Change on Psychological Contracts

Abstract

Purpose. This is a study on organizational change, psychological contracts and psychological contract reciprocity in seven different organizations. The influence of six organizational change characteristics (frequency, impact and type of change, successfulness of past changes, the justification of changes and change management) on fulfillment of the psychological contract is examined. Context characteristics (external environment, job and worker characteristics, organizational factors and time) are gathered to see whether these can explain the differences in psychological contract reactions associated with organizational change. Design/ methodology/ approach. A mixed method approach was used. Respondents (3379) of seven organizations filled in an online questionnaire and qualitative data was gathered during 28 meetings with the participating organizations. Regression analyses were used to test the relations between change characteristics and fulfillment of the psychological contract and to test the reciprocal character of the psychological contract. A narrative approach was used to interpret the results and to offer explanations for the differences in results between organizations. Findings. The impact of organizational changes, successfulness of past changes, justification of changes and change management have an influence on the perceived fulfillment of employer’s obligations. The qualitative data indicate the importance of the internal context (e.g. culture of the organization) and the external context (e.g. pressures from competition) in explaining the patterns of organizations. Practical implications. It is important to take organizational context into account when implementing organizational changes. Research limitations. The study is cross sectional. However, using a mixed-method approach, the empirical data were combined with qualitative data. Originality/ value. This study demonstrates that context may explain why employees in different organizations react differently to organizational change. By adding qualitative interpretations to the quantitative results of this study, our research contributes to the understanding of complex organizational changes in different contexts.