When Expatriates Feel Betrayed: Perceived Psychological Contract Violation and Its Consequences and Potential Moderators

Abstract

Purpose - Given the fact that a majority of multinational enterprises (MNEs) are still heavily reliant on expatriates for critical functions abroad, expatriate management is crucial to MNEs in today’s global business environment. In this context, increasing attention has been devoted to the psychological contract as a useful explanatory tool for understanding expatriate management. In spite of a growing recognition of its importance in expatriate management, the psychological contract has not yet been sufficiently studied in the multi-layered context of expatriation. Therefore, this paper aims to explore expatriate psychological contracts in the multicontextual nature of expatriation.
 Design/Methodology/Approach - Drawing upon social exchange theory and equity theory, this paper develops a conceptual framework for the relationship between perceived psychological contract violations and work-related outcomes and proposes the contextual moderators of this relationship at the individual, organizational, and national levels, respectively.
 Findings - Four research propositions are developed around the proposed conceptual model, such that expatriates that perceive a violation of the psychological contract have significantly lower job satisfaction and commitment to the MNE. Moreover, the moderating effects of individual (e.g., cultural intelligence), organizational (e.g., the extent of cross-cultural training), and national (e.g., cultural distance) factors on the relationship between perceived psychological contract violations and expatriate attitudinal outcomes are suggested.
 Research Implications - This paper can vastly increase the current understanding of psychological contracts by broadening its application beyond the domestic employee-employer relationship. It also provides relevant insight into expatriate management.