Abstract:
Talent retention, organisational commitment and diversity management is a key focus
area for organisations’ human resource departments, wanting to compete effectively in
the evolving business environment. The psychological contract provides a framework
for organisations to acknowledge, understand and manage employee expectations to
ensure positive employee attitude and importantly, reduce turnover. However, limited
research has attempted to describe the relationship between individual cultural
orientation, subcultural membership, organisational culture and the resultant impact on
the type of psychological contract. Against this backdrop, this research aimed to
determine whether individual cultural orientation in relation to subcultural membership
and organisational culture influences the psychological contract.
Prior to conducting the quantitative research, current literature was used to determine
the cultural and psychological contract constructs that could be used to describe the
relationship at an individual and organisational level, which were then incorporated as
inputs in the self-administered online questionnaire. 113 respondents from within the
medical devices and pharmaceutical industry completed the online survey.
Individualism and collectivism at both an individual and organisational level was found
to associate with the psychological contract. Irrespective of the cultural orientation,
respondents were found to develop psychological contracts which consisted of both
transactional and relational content. Collectivism was identified as being a strong
predictor in reducing contract violation as well as maintaining the integrity of the
psychological contract and thus congruence of individual and organisational collectivism
would have the most positive impact on the contract. Subcultural differences were not
apparent within the study and thus no inferences could be made. The results of this
study assist organisations in better understanding the dynamics of the psychological
contract and the role cultural diversity plays in shaping employees expectations
