Toward Relationship Resilience: Managing Buyer-Induced Breaches of Psychological Contracts During Joint Buyer–Supplier Projects

Journal of Supply Chain Management, Vol. 54, 2018

50 Pages Posted: 19 Nov 2018

See all articles by Lutz Kaufmann

Lutz Kaufmann

WHU - Otto Beisheim School of Management

Craig Carter

Arizona State University (ASU)

Jens Esslinger

WHU - Otto Beisheim School of Management

Date Written: November 7, 2018

Abstract

This research examines buyer–supplier relationship resilience associated with a psychological contract breach by the buying organization. Our study covers the span of buyer-induced negative events from pre-breach to post-repair. Specifically, we investigate the role of the nature of the interorganizational and interpersonal relationships in preventing initial trust loss (pre-breach) and the effectiveness of different repair processes (penance and regulation) in promoting subsequent trust repair (post-breach). The effects are analyzed on two levels: interorganizational and interpersonal. We use social exchange theory to derive the study’s hypotheses and a scenario-based role-playing experiment to test them. The results suggest that effective interorganizational trust repair can help to transform the nature of an interorganizational buyer–supplier relationship from adversarial to collaborative. Furthermore, initially adversarial interpersonal ties exacerbate the extent of interorganizational trust loss in collaborative interorganizational buyer–supplier relationships, while collaborative interpersonal ties help prevent initial interorganizational trust loss. Our study makes three contributions. First, it extends the psychological contract literature by investigating purchasing managers’ mitigation strategies in response to a buyer-induced negative event. Second, it accounts for the role of interpersonal ties in buyer–supplier relationship resilience. Third, it underscores the effectiveness of trust repair mechanisms, such as penance and regulation, in actually improving buyer–supplier relationship resilience after a psychological contract breach.

Keywords: psychological contract breach; buyer–supplier relationship resilience, trust, social exchange theory, scenario-based experiments

Suggested Citation

Kaufmann, Lutz and Carter, Craig and Esslinger, Jens, Toward Relationship Resilience: Managing Buyer-Induced Breaches of Psychological Contracts During Joint Buyer–Supplier Projects (November 7, 2018). Journal of Supply Chain Management, Vol. 54, 2018, Available at SSRN: https://ssrn.com/abstract=3280435

Lutz Kaufmann (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Craig Carter

Arizona State University (ASU) ( email )

Farmer Building 440G PO Box 872011
Tempe, AZ 85287
United States

Jens Esslinger

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

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