SUPPLY CHAIN PSYCHOLOGICAL CONTRACT BREACH: AN EXPERIMENTAL STUDY ACROSS NATIONAL CULTURES

Supply disruptions are commonplace in today's global supply chain environment. The sheer magnitude of daily transactions makes it inevitable that there will be disruptions, further exacerbated by differences in cultural norms and attitudes that add a layer of complexity to managerial response. In this research, we examine the impact of national culture on individuals' responses to supply disruptions due to psychological contract breach. Using data from controlled experiments conducted with 158 subjects in China and 125 subjects in the U.S., we evaluate changes in decision-making behaviors and assessments of attitudinal outcomes regarding trust and repurchase intentions. Our results show post-breach behavioral differences based on national culture, but find that these differences are short-term in nature. Additionally, cultural differences show up in both of the attitudinal outcomes assessed in this research. Following a psychological contract breach, individuals from the U.S. express less trust in their supply chain partner and less willingness to work with that partner again in the future as compared to individuals from China. Our research suggests that managers and scholars interested in the cultural influences on the response to supply disruption will benefit from further research and understanding focusing on the intersection of psychological contract breach and cultural distance.