Psychological contract breach and organizational cynicism and commitment among self-initiated expatriates vs. host country nationals in the Chinese and Malaysian transnational education sector

Abstract

In today’s global economy, self-initiated expatriates (SIEs) and host country nationals (HCNs) both represent critical human resources for organizations operating globally. Yet, because these two groups of employees have been studied separately, little is known about how SIEs’ and HCNs’ perceptions of, and attitudes towards the organization compare and diverge (vs. converge) in terms of implications for human resource management. This study aims to contribute to fill this gap by examining psychological contract breach, organizational cynicism, and organizational commitment components (i.e., affective, normative, and continuance) among a sample of 156 SIEs and HCNs working in the Chinese and Malaysian transnational education sector. Using a one-year time-lagged study, we found that compared to HCNs, SIEs experienced more organizational cynicism and less affective, normative, and continuance commitment. Moreover, the breach-organizational cynicism relationship was stronger (i.e., more positive) among SIEs than HCNs. The indirect relationships between breach and affective and continuance commitment, as mediated by organizational cynicism, were also stronger (i.e., more negative) among SIEs than HCNs. Implications for human resource management are discussed under the lens of Conservation of Resources theory.

In a context of globalization, many organizations, from established multinational corporations to smaller enterprises and international joint ventures, seek to attract international talents (Collings, Scullion, & Morley, 2007). Along with those, talented individuals seek employment opportunities worldwide (Haslberger & Vaiman, 2013; Tharenou, 2013). The workforce in many organizations is, as a result, becoming more diverse. Among others, self-initiated expatriates (i.e., individuals who seek employment outside of their home country on a self-initiated basis and do not aim to settle permanently in the host country; SIEs) have emerged as a central group of employees (Altman & Baruch, 2013; Andersen, 2019; Selmer, Andersen, & Cerdin, 2017). SIEs are increasingly working side-by-side with local employees (i.e., host country nationals; HCNs) (Kraimer, Takeuchi, & Frese, 2014; Singh, Pereira, Mellahi, & Collings, 2019). Yet, very little research has jointly studied these two groups of employees.Footnote 1 This is an important research avenue because SIEs and HCNs are fundamentally different. They differ from one another, not only based on national origin but also in terms of the challenges they face and the resources they need. These fundamental differences likely shape SIEs’ and HCNs’ perceptions of, and attitudes towards the organization, as well as their implications. They may also point out the necessity, for organizations, to adjust human resource management practices to the needs of each group. This paper aims to address this research avenue by examining how SIEs and HCNs view and relate to their organization.

Drawing on principles from Conservation of Resources (COR) theory (Hobfoll, 1989), we contend that, as a group of employees, SIEs are more likely to suffer from resource depletion or, in other words, to lack the resources they need, than HCNs. This should occur because SIEs are less familiar with the host country and the host organization than HCNs, hence see the resources they possess being highly solicited and have to acquire others, which they do not possess, to function effectively. This key difference should make SIEs more likely than HCNs to hold negative views and attitudes towards the organization (and less likely to hold positive ones), especially those views and attitudes that are known to be influenced by employees’ resources. Given that previous COR research indicates that employees’ resources affect and shape psychological contract breach perceptions (Robinson & Morrison, 2000), organizational cynicism (Dean, Brandes, & Dharwadkar, 1998), and organizational commitment (Meyer & Allen, 1991; Meyer & Herscovitch, 2001; Byrne & Hochwarter, 2008; Hobfoll & Shirom, 2001; Kiazad, Seibert, & Kraimer, 2014; Lapointe et al., 2013; Lapointe, Vandenberghe, & Boudrias, 2011), we focus on these key perceptions and attitudes in our study. We argue that, due to heightened resource depletion, SIEs, compared to HCNs, will report more psychological contract breach perceptions and organizational cynicism, and less affective, normative, and continuance commitment. Extending our COR theory reasoning to the examination of the relationships between our focal variables, we further argue that psychological contract breach will lead to increased organizational cynicism and, through organizational cynicism, to lower affective, normative, and continuance commitment among SIEs vs. HCNs.

This paper goes beyond previous research, which focused on either SIEs or HCNs (e.g., Hitotsuyanagi-Hansel, Froese, & Pak, 2016; Makkonen, 2017). It reveals a more complete and nuanced understanding of how different groups of employees perceive and relate to their organization. We directly compared SIEs and HCNs on key variables and examined how group membership (SIE or HCN) shapes the relationships among variables. This twofold approach enables us to fully seize the implications that differences between SIEs and HCNs have for research and practice. By adopting a COR theory framework, we put at the forefront the notion of ‘resource’. We show that resources are closely tied to employees’ group membership (SIE vs. HCN). We also show that COR theory can help understand how to effectively manage the two groups that are SIEs and HCNs (Hobfoll, Halbesleben, Neveu, & Westman, 2018; Kraimer et al., 2014) by suggesting that they may vary in the extent to which they experience resource depletion. Thus, this paper provides insights into how, in an increasingly globalized work context, organizations can better manage their employees (Kraimer et al., 2014). Such an endeavor is particularly important in the Asia Pacific region. As shown by recent studies (Froese, 2012; Halim, Bakar, & Mohamad, 2014; Makkonen, 2017; Richardson & Ng, 2019; Selmer & Lauring, 2014; Tang, Chang, & Cheng, 2017), SIEs represent an important group of employees for organizations located in this region. They are, in fact, increasingly considered as part of local organizations’ staffing strategy (Makkonen, 2016, 2017). Yet, Asia Pacific countries such as China and Malaysia are known to pose great challenges to organizations seeking to attract and retain global talented employees (Brookfield Global Relocation Services, 2016; Harvey, Speier, & Novecevic, 2001; Yeung, Warner, & Rowley, 2008). Within these countries, human resource management challenges associated with employee attraction and retention are even more salient in the transnational education sector (Hassan & Hashim, 2011; Lauring & Selmer, 2014; Ramalu, Subramaniam, & Nadarajah, 2017; Richardson & Wong, 2018). To add relevance to our study, we therefore draw on a sample of SIEs and HCNs working in the Chinese and Malaysian transnational education sector. We also adopted a one-year time-lagged design to improve over previous research in the field, which has been mostly cross-sectional (see Cascio, 2012; Kraimer, Bolino, & Mead, 2016; Shaffer, Kraimer, Chen, & Bolino, 2012).

Theoretical background

An overview of COR theory

COR theory revolves, as mentioned above, around the notion of ‘resource’. Resources include ‘object resources (e.g., car, tools for work), condition resources (e.g., employment, tenure, seniority), personal resources (e.g., key skills and personal traits such as self-efficacy and optimism), and energy resources (e.g., credit, knowledge, money)’ (Hobfoll et al., 2018, p. 105). Resources are, all in all, varied but, importantly, they all help individuals achieve their goals (Halbesleben, Neveu, Paustian-Underdahl, & Westman, 2014). It is this essential property that makes a specific object, condition, etc., a resource (Halbesleben et al., 2014). COR theory also distinguishes between resource loss and resource gain. Resource loss occurs when resources are subtracted from individuals’ resource pool and resource gain occurs when resources are added to individuals’ resource pool (Halbesleben et al., 2014). Importantly, COR theory stipulates that resource loss is perceived as more salient by individuals than resource gain (Halbesleben et al., 2014). Of similar importance, COR theory stipulates that individuals must invest resources to gain resources and protect themselves from losing resources or to recover from resource loss (Halbesleben et al., 2014). When individuals do not possess enough resources, gaining new resources can prevent them from entering into a resource loss spiral (i.e., losing further resources over time) whereas, when individuals have enough resources, gaining new resources can further strengthen or help expand their existing resource pool (Halbesleben et al., 2014). Taken together, these tenets highlight the fact that at least some resources are needed for individuals to function effectively. They also show that resource depletion, defined as a state in which individuals lack the resources they need, can be particularly debilitating (Halbesleben et al., 2014; Hobfoll, 1989; Hobfoll et al., 2018). In this regard, Hobfoll and colleagues (Hobfoll, 1989; Hobfoll et al., 2018) specify that environmental and contextual circumstances are critical to understand resource depletion and its deleterious consequences.

COR theory and SIEs vs. HCNs

A critical difference between SIEs and HCNs is that, for HCNs, the host country is a familiar environment while, for SIEs, it is a foreign environment. This difference should make SIEs more likely to experience resource depletion than HCNs, for two main reasons. First, SIEs should experience heightened resource depletion compared to HCNs because their resources should be more solicited in the host country than those of HCNs. Indeed, when individuals move beyond national or cultural borders, they need, for instance, more personal resources such as self-efficacy, flexibility, openness, tolerance of ambiguity and emotional sensitivity to adjust to the host country environment (Lazarova, Westman, & Shaffer, 2010; Zhu, Wanberg, Harrison, & Diehn, 2016). Given that they move on their own, SIEs also need more energy resources such as time and physical energy (Ten Brummelhuis & Bakker, 2012) to ‘learn the ropes’ independently or with very limited support (McDonnell & Scullion, 2013). In contrast, HCNs navigate in an environment in which they are socially and culturally embedded, hence they are less likely to see their resources being solicited to deal with similar challenges and, if they do, they should more easily overcome obstacles and achieve their goals (Reiche, 2007; Tarique, Schuler, & Gong, 2006; Vance, Vaiman, & Andersen, 2009). Second, there should be a variety of resources that SIEs do not possess and need to acquire. To function effectively in the host country, they need to acquire local language skills, knowledge, and networks (Altman & Baruch, 2013; Lee, 2005; Suutari & Brewster, 2000; see also Caligiuri & Lazarova, 2002; Kraimer, Wayne, & Jaworski, 2001). Similarly, in the work context, SIEs must acquire various resources to perform their tasks and build and maintain quality relationships with colleagues, clients, and other important stakeholders (Shen & Kram, 2011). HCNs, due to their familiarity with the host country and the host organization, may not have to tackle this learning curve (Shen & Kram, 2011).

To summarize, SIEs should be more likely to experience resource depletion than HCNs because (a) the resources they possess should be more solicited and (b) they will have to acquire new resources to function effectively. The heightened state of resource depletion among SIEs (vs. HCNs) should adversely impact the perceptions and attitudes typically influenced by employees’ resources. More specifically, the deleterious effect of resource depletion should translate into stronger perceptions of psychological contract breach, increased organizational cynicism, and lower organizational commitment among SIEs (vs. HCNs) (Byrne & Hochwarter, 2008; Hobfoll & Shirom, 2001; Kiazad et al., 2014; Lapointe et al., 2013; Lapointe et al., 2011). Employees’ group membership (SIE vs. HCN) should also represent a significant moderator of the relations among contract breach, organizational cynicism, and organizational commitment. We further develop our reasoning around these ideas in the next section.

Hypothesis development

Perceptions and attitudes among SIEs vs. HCNs

Psychological contract breach

Psychological contracts capture employees’ beliefs about what they are entitled to receive, or should receive, based on perceived promises made by the organization and on normative expectations (Morrison & Robinson, 1997; Rousseau, Hansen, & Tomprou, 2018). Perceptions of unmet promises and expectations lead employees to experience psychological contract breach, that is to view that the organization failed to fulfill its obligations towards them (Morrison & Robinson, 1997; Rousseau et al., 2018). Psychological contract breach reflects employees’ cognitive judgment and evaluation of the organization’s obligations, hence may or may not align with the promises explicitly made by the organization (Coyle-Shapiro, Costa, Doden, & Chang, 2019; Rousseau et al., 2018). As we will argue below, SIEs should be more likely to report breach than HCNs.

Previous research shows that expatriates experience heightened uncertainty and ambiguity in the host country and view the organization as an essential source of help and support (McNulty, 2013). Stated otherwise, expatriates experience resource depletion and expect that the organization will provide the necessary resources to overcome the challenges they face and restore their resource pool (Halbesleben et al., 2014). However, their organization might not be able to meet these expectations. Usually, when assigning corporate expatriates for international assignments, organizations include resources such as settling-in assistance, well-being support, language training, personal and family safety as well as work-related assistance in expatriates’ package (McDonnell & Scullion, 2013; see also O’Donohue, Hutchings, & Hansen, 2018; Perera, Chew, & Nielsen, 2017). These resources are provided to expatriates to help them function effectively. Yet, because SIEs moved to the host country on their own initiative (Selmer et al., 2017), organizations might not have a systematic and comprehensive plan to provide them with these resources (McDonnell & Scullion, 2013). The organizations in which SIEs work might not have sufficient experience or knowledge to meet the resource needs of expatriates (Froese, 2012). Thus, SIEs, a specific type of expatriates, are likely to perceive a gap between what they expected from the organization in terms of resources and what they actually receive. HCNs, because they already live in the host country and possess the resources needed to navigate in this environment, are less likely to perceive this gap. It follows that SIEs should report stronger breach perceptions than HCNs.

  • Hypothesis 1a. SIEs will report more psychological contract breach than HCNs.

Organizational cynicism

Organizational cynicism reflects one’s negative attitude toward the organization (Dean et al., 1998). It comprises cognitions, affects, and behavioral tendencies. The cognitive component of organizational cynicism captures the idea that cynical employees think that their organization lacks integrity, sincerity, honesty, and fairness (Andersson, 1996; Dean et al., 1998; Wilkerson, Evans, & Davis, 2008). The affective component of organizational cynicism captures the idea that cynical employees experience negative affective states (e.g., frustration, anger, inequity) when thinking of their organization (Abraham, 2000; Andersson, 1996; Dean et al., 1998). The behavioral component of organizational cynicism reflects the fact that cynical employees engage in behaviors that are consistent with the above negative beliefs and affects (e.g., bad mouthing the organization; Andersson, 1996; Wilkerson et al., 2008). Researchers usually focus on one or more of the above components, depending on the goal of their study (e.g., Gkorezis, Georgiou, & Theodorou, 2018; Johnson & O'Leary-Kelly, 2003). In this paper, we focus on the affective component of organizational cynicism, which reflects employees’ emotional responses. This is because the affective component of organizational cynicism is most likely to be affected by resource depletion, as is illustrated in the literature on emotional exhaustion (Crawford, LePine, & Rich, 2010). Thus, it is particularly relevant within our COR theory framework.

We contend that SIEs are more likely to report organizational cynicism than HCNs. As previously explained, SIEs are likely to experience a higher level of resource depletion than HCNs; therefore, they need a strategy to deal with this lack of resources and to gain a sense of balance. Organizational cynicism, because it represents a self-defensive and low-investment coping strategy (Abraham, 2000; Byrne & Hochwarter, 2008; Hobfoll & Shirom, 2001), can help SIEs achieve this goal at a minimal cost in terms of resources. Indeed, organizational cynicism enables individuals to cope with unpleasant experiences without expending much personal resources by way of forming negative affects towards the organization (e.g., frustration, anger, and inequity). These negative affects create a ‘disconnect’ between individuals and the organization, which shield them against future disappointments (Byrne & Hochwarter, 2008). Using organizational cynicism, SIEs can therefore distance themselves from the organization while also gaining some psychological comfort in dealing with the challenges they face, without exerting the few resources they have left.Footnote 2 Stated otherwise, organizational cynicism helps SIEs to maintain a certain sense of balance while also avoiding further resource loss and, potentially, entering a resource loss spiral (Halbesleben et al., 2014; Hobfoll et al., 2018). Following these arguments, we hypothesize that SIEs will report more organizational cynicism than HCNs.

  • Hypothesis 1b. SIEs will report more organizational cynicism than HCNs.

Organizational commitment

Meyer and Allen’s (1991; see also Meyer & Herscovitch, 2001) three-component model is the most widely used model of commitment. It comprises affective commitment, i.e., employees’ emotional attachment to the organization, normative commitment, i.e., employees’ feeling of moral obligation toward the organization, and continuance commitment, i.e., employees’ sense that organizational membership provides valuable benefits, such as good job conditions.

Affective and normative commitment share some common grounds. To build and maintain affective and normative commitment, individuals need to invest resources (e.g., time and physical energy) in the organization. Indeed, affective commitment develops, among other things, through personal involvement in the organization while normative commitment instills reciprocation towards the organization (Meyer & Herscovitch, 2001). Furthermore, these commitments both lead individuals to demonstrate desirable and resource-consuming behavior such as citizenship behavior (Halbesleben, Harvey, & Bolino, 2009; Meyer et al., 2002). Since SIEs are more likely to be at risk of resource depletion, they should be reluctant to expend extra resources building and maintaining strong affective and normative commitment. Indeed, they should focus on protecting and preserving their resources rather than expending them (Halbesleben et al., 2014; Hobfoll et al., 2018). SIEs should therefore report lower levels of affective and normative commitment than HCNs.

In contrast with affective and normative commitment, continuance commitment focuses on the instrumental benefits that organizational membership provides (Meyer & Herscovitch, 2001). In this regard, one should note that SIEs and HCNs can receive similar salaries and fringe benefits (Dowling, Festing, & Engle, 2008).Footnote 3 Also, recall that money represents a type of energy resource (Hobfoll et al., 2018). As mentioned earlier, SIEs may face more challenges because they navigate in a foreign environment. They may struggle to refill their resource pool and are highly vulnerable to further loss (Halbesleben et al., 2014). As a result, they may perceive the pay package provided by the organization as insufficient while HCNs may see it as appropriate (Dowling et al., 2008; Haslberger & Vaiman, 2013). Because SIEs are more likely than HCNs to perceive an imbalance between the resources that they ought to have (here, the pay package) and the resources that they actually have, they should report lower continuance commitment than HCNs. Taken together, the above arguments regarding affective, normative, and continuance commitment lead to the following hypotheses.

  • Hypothesis 1c. SIEs will report less affective commitment than HCNs.

  • Hypothesis 1d. SIEs will report less normative commitment than HCNs.

  • Hypothesis 1e. SIEs will report less continuance commitment than HCNs.

Employee group membership (SIE vs. HCN) as a moderator

As argued above, heightened resource depletion among SIEs leads them to compare unfavorably to HCNs in terms of psychological contract breach, organizational cynicism, and affective, normative, and continuance commitment. Extending our COR theory reasoning, we now contend that the state of heightened resource depletion experienced by SIEs (vs. HCNs) will shape the relationships between these variables. Specifically, employee group membership (SIE vs. HCN) should moderate the relation of psychological contract breach to organizational commitment components, as mediated by organizational cynicism. The relations should be stronger among SIEs than HCNs. We develop our reasoning for this pattern of relations below.

Psychological contract breach is a negative, often surprising event that mobilizes individuals’ resources (Conway, Guest, & Trenberth, 2011; Kiazad et al., 2014; Lapointe et al., 2013). It triggers a cognitive process whereby employees try to make sense of what happened (Morrison amp; Robinson, 1997). As part of this cognitive sense-making process, employees try to understand the causes of the breach and assign responsibility for the breach (Morrison & Robinson, 1997; Parzefall, 2011; Wong & Weiner, 1981). Because the psychological contract is established between the organization and its employees and because SIEs are more likely to suffer from resource depletion than HCNs, SIEs should be more likely to blame the organization following a case of breach than HCNs (Morrison & Robinson, 1997). Indeed, individuals who are more depleted from their resources are more likely to assign the responsibility of negative events such as psychological contract breach to other parties involved (here, the organization) than to themselves (Mayo & Mallin, 2010; see also Taylor & Fiske, 1978). Moreover, previous research suggests that it is specifically when the organization is seen as being at fault (i.e., as being blameworthy) that breach makes employees feel disillusioned and unlikely to place their future confidence in the organization, hence cynical towards the organization (Andersson, 1996; Dean et al., 1998; Johnson & O'Leary-Kelly, 2003; Pfrombeck, Doden, Grote, & Feierabend, 2020). Thus, SIEs should more readily attribute breach to, for instance, a lack of integrity on the part of the organization, than HCNs. Such attributions should make psychological contract breach more likely to translate into organizational cynicism among SIEs (vs. HCNs). This leads to the following hypothesis.

  • Hypothesis 2: Employee group membership (SIE vs. HCN) will moderate the relationship between psychological contract breach and organizational cynicism, such that this relationship is stronger (i.e., more positive) among SIEs than among HCNs.

Through organizational cynicism, breach should also lead to lowered affective, normative, and continuance commitment among SIEs compared to HCNs. Indeed, previous research on organizational cynicism highlighted the fact that it is broad in scope and generalizes from one object to another (Johnson & O'Leary-Kelly, 2003). This suggests that organizational cynicism may represent a mechanism through which employees’ perception of psychological contract breach and the specific attributions that accompany it, come to affect their commitment to the organization. That is, the experience of frustration that is elicited by breach and is the essence of the affective component of organizational cynicism should convey the negative effect of breach on employees’ experience of their relationship with the organization, and, following our previous argument, this negative effect should be exacerbated among SIEs compared to HCNs. In other words, perceptions of psychological contract breach among SIEs should, through cynicism, lead to less affective, normative, and continuance commitment than among HCNs. This moderated mediation hypothesis extends on previous research showing that the affective component of organizational cynicism mediates the relationship between psychological contract breach and affective commitment (Johnson & O'Leary-Kelly, 2003). It is summarized below.

  • Hypothesis 3: Employee group membership (SIE vs. HCN) will moderate the indirect relationships between psychological contract breach and (a) affective commitment, (b) normative commitment, and (c) continuance commitment (as mediated by organizational cynicism), such that these indirect relationships will be stronger (i.e., more negative) among SIEs than among HCNs.

Method

Sample and procedure

This study was conducted in the transnational education sector. Participants were recruited among the Chinese and Malaysian operations of a Western higher education institution. This institution offers formal tertiary degree programs and courses, as well as locally recognized courses and programs, on a variety of topics, including foreign languages, business management, and international communication. The two overseas operations are similar in size. Although the local context is considered, the Western organization applies the same general human resource management policies in these two operations. Importantly, the two operations recruit global talents independently instead of using corporate expatriates from the headquarters, i.e., they recruit individuals who seek jobs in China and Malaysia on their own rather than taking in expatriates assigned by the headquarters to fill positions. They also recruit local talents. Thus, their employees can be categorized as SIEs and HCNs (Suutari, Brewster, Makela, Dickmann, & Tornikoski, 2018). Employees working in the two operations perform a variety of tasks, including teaching-related tasks, research-related tasks, and managerial and administrative tasks.

Following approval by the upper management of the two operations (i.e., in China and Malaysia), an email containing a link to the first survey (Time 1) was sent to all 1328 employees. The introductory page of the survey explained the purpose of the study and advised employees that participation was voluntary and that responses would be kept confidential. One year later, employees were invited by email to complete a second survey (Time 2). Psychological contract breach and sociodemographic information (i.e., group membership [SIE vs. HCN], age, gender, and organizational tenure) were assessed at Time 1, while organizational cynicism and organizational commitment components were measured at Time 2. This time lag enabled us to ensure that organizational cynicism and commitment had time to develop among participants, and that breach had time to show its effects on employees (see Chen & Shaffer, 2017, for a similar reasoning). Using a time-lagged design is also consistent with COR theory, which suggests that conditions that mobilize individuals’ resources (here, psychological contract breach) may take time to affect individuals (see Halbesleben et al., 2014, and Hobfoll et al., 2018, for discussions of COR theory and time).

A total of 464 employees provided full data for the first survey (218 employees from the Chinese operation and 246 employees from the Malaysian operation, for an overall response rate of 35%). Matched data at Time 2 were obtained for 156 employees (71 employees from the Chinese operation and 85 employees from the Malaysian operation, corresponding to 34% of Time 1 responses). Note that, although relatively modest, the response rate and final sample size are comparable to that of similar studies and reflect the difficulty of collecting this type of data (Bhaskar-Shrinivas, Harrison, Shaffer, & Luk, 2005; Tharenou, 2015; Yang, Wang, & Su, 2006). Furthermore, results of attrition analyses (Goodman & Blum, 1996) (available upon request) indicate that attrition is not predicted by the study variables. This suggests that data attrition across time was randomly distributed. In the overall sample, 42% of participants were SIEs, 51% were male, and 60% were 36 years old or older. In terms of tenure, 66% reported working for the organization (i.e., the overseas’ operation in China or Malaysia) for 5 years or less.

Measures

Because English is the working language of all employees surveyed, the original English versions of the scales were used in this study. A 5-point Likert-type scale ranging from 1 (strongly disagree) to 5 (strongly agree) was used for all items except organizational cynicism items, for which the response scale is described below. For all scales, we referred to the ‘organization’ using the name of the overseas’ operation in China (for employees based in China) or Malaysia (for employees based in Malaysia).

Psychological contract breach

Robinson and Morrison’s (2000) 5-item scale was used to measure psychological contract breach (e.g., ‘So far, [name of the overseas’ operation] has done an excellent job of fulfilling its promises to me’; reversed item; α = .91).

Organizational cynicism

As mentioned in the development of the study’s hypotheses, we focused on the affective component of organizational cynicism. This component was measured using an adapted version of the 10-item scale reported by Johnson and O’Leary-Kelly (Johnson & O'Leary-Kelly, 2003). Instead of using a semantic differential scale, we asked participants to report the extent to which they experienced a series of affective states (e.g. ‘anxious’, ‘tense’, or ‘reassured’ [reversed]) when thinking about their organization (i.e., the overseas’ operation). Responses were rated on a Likert-type scale ranging from 1 (very slightly or not at all) to 5 (extremely). This response scale was preferred over the semantic differential scale following a pre-test with a subsample of participants who reported that the original response scale was confusing. More specifically, we sent the original Johnson and O’Leary-Kelly’s (Johnson & O'Leary-Kelly, 2003) measure to a subset of participants (including both SIEs and HCNs) and asked them to provide their comments on the clarity of the instructions, response scale, and items. All of them made negative comments about the clarity of the semantic differential scale. We then replaced the semantic differential scale by a Likert-type scale, like other researchers using this scale did (e.g., Morf, Bakker, & Feierabend, 2019), and sent it back to the same subset of participants. Participants told us that this response format was much clearer. Thus, our decision to change the response scale was driven by the feedback we received from our target sample but is also consistent with recent research using this specific scale to measure the affective component of organizational cynicism. Note that, in Morf et al.’s (2019) case, just as in our case, the scale’s internal reliability remained very good (α = .92) and its relationships with other variables remained consistent with what could be expected based on the literature.

Organizational commitment

Affective, normative, and continuance commitment were measured using Bentein, Vandenberg, Vandenberghe, and Stinglhamber’s (2005) adapted version of Meyer, Allen, and Smith’s (1993) scales. Affective (e.g., ‘I feel like part of the family at [name of the overseas’ operation]’; α = .95) and normative (e.g., ‘I think I would be guilty if I left [name of the overseas’ operation] now’; α = .92) commitment scales comprised six items, while continuance commitment (e.g., ‘I would not leave [name of the overseas’ operation] because of what I would stand to lose’; α = .88) was assessed by three items. Note that, consistent with Powell and Meyer (2004), the measure of continuance commitment used in this study reflects commitment based on investments that would be sacrificed in case of ending the relationship with the organization.

Control variables

We controlled for gender, age and tenure, as previous research reported significant correlations between these demographics and one or more of the study’s variables (e.g., Bal, De Lange, Jansen, & Van Der Velde, 2008; Bentein et al., 2005; Byrne & Hochwarter, 2008; Dulac, Coyle-Shapiro, Henderson, & Wayne, 2008; Lorinkova & Perry, 2017; Meyer, Stanley, Herscovitch, & Topolnytsky, 2002; Vandenberghe, Panaccio, & Ben Ayed, 2011). We also controlled for the operation to which participants were affiliated (0 = China, 1 = Malaysia) to ensure that the findings do not reflect operation-specific effects. Controlling for this variable also helps to ensure that findings are not influenced by the national origin of HCNs, which, in this study, can be Chinese or Malaysian, and truly reflect differences based on employee group membership (i.e., SIE vs. HCN).

Results

Confirmatory factor analyses

Mplus 6.12 (Muthen & Muthen, 2011) and the maximum likelihood method of estimation were used for confirmatory factor analyses. The hypothesized 5-factor model yielded a reasonably good fit to the data: χ2(265) = 589.88, p < .001, root mean square error of approximation (RMSEA) = .09, comparative fit index (CFI) = .91, Tucker–Lewis index (TLI) = .90, standardized root mean square residual (SRMR) = .06. Although the value for the RMSEA was rather large (≥ .08), it should be interpreted with caution in light of the sample size. Indeed, the RMSEA tends to over-reject the true model (i.e., to be positively biased) in small samples (N ≤ 250; Hu & Bentler, 1999) and, hence, may be inflated in this study (Chen, Curran, Bollen, Kirby, & Paxton, 2008; Kenny, Kaniskan, & McCoach, 2015). The 5-factor model also proved superior to six 4-factor models combining (a) organizational cynicism with each commitment variable alternatively or (b) commitment variables on a two-by-two basis, a 3-factor model merging all commitment variables, a 2-factor model combining all Time 2 variables, and a 1-factor model (Δχ2 = 178.19 to 1656.24, Δdf = 4 to 10, p < .001). Thus, the study’s variables appear distinguishable.

Descriptive statistics and intercorrelations

Descriptive statistics and intercorrelations are presented in Table 1. All variables displayed good internal consistency (αs ≥ .88). Employee group membership (0 = HCN, 1 = SIE) was positively correlated with organizational cynicism (r = .39, p < .001) and negatively correlated with affective, normative, and continuance commitment (rs = −.38, −.32, and − .31, all p < .001). Employee group membership was unrelated to psychological contract breach (r = .03, ns). Breach was positively related to organizational cynicism (r = .36, p < .001), negatively related to affective and continuance commitment (r = −.28, p < .01, and r = −.27, p < .01, respectively), and unrelated to normative commitment (r = −.09, ns). Finally, organizational cynicism was negatively related to affective, normative, and continuance commitment (rs = −.64, −.40, and − .38, all p < .001).

Table 1 Descriptive statistics and intercorrelations for the study variables

Hypothesis tests

Hypotheses 1a-e

Hierarchical regression analysis was used to test Hypotheses 1a-e. Controls were entered in step 1, while employee group membership was entered as a dichotomous variable (0 = HCN, 1 = SIE) in step 2. As can be seen from Table 2, employee group membership positively predicted organizational cynicism (β = .47, p < .001) and negatively predicted affective, normative, and continuance commitment (βs = −.43, −.39, and − .36, all p < .01). The increment in variance explained by employee group membership was notable, varying from a low of 8% for continuance commitment to a high of 13% for organizational cynicism. Employee group membership did not significantly predict psychological contract breach (β = .12, ns). Thus, Hypotheses 1b-e are supported while Hypothesis 1a is not supported.

Table 2 Results of hierarchical regression analyses for psychological contract breach, organizational cynicism, and organizational commitment components

Hypothesis 2

A moderated hierarchical regression analysis was conducted to test Hypothesis 2. Controls were entered in step 1, breach (centered) and employee group membership (0 = HCN, 1 = SIE) were entered in step 2, and the breach × employee group membership interaction term was entered in step 3 (Aiken & West, 1991). As can be seen from Table 3, the breach × employee group membership interaction term was significant (β = .23, p < .05; see Fig. 1 for a graphical representation). It explained 2% of unique variance in organizational cynicism, which is noteworthy in regard to sample size and previous research on dichotomous moderators (Aguinis, Beaty, Boik, & Pierce, 2005). Simple slope analyses showed that breach was positively related to organizational cynicism among SIEs (t[144] = 4.14, p < .05) but not among HCNs (t[144] = −0.01, ns). Moreover, these regression lines differed significantly from one another (t[144] = 2.11, p < .05). Hypothesis 2 is therefore supported.

Table 3 Results of moderated multiple regression analysis for organizational cynicism
Fig. 1
figure1

Interaction between psychological contract breach and employee group membership in predicting organizational cynicism

Hypotheses 3a-c

Bootstrap analysis was used to test Hypotheses 3a-c. We estimated the conditional indirect effect of breach on affective, normative, and continuance commitment, respectively, using 5000 bootstrap resamples, and we tested its significance using bias-corrected confidence intervals (CIs; Preacher, Rucker, & Hayes, 2007). Hayes’s (2015) PROCESS macro was used to perform these analyses. Employee group membership (0 = HCN, 1 = SIE) was found to significantly moderate the indirect effects of breach on affective and continuance commitment, with CIs excluding zero (−.21, 95% CI [−.44, −.00], and − .11, 95% CI [−.25, −.01], respectively). Specifically, these effects were significantly negative among SIEs (−.31, 95% CI [−.48, −.17], and − .16, 95% CI [−.30, −.07], respectively) but non-significant among HCNs (−.10, 95% CI [−.29, .06], and − .05, 95% CI [−.20, .02], respectively). Of interest, the CI for the conditional indirect effect involving normative commitment also excluded zero (−.14, 95% CI [−.34, −.01]). This effect was significantly negative among SIEs (−.21, 95% CI = −.35, −.12) but non-significant among HCNs (−.07, 95% CI [−.21, .04]). Thus, the results of the bootstrap analysis suggested that organizational cynicism mediated the relation between psychological contract breach and affective, normative, and continuance commitment. However, recall that psychological contract breach did not significantly correlate with normative commitment (r = −.09, ns; Table 1). For this reason, we conservatively concluded that there was a significant indirect relationship between breach and normative commitment but not a mediated effect (see Holmbeck, 1997, for a similar reasoning, and MacKinnon, 2008, for a discussion). It follows that Hypotheses 3a and 3c are supported while Hypothesis 3b is conservatively not supported.Footnote 4

Discussion

Extending previous research (e.g., Hitotsuyanagi-Hansel et al., 2016; Makkonen, 2017), this study focused on the experience of both SIEs and HCNs. It aimed to provide a more complete and nuanced understanding of SIEs’ and HCNs’ experience by examining how these two groups of employees perceived and related to their organization. Relying on a sample of SIEs and HCNs from a Western organization’s operations in the Chinese and Malaysian transnational education sector, we showed that there were significant differences between SIEs and HCNs in terms of organizational cynicism and affective, normative, and continuance commitment. We also showed that employee group membership (i.e., SIE or HCN) moderated the relationship of psychological contract breach to organizational cynicism and, indirectly, of psychological contract breach to affective and continuance commitment. Findings, theoretical implications and future research directions are discussed below.

Summary of findings, theoretical implications and directions for future research

This study found that SIEs held significantly higher levels of organizational cynicism, and significantly lower levels of affective, normative, and continuance commitment than HCNs. These findings are consistent with COR theory and may be explained by resource-related differences between these employee groups in the context of the host country and the host organization (Hobfoll, 1989). Indeed, SIEs, whose resources (e.g., tolerance of ambiguity and physical energy) are highly solicited and who do not possess certain resources needed to function effectively in the host country (e.g., local language skills, local knowledge and social networks), are more likely to experience resource depletion (Lee, 2005; Suutari & Brewster, 2000). To protect and preserve the limited resources they possess, they should be more likely than HCNs to opt for low-resource investment coping strategies, hence show more organizational cynicism (Byrne & Hochwarter, 2008). They should also be less likely than HCNs to invest resources in their relationship with the organization and to view it as beneficial for them, hence show less affective, normative, and continuance commitment (Meyer & Herscovitch, 2001). Future research based on COR theory should seek to identify which critical resources may help SIEs develop more positive views of, and attitudes towards their organization. For example, McDonnell and Scullion (2013) suggest that social self-efficacy and achievement self-efficacy represent personal resources that SIEs can leverage to better adjust to the host country. It would therefore be interesting to examine if, through compensatory mechanisms, for instance, these resources help shield SIEs against organizational cynicism or build their organizational commitment. Researchers should explore these ideas in the future.

Contrary to our expectations, results suggest that SIEs and HCNs do not differ in the extent to which they perceive psychological contract breach. Still, results also show that SIEs reacted more negatively than HCNs to breach via increased organizational cynicism and, indirectly, lowered affective and continuance commitment. This pattern of findings indicates that the critical issue may not be the psychological contract of SIEs (vs. HCNs) or how breaches are perceived, but rather the process linking breach to its outcomes among these two groups of employees. For example, Tomprou, Rousseau, and Hansen’s (2015) post-violation model suggests that the ways in which individuals cope with breach affects its relationship to work outcomes and that strategies based on withdrawal (e.g., disengagement) are particularly conducive to deleterious outcomes. Because such strategies are not costly in the short-term and involve distancing oneself from the perceived threat (Suls & Fletcher, 1985), they should, consistent with COR theory principles (Hobfoll et al., 2018), be more prevalent among SIEs than HCNs. Future research should explore this avenue.

In this study, we conservatively concluded that there was an indirect relationship between psychological contract breach and normative commitment but not a mediated effect, since the direct relationship between breach and normative commitment was non-significant. As suggested by Holmbeck (1997, p. 603), ‘the mediator does not (and cannot) significantly “account” for the predictor-criterion relationship [in such a case] because there was not a significant relation between the predictor and the criterion in the first place’. However, MacKinnon (MacKinnon, 2008; see also Hayes, 2017) argued that mediation can exist even when the overall relationship between a predictor and a criterion is non-significant. That would be the case when, under certain circumstances, the test of the mediated effect has more statistical power than the test of the overall relationship between the predictor and the criterion (MacKinnon, 2008). By extension, moderated mediation may also exist under some circumstances. We recommend that future research continues to explore the breach-normative commitment relationship to draw firmer conclusions about the pattern of the relationship between these two variables as well as the role played by organizational cynicism and other potential mediators.

Implications for practice

This study has implications for multinational organizations and organizations that aim to attract and retain global talents. Specifically, to effectively manage different groups of employees (i.e. HCNs vs. SIEs), organizations need to address the resource challenges that they respectively face. Our research suggests that SIEs are comparatively at a higher risk of resource depletion. As shown by the findings, this might make SIEs more likely to report organizational cynicism, and less likely to report affective, normative, and continuance commitment than HCNs. SIEs might also be more likely than HCNs to become cynical toward the organization and, indirectly, to show less affective and continuance commitment toward the organization, as a result of psychological contract breach. Thus, findings suggest that SIEs primarily need to access or develop appropriate resources, i.e., resources that will help them adjust and that will promote the development of positive perceptions and attitudes among them. Given that social support and positive work relationships contribute to buffer the deleterious effects of psychological contract breach, reduce organizational cynicism, promote organizational commitment, and help with expatriates’ overall adjustment (e.g., Banks et al., 2014; Caligiuri & Lazarova, 2002; Dulac et al., 2008; Morf et al., 2019; see also Hobfoll, Freedy, Lane, & Geller, 1990, for a discussion of COR theory and social support), organizations should aim to foster the development of supportive relationships between SIEs and other employees. For instance, to develop local network resources, gatherings could be organized between SIEs and other employees, including managers, to get them the opportunity to know each other, and interact with one another. Mentoring programs could also be established to help SIEs develop important personal resources such as self-efficacy, which is known to promote, among other things, organizational commitment and SIEs’ adjustment (Lauring & Selmer, 2014; Pillai & Williams, 2004). Regarding HCNs, our findings suggest that they compare favorably to SIEs. Yet, this does not mean that providing appropriate resources to HCNs is not necessary. As countries such as China and Malaysia are becoming more advanced economically, HCNs are likely to be employed in increasingly important roles for which expatriates would have been hired in the past (Harvey et al., 2001; Toh & DeNisi, 2007). Thus, organizations should proactively seek to do more for HCNs. Among other things, organizations should provide HCNs with career-related resources (e.g., career support and career mentoring or skill development programs), since these resources are likely to sustain positive perceptions and attitudes among them (Toh & DeNisi, 2003).

Limitations

First, self-reports were used, and data for organizational cynicism and commitment were gathered at the same point in time, which is a limitation (Cascio, 2012). However, because all variables capture perceptual and attitudinal constructs, collecting data from third parties does not seem appropriate. Moreover, the use of a time-lagged design contributes to alleviate concerns of common method variance. Second, no detailed sociodemographic information about the participants was collected due to confidentiality constraints imposed by the participating overseas operations. For instance, we were not allowed to collect information about the country of origin of SIEs. This means that we cannot say in which proportions our sample of SIEs include parent-country nationals (PCNs) vs. third country nationals (TCNs). Because these two subgroups might differ, because most research on expatriates reports the nationality of participants (Olsen & Martins, 2009) and because perceptions and attitudes can be shaped by socio-cultural backgrounds (Waxin, 2004), future research should control for this variable. Other variables that might shape SIEs’ experience such as their motivations to work in the host country or their previous work experience should also be considered as controls in future research. In the same vein, other demographics (e.g., ethnicity, organizational rank, educational level) should be included in future research. Third, due to the small sample size, we decided not to perform country comparisons in testing our main hypotheses. We controlled for location to ensure that findings do not reflect differences between countries. We also reported, in a footnote, the results of the analyses conducted separately for the Chinese and Malaysian operations. The minor differences with the results of analyses conducted on the whole sample likely reflect a lack of statistical power. Note that the above limitations about the sample are somewhat mitigated by the fact that the theoretical framework used to develop hypotheses (i.e., COR theory) does not depend on national origin but rather on employees’ group membership (i.e., SIE vs. HCN). Fourth, we acknowledge that SIEs and HCNs do not represent the only groups of employees within organizations, which can be much more diverse. Organizations can also employ, for example, corporate expatriates. Although corporate expatriates did not represent a significant group of employees in the overseas operations we collaborated with, we encourage researchers to examine, in the future, differences between corporate expatriates, SIEs, HCNs, and other significant groups. Finally, we acknowledge that the modest sample size and the fact that participants were from two Asian operations of a Western organization in the transnational education sector raises questions about generalizability. Yet, it should be noted that results are rather conservative since the small sample size makes it more difficult to attain statistical significance. We also believe that the insights gained about SIEs and HCNs in this study may apply to other industries and other developing countries. In relation to the last point, we need to point out that our research follows the tradition of the SIE literature, which implicitly focuses on individuals who relocated from developed countries to developing countries and who do not intend to live permanently in the host country (Al Ariss, 2013). Our findings might not be generalizable to individuals who relocated from developing countries to developed countries, which are often researched by the migrant literature (Al Ariss, 2013). Replication of the findings in other samples and contexts is required.

Conclusion

This study sought to better understand the experience of SIEs vs. HCNs by relying on COR theory as a theoretical framework. We argued that, as an indication that SIEs experience more resource depletion than HCNs, SIEs would demonstrate less favorable perceptions of, and attitudes toward their organization than HCNs. Findings from a two-wave study conducted with a sample of SIEs and HCNs employed in the Chinese and Malaysian transnational education sector generally supported this proposition. SIEs reported more organizational cynicism and less affective, normative, and continuance commitment than HCNs. The indirect relation between psychological contract breach and affective and continuance commitment was also stronger among SIEs than HCNs. We hope that this study will generate interest for the study of diverse groups of employees, and help practitioners acknowledge the importance of tailoring practices to the groups’ particular needs.

Notes

  1. 1.

    In this paper, we will use the word ‘group’ to refer to employees from the host country (i.e., HCNs) versus employees who do not originate from the host country but moved in the host country by themselves for employment purposes and without the intention of settling permanently in the host country (SIEs) (see Altman & Baruch, 2013; Selmer et al., 2017).

  2. 2.

    For research on the use of self-defensive strategies among expatriates, see Richards (1996) and Shaffer and Harrison (1998).

  3. 3.

    Note that the situation is different for assigned corporate expatriates, who receive substantially more generous pay packages than HCNs and SIEs (Dowling et al., 2008).

  4. 4.

    We also conducted the hypothesis tests separately for the Chinese operation and the Malaysian operation. The major difference between the results of these analyses and those obtained on the entire sample (where we controlled for the operation SIEs and HCNs were affiliated with, i.e., the Chinese operation vs. the Malaysian operation) is that, for the Chinese subsample, employee group membership (SIE vs. HCN) did not significantly predict continuance commitment (β = -.22, ns), did not significantly interact with psychological contract breach to predict organizational cynicism (β = .23, ns), and did not significantly moderate the indirect relationships between psychological contract breach and affective, normative, and continuance commitment, as mediated by organizational cynicism (-.20, 95% CI [-.57, .13]; -.10, 95% CI [-.37, .04]; -.10, 95% CI [-.38, .04]). Given the small size of the Chinese operation (n = 71), these non-significant results most likely reflect a lack of statistical power. This is particularly likely for the hypothesis involving moderation effects since these effects are known to be difficult to detect (Aguinis et al., 2005).

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Lapointe, É., Vandenberghe, C. & Fan, S.X. Psychological contract breach and organizational cynicism and commitment among self-initiated expatriates vs. host country nationals in the Chinese and Malaysian transnational education sector. Asia Pac J Manag (2020). https://doi.org/10.1007/s10490-020-09729-7

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Keywords

  • Self-initiated expatriates
  • Host country nationals
  • Psychological contract breach
  • Organizational cynicism
  • Organizational commitment
  • China and Malaysia