What happens abroad stays abroad? Expatriates’ Psychological Contracts during International Assignments

• Applicant: Professor Dr. Tassilo Schuster
• Subject Area: Accounting and Finance
• Term: since 2020
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 447585650

Expatriates play a crucial role for international companies as they are irreplaceable for entering foreign markets, implementing strategies, and transferring knowledge across borders. Managing international assignments, however, is a challenging and costly HR practice. One of its challenges involves expatriate expectations, a topic that has increasingly received attention in research on psychological contracts (PCs) in international settings. Managing expatriate expectations is much more complex compared to domestic employee-employer relationships (i.e. single-agency settings) as expatriates execute tasks for two entities at the same time - the parent company and the foreign subsidiary (i.e. multiple-agency settings). As a result, they form two PCs and either the parent company or the subsidiary, or both, can be responsible for breaching the expatriate’s PC.Even though the severe effects of PCs in single-agency settings have been the subject of considerable research, their effects are largely unknown in multiple-agency settings. Also expatriation research, where multiple-foci exchange relationships are an undeniable fact, kept on conceptualizing PCs in the same way as in the domestic context. This is problematic as a simple transfer of the logic of single-agency PCs to the expatriation context creates an inadequate picture, in which fundamental differences are overlooked. One oversight is the potential for displacing negative responses when one party fails to fulfill the PC upon another party not responsible for it. The possibility that responses spill over to a seemingly innocent third party challenges our current viewpoint and the prevailing doctrine of reciprocity. Hence, we have an imperfect understanding of the mechanisms and conditions when and why such spillover effects occur.To do justice to this novel perspective, this project will explore expatriates’ PCs from a multiple-agency perspective. Drawing on PC and reciprocity theory, it will develop and test theoretical mechanisms that will explain when and why expatriates displace their negative responses to seemingly innocent third parties. This overarching research goal leads to several subordinate objectives: First, the project will explore the formation process of expatriates’ PCs to disentangle expatriates’ expectations toward the parent company and the subsidiary. Second, the project will map boundary conditions that influence the PC to understand the mechanisms of spillover effects. Finally, the project will consider actions of the organizational actors as they may buffer adverse consequences of broken PCs and may even prevent spillover effects.To realize these goals, a mixed method research design will be applied, in which data from interviews, surveys and experiments will be collected and analyzed. By combining PC theory with the logics of indirect reciprocity in this novel context, the project will provide central insights into the underlying mechanisms for these effects.

• DFG Programme: Research Grants
• International Connection: USA
• Cooperation Partner: Professorin Denise M. Rousseau, Ph.D.