Psychological Contract Violation: A Bridge between Unethical Behavior and Trust

Abstract

Yuris Danilwan, Dewi Budhiartini Yuli Isnaini, Ikbar Pratama.

Formation of intentional relationships which increase the organizational restrictions has confirmed a challenging struggle for managers. The corporation survey of supply chain revealed that the offender of firm communicates the most undersized area of their supply chain. There are some other problems faced by an organization, including the problems of trust, psychological contracts and the ethics. All these problems are considered as main features of buyer and seller relationships and provide a basis of present study. Generally, there are some incidences in the organization for the study that are unwritten but exciting on the significant performance variables. Organization’s commitment regarding the contentment of their promises, known as psychological contract, is one of the classifications that should be examined. Therefore, present study attempts to investigate the mediating role of experience of psychological contract violation (EPCV) on the relationship between unethical behavior (UEB) and trust (TRS). For this purpose, study utilized the data of 179 operational managers of manufacturing industry of Thailand. Study applies structural equational modeling (SEM) approach for investigating the empirical results. Study used measurement model for testing the reliability and validity of each item and construct. Structural model is used for testing the proposed hypotheses of the study. Path analysis is conducted for examining the direct and indirect effects of the variables. Results of the study shows that EPCV significantly mediates the negative relationship between UEB and TRS.