Understanding psychological contract breach in the customer-firm relationship

Because of great variation in service performance, service providers cannot avoid situations of service failures, in which customers feel that their consumption goals for services have not been achieved. Information about service attributes obtained through personal selling or online customer reviews may create different levels of psychological contract in customers' minds and result in various customer reactions to service failure. This dissertation explores antecedents, consequences and the psychological process of psychological contract breach through role-playing activities using scenarios in three field experiments. Study 1 explored the role of psychological contract breach on the evolution of customers' feelings of betrayal, anger and evaluation of partner quality. Results of a 2 (high vs. low psychological contract) x 2 (high vs. low service failure) between-subject factorial experiment indicated that psychological contract breach mediated the effect of psychological contract and service failure on feelings of betrayal and anger; participants in the condition of high psychological contract and high service failure reported higher levels of psychological contract breach than did those in the other three conditions; psychological contract breach raised feelings of betrayal and anger and reduced customers' evaluation of the service providers' partner quality. Study 2a suggested that source-of-fault information (source of the mistake directly related to the failure) was one situational antecedent of psychological contract breach. Results of a 2 (high vs. low psychological contract) x 2 (customer fault vs. provider fault) between-subject factorial experiment suggested that participants in the condition of high psychological contract and the provider fault reported higher levels of breach than did those in the other three conditions. Study 2b suggested that social obligation bias was a personal antecedent of psychological contract breach. Results of a 2 (customer fault vs. provider fault) x 2 (self-obligation focus vs. others-obligation focus) between-subject factorial experiment indicated that participants in the condition of provider fault and others-obligation focus attributed more controllability to the service provider than did those in the other three conditions; attribution of controllability positively influenced psychological contract breach and mediated the influence of source of fault on psychological contract breach. Study 3 explored a situational factor, compensation relevance (i.e., compensation that is relevant to the consumption goal and promotes a perception of fairness), and a personal factor, justice salience (customers' accessibility to their beliefs in a just world), which could influence recovery from negative outcomes brought about by psychological contract breach. Results of a 2 (high vs. relevant compensation) x 2 (high vs. low justice salience) between-subject factorial experiment indicated that participants in the condition of high relevant compensation and low justice salience perceived higher levels of fairness than did those in the other three conditions; perception of fairness reduced levels of feelings of betrayal and anger and raised evaluation of partner quality; and perception of fairness mediated the interaction effect of compensation relevance and justice salience on feelings of betrayal, anger and partner quality.