A psychological contract is a persons perception regarding the reciprocal
exchange relationship that exists between an employee and organization
Generalization of findings for psychological contracts based on data from Western countries is questionable, particularly in societies like India that are undergoing profound transitions in institutional rules, social norms and values. Since 1991, India has undergone a significant techno-economic transformation, precipitating many changes in employee organization relationships (DCruz and Bharat 2001). Post-liberalization, Indian companies faced intense competition in terms of product quality and price. To cut costs, organizations withdrew many benefits such as job security, retirement provisions and time-based career growth. Contemporaneous to changes in employment relationships was a noticeable presence of women in professional roles, resulting in a steady increase of working couples. Managing work and family obligations concurrently (Shah 2000) altered employee expectations such as work-life balance and career growth, resulting in fragile and individualized employee organization relationships. Increased globalization, changing demography and a need to manage both employees and businesses resulted in practitioners and academicians investing greater time, resources and intellect to understanding employee organization relationships in India. Although Indian managers are exposed to foreign management styles and influences, it is not known whether employee expectations and their reactions will be similar in India. Hofstede (1991) argues that eastern and Western societies differ among six cultural dimensions: power distance, individualism versus collectivism, uncertainty avoidance, masculinity versus femininity, long- versus short-term orientation and indulgence versus restraint (Hofstede, Hofstede and Minkov 2010). Research suggests the most evident differences between Asian and Western European/Anglo countries relate to individualism versus collectivism and power distance, both of which have profound influences on employee organization relationships. Collectivism is the degree to which individuals base identities on group membership (Hofstede 1991). India is a collectivist country in which relationships include a strong normative component; protecting relationships is far more important than retaliating in response to violations of fairness norms (Hofstede 1991).When treated disrespectfully or in cases of perceived inequity, individuals in collectivist cultures maintain harmonious relationships, even at personal costs (Markus and Kitayama 1991). Erdogan and Liden (2006) found that when people in these cultures experience inequity, they find covert ways such as ingratiation to prevent similar occurrences. India also has a high power distance culture, and inequality in the distribution of power is both approved and un-resented. Indians are submissive and extremely status conscious, perceiving comfort with both personal ties to supervisors and paternalistic treatment. Societal values of PCB Perceived Organization Support Leader Member Exchange TRUST Affective commitment Intention to quit Innovative work Behaviour Figure 1. Proposed model of psychological contract breach. 1486 U.A. Agarwal and S. Bhargava personalized relationships, dependence proneness and sneh- shraddha (i.e. a superiors affection for subordinates and a subordinates deference to the superior) encourage Indians to maintain amicable relationships in personal and professional lives, especially regarding elders and people in authority (Sinha and Sinha 1990). Given cultural orientations of collectivism and high power distance, this study examines expectations of Indian managers using psychological contracts as a framework. This paper explores the influence of context (i.e. organization and supervisor relationship quality and trust) on psychological contracts, uncovering similarities in the literature regarding psychological contracts in comparison to what Western literature suggests. relationship between POS and psychological contracts, Aselage and Eisenberger (2003) propose that high-quality POS (1) makes employees less likely to notice minor contract breaches and (2) makes employees who notice a breach more willing to give the organization the benefit of the doubt. For example, they perceive the breach as a temporary or unimportant occurrence rather than a breach. Individuals enter relationships with organizations to maximize benefits (Blau 1964). When one party provides something to another, the first party expects reciprocation. NOR is a guarantee that an individual will be paid back in a currency they value. If one party does not reciprocate, an imbalance is created between the contributions of the two parties, and the relationship dissolves. Perceived breach is a signal of imbalance in the relationship (Morrison and Robinson 1997), serving as a shock that causes employees to reassess their basic commitment to the organization (Lee and Mitchell 1994, p. 61), resulting in negative consequences and creating inequality in employment relationships. Results suggest that although employees in collectivist cultures (e.g. India) ascribe great importance to people in authority (Sinha and Sinha 1990; Agarwal, Datta, Blake-Beard and Bhargava 2012), they are vulnerable to incidences of breach and react with lower commitment and IWBs, and high intention to quit. Perhaps the economic liberalization of the country combined with a strong Western-style education, increasing ease of access to technology, and various forms of media led to enhanced exposure to Western ideals. Employees educated and socialized with Western values possess a broader worldview. These new genres of employees, though collectivist, possess strands of thoughts, feelings and actions that reflect underlying individualism; they not only nourish Western values of achievement and advancement, but also demand fairness and equity.