The impact of organizational practices on formation and development of psychological contract: expatriates' perception-based view

Abstract

PurposeBased on signaling and motivation theories, this study investigates the impact of organizational practices on the formation and development of expatriates' psychological contracts in three stages. Stage 1: the impact of the selection process on psychological contract formation with the mediating role of perceived organizational justice. Stage 2: the impact of pre-departure training on psychological contract formation with the mediating role of individual absorptive capacity. Stage 3: the impact of perceived organizational support on psychological contract development with the mediating role of expatriates' adjustment.Design/methodology/approachBy using a purposive sampling technique, the respondents were approached via e-mails and personal visits in three waves, each wave had 45 days gap. After three waves, a total of 402 complete questionnaires were received back. To test the hypotheses, the partial least squares-based structural equation modeling (PLS-SEM) approach was used.FindingsStage 1: effective selection process and perceived organizational justice positively support the psychological contract formation. Stage 2: the pre-departure training and individual absorptive capacity have a positive influence on the psychological contract formation of expatriates. Stage 3: the perceived organizational support and psychological contract development have a positive direct association. However, expatriates' adjustment does not mediate the association between perceived organizational support and the psychological contract development of expatriates.Practical implicationsThe implications of this study are supportive to the organizations that deal with expatriates. The organizations should adopt practices (i.e. effective selection process, pre-departure training and perceived organizational support) for effective formation of psychological contract formation and development. In addition, perceived organizational justice, individual absorptive capacity and expatriates' adjustment can help out in the formation and development of the psychological contract of expatriates.Originality/valueThis study highlights the role of organizational best practices in the formation and development of the psychological contract of expatriates.