The term psychological contract (Argy ris, 1960; Schein, 1965) describes a set of individual perceptions concerning the terms of the exchange relationship between individuals and their organizations. For example, it may include beliefs about performance requirements, job security, training, compensation, and career development (Rousseau, 1989), but is not limited to these dimensions. Psychological contracts manifest themselves in individuals' mental representations (schemes) of their relationship to their organization (Rousseau, 1998). Because psychological contracts are mental representations, having to do with mutual obligations, they help employees make sense out of a complex employment relationship (Shore & Te trick, 1994).

Recent As a determinant of social exchange in general, research has noted that culture is a primary component in choices people make as to how exchanges occur (Fiske, 1991). The transactional versus relational contract Individualism and collectivism Motives that are linked to the self assume different forms depending on the concept of self being enhanced or verified (Markus & Kitayama, 1991). For example, for those with independent (separate) selves, feeling good about oneself means uniqueness and expression of inner attributes, internal needs, and rights, and exhibition of the capacity to withstand undue social pressure (Janis & Mann, 1977). Those with interdependent (Connected) selves derive a positive self-image from belonging, fitting in, occupying one's proper place, maintaining harmony, receptivity to others, and restraint of personal needs or desires (Markus & Kitayama, 1991). In sum, we propose that the mechanisms of cultural influence can be described as falling into two related domains, cognitive and motivational.

The cognitive domain involves cultural variation in perception and interpretation of signals from the organization and in behavioral scripts associated with an individual's relationship to the organization. The motivational domain involves how culturally different self-concepts influence what is desirable and thus, varying forces on preferred outcomes and ways of behaving (Fiske & Taylor, 1991). Figure 1 shows a heuristic conceptualization of how these two mechanisms influence the formation of the psychological contract, perception of and attribution for contract violations, and responses to these violations. Cultural Differences in Psychological Contract Formation Based on the above conceptualizations of culture, its cognitive and motivational influences, and the psychological contract, we propose that the cultural profile of individuals' influences the form that the psychological contract takes (dominated by a transactional or relational orientation). First, through social cognitive processes such as attention and encoding, systematic cultural differences exist in the interpretation culturally different individuals have for the same organizational messages regarding the exchange relationship.

Second, based on variation in exchange relationship motives, systematic differences exist in the extent to which individuals attempt to formulate their contracts with a transactional or relational orientation. Each of these mechanisms is discussed ahead. Proposition 1: The cultural profile of individuals will influence formation of the psychological contract towards transactional or relational forms through cognitive processing based on existing cognitive structures. Proposition 1 a: Selective attention and encoding, storage, and retrieval biases will influence individualists to interpret organizational messages to be transactional, and collectivists relational, in nature. Proposition 1 b: Selective attention will influence the extent to which message context, or non-explicit communication, influences the formation of the psychological contract, such that collectivists are more likely to attend to message context than individualists. Proposition 2: Individualist cultural values will motivate individuals to form a more transactional psychological contract to enhance the independent self, whereas collectivist cultural values will influence individuals to form a more relational contract to enhance the interdependent self and to satisfy related motives toward consensus.

Proposition 3: The cultural profile of individuals will influence the extent to which unmet obligations are perceived as violations of the psychological contract, based on differences in selective attention, encoding, and storage of communication regarding unmet obligations. Proposition 3 a: Individualists are more likely to perceive unmet transactional obligations as violations, whereas collectivists are more likely to perceive unmet relational obligations as violations. Proposition 3 b: Collectivists will have a higher overall threshold for the perception of a psychological contract violation than will individualists. Proposition 4: Individualists are more likely to attribute perceived unmet expectations to factors within organizational control than are collectivists. Proposition 5: Collectivists, based on motives to maintain their self-enhancing relationship with the organization, will experience greater stress, tension, and internal conflict when experiencing a breach than will individualists. Proposition 6: The cultural profile of individuals will influence the content of behavioral scripts retrieved and enacted in response to a violation of the psychological contract.

Proposition 6 a: Individualists are more likely to respond to violations in the psychological contract by retrieving and enacting voice and neglect scripts than collectivists. Proposition 6 b: Collectivists are more likely to respond to violations in the psychological contract by retrieving and enacting loyalty and exit scripts than individualists. Proposition 7: The cultural profile of individuals will have both direct and moderating effects on responses to violations of the psychological contract through social exchange motives. Proposition 7 a: Individualists are more likely to prefer and respond with voice to psychological contract violations than collectivists.

Proposition 7 b: Collectivists are more likely to prefer and respond with loyalty to psychological contract violations than individualists. Proposition 7 c: Quality of job alternatives will have a greater influence on response behavior for individualists than for collectivists, such that (ceteris paribus) in the case of high-quality job alternatives individualists will be more likely to prefer and choose exit in response to psychological contract violations than will collectivists. Contributions and Implications Psychological contract theory is fundamentally concerned with employee willingness to rely on employer promises, and to feel obligated in return. The psychological contract is a perceptual process based in social cognition and social exchange motives. In this article, we draw attention to the fact that systematic variation in the cultural orientation of individuals influences the conception of the psychological contract, how such conceptions form, how violations of the contract are perceived, and what dominant responses to violations might exist.

The approach we have identified provides both a framework for understanding the effects of culture and an agenda for future research. Recent research (Rousseau & Schalk, 2000) has documented the differences that exist in various societies in the psychological contract. In this article we identify both cognitive and motivational mechanisms through which a fundamental feature of society, its culture, manifests its influence. Cognitive influences include selective attention to organizational information, differences in the encoding of similar organizational messages, bias in attribution regarding violation controllability, and the holding and re of culturally based behavioral scripts in response to violations. Social exchange motives are based on preferences that culturally different individuals have that are regulated by self-concept enhancement.

They result in differences in the form (transactional versus relational) the psychological contract takes and differences in the extent to which conceptions of the psychological contract are shared. Motives also affect psychological responses to breach of contract, the extent to which individuals wish to maintain a connection with the organization in the context of their response to contract violations, and in different evaluations of situational factors in response to contract violations. One strength of our approach is that it improves the cross-cultural of the literature on the psychological contract without undermining its theoretical base. Our focus on cognitive processes and social exchange motives defines the influence of culture as occurring through identifiable psychological processes.

Future research can build on this development in several ways. First, we provide the opportunity for empirical verification of the proposed general effects of the cultural profiles of individuals. We chose to emphasize the process mechanisms whereby individual cultural profiles have their effects, and we argue that these mechanisms can be extended to a variety of cultural content. Our discussion of culture's influence on the psychological contract gives examples based on the cultural dimensions of collectivism and individualism as a parsimonious approach to categorizing culture. While these dimensions are well documented and powerful in predicting culture's influence, future research should also examine a wider array of cultural variation (e. g.

, Earley & Gibson, 1998). For example, interesting hypotheses can be generated based on the cultural dimension of power distance (Hofstede, 1980), or verticality (Tri andis, 1995). McLean Parks and Smith (1998) consider symmetric (horizontal) and asymmetric (vertical) power distributions combined with transactional and relational components of the psychological contract. When power relationships are asymmetric, additional contract types such as custodial (relational) and exploitive (transactional) can also be identified.

Research on communal relationship orientations has shown expectations by subordinates of custodial relationships in some collectivist groups (Chen, Lee-Chai, & B argh, 2001) that are consistent with McLean Parks and smith's framework. An additional link may be made to research in strategic human resource management. Over-investment strategies may resemble custodial relationships, in which organizations provide employment security, but have fairly narrow requirements of employees, and under-investment may be symptomatic of exploitive relationships, in which more is expected of employees, but the organization provides little (Tsui, Pearce, Porter, & Tripoli, 1997). Various types of human resource strategies used in different cultures should be differentially effective, depending on the employment expectations of the workforce (Ferris et al.

, 1998). At the individual level, while we make predictions regarding the effect of culture on behavioral responses designed to re-establish balance in the exchange relationship, it is also possible to envision cultural differences in the physical and mental health outcomes of psychological contract violations. Second, we ground our theoretical predictions in empirical results from literature on culture, the psychological contract, social cognition, and social exchange. However, there may be other psychological processes that are also plausible.

Empirical tests of the proposed relationships would identify strengths and weaknesses of our individual-level theory. Future research could also benefit by examining the individual mechanisms proposed in the context of differing societal- and firm-level constraints. Features of particular firms within a society shape the extent to which the cultural profiles of individuals are influential, for example, how the absence of the enforcement of promises affects individuals' motives for forming transactional versus relational contracts. Third, while recognizing the dynamic nature of the psychological contract, our approach does not capture all the complexity associated with how psychological contracts change over time. We can envision numerous feedback loops and interactions that iterate between elements, such as between perceived contract violations and the subsequent form of the contract.

For example, violation of a relational contract may suggest that future relationships will be more transactional in some cultures, but not in others. One issue related to the evolution of the psychological contract over time is whether, and how, the organization becomes defined by the individual as a part of the in-group. Clearly, this definition of social identity is central to how culturally different individuals will interpret and respond to organizational situations. Finally, the approach presented here lays groundwork for examination of the psychological contract in cross-cultural interactions.

In our discussion, the extent of cultural differences of the parties to the psychological contract was not emphasized. However, because of globalization, it is increasingly likely that organizational agents can represent one cultural profile and employees another. The different parties to the contract have different mental representations (culturally based schemes) about the exchange between them, what constitutes a violation of the terms of the exchange, and what are appropriate responses to a violation. Both the specifics of the cultural profiles represented in the exchange and the degree of difference between them should influence interpretation of information about psychological contract formation, perceptions of violations, and the extent to which responses to violations follow culturally based scripts (see Yan, Zhu, & Hall, 2002, for a discussion of issues in the mismatch of expatriate and organizational expectations in the context of psychological contracts). Theoretical elaborations proposed here also have implications for both employees and organizational agents regarding improvement of cross-cultural understanding. Both parties can begin by recognizing that in cross-cultural exchange relationships, systematic differences in cognition and motivation will affect the extent to which terms of the relationships are clearly understood.

Some vagueness and ambiguity will always exist in cross-cultural relationships. Explicit discussions clarifying the terms of the employee-firm relationship help to minimize misunderstandings and inadvertent violations of the psychological contract. As suggested by Morrison and Robinson (1997), one of the best ways to reduce such violations is through better management of the contract formation process. This may be especially true when the parties to the exchange relationship are culturally different. Finally, organizational agents cannot assume culturally different employees' responses to organizational messages are consistent with how they themselves would react in similar circumstances. Normative behavior in a particular culture, as well as the differing value that culturally different individuals place on situational contingencies, can affect behavioral responses to organizational actions.

Continuous dialog and feedback are necessary to insure more accurate perceptions and isomorphic attributions, and can contribute to the development of multiple methods of meeting diverse social exchange motives. Rousseau, D. M. , & Schalk, R. (Eds. ) (2000).

Psychological contracts in employment: Cross-national perspectives. Thousand Oaks, CA: Sage.