Antecedents and outcomes of psychological contract breach: Coping behaviour as a mediator of the effects of feelings of violation related to service outcomes

Psychological contract is “an individual’s relational schema regarding the rules and conditions of the resource exchange between the organization and the person” (Guo et al., 2015, p.4). When people think they are not getting what they expect from a contractual agreement, psychological contract breach occurs (Morrison and Robinson, 1997). Driven by lack of research investigating the antecedents and outcomes of psychological contract breach within service encounters, this study extends existing research on psychological contract theory (Rousseau, 1995) and service marketing literature using the cognitive appraisal theory to investigate antecedents and outcomes of psychological contract breach within a service setting. The study examines a comprehensive model that analyses cognitive appraisal and emotional elicitation to further contribute to service marketing literature. An examination of the direct effects of feelings of violation on service outcomes precludes an understanding of people’s responses to violation-inducing service incidents. Building upon stress-and-coping theory (Folkman and Lazarus, 1984), this study also examines three consumer coping strategies as mediators of violation on consumer’s affective states and behavioural outcomes. Therefore, this study aims to build on prior marketing literature research, which has focused narrowly on psychological contract fulfilment and violation, to expand service failure literature by examining antecedents and outcomes of perceived psychological contract breach in a more holistic view. Using a survey-based approach, 779 usable responses were collected using an online panel by targeting mobile phone users in the USA. Subsequently, structural equation modelling procedures were followed using AMOS23 to analyse the data. The findings reveal that psychological contract breach can be a source of service failure during service encounters and the perception of contract breach within service encounter failures lead to negative outcomes. Service managers should ask customers to provide feedback that tailored to capture psychological contract issues. Customer active and expressive coping strategies mediate effects of violation on service outcomes. Hence, when customers perceive a contract breach, service managers should encourage customers to use active coping to fix the problem. Otherwise, customers may cope by expressing their feelings of violation to others or deny the failure episode, both of which lead to unfavourable service outcomes for the firm