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Junping Huang

DBA Graduate - 2017

Thesis title

The influence of psychological contract breach on China's SOE employees' work behavior : a study based on one of Chinese major state-owned commercial banks.

Supervisor(s)

Shanmin Li

Junping Huang is an experienced banker in China, and presently, he is the general manager of the Guangdong Province branch of China Huarong Asset Management Co., one of China’s four leading financial assets management companies. Mr. Huang was employed in the Bank of China before Huarong and successively served as the presidents of the Jieyang branch, the Shantou branch, and the Foshan branch and was the general manager of investment banking and corporate banking departments.

Purpose This thesis explores the special features of China’s SOE employees’ psychological contracts by contrasting how SOE employees’ perceived psychological contracts differ from private enterprise employees, how psychological contract breach affects employee behavior, and how attitude plays a mediating role in this influence. Current literatures show that identifying these can facilitate a better understanding of China’s SOE employees’ real needs, which can contribute to more effective China’s SOE business management. Design/methodology/approach The study was designed to collect quantitative data via interviews and questionnaires and analyze it to understand the influence of the breach of China’s SOE employees’ psychological contracts on their behaviors. In total, 117 valid interviews were completed, and 381 valid questionnaires were collected. The influence was analyzed by the structural equation regression methodology, and with the data, employees’ expectations of responsibilities and obligations and the specificities of the psychological contracts of China’s SEO employees were determined. Findings By examining two conjectures, it was found that China’s SOE employees are subject to special non-classical psychological contracts. Three hypotheses were tested and proved, finding that the breach of psychological contracts of SOE employees significantly influences their behavior and that employees’ attitudes play a mediating role in this influence. Research limitations/implications The study’s limitation is its narrow sample of interviewees and questionnaire respondents, who are employees of only one bank. A wider pool of employees from multiple industries and MBA students from management schools would enhance the credibility of the conclusions. Practical implications The research implications are given that China’s SOE employees are under non-classical psychological contracts, and traditional Chinese conceptions such as “iron rice bowl,” “easy work,” and “workers are owners of the state and SOEs” are in place. If the actions of the management of China’s SOEs lead to breaches of these special psychological contracts, the efficiency of SOEs will be damaged. Originality/value The originality of this study lies in its attempt to a. find a viable new psychological contract to replace the classical model illustrated in the existing literature; b. study the psychological contracts regarding the Performance Appraisal System; and c. study the relationship among general psychological contracts, psychological contracts regarding the Performance Appraisal System, and employees’ attitudes and behavior by analyzing questionnaire data. Keywords Psychological contract, SOE, attitude, behavior