The Antecedents to Knowledge Exchange in Organisations: A Psychological Contract Perspective

Ultan P. Sherman

School of Management & Marketing

University College Cork

ultan.sherman@ucc.ie

Abstract

Purpose: Evidence suggests how knowledge is managed by organisations is an important source of competitive advantage. This theoretical paper makes the case for a psychological contract perspective to help explain knowledge exchange in organisations. Specifically, it examines two key areas of psychological contract theory and their prospective influence on knowledge exchange (knowledge seeking and knowledge sharing): (1) the psychological contract formed and; (2) psychological contract fulfilment or violation. Arising from this we offer a number of linked propositions to help direct future researchers along this line of enquiry.

Approach: The literature broadly categorises the antecedents to knowledge sharing and knowledge seeking as individual or organisational. To better understand how knowledge circulates in an organisation researchers need to consider different theoretical frameworks. With this in mind, by adopting psychological contract theory as an analytical framework to explore knowledge exchange, this paper seeks to harvest new insights into this domain area.

Research Implications: This paper seeks to provide a route-map for future researchers investigating knowledge exchange. By understanding the multi-faceted nature of the psychological contract researchers can better predict the likelihood of employees engaging with the exchange process.

Practical Implications: This paper suggests that by paying closer attention to the information communicated to new recruits at organisational entry, managers can help shape newcomers’ expectations of the importance of knowledge seeking and sharing. Similarly, delivering on promises made to employees can facilitate a deeper commitment to knowledge exchange amongst the workforce.

Originality/Value: This paper aims to open up new lines of enquiry into what is an underdeveloped area of research in the organisational development field.

Keywords: knowledge exchange; psychological contract; formation; fulfilment; violation

2

Introduction

Knowledge management is a growing research area in the organisational development field

(Cabrera & Cabrera, 2005). Evidence suggests how organisations use knowledge is an

important source of competitive advantage (Argote & Ingram, 2000). Accordingly, how

knowledge is passed from employee to employee in the organisation and how management

can shape this circulation process is an important research issue in the organisational

development field. The challenges of knowledge management have received a deal of

attention in the literature, with issues relating to structure (Kim & Lee, 2006), employee-

supervisor relationships (King & Marks, 2008), and personality characteristics (Cabrera,

Collins & Salgado, 2006) among significant factors found to influence this process.

Nonetheless, given the central role of knowledge management in organisational development

it is necessary to unearth new antecedents of knowledge exchange. Indeed, Wang & Noe

(2010) call for an expanded view of knowledge exchange using different interpretive

frameworks. Therefore, this theoretical paper explores how psychological contract theory can

offer fresh insights into how knowledge is exchanged in organisations.

Knowledge Exchange: Sharing & Seeking

This paper examines two of the main processes identified in knowledge exchange research:

knowledge sharing and knowledge seeking. Knowledge sharing refers to the provision of task

information and know-how (tacit knowledge) to help others and to collaborate with others to

solve problems, develop new ideas, or implement policies or procedures (Wang & Noe,

2010). Knowledge seeking refers to planned behaviour to acquire sufficient information so as

to enable successful functioning in the organisation (Feldman, 1976).

3

A multitude of factors have been found to influence both knowledge seeking and

knowledge sharing. In reviewing the literature on knowledge exchange, Wang & Noe (2010)

broadly categorise its antecedents as organisational and individual. That knowledge is

exchanged ‘within’ an organisation it follows that various organisational factors are likely to

influence how knowledge is shared and sought. Among the most prominent organisational

forces is ‘culture’. Indeed, Ruppel & Harrington (2001) argue that firms who emphasise

innovation tend to have cultures that facilitate the sharing and transfer of knowledge such

cross-departmental teams. The structure of the organisation is likely to shape knowledge

exchange too (Morley & Heraty, 2008). Kim & Lee (2006) found that a less centralised

structure that awarded greater autonomy across units encouraged knowledge sharing.

Organisations employing an open workspace see greater interaction among the workforce

which facilitates knowledge exchange (Jones, 2005). It has also been suggested that a lack of

incentives is a major challenge to knowledge exchange (Liebowitz & Megbolugbe, 2003; Hu

& Randel, 2014). However, the evidence from the literature supporting this contention is

mixed. For example, Kim & Lee (2006) found that performance-related pay contributed to

knowledge sharing. However, Bock & Kim (2002) found that extrinsic rewards had a

negative effect on levels of knowledge sharing. Much more work is needed in this area. The

general point here is that the organisation itself influences knowledge exchange. By making

necessary cultural, structural or design changes, knowledge can circulate more readily around

the organisation.

Wang & Noe (2010) highlight the importance of understanding knowledge exchange

at the individual level. Individuals are the fundamental repositories of tacit knowledge and

dispositional characteristics influence knowledge exchange. Among the most significant

individual factors is ‘personality’. Cabrera et al (2006) found that ‘openness’, an inherent

welcoming of new experiences was positively associated with knowledge seeking and

4

sharing. Similarly, Lin (2007) identified a relationship between perceived efficacy and

knowledge sharing. A recent study by Wang, Noe & Wang (2014) found that

conscientiousness and emotional stability also influenced knowledge sharing. Another

prominent individual factor found to shape the knowledge exchange process is ‘willingness to

share’. Indeed, Bock & Kim (2002) argue that employees are differentially motivated to share

or guard knowledge and understanding underlying motivations can predict their behaviour

around the exchange of knowledge. Given the importance of the ‘person’ to sharing and

seeking knowledge in an organisation, much more research is required exploring the

individual factors that shape the exchange process.

As explained, research demonstrates that individuals have different expectations and

beliefs concerning their role in exchanging knowledge with their co-workers (Hu & Randel,

2014). This calls attention to how individual employees understand their relationship with the

organisation. Researchers have explored this ‘understanding’ using a psychological contract

lens. The psychological contract is an individual’s interpretation of the exchange agreement

they have with another party, typically the organisation (Rousseau, 1995). The last quarter-

century has seen significant research into the employment relationship around the concept of

the psychological contract (e.g. Rousseau, 1990; Anderson & Schalk, 1998; Guest, 2004; Ng

& Feldman, 2009). Psychological contract theory has provided useful explanations for

important concepts in the management field such as organisational commitment (e.g. Sturges,

Conway, Guest & Liefooghe, 2005), job satisfaction (Zhao, Wayne, Glibowski & Bravo,

2007) and intention to leave (Clinton & Guest, 2014). Very few researchers have examined

knowledge exchange from a psychological contract perspective with the notable exception of

O’ Neill & Adya (2007), O’ Donohue, Sheehan, Hecker & Holland (2007) and Bal, Chiaburu

& Diaz (2011) among others. From a practical point of view, these studies highlight the

importance of effectively managing the psychological contract as a means of ensuring

5

knowledge is exchanged in the organisation. Despite these encouraging studies, considerable

more research is required to better understand the relationship between the psychological

contract and knowledge exchange. The remainder of this paper lays down a framework for

future researchers investigating knowledge exchange from a psychological contract

perspective. Specifically, we focus on two key areas within the literature: psychological

contract formation and; psychological contract fulfilment/violation. Arising from this we

advance a series of linked propositions to direct future research in these domain areas.

1: Psychological Contract Formation

Fully understanding the dynamics of the psychological contract is difficult without insight

into how it is created in the first instance. The antecedents of the psychological contract have

received moderate attention from organisational researchers (e.g. Rousseau, 2001, Shore &

Tetrick, 1994). Recent work by Sherman & Morley (2015) explore how expectations

established early in the employment relationship act as a filter for future interactions with the

employer. That is, once established, initial expectations have an enduring quality and are only

changed at certain episodes in the employment relationship (Rousseau, 2001). Therefore, the

early period of socialisation is a critical time for the new employee to create a realistic picture

of organisational life but also for the employer in terms of communicating accurate and

useful information to that employee (Feldman, 1976). The information used by the new

employee to form a new psychological contract can be obtained from a variety of sources.

The organisation is likely to communicate relatively consistent information to new recruits

through formal processes such as the selection interview, the employment contract, and the

induction for example. If an organisation has a culture of knowledge exchange and

6

purposefully conveys this information to new recruits at organisational entry it follows that

these expressions of organisational policy should all communicate the same message.

However, information used in the psychological contract creation process also comes

from unofficial sources (Rousseau, 1995). Co-workers, work groups and supervisors also

relay important contract-related information to new recruits. However, this information is

likely to be inconsistent and subject stemming from the individual biases inherent in each

information source (Sherman & Morley, 2015). It follows that members of the work group

will each present a subjective view of organisational reality to the new recruit which is likely

to differ with the official view presented by the organisation. For example, during induction a

new recruit may be told that the organisation encourages newcomers to arrange meetings

with more tenured colleagues as a means of acquiring important work-related knowledge.

The workgroup on the other hand may tell the same recruit that such a practice rarely happens

and will not be well received by the veteran employees. In this scenario, the new recruit is

confronted with two contrasting views of the organisation’s approach to knowledge

exchange. Research suggests that individuals are less likely to pay attention to confusing

information (Sherman & Morley, 2015). Interpreting the above example from a psychological

contract perspective, contributing to knowledge exchange is unlikely to be an element of the

newly formed psychological contract as the information provided is not clear. Rousseau

(2001) asserts that the provision of clear and unambiguous information helps the individual to

create more accurate and realistic psychological contracts. Therefore, it follows that more

closely aligning information from official organisation sources and informal sources such as

the workgroup is more likely to result in a more accurate psychological contract. Indeed,

communicating symmetrical information is an integral part of early socialisation (Suazo,

Martinez & Sandoval, 2009).

7

Proposition P1A: The provision of symmetrical information regarding

knowledge exchange at organisational entry will see new recruits explicating

obligations concerning knowledge seeking and knowledge sharing

Exploring how the psychological contract is created is an important issue in the

literature on the formation process. However, beyond understanding the formation process

researchers need to explore the content of the newly formed psychological contract. The

content of the psychological contract refers to the perceived obligations of the two parties to

the agreement (Herriot, Manning & Kidd, 1997) and fulfilment of these obligations is the

driving force of behaviour in the organisation (Conway & Briner, 2005). Due to its subjective

nature, the psychological contract is influenced by a countless number of individual factors.

Therefore, each psychological contract will contain idiosyncratic and personal content

dimensions. In an attempt to bring clarity to what potentially is a complex field of research,

Rousseau (1990) broadly asserts that there are two distinct types of psychological contracts:

A ‘transactional psychological contract’ (employer obligations concerning high pay, rapid

promotion and performance-based pay and employee obligations concerning advance notice,

accepting transfers, no competitor support and protection of proprietary information); and a

‘relational psychological contract’ (employer obligations concerning training, long-term job

security, career development and personal support and employee obligations concerning

working overtime, loyalty and extra-role behaviour). The transactional-relational

categorisation has been used in countless numbers of psychological contract studies (e.g.

Millward & Hopkins, 1998; De Vos, De Stobbeleir, Meganck, 2009 etc.).

Those employees who hold a transactional psychological contract at the beginning of

employment view their relationship with the organisation in narrow terms. Often their

8

relationship is founded on very specific terms. For example, this employee would only

engage in extra role behaviours (working additional hours) as long as they were rewarded for

it. Therefore, the performance-reward contingency for these employees is high. Within the

context of knowledge exchange in organisations it is unlikely that a transactional

psychological contract would contain employee obligations relating to knowledge sharing

and knowledge seeking. Indeed, research suggests that development opportunities and the

obligations of both parties relating to it are of little relevance to an employee with a

transactional psychological contract (Robinson & Rousseau, 1994).

Proposition P1B: Employees holding a transactional psychological contract at

organisational entry will be less likely to report obligations concerning

knowledge seeking and knowledge sharing

Conversely, employees holding a relational psychological contract typically perceive a

broader relationship with the organisation. These employees typically have an open-ended

arrangement with the employer and are looking to increase their levels of employability

throughout their stay with the organisation (Guest, 2004). To this end, they seek opportunities

for development and are willing to contribute to effective team dynamics in return (Conway

& Briner, 2005). Indeed, a relational psychological contract is often associated with pro-

social employee behaviours (Coyle-Shapiro, Kessler & Purcell, 2000). We propose that

employees with this type of arrangement with the organisation will be more willing to

contribute to knowledge exchange in organisations.

Proposition P1C: Employees holding a relational psychological contract at

organisational entry will be more likely to report obligations concerning

knowledge seeking and knowledge sharing

9

Based on the contingent and reciprocal principles inherent in psychological contract theory

(Rousseau, 1995) those employees who report obligations relating to knowledge sharing and

knowledge seeking will expect something in return from the employer. Research suggests

that in return for extra role behaviours employees often expect the organisation to provide

opportunities for development and also to improve their employability (De Vos et al, 2009).

Proposition P1D: Employees who explicate obligations concerning knowledge

seeking and knowledge sharing will expect opportunities for development and

improved employability in return from the organisation

2: Psychological Contract Fulfilment/Violation

The vast majority of research on the psychological contract concerns evaluating the

psychological contract (Rousseau & Tijoriwala, 1998). That is, most studies examine the

‘state’ of the psychological contract, the extent to which it has been fulfilled or violated. As

the employment relationship develops over time the employee reflects on the psychological

contract at certain episodes in the relationship (e.g. performance appraisal, contract

renegotiation etc.). Violation refers to the belief that the other party has not upheld their side

of the agreement. Fulfilment refers to the belief that the other party has upheld their side of

the agreement (Rousseau, 1995). When the psychological contract is fulfilled, the employee

perceives that the organisation is delivering on the inducements promised to the newcomer at

the beginning of employment. When the psychological contract is in a ‘positive’ state the

employee is obliged to ensure their side of the agreement is upheld, in line with the reciprocal

nature of the theory.

10

Psychological contract fulfilment has been associated with a number of positive

outcomes in previous psychological contract research (e.g. citizenship (Turnley, Bolino,

Lester & Bloodgood, 2003); satisfaction (Coyle-Shapiro & Kessler, 2000)). These studies

demonstrate that the employee is more likely to demonstrate prosocial behaviours in the

organisation when the psychological contract is fulfilled (Coyle-Shapiro et al., 2000). Most

contemporary organisations recognise the importance of knowledge exchange to

organisational learning (Heraty & Morley, 2008). Addressing the antecedents of these

behaviours is an important organisational issue.

Proposition P2A: Psychological contract fulfilment will be positively associated

with knowledge seeking and knowledge sharing

Robinson & Rousseau (1994) argue that violations of the psychological contract are almost

inevitable in exchange relationships. Indeed, considerable research on the psychological

contract is concerned with the outcomes of violation. For example, reduced contributions

(Tomprou & Rousseau, 2015), reduced loyalty (Turnley & Feldman, 1999), and less

commitment (Cassar & Briner, 2011) have all been identified in the literature as negative

behaviours in response to psychological contract violation. Within the context of

organisational learning, it seems likely that employees would less likely to make the effort to

seek out information from their colleagues or, indeed, share knowledge with their

counterparts.

Proposition P2B: Psychological contract violation will be negatively associated

with knowledge seeking and knowledge sharing

11

Summary

This theoretical paper advances a psychological contract theory perspective to better

understand knowledge exchange in organisations. Exploring the antecedents of why

knowledge is sought and shared are important research areas in the organisational

development field. Specifically, this paper identifies two distinct areas for future researchers

to explore. First, addressing the early stages of the psychological contract facilitates deeper

insights into newcomers’ expectations of their role in the organisation (Sherman & Morley,

2015). Additionally, identifying the type of psychological contract formed in the first instance

allows us to predict future behaviour in relation to knowledge exchange in the organisation.

Second, the extent to which the psychological contract is fulfilled or violated is an important

research issue given the associated outcomes with these variables. How the employees

perceives the employers contributions to the exchange agreement is likely to shape their

behaviour around knowledge seeking and sharing.

Overall, this paper adds to the growing body of research investigating knowledge

exchange in organisations. Psychological contract theory is a significant exploratory

framework in the broad management field. Within the context of human resource

development, it has the potential to open up new lines of enquiry into how knowledge is

sought and shared in organisations.

References

Anderson, N., & Schalk, R. (1998). Editorial: The psychological contract in

retrospect and prospect. Journal of organizational behavior, 19(1), 637-647.

12

Argote, L., & Ingram, P. (2000). Knowledge transfer: A basis for competitive advantage in

firms. Organizational behavior and human decision processes, 82(1), 150-169.

Bal, P. M., Chiaburu, D. S., & Diaz, I. (2011). Does psychological contract breach decrease

proactive behaviors? The moderating effect of emotion regulation. Group & Organization

Management, 36(6), 722-758.

Bock, G. W., & Kim, Y. G. (2001). Breaking the myths of rewards: An exploratory study of

attitudes about knowledge sharing. Pacis 2001 proceedings, 78.

Bolino, M. C., Turnley, W. H., & Bloodgood, J. M. (2002). Citizenship behavior and the

creation of social capital in organizations. Academy of management review, 27(4), 505-522.

Cabrera, A., Collins, W. C., & Salgado, J. F. (2006). Determinants of individual engagement

in knowledge sharing. The International Journal of Human Resource Management, 17(2),

245-264.

Cabrera, E. F., & Cabrera, A. (2005). Fostering knowledge sharing through people

management practices. The International Journal of Human Resource Management, 16(5),

720-735.

Cassar, V., & Briner, R. B. (2011). The relationship between psychological contract breach

and organizational commitment: Exchange imbalance as a moderator of the mediating role of

violation. Journal of Vocational Behavior,78(2), 283-289.

Clinton, M. E., & Guest, D. E. (2014). Psychological contract breach and voluntary turnover:

Testing a multiple mediation model. Journal of occupational and organizational

psychology, 87(1), 200-207.

Conway, N., & Briner, R. B. (2005). Understanding psychological contracts at work: A

critical evaluation of theory and research. Oxford University Press. UK.

13

Coyle‐Shapiro, J. A. M., Kessler, I., & Purcell, J. (2004). Exploring Organizationally

Directed Citizenship Behaviour: Reciprocity or ‘It's my Job’. Journal of Management

Studies, 41(1), 85-106.

Coyle‐Shapiro, J., & Kessler, I. (2000). Consequences of the psychological contract for the

employment relationship: A large scale survey*. Journal of management studies, 37(7), 903-

930.

De Vos, A., De Stobbeleir, K., & Meganck, A. (2009). The relationship between career-

related antecedents and graduates’ anticipatory psychological contracts. Journal of Business

and Psychology, 24(3), 289-298.

Feldman, D. C. (1976). A contingency theory of socialization. Administrative science

quarterly, 433-452.

Guest, D. E. (2004). The psychology of the employment relationship: An analysis based on

the psychological contract. Applied psychology, 53(4), 541-555.

Heraty, N., & Morley, M. (2008). Dimensionalizing the architecture of organization-led

learning: A framework for collective practice. Advances in Developing Human

Resources, 10(4), 472-493.

Herriot, P., Manning, W. E. G., & Kidd, J. M. (1997). The content of the psychological

contract. British Journal of management, 8(2), 151-162.

Hu, L., & Randel, A. E. (2014). Knowledge sharing in teams: Social capital, extrinsic

incentives, and team innovation. Group & Organization Management, (in press)

1059601114520969.

Jones, M. C. (2005). Tacit knowledge sharing during ERP implementation: a multi-site case

study. Information Resources Management Journal (IRMJ),18(2), 1-23.

14

Kim, S., & Lee, H. (2006). The impact of organizational context and information technology

on employee knowledge‐sharing capabilities. Public Administration Review, 66(3), 370-385.

King, W. R., & Marks, P. V. (2008). Motivating knowledge sharing through a knowledge

management system. Omega, 36(1), 131-146.

Liebowitz, J., & Megbolugbe, I. (2003). A set of frameworks to aid the project manager in

conceptualizing and implementing knowledge management initiatives. International Journal

of Project Management, 21(3), 189-198.

Lin, H. F. (2007). Effects of extrinsic and intrinsic motivation on employee knowledge

sharing intentions. Journal of Information Science, 33(2), 135-149.

Millward, L. J., & Hopkins, L. J. (1998). Psychological contracts, organizational and job

commitment. Journal of Applied Social Psychology, 28(16), 1530-1556.

Ng, T. W., & Feldman, D. C. (2009). Age, work experience, and the psychological

contract. Journal of Organizational Behavior, 30(8), 1053-1075.

O'Donohue, W., Sheehan, C., Hecker, R., & Holland, P. (2007). The psychological contract

of knowledge workers. Journal of Knowledge Management, 11(2), 73-82.

O'Neill, B. S., & Adya, M. (2007). Knowledge sharing and the psychological contract:

Managing knowledge workers across different stages of employment.Journal of Managerial

Psychology, 22(4), 411-436.

Rousseau, D. M. (1990). New hire perceptions of their own and their employer's obligations:

A study of psychological contracts. Journal of organizational behavior, 11(5), 389-400.

Rousseau, D. M. (2001). Schema, promise and mutuality: The building blocks of the

psychological contract. Journal of occupational and organizational psychology, 74(4), 511-

541.

15

Rousseau, D. M., & Tijoriwala, S. A. (1998). Assessing psychological contracts: Issues,

alternatives and measures. Journal of organizational Behavior, 19(S1), 679-695.

Rousseau, D.M. (1995). Psychological contracts in organizations: Understanding written

and unwritten agreements. Chicago. Sage.

Ruppel, C. P., & Harrington, S. J. (2001). Sharing knowledge through intranets: A study of

organizational culture and intranet implementation. Professional Communication, IEEE

Transactions, 44(1), 37-52.

Sherman, U. P., & Morley, M. J. (2015). On the formation of the psychological contract: A

schema theory perspective. Group & Organization Management, 40(2), 160-192.

Shore, L. M., & Tetrick, L. E. (1994). The psychological contract as an explanatory

framework in the employment relationship. Trends in organizational behavior, 1(91), 91-109.

Sturges, J., Conway, N., Guest, D., & Liefooghe, A. (2005). Managing the career deal: The

psychological contract as a framework for understanding career management, organizational

commitment and work behavior. Journal of Organizational Behavior, 26(7), 821-838.

Suazo, M. M., Martínez, P. G., & Sandoval, R. (2009). Creating psychological and legal

contracts through human resource practices: A signaling theory perspective. Human

Resource Management Review, 19(2), 154-166.

Tomprou, M., Rousseau, D. M., & Hansen, S. D. (2015). The psychological contracts of

violation victims: A post‐violation model. Journal of Organizational Behavior. (in press).

Turnley, W. H., & Feldman, D. C. (1999). The impact of psychological contract violations on

exit, voice, loyalty, and neglect. Human relations, 52(7), 895-922.

Wang, S., & Noe, R. A. (2010). Knowledge sharing: A review and directions for future

research. Human Resource Management Review, 20(2), 115-131.

16

Zhao, H. A. O., Wayne, S. J., Glibkowski, B. C., & Bravo, J. (2007). The impact of

psychological contract breach on work‐related outcomes: a meta‐analysis. Personnel

Psychology, 60(3), 647-680.

17