Psychological Contracts in Business Process Transformation Effect:
Structure of Psychological Contracts
Kayo Iizuka
1,*
and Chihiro Suematsu
2
1
School of Network and Information, Senshu University, Higashimita 2-1-1, Tama-ku, Kawasaki, Japan
2
Graduate School of Business Management, Kyoto University, Yoshida-honmachi, Sakyo-ku, Kyoto, Japan
Keywords: Business Process Transformation (BPT), Psychological Contract, Success Factor.
Abstract: This paper presents the result of analysis of the psychological contract structure in business process
transformation (BPT) project. Much research has contributed to improving the effectiveness of BPT. As for
cases in Japan, there are some unique issues around changing business processes, and the overall business
processes, including the work of back offices throughout all industries, are not always efficient, as Japan's
labor productivity was still the lowest among G7 members in 2018, according to the Japan Productivity Center.
Therefore, besides the BPT methodologies used in Western countries, it is necessary to seek a counterpart for
the unique issue of BPT in Japan. In this paper, the authors focus on the relationship between the psychological
contract and BPT effect as one of the success factors of BPT based on a survey they conducted in 2019 and
2020.
1 INTRODUCTION
It has been said for some decades now that the overall
quality and efficiency of production lines in Japan are
superior to other countries. However, the overall
business processes are not always efficient.
According to the Japan Productivity Center, Japan's
labor productivity was still the lowest among G7
members in 2018 (https://www.japantimes.co.jp).
Firms in Japan are trying to make their business
processes more efficient by using Information
Technology (IT). Business process transformation
(BPT) is one of the useful ways for companies or
other organizations to sustain themselves in order to
adapt to changes in the business environment. There
are many methodologies for BPT, including business
process re-engineering (BPR) or business process
integration (BPI) (Khosravi, 2005). However, it is
difficult to achieve effectiveness by conforming to an
ideal or to picture-perfect models. In this paper, the
authors focus on the relationship between the
psychological contract and the BPT effect as one of
the success factors of BPT through the survey
conducted in 2019 and 2020.
*
https://www.senshu-u.ac.jp/english/learn/network/
2 RELATED WORK
The concept of the psychological contract was
developed by Rousseau; it was defined as the
employees’ beliefs of their exchange agreement with
their employer and the organization (Rousseau, 1989
or 1995). The psychological contract is developed
within a dynamic environment in which the
individual is often interacting with multiple
organizational agents who may each be sending
messages both verbal and non-verbal (Shore, 1994).
It is impossible for employees to have a literal,
official contract with their employer or organization
for all possible scenarios. Therefore, considering the
influence of the psychological contract is important in
managing organizations, not only for managing
ordinary working organizations, but for tentative
organizing, such as for a project. A BPT project is
important for companies or other organizations in
order to realize change in their business processes and
IT to match a business environment that is rapidly
changing. BPT is an important factor for companies
or other organizations to consider in order to sustain
themselves during business environment changes.
Much research has contributed to improving the
effectiveness of BPT, including BPR, business
Iizuka, K. and Suematsu, C.
Psychological Contracts in Business Process Transformation Effect: Str ucture of Psychological Contracts.
DOI: 10.5220/0010526304290435
In Proceedings of the 23rd International Conference on Enterprise Information Systems (ICEIS 2021) - Volume 2, pages 429-435
ISBN: 978-989-758-509-8
Copyright
c
2021 by SCITEPRESS Science and Technology Publications, Lda. All rights reserved
429
process modeling, etc. Hammer and Champy define
BPR as the fundamental rethinking and radical
redesign of business processes to achieve dramatic
improvements in critical, contemporary measures of
performance, such as cost, quality, service and speed
(Hammer and Champy, 1993). In past studies on this
topic, Grover focused on the implementation problem
(Grover, 1995), Earl analyzed the relationship
between BPR and strategic planning (Earl, 1995), and
Attaran explored the relationship between IT and
BPR based on the capabilities and barriers to effective
implementation (Attaran, 2004). There are also many
studies that deal with BPR success and failure factors
(Larsen, 1997; Al-Mashari, 1999). Therefore,
focusing on the relationship between the
psychological contract and the BPT effect as one of
the success factors of BPT is appropriate for
improving BPT effectiveness.
3 PREVIOUS STUDY
In order to clarify the relationship between the
psychological contract and the BPT effect, the
authors developed the research model shown in
Figure 1.
Figure 1: Initial Research Model of Previous Study.
The hypotheses constructed for this survey (2019)
were as follows:
H1: The BPT psychology contract has a positive
impact on BPT effectiveness.
H2: The psychology contract of the ordinary work
environment (Work Psychology Contract) has a
positive impact on the BPT psychology
contract.
H3: The work psychology contract has a positive
impact on BPT effectiveness.
Hypotheses 1 and 2 will show the indirect
relationship between the work psychological contract
and BPT effectiveness. The authors thought there
would be a direct relationship. The survey was
conducted in February 2019 (182 valid responses, and
the number of respondents who answered that they
had the experience of engaging in more than one BPT
projects excluding on-going project were 32).
However, in the analysis results in 2019 (Figure2),
the direct relationship between the work
psychological contract and the BPT effect was not
significant (Table1). Following this, the authors tried
to improve the model as shown in Figure 3and 4.
Figure 2: The Initial Path Coefficient Map of the Survey
2019 (Iizuka and Suematsu 2019).
Table 1: Regression Weight of Figure2 Model.
S.E.: Standard Error C.R.: Critical Ratio *** significant result (P value <1%)
Figure 3: Revised Path Coefficient Map of the Survey 2019
(Iizuka and Suematsu 2019).
Figure 4: Revised Research Model of Previous Study.
Table 2: Regression Weight of Figure2 Model.
S.E.: Standard Error C.R.: Critical Ratio *** significant result (P value <1%)
Estimate S.E. C.R. P
BPT_PsyCon
<---
Work_PsyCon 0.767 0.164 4.662 ***
Q5S2
<---
Work_PsyCon 1.022 0.177 5.774 ***
Q5S6
<---
Work_PsyCon 0.805 0.182 4.426 ***
Q5S5
<---
Work_PsyCon 0.697 0.197 3.533 ***
B P T _ E ffe ct
<---
Work PsyCon -0.295 0.464 -0.635 0.525
B P T _ E ffe ct
<---
BPT PsyCon 1.039 0.525 1.98 0.048
Q7Q2
<---
BPT PsyCon 1
Q7Q4
<---
BPT PsyCon 1.179 0.184 6.418 ***
Estimate S.E. C.R. P
BPT_PsyCon <--- Work_PsyCon 0.748 0.165 4.527 ***
Q5S2 <--- Work_PsyCon 1.037 0.176 5.885 ***
Q5S6 <--- Work_PsyCon 0.81 0.182 4.463 ***
Q5S5 <--- Work_PsyCon 0.675 0.198 3.407 ***
BPT_Effect <--- BPT PsyCon 0.738 0.18 4.097 ***
Q7Q2
<---
BPT PsyCon 1 ***
Work
Psychology
Contract
BPT Psychology
Contract
BPT
Effectiveness
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430
The adopted variables in the revised model are as
follows.
Psychological Contract of Usual Working
Environment [Work_Phy_Con]
-I believe that my employer gives me appropriate
performance feedback for my work. [Q5S2]
-I believe that my employer assigns me suitable jobs
-I believe I can engage in work that I feel it is
intriguing. [Q5S5]
-I believe that there are appropriate career options for
me in my company. [Q5S6]
Psychological Contract of BPT [BPT_
Psy_Con]
-I believe that I can obtain feedbacks regarding the
total BPT effect on the company. [Q7S2]
-I believe that I can obtain feedback regarding to my
contribution. [Q7S4]
BPT Effect [BPT_Effect]
-BPT projects have succeeded in my company.
[Q10S1]
From this analysis result, the existence of 1) direct
relationship between the psychological contract of the
usual working environment and BPT, 2) direct
relationship between the psychological contract of
BPT and BPT effects was clarified. However, the
direct relationship between the psychological
contract of the usual working environment and BPT
effect was shown not to exist. This result shows the
importance of the psychological contract both in the
usual working environment and BPT projects.
However, the observed variables adapted to this
model are quite limited because of the sample size of
the data. In order to improve this situation, it was
important to survey for collecting data with much
more numbers of sample size and detail level, so the
authors decided to conduct another survey in 2020.
4 RESEARCH METHOD
4.1 Purpose of the Research
The purpose of the research conducted in 2020 was to
clarify the detailed structure of the psychological
contract model in BPT. In order to form the detailed
model of the psychological contract-BPT model, the
number of observed variables must be increased to a
significant level in statistical analysis. Therefore, the
survey conducted in 2020 had to increase the number
of respondents compare to the survey conducted in
2019. Also, some questionnaire items were added in
order to variables in order to increase the number of
the variables adapted for the model. Some interviews
with the researchers from the perspective of many
research fields, such as psychology, management
organization, and information systems, were
organized to determine the adding variables.
4.2 About Survey 2020
An overview of the survey conducted in 2020 is as
follows.
Data collection: February 2020
Survey method: Internet Survey
Target of data collection: about 300 in number
(about 150% of the survey in 2019)
Questionnaire items: The major hypotheses are
based on the authors’ research model of 2019
(Figure 1). Questionnaire items are also based on
the survey of 2019. In addition, some items as
follows are included in the questionnaire.
- Whether there is a labor union in your
company/organization or not
- Length of service
- Industry
- I cognize that I can gain a raise and promotion
corresponding to my contribution. [BPT_
Psy_Con]
- The level of coordination and communication
between the divisions has increased. [Q13S4]
- The trust between divisions has increased.
[Q13S5]
- The trust within each division has increased.
[Q13S6]
- I think working conditions have become better.
[Q13S7]
- I want to keep working in this organization.
[Q13S8]
- I want to keep contributing to make this
organization better. [Q13S9]
4.3 Process of the Analysis
After the data was collected, the analysis aimed to
develop detail model of the psychological contract for
BPT. At first, a multi-regression analysis conducted
to examine the variable relationship between
[Work_Phy_Con] and [BPT_Psy_Con], and the
relationship between [BPT_Psy_Con] and
[BPT_Effect]. Variables include new items added in
this survey. From the results of these multi-regression
analyses, the a new and detail model would be
formed. Based on this model, covariance structure
analysis would be conducted. In addition, analysis to
examine differences in the psychological contract
according to the presence or absence of labor unions
are conducted.
Psychological Contracts in Business Process Transformation Effect: Structure of Psychological Contracts
431
5 RESEARCH RESULT
5.1 Overall Model
Data was collected in February 2020 through the
internet. The respondents were people working for
companies or other organizations. There were 275
valid responses, and as for respondents who answered
that they had experience engaging in BPT projects
that had already ended, there were 52.
At first, the authors tried multi-regression analysis
to examine the variable relationship between
[Work_Phy_Con] and [BPT_Psy_Con], and the
relationship between [BPT_Psy_Con] and
[BPT_Effect]. From the results of these multi-
regression analyses, they found that both
[BPT_Psy_Con] and [BPT_Effect] can be formed into
two groups. Therefore, they divided the variables of
both categories into two groups as shown in figure 5.
Figure 5: Research model of Study in 2020.
Based on this result, the researchers developed a
structural equation model as shown in Figure 6.
Figure 6: The Path Coefficient Map of Psychological
Contract and BPT Effect.
Table 2: Regression Weight of the Model in Figure 5.
S.E.: Standard Error C.R.: Critical Ratio *** significant result (P value <1%)
Table 3: Standardized Regression of the Model in Figure 4.
Adopted variables in this study are as follows.
Psychology Contract of the Usual Working
Environment [Work_Phy_Con]
- I cognize that my employer gives me appropriate
performance feedback on my work. [Q8S2]
Estimate S.E. C.R. P
BPRPC2 <--- WorkPC 1.085 .068 15.881 ***
BPRPC1 <--- WorkPC 1.076 .069 15.627 ***
BPREffect1 <--- BPRPC1 .773 .121 6.403 ***
BPREffect2 <--- BPRPC2 .613 .116 5.294 ***
Q13S1 <--- BPREffect1 .969 .068 14.330 ***
Q13S3 <--- BPREffect1 .794 .085 9.351 ***
Q13S6 <--- BPREffect1 .623 .116 5.378 ***
Q13S4 <--- BPREffect2 1.047 .206 5.072 ***
Q13S5 BPREffect2 1.000
Q13S7 BPREffect2 1.184 .197 6.020 ***
Q13S8 BPREffect2 1.131 .208 5.445 ***
Q10S2 BPRPC2 .959 .036 26.962 ***
Q10S5 BPRPC2 .953 .045 21.382 ***
Q10S6 BPRPC1 .937 .043 21.700 ***
Q10S1 BPRPC1 .918 .047 19.446 ***
Q8S2 WorkPC 1.021 .073 13.977 ***
Q8S6 WorkPC 1.000
Q8S7 WorkPC 1.074 .077 14.002 ***
Q8S8 WorkPC 1.025 .076 13.403 ***
Q13S2 BPREffect1 1.000
Q8S4 WorkPC .825 .075 11.047 ***
Q8S5 WorkPC .919 .077 11.869 ***
Q13S9 BPREffect1 .547 .115 4.753 ***
Q10S3 BPRPC1 1.000
Q10S4 BPRPC2 1.000
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
Estimate
BPRPC2 <--- WorkPC .940
BPRPC1 <--- WorkPC .953
BPREffect1 <--- BPRPC1 .724
BPREffect2 <--- BPRPC2 .803
Q13S1 <--- BPREffect1 .961
Q13S3 <--- BPREffect1 .837
Q13S6 <--- BPREffect1 .625
Q13S4 <--- BPREffect2 .748
Q13S5 BPREffect2 .713
Q13S7 BPREffect2 .904
Q13S8 BPREffect2 .811
Q10S2 BPRPC2 .914
Q10S5 BPRPC2 .842
Q10S6 BPRPC1 .871
Q10S1 BPRPC1 .829
Q8S2 WorkPC .795
Q8S6 WorkPC .761
Q8S7 WorkPC .798
Q8S8 WorkPC .768
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
<---
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432
- I cognize that my employer assigns me to an
appropriate job. [Q8S3]
- I cognize that my employer supports me in my
job when necessary. [Q8S4]
- I cognize that I can engage in the work that I feel
is interesting. [Q8S5]
- I cognize that there are appropriate career options
for me in my company. [Q8S6]
- I cognize that I can improve my skills and
knowledge through my job. [Q8S7]
- I cognize that I can construct human networks
through my job. [Q8S8]
Psychological Contract of BPT [BPT _Con1]
…Achieving Effect
- I cognize that I can achieve a BPT effect.
[Q10S1]
- I cognize that my division can gain feedback
about the total BPT effect of the company.
[Q10S3]
- I cognize that the support system for BPT is well
arranged. [Q10S6]
Psychological Contract of BPT [BPT_Con2]
…Reward
- I cognize that I can gain feedback about the total
BPT effect of the whole company. [Q10S2]
- I cognize that I can gain feedback corresponding
to my contribution. [Q10S4]
- I cognize that I can gain a raise and promotion
corresponding to my contribution. [Q10S5]
BPT Effect [BPT_Effect1] …Project
Successes
- The BPT project succeeded. [Q13S1]
- The BPT project gained effectiveness. [Q13S2]
- Employees have improved their skills through
BPT. [Q13S3]
- The trust within each division has increased.
[Q13S6]
- I want to keep contributing to make this
organization better. [Q13S9]
BPT Effect [BPT_Effect2] …Project
Communication and Awareness of Belonging
- The level of coordination and communication
between the divisions has increased. [Q13S4]
- The trust between divisions has increased.
[Q13S5]
- I think working conditions have become better.
[Q13S7]
- I want to keep working in this organization.
[Q13S8]
5.2 Difference Depending on Labor
Union
As a result of this analysis described in the previous
section, the importance of the psychological contract
was revealed. Then the authors analyzed whether it
was different or not considering the labor union
(Appendix1 and 2). As a rough trend, the score for the
psychological contract of the employees in
companies without labor union seems to be rather low
both for the psychological contract in the usual
working environment and BPT. That means that
forming the psychological contract is even more
important for the companies without labor unions.
6 CONCLUSIONS
The purpose of this paper was to examine in detail
relationship between the psychological contract and
the BPT effect as one of the success factors of BPT.
There was a positive relationship between the work
psychological contract and the BPT psychological
contract, and the BPT psychological contract has a
positive impact on BPT effectiveness. Further, there
were two groups in both the BPT psychological
contract and the BPT Effects, and therefore the
authors formed two latent variables for each; [BPT
_Con1](achieving effect) and [BPT_Con2] (reward)
for the latent variables of the BPT psychological
contract, [BPT_Effect1](Project) and [BPT_Effect2]
(project communication and awareness of belonging)
for the latent variables of the BPT effectiveness. From
these results, it can be said that it is important to form
psychological contracts both in the BPT project and
the usual working environment, and the BPT PC in
order to achieve BPT effectiveness, and those
psychological contracts should be formed by the
personal benefit such as raises or promotions as a
result of total effectiveness of the organization. For
future research, the authors will analyze the
differences in psychological contracts by profiling the
employees (based on occupation, position, years of
continuous employment, etc.).
ACKNOWLEDGMENTS
This work was supported in part by a Grant-in-Aid for
Scientific Research (16K03819). The authors
appreciate researchers, who gave advices from the
perspectives of many research fields, such as
psychology, management organization, and
Psychological Contracts in Business Process Transformation Effect: Structure of Psychological Contracts
433
information system. Also, the authors greatly
appreciate the firms that cooperated in the
questionnaire.
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APPENDIX
1 Work Psychological Contract
(5point Scale)
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2 Work Psychological Contract
(5point Scale)
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