Business and intercultural communication issues: Three contributions to various aspects of business communication

This paper describes psychological contracts and how they are created. Even though the phenomenon of the psychological contract can be observed in a variety of relationships, this paper solely discusses psychological contracts in business settings. The paper discusses in particular how psychological contracts affect the employee/employer-relationship.The findings will then be applied to the example of IBM in the early 1990s, when IBM decided to lay off employees despite its no-layoff policy. Finally, suggestions are made as to what could have been done to prevent the negative effects of psychological contract violation at IBM.