“Try to keep them dumb and under the thumb”: exploring the “darker side” of psychological contracts in “overly embedded” immigrant enterprises

What is it about?

This study explores how immigrant entrepreneurs, particularly Pakistani business owners in Northern England, manage relationships with their employees and the challenges that arise from informal agreements based on family and cultural ties. Unlike formal employment contracts, these relationships rely heavily on trust and ethnic connections, which can create both advantages and problems. While close-knit ties promote loyalty, they also lead to unexpected issues, such as skill gaps and even competition within the family. By combining psychological contract theory with the mixed embeddedness framework, this study shows how relying too much on informal agreements can hurt business stability and growth. The findings suggest that immigrant entrepreneurs could benefit from formalized management practices and clearer role definitions, and that training programs could help these businesses thrive more sustainably. This research contributes a fresh perspective on the complexities of immigrant entrepreneurship and the need for more structured employment practices in culturally embedded enterprises.

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