Entrepreneurship has been a massive movement nowadays affecting the economic level and social conditions of a country (Choi & Majumdar, 2014; Ridley-Duff & Bull, 2015). Job creation, innovative products and the pursuit of productivity are the main business activities mainly attributed to entrepreneurship (Koe, Sa’ari, Majid & Ismail, 2012). Therefore, every country is arguably willing to do everything possible to encourage the supportive business environment capable of inspiring the emergence of entrepreneurs.

Moreover, entrepreneurial orientation is closely linked with self-initiative and self-employed being generally associated with young people (Burstein, 2013; Ferri-Reed, 2015; Koe et al., 2012). Hence, creating young entrepreneurs and improving their participation will be an effective strategy to promote the level of entrepreneurship (Rahman et al., 2016; Van Praag, 2003). However, although entrepreneurial programs have been largely examined by scholars and executed by government, the applicability in the youth has attracted limited attention. To date, examination of young entrepreneur characteristics, partially the millennial generation on entrepreneurship, remains unclear.

Millennial generations are frequently referred to as capitalists who are highly committed to performing business by any means to serve the interests of stakeholders of suppliers, employees and customers. As the first generation living totally immersed in digital technology (Kilian, Hennigs & Langner, 2012; Kraft & Wang, 2010; Sago, 2010 Taylor, 2012), providing the identities of cultural and social attitudes, millennial generations are also highly sensitive to community development of both local and global sphere (Nelson, 2015; Yadin, 2012), which in turn have more focus on communality than individuality (Pendergast, 2010). The millennial generation is characterised as informative and expressive in creative ideas and personal values to align the expectations between the owners and employees. Flexibility and responsiveness to the employees are other unique characters of the generation (Moscardo & Benckendorff, 2010; Pendergast, 2010). The millennial generation also seek to motivate their employees to become more involved and contributing in the formulation of strategy and business decision making (Richardson, 2010). This generation is more positive and optimistic in looking at the aspects of the recruitment and development of employees as one of the main components of business planning.

Flexible social relationships become the central feature in the business management of the millennial generation. Nevertheless, this millennial is very demanding for the professional capabilities of employees. Hence, the relationship between employees and business owners is characterised as flexible but productive. In the context of organisation size, this character is relevant to the study of Harney and Dundon (2006) divulging that the characteristics of human resource management in small and medium-sized enterprises (SMEs) culture are mainly characterised by informality and non-bureaucratic. The employment relationship in this context can be built through the concept of relational aspects of the psychological contract that specifically focuses on the efforts to fulfil the needs of employees. The fulfilment of these needs is more likely potential to increase the employees’ attachment to their company through the internalisation of the norms and company values. Therefore, the improvement of commitment to the company makes them willing to be more concerned to achieve the company’s goals (Rhoades, Eisenberger & Armeli, 2001).

Hence, this study attempts to analyse the characteristics of the millennial generation as the owners of SMEs in running the business by examining their managerial characteristics in managing workplace relationship that aims to achieve the stakeholder expectations and improve both commitment and organisational citizenship behaviour (OCB) of employees. This article proposes the antecedents of organisational support and the role of psychological contract that affects employee commitment and OCB.

This study empirically examines the effect of psychological contract particularly on the aspects of relational and organisational support to the organisational commitment and OCB in small-scale businesses owned by the millennial entrepreneurs. The results show a positive influence of the psychological contract on the organisational commitment (see Figure 1). This result confirms the previous findings by Flood et al. (2001), Coyle-Shapiro and Kessler (2000), Aubé, Rousseau and Morin (2007), revealing that the psychological contract affects employee commitment.

This result reveals that psychological contract perceived by employees about the implicit agreement between the business owner and employees consisting of the expectations and needs of employees determines the formation of employees’ commitment. Emotionally, employees’ attachment to the workplace and the feeling of belonging is formed by the employees’ perception to the business owners in providing opportunities for employees’ career development and self-actualisation through various training programs aimed at improving the skills of employees. The fulfilment of the needs of employees can be implemented by creating a pleasant working environment and by establishing great togetherness and effective communication.

The psychological contract is based on the perception of each responsibility, and reciprocal provisions, of both parties (McShane & Von Gilnow, 2003). Though the contract is not written, yet it is actually very constructive for both sides. Business owners provide access to compensation, competitive rewards and according to their employees a large number of opportunities to excel in their professionalism. On the contrary, employees dedicate their capabilities on an on-going basis in the form of increased productivity and extra effort for the advancement of business (Mathis & Jackson, 2007). Chen and Kao (2012), Hu et al. (2014) stated that, psychological contract effects on the citizenship behaviour of employees. Organisation’s efforts to meet the needs of employees can encourage the level of active contribution employees can make to achieve the success of the business. Employees’ active-participation in giving suggestions for innovative ideas and in working together tends to improve their level of participation in maintaining the positive image of the business where they work.

The results also show the significant influence of the organisational support on the organisational commitment. This result confirms the previous empirical findings by Flood et al. (2001), Coyle-Shapiro and Kessler (2000), Aubé, Rousseau and Morin (2007), revealing that the organisational support influences employee commitment.

The psychological contract as indicated by the fulfilment of the employees’ need and the establishing harmonious social relations is the impetus for the emotional attachment of employees with the organisation. The challenging work is more likely to give attachment of employees with the values and goals of the organisation, and the inspiration for achieving the organisational goals. This result shows that the organisational support from business owners significantly encourages the employees’ positive commitment. This has the implication to organisational support to the impetus for the initiative, the participation of employees in the decision making, and the internalisation of the values embraced by the business owners.

The organisational support is believed to have a positive effect on the OCB. This result confirms the studies conducted by Chen and Kao (2012), Hu et al. (2014), which stated that organisational support to the employees’ citizenship behaviour. Organisational commitment is indicated by the level of employees’ internalisation of the values of the organisation and engagement in achieving the goals. The organisational support through the cooperation with its employees to encourage their job initiatives can help them to provide constructive ideas for business development. The organisational consideration in treating employees as a job partner can improve the level of emotional attachment, and eventually, they are willing to contribute to the progress of the business. Organisational support is more likely to encourage employees to work according to their ability and contribute ideas and the voluntary citizenship work for the organisation.

Finally, there are positive influences of organisational commitment on OCB. This result confirms the findings of Davoudi (2012), Gautam et al. (2005), revealing that the organisational commitment influences OCB.

Hence, emotional attachment as a form of the employees’ commitment is more likely to influence the citizenship behaviour. This bond tends to encourage the level of employees’ participation to think effectively in developing and achieving the organisational goals. Employees’ attachment to the work place and colleagues also encourages them to get involved in working together in a harmonious environment and to build the positive image of the organisation.

This study used transactional and relational dimensions in psychological contract measurement. However, literature categorised psychological contract into three dimensions including transactional, relational and balanced contract (for instance, Hui et al., 2004). Future studies should consider involving balanced dimension in the measurement. This study analysed the influence of psychological contract on OCB. By considering the business managed by the millennial generation orienting in innovation, future studies should explore the influence of psychological contract on innovative behaviour of employees.

Primarily, this study provides insightful analysis of organisational psychology regarding the success of employee management relationship of SMEs run by the millennial generation. It is worth mentioning that the characteristics of the millennial generation in building the social relationship with employees allow the process of identifying the needs of employees. Business enterprises managed by the millennial can encourage the employees’ contribution to the company. Employees who are able to perform beyond the job description have a strong commitment and are able to balance their personal principles and the morality held by the organisation where they work (Luthans, Norman & Hughes, 2006). The support given by the owners to the employees indicates that the company cares about the contributions of the employees and the welfare of them (Rhoades et al., 2001). Rhoades and Eisenberger (2002) pointed out that the employees receiving more company support will dedicate their extra-role performances like being more responsible for their work, aiding their work partners and giving their inventive ideas. Similarly, Duffy and Lily (2013) stated that the company support affects the OCB of the employees to work beyond the minimal requirements of the job and provides a positive impact on the achievement of corporate goals.

On the contrary, this provides an opportunity for business owners to share their work values and goals to be achieved by the employees. This value is reflected on the level of employees ‘perception related to the relational agreement with business owners in the form of positive psychological contract that can be implemented through the employees’ training and gathering for the fulfilment of employees’ needs, personal development and creating a pleasant atmosphere in the workplace.

This generation seems to work with strict targets, which can be interpreted as a challenge for employees. However, their flexible working relationship also allows more space for employees to be involved in the decision making process. This is reflected in some organisational supports perceived by employees in providing appreciation and reward to their job, and facilitating their opinions as one of business solutions. Generation Y is likely to consider the employees as working partners, and give more space to employees to show their initiatives, innovation and constructive ideas for business development. These factors lead to employees’ emotional attachment to the work place and their willingness to actively contribute to the progress of the business.

This study implies the need for academic institutions and policy makers to get involved in addressing the rising phenomenon of entrepreneurship among the young generation, especially the millennial generation. They need to design the innovative and applicable training for young entrepreneurs in order to facilitate them in searching for business opportunities and orientation.