Enhancing the role of human resource management in corporate sustainability and social responsibility: A multi-stakeholder, multidimensional approach to HRM
Introduction
Interest in corporate sustainability (CS) and the closely related concept of corporate social responsibility (CSR) continues to grow. One key driver is the unending wave of corporate scandals and collapses that have destroyed hundreds of billions of dollars of market value and the consequent crisis of confidence in our current institutions and economic system (Liran & Dolan, 2016; Pearce & Stahl, 2015; Waldman & Siegel, 2008). This has resulted in increased stakeholder activism and regulatory scrutiny. Another driver is the growing economic, social and environmental problems facing the world – ‘grand challenges’ (George, Howard-Grenville, Joshi, & Tihanyi, 2016), like those posed by climate change, poverty and hunger, growing economic insecurity, and restricted access to education. These problems are accompanied by increased pressure for corporations to “contribute to the creation of economic and societal progress in a globally responsible and sustainable way” (GRLI, 2017: 3). The creation of the United Nations Sustainable Development Goals to end poverty, protect the planet and ensure prosperity for all is a reflection of these developments (Fig. 1). This initiative comes at a time when seismic changes in the international political landscape, the rise of anti-globalization sentiments around the globe, the inflow of migrants and refugees and resulting xenophobic backlash in many countries, and other geopolitical crises pose new challenges for companies, particularly those operating across national borders (Buckley, Doh, & Benischke, 2017; Horak, Farndale, Brannen, & Collings, 2019; Inglehart & Norris, 2016).
The private sector is increasingly seen as a critical part of the solution to these challenges, positioning “corporations as important and necessary social change agents” (Aguilera, Rupp, Williams, & Ganapathi, 2007:857). Many companies have committed to addressing these larger societal challenges and have taken some form of action to align their activities with the needs of stakeholders inside and outside the organization, as demonstrated by the growing number of partnerships between corporations and governments, the emergence of dedicated CS/CSR departments in many large companies, and the proliferation of voluntary self-regulatory codes like the UN Global Compact. Some have gone even further and adopted ‘profit-with-purpose’ business models (Levillain, Segrestin, & Hatchuel, 2019), with the goal of creating shared value (Porter & Kramer, 2011) and contributing to the triple bottom line (i.e., people, planet, prosperity). For example, in a newspaper interview Paul Polman, the CEO of Unilever argued “We now have the opportunity to eradicate poverty and deal with the issue of climate change. What bigger opportunity do you want to see? Companies make up 60% of the global economy. If they don't play an active part, how can we solve [these crises]?” (Burn-Callander, 2015).
Both the academic (e.g., Eccles, Ioannou, & Serafeim, 2014; Siegel & Vitaliano, 2007) and practitioner literatures (e.g., Kearns & Woollard, 2019; McKinsey, 2014) show that firms may benefit economically from incorporating responsibility and sustainability principles into their strategies and core business processes. Concomitantly, however, research also points to business-as-usual tendencies and ‘decoupling strategies’ – or ‘greenwashing’, i.e., demonstrating symbolic social or environmental responsibility while leaving the core business untouched (Crilly, Zollo, & Hansen, 2012; Graafland & Smid, 2016; Wright & Nyberg, 2017). Indeed, some have argued that the ‘business case for CSR’ has had the perverse effect of limiting firms' efforts to resolve these critical issues (Barnett, 2019). Thus, the fundamental challenge for corporations is to fully integrate CS/CSR into their strategies, business models, and operating processes and build cultures that support the necessary transformation of mind-sets and behaviors.
We propose that sustainable human resource management (sustainable HRM), defined as “the adoption of HRM strategies and practices that enable the achievement of financial, social and ecological goals, with an impact inside and outside of the organisation and over a long-term time horizon” (Ehnert, Parsa, Roper, Wagner, & Müller-Camen, 2016, p. 90), has a potentially vital role to play in addressing these challenges and delivering CS/CSR initiatives that go beyond mere public relations exercises. But it appears that HRM specialists and departments are not currently accepted as partners in influencing CS/CSR strategies, nor is HRM a key implementer of CS/CSR initiatives and programs (Cohen, Taylor, & Müller-Camen, 2012a; Mellahi, 2014). We examine this failure, explore the reasons for it, and identify ways for HRM to play a more prominent role in the design and implementation of a firm's CS/CSR strategy. Building on earlier attempts to integrate a stakeholder perspective into the HRM performance construct (Beer, Boselie, & Brewster, 2015; Paauwe, 2004; Rogers & Wright, 1998), and drawing on existing CSR, sustainability, and ethics frameworks that define a corporation's responsibilities to society and the global community, we propose a multidimensional HRM performance framework that can be used as a basis for assessing the potential of a firm's HRM system to contribute to positive outcomes and constrain negative outcomes in the economic, environmental and social domains. By providing a framework that integrates the CS, CSR and HRM literatures around the concept of sustainable HRM and considers the ethical foundations as well as inherent tensions and tradeoffs involved in sustainable HRM we attempt to overcome the “piecemeal” approach (Kramar, 2014, p. 1075) and “lack of theoretical anchoring, conceptual framing and meta-theoretical awareness” (Voegtlin & Greenwood, 2016, p. 182) that has characterized this literature to date. We conclude by demonstrating how HRM research can aid the practice of CS/CSR by offering actionable and evidence-based solutions to practitioners who wish to contribute to the achievement of their organization's CS/CSR goals.
Section snippets
Our point of departure: HRM should be deeply involved in CS/CSR (and vice versa)
HRM scholars maintain that the HRM function “is uniquely positioned to assist in both developing and implementing [CSR and] sustainability strategy” (Cohen et al., 2012a, p.1), first, because CS/CSR has implications for HRM; and, second, because most CS/CSR strategies have an internal as well as an external element (Goergen, Chahine, Wood, & Brewster, 2017; Mellahi, Morrell, & Wood, 2010). The internal element covers the way people within the organization are treated and the external element
Explaining HRM's failure to get involved in CS/CSR
How are we to explain the failure of HRM to be more involved in CS/CSR? Much is of course a result of the failure of top management to empower the HRM function and allow HRM specialists to develop and play a key role in CS/CSR. The wider lack of strategic influence of the HRM function has been widely documented – and much lamented – for a long time (Becker, Huselid, & Ulrich, 2001; Lawler, 2017), and HRM's role in the design and implementation of CS/CSR strategies is no exception.
Another
To contribute to CS/CSR HRM (scholars and practitioners) need a multidimensional, multi-stakeholder approach
So how are we, as HRM scholars, to contribute to overcoming the blind-spots that lead to this lack of engagement with CS/CSR? We contend that if we are to make HRM research relevant and impactful, we must widen the lens and adopt a multi-stakeholder perspective on HRM (Beer et al., 2015; Paauwe, 2004; Rogers & Wright, 1998). Recognizing that corporations derive their legitimacy and supporting resources from society, Beer et al. (2015) recently suggested returning to the ‘Harvard Model’ of HRM (
Putting sustainable HRM into action: examples of HRM activities designed to promote CS/CSR
Table 1 provides specific examples of how HRM practices can contribute to positive outcomes or prevent negative outcomes in the economic, social and environmental domains.
Activities aiming at avoiding harmful consequences for stakeholders, in areas such as employment discrimination, worker safety, or environmental protection, are usually regulated (in most developed economies, at least). Even if not required by the law, companies are expected to fulfill these quasi-mandatory requirements and
Discussion and conclusions
In reviewing the evolution of CS/CSR over the past decades, Lenox and Chatterji (2018) observed that up until the early 1990s, to the extent that businesses thought about their responsibilities to society and environmental issues at all, it was usually as a legal or regulatory issue handled by compliance offices, typically referred to as Environment, Health, and Safety offices. In recent years, however, we have seen a proliferation of CS/CSR initiatives, with companies looking at new and
Declaration of Competing Interest
This manuscript has not been submitted previously and there is no conflict of interest.
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