Institutional Contexts for Developing Sustainable HRM

This chapter highlights that sustainable HRM is that are shaped by the macro-, meso-, and micro- level institutional factors. The institutional theory is used to explain ‘why’ organisations attribute importance to certain elements of the contexts for developing sustainable HRM practices as organisational level practices to implement corporate sustainability business strategy for shared value for the organisation and stakeholders (i.e., customers, employees, their families, supply chain employees, the society etc.). Hence, an attempt is made to explain the roles of various global institutions (e.g., GRI, IFRS – International Sustainability Standards Board (ISSB), ILO etc.) that promote sustainable development to achieve economic, environment and social goals of the society as a background. GRI, IFRS-ISSB, and UN Global Compact guidelines for sustainability reporting, financial market institutions for sustainability and civil societies are explained as the important macro-level contexts that have operationalized the development of sustainable HRM practices for shaping human capital required for implementing corporate sustainability business strategy of MNCs to achieve sustainability outcomes. It is explained that the meso-level national contexts such as employment relations, local NGOs, trade unions, business schools, and business competitive conditions has shaped sustainable HRM for socially responsible corporate behaviour. Finally, the micro-level industry context for developing and shaping sustainable HRM practices among MNCs is explained as strategic choices or responses to industry characteristics or contexts, such as the percentage of women employees in an industry, occupational health and wellbeing, higher training costs, capital intensity, industry growth, industry differentiation and industry dynamism.