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Role of employee relations and HRM in driving commitment to sustainability

in MSME firms

Article in International Journal of Productivity and Performance Management · June 2020

DOI: 10.1108/IJPPM-12-2019-0599

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Role of employee relations and Role of

employee
HRM in driving commitment to relations and
HRM
sustainability in MSME firms
Mridul Maheshwari, Arbind Samal and Vaibhav Bhamoriya
Indian Institute of Management Kashipur, Kashipur, India
Received 31 December 2019
Revised 5 May 2020
Abstract 26 May 2020
Accepted 30 May 2020
Purpose – The purpose of this study is to explore the role of employee relations and human resource
management (HRM) practices on firms’ commitment to sustainability in the context of micro, small and
medium enterprises (MSME) in India. This paper proposes a theoretical framework, namely “awareness, action,
comprehensiveness, and excellence (AACE),” to present the solutions and practices as adopted by MSME firms
in meeting their sustainability objectives alongside pluralistic constraints related to human resource, capital
and legitimacy risk.
Design/methodology/approach – The paper employs a cross-case methodology to investigate five food
processing MSME firms to understand and delineate the role of employee relations and HRM practices in
driving their commitment to sustainability.
Findings – The paper discusses the status of employee relations and HRM practices as practiced by MSME
firms, specifically designed to meet their agenda to strengthen their commitment to sustainability. The study
proposes a framework constituting four levels, namely “awareness, action, comprehensiveness, and excellence
(AACE),” that reflects HRM practices as adopted by MSME firms to develop their commitment to
sustainability.
Social implications – MSMEs and food processing industries are critical to the growth of Indian economy
and likewise for other emerging and developing economies. They are especially critical for their contribution to
overall employment and sustainability comprising the second, third and fourth supplier links in supply chains.
They have a major impact on sustainability outcomes and the life quality of employees. This paper makes a
contribution in this direction.
Originality/value – The study fulfills the need to explore the role of employee relations and HRM practices to
develop “commitment to sustainability” in the context of food processing MSME firms in an emerging economy
of India. This paper adds an understanding of people management practices and sustainability in small firms
(MSMEs), adding to the existing literature on the domain, which is mostly skewed toward large firms.
Keywords Employee relations, Commitment to sustainability, Leadership, HRM, AMO theory, Triple bottom
line (TBL)
Paper type Research paper

1. Introduction
Most organizations currently are struggling with dual pressures of promulgating long-term
business growth while operating in the hypercompetitive markets along with the need to
alleviate the negative footprints of their operations (Jansson et al., 2017). Aziz et al. (2018) too
emphasized this challenge and shared how organizations currently walk on a tight rope of
maintaining the financial stability of business and ensuring commitment to sustainability.
Commitment to sustainability is expected to require organizations to harness relationships
with their key stakeholders, such as investors, employees, customers and immediate social
community, for accomplishing their sustainability agenda (Daily and Huang, 2001).
The concept of “commitment to sustainability” has gained a lot of attention from academia
over the last decade. This concept has been studied in different contexts with multiple
perspectives and varied explanations (Schrettle et al., 2014). This study has adopted
“commitment to sustainability,” concept as presented by Jansson et al. (2017, p. 71). They International Journal of
Productivity and Performance
Management
we acknowledge the support and cooperation of the case firms studied and the individuals interviewed © Emerald Publishing Limited
1741-0401
for their time and inputs. DOI 10.1108/IJPPM-12-2019-0599
IJPPM discussed commitment to sustainability as an overarching perspective that sustainability is a
crucial component in several of the firm’s processes and procedures, such as overall
management philosophy, strategic product decisions, competitiveness and strategic planning.
This concept, in connection to all key business processes, has been discussed from three
dimensions, namely economic, social and environmental (Hahn and Figge, 2011). These three
dimensions, driving sustainability, are popularly known as the concept of triple bottom line
(TBL) (Hahn and Figge, 2011; Laszlo and Zhexembayeva, 2011). The TBL perspective reflects
the philosophical and strategic orientation of firms striving for balanced consumption and
regeneration of resources that they may need in the future (Laszlo and Zhexembayeva, 2011).
Though such a notion of business outcome seems pragmatic for TBL, it requires firms to make
considerable changes by aligning their business processes, culture and people pool essential
for any organization committed to sustainable pursuits (Ehnert and Harry, 2012).
Literature has extensively explored the drivers to “commitment to sustainability,” and the
significance of developing positive orientation among people and the alignment of human
resources with these pursuits is accepted (Atkinson et al., 2016; Renwick et al., 2013).
However, most previous studies have examined all these three dimensions in large-firm
context, generally having access to resources that could be allocated to agendas other than
routine operations. (Bryson and White, 2018). The literature on organization sustainability in
medium, small and micro enterprises (MSMEs) context is somewhat limited. The existing
literature has mostly focused on capturing the influence of business orientation (Miller, 2011),
strategic goals (Miles and Arnold, 1991), market orientations (Baker and Sinkula, 2007) and
entrepreneurial or leader’s orientations (Moreno and Casilla, 2008) in the quest for achieving
the sustainability goals. As a result, there exists an unexplored dimension of the role of
“employees” or “people orientation” in driving commitment to sustainability in MSMEs.
The MSME context provides the opportunity to delve deeper into the exploration of the
influence of employees in building commitment to sustainability in unique settings. They are
more diverse than large organizational setups in terms of positioning in the industry and
institutional pressures (Greer et al., 2016). Bryson and White (2018) urged researchers to
investigate the role of employees in driving small firms due to their unique context from large
firms. This research postulates that MSME firms initiate special efforts to build commitment
among their employees by aligning their people processes to generate support for their
sustainability agenda (Atkinson et al., 2016; Schrettle et al., 2014). More specifically, this study
attempts to examine the role of human resource management (HRM) in driving commitment
to sustainability through HR practices in MSMEs from a “how” and “what” perspective.
Through this exploration, this study endeavors to make substantial contributions to both
research and practice. First, drawing upon the tenets of ability, motivation and opportunity
(AMO) and psychological contract theory, the study proposes that MSME firms leverage
their long-built relations with their employees mostly characterized by informality to gain
support for their sustainability agenda. Second, the study proposes a comprehensive
framework, namely AACE (A – Awareness; A – Action; C – Comprehensiveness; E –
Excellence), postulating the role of prevalent HRM practices in MSME firms in their quest
for the legitimization of their sustainability agendas. The framework presents an emerging
economy’s existing context by focusing on one of its socioeconomically crucial food
processing industries. Third, the current study through a cross-case comparative research
design adds to the call by academia for more case study research to capture contemporary
events for holistic and grounded understanding (Yin, 2017).

2. Theoretical background
Traditionally, discussions on sustainability have revolved around the need for organizations
to build internal capabilities, particularly for economic sustenance and development
(Loucks et al., 2010). However, this unidimensional view of sustainability has lately been Role of
critiqued (Jannson et al., 2017). As a response from a contemporary lens, sustainability is employee
envisaged as constituting three dimensions affecting the overall sustenance of an
organization. These three dimensions are popularly referred to as “The triple bottom line
relations and
(TBL) approach” (Elkington, 2013; Hussain et al., 2018). This approach demands equal and HRM
meaningful importance to all three aspects of sustainability, that is, economic, social and
environmental, to remain competitive despite the significance of economics (Elkington, 2013).
Further, existing literature on organization sustainability suggests that organizations
require a blend of strategic reorientation (Hillman and Keim, 2001), alignment of structure
with the industry trends, (Wheelen et al., 2010), regulatory compliance (Schaltegger, 2011) and
constant innovation (Van Bommel, 2011) to accomplish their sustainability goals holistically.
Norman and MacDonald (2004) note that while the rhetoric associated with the TBL seems
worthy, there are practical difficulties associated with managing social and environmental
outcomes along with economic outcomes. According to Melissen et al. (2016), managing all
these three dimensions of sustainability, as proposed in the TBL framework, requires a well-
laid down strategic direction from management, developing trust among employees and
explicit communication indicating its commitment to sustainability.

2.1 MSME firms and commitment to sustainability

From an economic perspective, MSME firms play a central role in the overall development of
an economy. Their role is more significant in developing economies such as India and Mexico
due to their substantial influence on the overall business environment (Batra and Sharma,
2018; Newberry, 2006). Despite this criticality of MSME firms in developing economies, there
is an insufficient understanding of their commitment to sustainability, driven through
appropriate business processes and policies (Johnson and Schaltegger, 2016).
For MSME firms, developing commitment to sustainability has been discussed as a
conscious endeavor, mostly undertaken to gain legitimacy in their industrial, external
ecosystem (Jayanti and Raghunath, 2018). According to Suchman (1995), legitimacy refers to
“generalized perception that the actions of an entity are desirable, proper or appropriate
within some socially constructed system of norms, beliefs, and definitions.” Gaining
legitimacy, in the MSME context, has always been associated with the attainment of validity
for their strategic goals indicating the commitment and confidence of the entrepreneur in the
capabilities and processes essential for change (Rao et al., 2008).
Literature abounds with the arguments related to organizations gaining employees’
confidence in their strategic pursuits by engaging them and partnering with them on this
agenda (Langfield-Smith, 2008). This explanation theoretically finds support from the AMO
theory, which explains the possible influence of specifically designed employee management
practices on channelizing the employees’ efforts toward desired performance outcomes
(Kellner et al., 2019). For MSME firms, the need to gain legitimacy, along with harnessing the
AMO of its employees, has emerged as a critical factor for developing commitment to
sustainability (Ologunde et al., 2015). Some of these legitimacy-seeking activities could be
strong leadership intent for change, clearly laid out communication for awareness, well-
assigned individual roles, suitable rewards and engagement mechanisms, specific initiatives
toward sustainability (Al-Ali et al., 2017; Johnson and Schaltegger, 2016). However, some of
these initiatives as mentioned earlier actually pose challenges for most MSMEs. They, unlike
large firms, operate on informal relations and unstructured HR making it difficult for them to
gain employee’s support (Jiang et al., 2012). Therefore, for MSME managers, it is mainly the
perceived leaders’ intent, initiated actions and constant support that work as proximal
indicators reflecting the commitment of the organization for sustainability (Boxall and
Purcell, 2011).
IJPPM 2.2 Employee relations and commitment to sustainability
Lai et al. (2016) mention different types of employment relationships that exist in the
MSME context. The nature of employer–employee interactions determines the prevailing
employment relations, affecting the ability of the MSME firms to gain support in their
commitment to sustainability (Aldrich and Von Glinow, 1992; Kitching and Marlow, 2013).
The nature of employer–employee relations has been discussed in the literature as based on
the relational psychological contract developed and harnessed by the MSME firms over a
while (Guest, 2016).
Rousseau (1995) postulated relational psychological contracts to be based on mutual
agreements between the employee and the employer developed over long term aligned with
the need of the organization. In the MSME context, employee’s perception of leader’s support
and long-term associations play a critical role in strengthening their relationships essential
for gaining employees’ support in meeting its commitment to sustainability (Amui et al., 2017;
Bartram, 2005). Therefore, as suggested by extensive research, leader-driven employees’
relations dynamics in MSMEs would have a substantial influence in driving MSME’s
commitment to sustainability.

2.3 HRM practices for commitment to sustainability

A review of the existing literature suggests that organizations committed to sustainability
typically engage in techno-centric changes (Linnenluecke et al., 2009). As a result, softer
organizational issues such as their values, vision and employee relations get renegaded in
priority (Blanco-Portela et al., 2017). It is well established now that HRM practices, ranging
from hiring to retirement, have to be continuously aligned with business strategies for
performance and growth (Aldrich and Von Glinow, 1992; Pfeffer, 1998). Similarly,
organizations committed to sustainability also have to align their strategic processes and
HRM practices accordingly (Amui et al., 2017). In the MSME context, to date, evidence suggests
a comparatively limited role of HRM practices in driving organizational goals (Markman and
Baron, 2002; Scase, 2003; Wu et al., 2015). For example, training and development are usually
ad hoc, while functional aspects of the business are relied on. Similarly, compensation and
reward systems are a symbolic appreciation of innovation and positive organizational
citizenship behavior among employees (Nath, 2019). Such practices reflect informal policies
designed and implemented on an ad-hoc basis that lack proactive orientation.
Literature has also discussed the integration of HRM practices with sustainability to
depend upon the organizational values, business strategies and the orientation of the leader
(Amui et al., 2017). However, in MSME firms, “leaders” gain support and trust of employees
by leveraging their family-like relationships and by mainly designing informal HR practices
to gain their commitment (Bartram, 2005; Garavan et al., 2016). Anecdotal evidence suggests
that it is mainly the MSME leaders’ orientation to sustainability and efforts directed toward
key HR practices that promote and strengthen employees’ “commitment to sustainability”
(Ehnert, 2014; Mishra, 2017). Alternative evidence suggesting the primacy of economic
objectives over other sustainability goals as limiting the role of HR on driving sustainability
also exists. (Markman and Baron, 2002). These conflicting evidences create the need to
examine the role of employee relations and HRM practices in driving commitment to
sustainability in MSME context as undertaken in this study.

3. Research methodology
A multiple case studies approach, for qualitative exploratory research design, was used for
investigation (Eisenhardt, 1989). The choice of the method was guided by the need to examine
this contemporary phenomenon in its contextual setting to provide explanations related to
the influence of HRM practices in driving commitment to sustainability in the MSME context.
Also, multiple case studies approach has been widely described in the literature to provide an Role of
opportunity for multisource data collection and in-depth understanding about the employee
phenomenon that cannot be examined in isolation from its context (Robert K. Yin, 2014;
Eisenhardt and Graebner, 2007).
relations and
HRM
3.1 Research context: MSME enterprises vis-a-vis food processing industry
The MSME firms in India have been classified as a group with a set limit of investment on
plant machinery and equipment as illustrated in Table 1. This study was conducted in the
MSME setting as the phenomenon was witnessed to be deeply intertwined with it with
opportunities for unique explorations (Singh and Vohra, 2009). The phenomenon of the role of
employee relations and HRM practices in driving commitment to sustainability in MSME
firms was found to be exciting for investigation due to a unique combination of their
smallness and constant economic urgencies along with the need to innovate for holistic
sustainability (Garavan et al., 2016). The MSME firms account for approximately 55%
contribution to Indian GDP and generate roughly 45% employment in both formal and
informal sectors, which is a large percentage as per Indian socioeconomic landscape (Ghatak,
2010). Further, this Indian industry in India is poised to grow at 14.6% CAGR till 2021, with
32% of the total food market operating in MSME format and generating 11.6% share in total
employment and 13% share in exports (MSME-Support, 2018).
Within the MSME sector, the food processing sector is considered as the “sunrise
industry” in India, signifying immense growth potential. MSME food processing units were
chosen as strategic research sites for the study as the complexity and multiple stakeholders
involved (Bijker et al., 2012) provide an ideal setting for exploring our research question.
There are three significant characteristics of the food processing industry: quality, compliance
and cost-effectiveness (Ziggers and Trienekens, 1999). Consumers demand food, which is of
consistent quality with broad assortment available at a competitive price. The entire
production chain and distribution processes are also characterized by quality concerns (van
der Vorst, 2000). Regulations and standards may not be explicit or sufficient in many cases,
especially in the MSME industry. Proactive management is essential to curb the negative
environmental and social impacts of business (Singh and Vohra, 2009), and failures to
manage lead to loss of brand image (Rondinelli and Berry, 2000). This newly developed
emphasis on organizational sustainability unfolds pluralistic constraints wherein managers
need to balance economic goals along with social and environmental aspects too.

3.2 Case selection

Five independent food processing MSME firms were selected as the unit of analysis and
strategic sites for this research. Sample size of five proved to be sufficient, considering the
insights that emerged, providing deeper insights into the phenomenon under investigation.
Yin (2017), too, had suggested that three or more cases help in providing compelling support
for evidence while moving ahead with initial exploratory frameworks. The chosen five case

Investment ceiling for plant, machinery or equipment

Classification Manufacturing enterprises* Service enterprises**

Micro Up to Rs. 2.5 million (US$ 50,000) Up to Rs. 1 million (US$ 20,000)
Small Rs. 2.5–50m (US$ 1m) Rs. 1–20m (US$ 40,00,000)
Medium Rs. 50–100m (US$ 2m) Rs. 20–50m (US$ 1m) Table 1.
Note(s): *Investment limit in plant and machinery, **Investment limit in equipment, ***Rs. 50 5 US$ 1 MSME classification
Source(s): Ghatak (2010) in India
IJPPM sites proved to be representative, as all of them exhibited distinct management and
ownership patterns, reminiscent to typical MSME structures generally seen in India with a
flavor of variations within them as illustrated in Table 2. Secondly, these firms were selected
keeping in mind the presence or absence of formal HR teams. Such an assortment within the
firms helped in capturing similarities and differences concerning people orientation in
driving their commitment to sustainability. Thirdly, most of our chosen firms have marked
differences in terms of labor composition (male/female ratio), thus adding breadth to the
analysis and overall outcomes. Lastly, the chosen firms also exhibited variations in terms of
the target market and customer segment they are catering helping to understand variations,
if any, in their strategic approaches to managing the business along with “commitment to
sustainability.” In general, the authors were able to explore multiple contexts of
organizational sustainability measures through a comparative analysis of HRM practices
and employee relations prevalent in these five MSME settings.

3.3 Data collection

The researchers collected data over six months from all these five firms, and interviews were
mainly conducted with key internal stakeholders holding strategic positions. The key
stakeholders included entrepreneurs themselves holding designations such as chairman and
managing/executive directors and managerial staff holding key positions. Multisource data
collection from each case helped in data triangulation and capturing information from
various perspectives (Ahlstrom et al., 2008). In total, our study comprised 33 interviews, each
ranging from 1 to 2 h.
For conducting the interviews, a suggestive case study protocol was prepared for
guidance with scope for flexibility available with the researchers to capture the depth too.
Each interview started with researchers introducing themselves to the respondents to
develop a rapport, followed by semistructured inquiry to gain responses for the broad
questions planned. Our initial interviews explored the history and growth of each firm along
with prevalent industry trends, sustainability orientation and practices as followed and the
role of employee relations and HRM practices in particular. The snowball technique was
employed for identifying key employees to be interviewed within each firm. Besides
interviews, relevant data was also gathered by reviewing relevant organizational documents
as provided and by participating in official meetings with permission. Yin (2014), too,
suggested researchers to pay attention, particularly to the richness of data, methodological
rigor by gaining the trust of the participants.

3.4 Data analysis

For data analysis, Eisenhardt’s (1989) work on theory building from qualitative case studies
was referred to gain insights and develop conclusions. All the interviews were self-
transcribed, which helped in the first round analysis leading to advance within-case analysis.
Then second cross-case analysis was conducted to trace similarities and differences across
cases. It helped to gain insights into emerging, repetitive and unique insights that facilitated
the development of the conceptual framework. This conceptual framework provided a
holistic explanation of the phenomenon investigated. The initial analysis of verbatim quotes
was done through open coding process to identify first-order concepts and later linkages were
captured through multiple iterations of axial coding conducted to develop second-order
themes, leading to aggregate themes providing explanations to our research questions
(Strauss and Corbin, 1997). The coding structure has been presented in Figure 1.
For triangulation, the research team comprising three authors independently conducted
the theme extraction activity for each firm, which was later compared to derive patterns and
themes inductively. This process helped to ensure the validity of data analysis. Adequate
 No. of employees Male/
Firm (permanent/ female Turnover Nature of Ownership/management
no temporary) ratio (2018-2019) business Market/customer segment HR department pattern

Firm 1 36/150 65/35% ∼100 Crores Packaged food Domestic market with focus Exists Private limited –
on all set of consumers professionally managed by
industry experts þ owner
Firm 2 26/280 82/18% ∼150 Crores Rice milling and Domestic as well as exports to Nonexistent Private limited – family
frozen foods African countries ownership and management
Firm 3 31/170 93/7% ∼200 Crores Oil extraction and Domestic market with focus Single HR Private limited – family-
cattle feed on consumers restricted to professional owned and managed by the
specific geographic location owners þ hired staff
Firm 4 29/128 30/70% ∼120 Crores Spices Domestic market with focus Exists Hindu undivided family
manufacturing on niche customer segment (HUF) concern converted into
a private limited entity
Firm 5 30/200 25/75% ∼35 Crores Fresh food Premium domestic B2B Exists –mostly Private family-owned and
packaging market þ some indirect export informally managed enterprise
value chains managed by the
owner
employee
relations and
HRM
Role of

Table 2.
Details of case firms
IJPPM

Figure 1.
Data structure and
coding process

precautions were taken to avoid bias to creep in the data by conducting multisource
triangulation and interviewing people from different hierarchical levels for data validation.

4. Findings
The study proposes an emerging conceptual framework presenting four dimensions that
discusses the role of employee relations and HRM practices in strengthening MSME firm’s
commitment to sustainability. These four dimensions are (1) awareness, (2) action (3) Role of
comprehensiveness and (4) excellence. Table 3 presents the data on the status of five MSME employee
food processing sector firms studied concerning these four dimensions and their components
related to the role of HRM in driving commitment to sustainability. It also provides the
relations and
coding scheme adopted to arrive at these subthemes and themes that combine to form the frame. HRM
The data reinforces our initial theoretical proposition that the Indian MSME managers and
promoters generally attempt to exploit institutional voids they experience while deploying
any specific strategic interventions with an agenda to be more committed toward
sustainability. They also need to respond to external stimuli such as statutory guidelines,
industry standards and even aspirational practices of market leaders and multinational firms
in order to compete. The following analysis discusses the role of employee relations and HRM
practices and MSME-specific informal employee relations under the guidance of leadership as
coexisting logics to fill institutional voids present in the tininess and newness of their context.

4.1 Awareness
Awareness has emerged as the first step taken by a firm developing commitment to
sustainability. It is related to the sharing of information from the leader of the firm to
employees to introduce them to the strategic direction of the firm. With these employees get
an idea about the focus of the firm and actions they would be expected to initiate related to
sustainability. The subdimensions related to awareness emerging from the data are:
4.1.1 Information dissemination for generating awareness internally. MSME firms usually
face resource constraints, which mostly result in economics taking priority while other
sustainability agendas either take the back seat or go undocumented. The firms striving for
sustainability have to make concerted efforts to create awareness so that employees start
appreciating the logic for sustainability and get a sense of the interest of the leader about it.
The general manager of firm 1 shared that they use both formal structures and informal
contacts with the staff and workers for communicating the vision and mission of the firm,
including sustainability agendas. It depicts how they are trying to leverage the HR
department along with informal means to facilitate awareness generation among employees.
Our HR department maintains relations with employees through formal and informal means,
communicates the top boss’s plans to, and seamlessly acts as a mediator between different
departments. The personal contacts of the HR staff with all the employees ensure ideas and
innovation are not pushed to the background - (GM – case firm 1)
4.1.2 Access to sustainability practices prevalent in the industry. It emerged from the data that
firms and especially their leaders have to remain updated with the industry continuously. As
per respondents, this helps leaders to communicate their plans about sustainability actions
with employees with a logic that other firms are doing. It helps to gain employees’ support too.
The chairman of organization 2 reminisced how they have always been part of trade
association meetings, mainly to be aware of the latest technologies and practices.
It’s my responsibility as a director to make my employees aware and sure as to why we are changing
our processes. I have seen that employees appreciate when they are told why we are doing it and how
it would help us in the future. (Communicating) the fact that others are doing similarly, really helps
(Chairman – case firm 2)
4.1.3 Developing reorientation among people for triple bottom line sustainability. The
respondents shared that awareness about the need to integrate social and environmental
dimensions of sustainability with economic dimension has always helped; otherwise, it is
generally different for people to relate.
The respondents shared that there is a constant struggle to maintain economic sustenance
of the business as they operate on a tight margin. However, even with this condition, if logic is
 Table 3.
IJPPM

MSME firms
commitment to
HRM in driving
Status of role of

sustainability in
employee relations and
Theme Subtheme Firm 1 Firm 2 Firm 3 Firm 4 Firm 5

Awareness Information Present Present Present but limited Present Present

dissemination for
generating awareness
internally
Access to Present, actively Present, forge Present but very Present Present, actively
sustainability search information collaborations limited search information
practices prevalent in
the industry
Developing Present Present Present but limited Present Present but focus on
reorientation among social dimension
people for triple
bottom line
sustainability
Action Initiating actions with Present with Job Present, Formal HR Present and Driven through
assignment of descriptions responsibility department assigns informal informal assignment
responsibilities to assigned also to responsibilities
specific individuals females family
members
Aligning processes for Present Present, actively Only short-term focus Present, focus on Long-term focus
short-term and long- investing in – long-term focus short to medium related to hiring else
term actions technologies largely absent term all processes have
short-term focus
Initiatives to upskill Present, investments Present, seeking Largely absent Present, pursued Present, focus on
employees for driving in training and professional with external keeping operating
new processes developments advancement of support costs low through
family members improved loyalty
joining business

(continued )
Theme Subtheme Firm 1 Firm 2 Firm 3 Firm 4 Firm 5

Comprehensiveness Setting up KRAs at Present through Present, teams led HR professional led Present, specific Largely absent
teams and department responsibility by owner-managers team goals evolving for
level to focus on assigned to teams and teams
sustainability departments
Focusing on Present, seeking Present, involving Largely absent apart Present Quite weak
harnessing inputs from local professionals from zero waste
sustainability driven academic institutions through practices and
competencies participation in the competencies
board
Adjusting policies for Present, actively Present, pursuing Largely absent except Present, focus to Present, actively
integrating business integrated in business as a business integration of zero strengthen pursuing social
with sustainability strategy strategy to tap waste in business sustainability change
international strategy performance
markets (exports)
Excellence Voluntary CSR Present Present Somewhat present Present Integrated into social
activities beyond the entrepreneurship
mandatory
requirements
Reinforcing Present, Informal with Present, Present, largely Present, informal but
commitment to formal þ informal stronger norms formal þ informal informal strong norms
sustainability goals existing
through employee
engagement and
rewards
Generating Present, actively Present, actively Largely absent Present Present but nascent
continuous learning pursuing through pursuing through
for process external linkages internal and
improvements external linkages
employee
relations and
HRM
Role of

Table 3.
IJPPM shared how by giving importance to social and environmental dimensions too would help us
grow in the future, then it is appreciated.
As an MSME, we are small in size with limited resources. We do not have many choices, business
supersedes all decisions, but if the management is really sure why they are doing it and why focus on
community and environment is important then employees relate with it. When I speak to my people
they gears up to do it. – (MD – case firm 5)
Sustainability awareness also emerged as an instrument that helps MSME firms to gain
legitimacy in their ecosystem. Semiformal employee engagement tactics facilitated through
HR emerged as a massive influencer in reorienting people for the TBL.
We started our venture inspired by our founder to help local people with jobs, so we tied up with an
NGO to help reach the neediest. This helped us in realizing their needs and aspirations better ad it has
given us stable workforce (Manager – case firm 1)
The earlier discussion suggests the importance given to awareness building by MSME firms
to gain their employee’s support for initiating actions to build “commitment to
sustainability”. Table 3 presents the status of all five case firms on aforementioned
attributes related to the role of “awareness.” These initiatives were mostly found to be present
in all five firms, with most of them actively boundary spanning and gathering industry
information to update their employees about the industry. Case firm 1, 2, 4 and 5 significantly
emphasized on awareness generation to develop employee’s commitment to sustainability.
Firm 3 came out to be significantly focusing on the economic aspect of sustainability with
minimal efforts taken to drive social and environmental sustainability quite contrary to Firm
5 due to variations in the values on which these firms were established.

4.2 Action
Second important aspect emerging from the data as shared by the case firms is about suitable
actions initiated by them to align their existing processes to manage their sustainability
agendas.
4.2.1 Initiating actions with assignment of responsibilities to specific individuals. All the
sampled firms have taken special initiatives to drive sustainability by assigning specified
responsibilities to their employees. The following excerpt presents suitable evidence for
the same.
“We are always in touch with plant supervisors and contractors and ask them to ensure that there is
standardization between shifts to main consistency in our efforts. It helps us to follow proper
processes and committed. (GM, case firm 2)
Case firm 2 was particular that each shift follows the same process providing strength
to their sustainable operations, and for this, they have assigned responsibilities to the
plant supervisors and even to contractors that process should remain consistent across
shifts.
In this, “leader” emerged to be playing a crucial role. Respondents shared that it is the
leader who has to give signals that the firm is serious about it, and everybody follows the
responsibilities assigned to them.
“We know the importance of sustainability for our business. . .so we regularly involve all our key
employees in this process even in constant up-gradation of technology. . .this helps to remain
relevant and focused (Manager, case firm 4)
4.2.2 Aligning processes for short-term and long-term actions. Data suggests that assignment
of responsibilities will deliver results when employees get opportunities to work with
processes aligned with the change initiated. Each of these MSME firms stressed on the fact
that they have to manage this task with limited resources by aligning their processes with Role of
the goals. employee
We understand the importance of sustainability, especially the need to be environmentally relations and
conscious, but we have seen in our business, even up-gradation of technology has been done when it HRM
was essential. It was for short-term profitability, but our investment in the solar-plant was made
without any emergency, and it was a big investment with results to be received in the long-term only.
We think from both the perspectives (MD, case firm 2)
Some firms shared to have even tied up with engineering and management colleges, locally, to
initiate two-way sharing to improve their operations and production process.
Our second production line which was far more effective from the first one is an outcome of better
processes that we learned during an interaction with a management institute professor (Product
Manager, case firm 1)
4.2.3 Initiatives to upskill employees for driving new processes. Along with aligning all
processes, it emerged that the right actions could be taken only when the upskilling of
employees is done about new processes and developments through training. Training
enables them to drive sustainability, not always possible with traditional approaches.
Disrupting the production line for checks and corrections has led to severe wastage for us. We even
encouraged a simultaneous correction system, but it was never efficient. Then we initiated the
training of all our line managers as per our new initiatives and it helped. We were efficient and were
also able to boost the morale of our employees. (Plant Manager, case firm 1)
Further, some of these firms also shared the efforts taken by them in developing their
employees by adopting practices through which processes were improved, and employees
were also more engaged.
We believe in zero wastage policy as it helps us in maintaining profit. Our employees are regularly
trained in new technologies to cut costs. Job rotation is a perfect solution for this. Our HR ensures
adequate and compulsory job rotation. Now our employees have started liking it actually as they
know multiple tasks (MD – case firm 3)
The earlier discussion highlights that these MSME firms continuously attempt to promote
sustainability through their actions and involvement of all work teams. However, these
actions further require efforts to generate acceptance of sustainability in policymaking.
However, different approaches have been shared by different case firms regarding the
assignment of responsibilities, as presented in Table 3. Case firm 1 and 4 set departmental
and team responsibilities, case firm 2 used family’s female members to take responsibility to
drive sustainable actions, case firm 3 used HR department and case firm 5 relied purely on
informal relations. Ultimately, in all these firms, it emerged that various actions are taken to
drive sustainability. However, the momentum with which it is initiated in a firm is based on
the importance given to it by the leader while leveraging the informality in employer–
employee relations to operate in MSME firms.

4.3 Comprehensiveness
Apart from raising awareness and implementable actions, developing a wide-ranging
support system to drive coordinated efforts for the development of a “comprehensive” culture
emerged as an essential element for driving a long-term pursuit of sustainability by
MSME firms.
4.3.1 Setting up KRAs of departments (and teams) to focus on sustainability. Most of these
firms shared to have a basic plan to focus on sustainability by fixing Key Responsibility
Areas (KRAs) of critical department/s (teams). This preparedness is even more crucial for
IJPPM food processing businesses due to tremendous pressure on this sector from federal
agencies such as National Green Tribunal (NGT), National and State Pollution Control
Boards, to adhere to regulatory norms.
We are aware of our responsibility towards society and the environment. Frankly, there is a lot of
pressure on us these days. . . . . .from the regulatory agencies like NGT, Pollution Control Board,
FSSAI. Operations, projects, HR, all have worked together, but HR has to ensure that everybody
understands and adheres. That requires efforts to boosting the morale of staff and upskilling as per
new requirements (DGM, Finance – case firm 1)
For case firm 2, exports account for 80% of revenue. Focus on meeting stringent quality
standards and traceability across the entire food production process is critical for them,
especially when they have to compete with large enterprises.
Product standardization is key to our business. We value our supply chain partners, right from
farmers to our retail partners overseas. For this, we have set high values and ethical standards and
honor our commitment at any cost without compromising. As owners we take full responsibility
even with some extra costs in the short run. (MD, case firm 2)
4.3.2 Focusing on harnessing sustainability-driven competencies. Data clearly shows that most
of these firms are continuously working for developing different kinds of skills and
competencies, which they believed essential to harness sustainability.
Our plant in-charge was brought from the country’s leading player from our industry not only for
processes but also for his capabilities to make the plant the best overall . . .whether it is raw material
management, people, training, and environment too. . .no wastage. . .he is a master. (Chairman, case
firm 1)
Some of these firms also mentioned resorting to developing their talent with new
competencies instead of bringing a resource from outside.
Training the employees across the entire organization is a must to keep abreast with the latest
technologies and management systems (Owner, case firm 4)
The owner-managers of firm 2 were proactive in developing competency and had set up a
board to ensure some of the competencies (that they could not hire) were available within the
board for strategic advice. Therefore, different strategies have been adopted by these firms
for accomplishing a common objective of building the right skills and competencies to drive
sustainability.
4.3.3 Adjusting policies for integrating business with sustainability. Pursuing sustainability
has never been easy for MSME firms as they are constrained mostly with financial resources,
and economic sustenance takes priority. Therefore, case firms expressed that wide-ranging
sustainability requires redesigning processes by integrating economics with social and
environmental agendas.
We understand the importance of sustainability in our business. We have been upgrading our
technology from time to time by applying the profit logic with social and environmental factors over
the long run. We have a zero wastage policy in our unit. It saves cost, involves people, and also
supports the environment. So far we have been doing it successfully (MD, case firm 3)
In case firm 2, owners have built a system where the smooth running of production processes
is monitored through informal structures and positive work behaviors developed with
employees over the years through the relational contract and two-way communication. Now
employees themselves believe in and proactively take initiatives toward sustainability.
We rely on automation for extending superior quality to our customers. Our owners have given us a
free hand in managing the production line for better efficient results. We want it to be the best
 without any problem. We take care of minute details and sahib (the boss) monitors it without Role of
interference. (Manager, production, case firm 2)
employee
The earlier discussion highlights how these MSME firms have adopted a comprehensive relations and
approach to sustainability by aligning their processes with sustainability. Table 3 clearly HRM
shows how informality provides advantages to MSME firms in leveraging their informal
norms and structures through committed leadership to create wide-ranging sustainability
efforts. They are also moving out of their comfort zones to resolve the business–
sustainability dichotomy by involving employees more in this endeavor.

4.4 Excellence
Regularization of initiatives taken to achieve sustainability by identifying opportunities,
pursuing them consistently and accomplishing stated sustainability goals has been termed
as excellence. Data provides several pieces of evidence depicting pursuance of excellence by
these case firms driven by the selection and execution of focused strategies and initiatives to
leverage resources available. The key lies in the proactive management approach focused on
capturing opportunities along with ensuring the viability of the business. The aspects
emerging from the data are:
4.4.1 Voluntary CSR activities beyond the mandatory requirements. These aspects emerged
in the case of firms who saw sustainability as a base for the future of their business. These
firms realizing the importance of social impact in their business drive special social initiatives
for gaining excellence. Most of these firms had undertaken mandatory CSR spending on
social causes and the creation of environmental awareness within and around their city. It
helps them build a brand with a culture promoting organization committed to ethical and
sustainable business practices.
The philosophy is to go beyond the stated and not just in monetary terms only. . . we believe in
inclusive growth. Beyond our statutory contributions in CSR, we make special awareness drive for
going green, and additionally, we are handholding a local school with infrastructure and monitoring
its development. (DGM Finance – case firm 1)
Respondents shared that efforts are made to ensure that CSR and other such activities
become an integral part of their functioning and employees believe in it. Some firms even
shared to have adopted it purely on a voluntary basis and have garnered goodwill through it.
It helped them in retaining value-oriented employees.
Amrit Ganga is a voluntary program for the adoption of stray animals like cows. It’s a noble
initiative. In India, cows are worshipped it’s a small initiative to protect the cows and bulls. From a
personal initiative, it has now become a community initiative. We are proud of it. (MD – case firm 4)
4.4.2 Reinforcing commitment to sustainability through employee engagement and rewards.
Engaging employees has emerged as an essential instrument supporting these firms to
channelize their efforts and actions in the direction of sustainable goals and strategies. All
these firms have designed their mechanism to remain connected with their employees.
Some of these firms shared providing housing facilities to managers in addition to
monetary and nonmonetary benefits. The owners acknowledged that their employees
contribute substantially to their business.
We have built a culture of trust, loyalty, and competency among our workforce. We keep them
engaged through periodic job rotation and special rewards/ recognition programs. (Chairman – case
firm 2)
More insights were shared by case firm 5 owner, with a slightly different view on this, while
explaining the impact of being rooted in a vision of working for the benefit of local area and
people.
IJPPM Pushing new ideas through rewards works sometimes, but its impact is temporary, for longer impact
enjoyment of work and involvement in it (engagement) is essential. . . if we want our business to
grow along with these committed people (Owner – case firm 5)
Some of these firms also emphasized the importance of building an excellent brand image.
They specifically mentioned that employee engagement is a game changer and that their
employees are eventually extending it to other stakeholders in the supply chain.
We care for the well-being of our employees and partners. We have voluntarily instituted programs
to teach our farmers the best agricultural practices. Our customers associate us with the highest
quality product. Our business values, ethical and sustainable business practices are the hallmark of
our brand today. Even our workers and staff are encouraged to share new ideas. . .they are excited.
Our efforts are paying now. (MD – case firm 5)
4.4.3 Generating continuous learning for process improvements. While some clarity exists on
how the MSME firms were trying to tackle the change and compete in the era of sustainability
beckoning them, they could not help avoiding the uncertainty that characterizes them as they
are not the market leaders in product or factor markets. They must continually adjust to the
changes in the market at the micro level.
Our issues are never-ending. Every second day a new situation arises, and solutions have to be
developed in-house. We always push our people to learn new-new things, whether operations, social
systems or environmental challenges. We strive for being the best in our lot. (MD – case firm 1)
Some firms shared how they have to focus on building a system for continuous learning of
their employees so that they understand sustainability in-depth, remain connected with the
latest developments and efforts to drive it. One such dimension of constant learning for
organizations and employees was of integrating business with sustainability.
We consciously hire more women (almost 70% of the workforce is comprised of women) as they are
more efficient in delivering quality in a repetitive process. They are also keen observers and give
suggestions for improving our processes (Owner – case firm 5)
Across these firms, wide variation exists concerning aspects of excellence as presented in
Table 3. While voluntary CSR beyond the mandated is prevalent in all firms, continuous
improvement of processes for sustainability beyond profits is nearly absent in firm 3 and
weak in firm 5, it is proactively sought for by firms 1 and 2. The use of informal employee
engagement and rewards is prevalent across firms but formally used by only firms 1 and 3
along with informal efforts driving commitment to sustainability.

5. Discussion and implications

5.1 Theoretical contributions
Within the food processing industry, the pluralistic logics of quality, compliance,
cost-effectiveness, traceability and employee relations serve as the main challenge toward
“commitment to sustainability” (Ziggers and Trienekens, 1999). These challenges posit a lot
more constraints for MSME firms in the food processing industry due to limitations because
of their small scale and resource crunch (Krishnaiah and Rajashekhar, 2012). MSME firms
experience constant need for modification in entrepreneurial and managerial actions
promoting innovation (Mittaal, 2010). This study conducted in the Indian MSME context
postulates that most MSME firms in India are family-owned enterprises that operate with
leadership playing dual roles of owner and manager. Our findings reaffirm literature
suggesting the prevalence of informal relations (employer–employee), mainly developed by
leaders using unique management styles. They are found significant to set up processes and
practices driving the reoriented business agenda of sustainability (Trienekens and
Zuurbier, 2008).
 The findings depict the influential role of MSME leaders who, by practicing informality, Role of
adopt varied kinds of employee management practices to control and channelize business employee
operations toward chalked out strategies. Most of these MSME leaders leverage their family-
like relationships harnessed over the years and generations for building strong employee
relations and
relations (Robertson and Barling, 2013). These relationships are theorized as relational HRM
psychological contracts, an essential determinant for driving desired behaviors from
employees (Storey, 2014). Almost all owners interviewed presented benefits gained by
developing relationships with employees. Further, informality in their structure and
communications provided them enormous opportunities to promote an organization-wide
channelizing of efforts or employees toward sustainability (Wu et al., 2015). The influence of
such relationships on the simultaneous implementation of social, environmental and financial
goals has been discussed in previous research studies (Epstein et al., 2010). This study further
endorses the HRM literature advocating the design of organizational HR practices initiating
specific actions by harnessing the AMO of its people, for their desired support and
involvement (Kellner et al., 2019).
The study proposes a conceptual framework depicting the role of employee relations and
HRM in driving commitment to sustainability in MSME firms. It presents that individual
employees and MSME firms develop “commitment to sustainability” using the framework of
building awareness, initiating action, developing comprehensiveness and attaining excellence.
In this process of driving commitment to sustainability, the leadership operates like an
invisible, omnipresent medium.
Awareness refers to the supply and use of information to bring in required reorientation in
people. MSME leaders engage in personal and direct efforts to gain legitimacy through
awareness and commitment to the TBL functioning of their firms by mitigating information
asymmetry (Al-Ali et al., 2017). Awareness is the first level toward a commitment to
sustainability (Hammer and Pivo, 2017). Our findings suggest that MSME entrepreneurs
perform the boundary spanning role and serve as the key linkage between external and
internal environments in which the business operates. Jayanti and Singh (2018) reported
somewhat similar results for achieving TBL objectives.
“Action” is posited as the next level while being linked to “awareness.” While recycling,
reuse and waste reduction are primary principles for ensuring organizational sustainability,
our findings suggest that HRM practices such as assigning responsibilities to specific
individuals increase the clarity and seek learning curve benefits of actions being undertaken.
HRM practices supporting employee engagement and upgradation and reminiscent of high-
performance work practices (Obeidat et al., 2016) such as selective hiring, training and smart
compensation strategy may help.
Achieving an organization-wide approach is “Comprehensiveness,” the next level in the
frame. MSME units build a culture of trust and positive affective behavior through employee
engagement and informality for setting departmental responsibilities. MSME managers and
promoters acknowledge the newfound challenge of the customer and societal concern for
healthy and ethical footprints of business. Most firms focus on harnessing sustainability-
driven competencies as a future focus area for change by challenging traditional policies and
integrating demands of business and other sustainability dimensions.
Lastly, we posit “excellence” as the final level for firms aspiring for sustainability goals. In
particular, most MSME firms are not bound to compulsory CSR spending in India (Jain and
Winner, 2016). However, our findings suggest that most firms are involved in voluntary CSR
initiatives, and they leverage it as a tool for marketing their brand within their local
periphery. The establishment of employee engagement and rewards programs assists in
creating a culture for innovations and holistic business gains.
This proposed conceptual framework presents significant contributions to both theory
and practice. It provides the theoretical explanation related to the process through which HR
IJPPM practices drive harnessing of commitment to sustainability in MSME firms in the food
processing sector. It also highlights the role of the leader in removing information
asymmetry, empowering HR strategy through AMO theory and using informal employee
relations to ameliorate culture in the Indian MSME context.

5.2 Managerial implications

To practice, the proposed framework provides a four-stage charter that could be used by
MSME firms choosing to pursue sustainability by introducing them to the attributes of all
four dimensions proposed in this framework. The firms can use this framework as a checklist
to assess their current status and plan the efforts and actions that could be taken up to drive
efforts toward their sustainability goals. The firms could assess their information
dissemination processes regarding their sustainability goals, to examine how their
business processes could be aligned with sustainability goals, to focus on developing
requested competencies and further reinforcement of sustainability through the designing of
appropriate rewards and training processes. The framework empowers the firms with a
better understanding of what complementary information, actions, policies or ecosystem
components are leading to success or low achievement. Thus, the framework enables course
correction on the way to achieving sustainability goals as well.

5.3 Limitations and recommendations for future directions

This study despite its contributions to both academia and practice has certain limitations. A
possible limitation could be the research approach that is the selection of qualitative mode of
inquiry that is quite often criticized as “impressionistic and subjective” (Bryman, 2004,
p. 284). To cut down on this subjectivity, numerous attempts have been made to cut down on
the personal bias of researchers through reflexivity and constant comparison of codes done
across researchers. After each interview, the team of researchers who conducted interviews
jointly constantly compared their understandings and clarified their misconceptions, if any,
to provide strength to data. However, this work conducted using a qualitative approach with
five case organizations raises another concern about the generalizability of findings (Bryman,
2004, p. 284). However, the objective of qualitative studies is to uncover reality along with the
specifics of the context instead of arguing for the larger applicability of the findings. Further,
qualitative studies mainly attempts to attain assertional logic guiding analytical
generalization (Kvale, 1996).
To build over this study, the future researches can include a longitudinal study across
sectors and geography to ascertain the findings of the present study. Lastly, future studies in
the MSME context can empirically test the role of entrepreneur orientation and innovative
workplace behavior as antecedents of commitment to sustainability. Such studies will further
pique the interest of the readers and also add more meaningful antecedents to the existing
body of literature on organizational sustainability.

6. Conclusions
Our study indicates the pivotal role of HRM practices characterized by the leader-led
informality in employee relations as the key to the creation of commitment to sustainability.
The sampled firms have innovated the interface of employee relations and HRM tools for
achieving sustainability goals. The use of innovative solutions and practices to avoid agency
and information asymmetry toward developing a shared vision and culture for sustainability
and continuous learning are pioneering and counterintuitive. The frame of awareness, action,
comprehensive and excellence is particularly suitable for guiding MSME firms. This study
concludes by filling in existing literature gaps related to the interlinkages between employee
relations and commitment to sustainability in the MSME context. Secondly, the study Role of
contributes to practice by providing an understanding of MSME firms about the ways through employee
which they operate in the food processing sector while striving toward sustainability goals.
relations and
HRM
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Corresponding author
Mridul Maheshwari can be contacted at: mridul.maheshwari@iimkashipur.ac.in

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