Linking Green Hrm And Green Intellectual Capital With Corporate Environmental Citizenship Behaviour

Abstract

Many studies on green management (GM) focusing on behaviour of organizations in relation to external and internal pressure agreed that organization behaviour can vary according to institutional environments. Some studies argued that Corporate Environmental Citizenship Behaviour (CECB) can be viewed by categories of regulative, normative and cognitive adoption. While, researchers in the area of human resource management argued that Green HRM should be employed in order to effectively implement GM initiatives. Whiles others postulated that GM needs high level of knowledge, skills and competencies as resources for further implement green management. It is important to explore how Green HRM specifically contribute to effective implementation of GM by observing CECB. We need to understand as well, how Green Intellectual Capital (GIC) being influenced by Green HRM and in turn how these variables affect CECB. This study proposed to explore the mediating effect of GIC in the relationship between Green HRM and CECB. Based on previous literature, a researchable framework was developed. Data from Malaysian Electric and Electronics industry was collected to test these relationships. This study found that GIC do significantly mediates the relationship between Green HRM and CECB.

Keywords: Green HRMgreen intellectual capitalcorporate environmental citizenship behaviourelectric & electronics

Introduction

Green management (GM) has become essential part of the business practices. Many businesses embedded environmental friendly management practices as part of their initiatives, voluntarily or as a compliance to external pressure imposed to them. Some researchers found that being environmental friendly companies would contributed to economic benefit (Molina-Azor´ın et al., 2009) and escalate the company manufacturing effectiveness, supporting cost reduction, quality enhancements and the creation of new products and processes (Yang et al., 2010).

GM is described as the organization broad process, practically to attain sustainability, waste reduction, social obligation and a competitive benefit through a continuous learning and development and captivate environmental initiatives that are fully synchronised with organizations’ objectives and procedures (Haden et al., 2009). There is an increasing pressure from external business environment that force business to engage in environmental management initiatives (Clark, 2005). GM behaviour vary from obligatory or compliance to voluntary dimensions (Ozen & Kusku, 2008).

On the other hand, to effectively implement GM initiatives, organizations would need specific and high level knowledge, skills and competencies among the employees (Renwick et. al., 2008). To facilitate the implementation of GM, human resource practices should be employed systematically and strategically which allow the firms to realize and use the knowledge and expertise (Scarbrough, 2003). Many researchers also argued that to effectively implement GM, organization requires specific knowledge and skills that formed green intellectual capital (GIC) in the organization.

This paper explored the linkages of managing green human resource practices that contribute to green human capital and in turn contribute to corporate environmental behaviour. This paper reviewed the existing literature to maps the current thinking of corporate environmental citizenship behaviour and its linkages to human resources practices and intellectual capital; proposed a researchable framework and tested their relationships using data collected from the Malaysian Electric and Electronics (E&E) industry.

Green Intellectual Capital (GIC)

Findings from previous researches proven that intellectual capital (IC) positively influence the firm’s competitive advantage (Davenport & Prusak, 1998). IC is conceptually derived as the total shares of all intangible assets, knowledge, and capabilities of a firm that possibly could contribute to the value creation of competitive advantages, hence fit the purpose of gaining its organizational performance goals (Masoulas, 1998).

However, a very limited research has examined whether IC in environmental management has a positive effect on organizational performance or competitive advantage of firms (Chen, 2008). Hence, this paper proposed to explore and fill this research gap. This study proposed to support a novel construct of green intellectual capital (GIC), the significant positive relationship between intellectual capital in GM initiatives or environmental management system and sustainable competitive advantages of firms. This paper incorporated the classification of IC adopted by Bontis (1999) which categorise Green IC into green human capital, green structural capital and green relational capital. This further explored whether the three types of green IC have positive effects on CECB as one important factor of competitive advantages of firms. This study also explored the relationships of Green HRM and environmental consciousness on three types of green intellectual capital on Corporate Environmental Citizenship Behaviour (CECB).

Based on the above literature review and arguments, this study proposed the following research framework (Figure 01 ).

See Full Size >

Based on the above arguments and the theoretical framework as in Figure 01 , this study proposes the following hypotheses;

H1:Green HRM which consists of Recruitment, Selection, Training, Rewards, Performance Management, and Employee Involvement will has a positive significant relationship to Corporate Environmental Citizenship Behaviour which consists of Technological Precautions, Structural Precautions, Strategic Precautions, External Relationship Activities, and Attitude of Top Management.

H2:Green HRM which consists of Recruitment, Selection, Training, Rewards, Performance Management, and Employee Involvement will has a positive significant relationship to Green Intellectual Capital which consists of Human, Structural, and Relationship .

H3:Green Intellectual Capital which consists of Human, Structural, and Relationship will has a positive significant relationship to Corporate Environmental Citizenship Behaviour which consists of Technological Precautions, Structural Precautions, Strategic Precautions, External Relationship Activities, and Attitude of Top Management .

H4:Green Intellectual Capital which consists of Human, Structural, and Relationship will mediates the relationship between Green HRM which consists of Recruitment, Selection, Training, Rewards, Performance Management, and Employee Involvement and Corporate Environmental Citizenship Behaviour which consists of Technological Precautions, Structural Precautions, Strategic Precautions, External Relationship Activities, and Attitude of Top Management .

Problem Statement

Researchers in the area of GM argued that organizations choose to behave in a certain way based on how their perceived and react to external forces. Some companies tend to adopt obligatory behaviour or compliance adoption to law and regulations that force them to do so, while others do it as normative adoption and even as cognitive adoption at the highest level. Many researchers argued that all these adoption of behaviours are as a result of internal factors that react to external pressures. The way they manage internal processes and systems as well as the level of knowledge they possessed and managed will affect the way they behave in relation to GM practices in their organization. Many researchers posited to this thinking and postulated the relationship of these constructs but the proposed theoretical frameworks seldom been tested using empirical data. This study proposed a researchable framework to discover the relationship between Green HRM, Green Intellectual Capital and Corporate Environmental Citizenship Behaviour, and test these relationships using quantitative data collected from Malaysian Electric and Electronics industry.

Research Questions

This study tends to answer the important research questions as the following;

• What are the construct of Green Human Resource Management?

• What are the construct of Green Intellectual Capital?

• What are the construct of Corporate Environmental Citizenship Behaviour?

• What are the relationship between Green HRM, Green Intellectual Capital and Corporate Environmental Citizenship Behaviour?

• Do Green Intellectual Capital mediates the relationship between Green HRM and CECB?

Purpose of the Study

The main purpose of this research is to investigate how CECB are being influenced by the strategic practices of Green Human Resource Management (GHRM) that focusing on developing and implementing GM initiatives and linking them to Green Intellectual Capital. Specifically the objectives of this study are;

• To explore the relationship between Green HRM and Corporate Environmental Citizenship Behaviour.

• To explore the relationship between Green HRM and Green Intellectual Capital.

• To explore the relationship between Green Intellectual Capital and Corporate Environmental Citizenship Behaviour.

• To test the mediating effect of Green Intellectual Capital between Green HRM and Corporate Environmental Citizenship Behaviour.

Research Methods

Findings

This study analysed the Cronbach’s alpha for reliability of all variables in question and the result is presented in Table 01 . Hair et al. (2009) suggested that usual lower limit for Cronbach’s alpha is 0.70 and it may decrease to 0.60 in the exploratory study, while Malhotra (2010) suggested that Cronbach’s alpha value of 0.6 or less generally indicates unsatisfactory internal consistency reliability. This study found that the Cronbach’s alpha of all the variables are 0.80 or above which were considered reliable and good for further analysis.

To test the relationship of all variables, correlations analysis was conducted and the results are presented in Table 02 . The purpose of correlation analysis is to summarise the strength of association between variables (Malhotra, 2010).

In summary, from the correlations analysis results presented in Table 02 , it was found that all variables were significantly related to all dependent variables in the study, except for Recruitment and Selection. We could conclude that Green HRM which consists of only Training, Rewards, Performance Management, and Employee Involvement, significantly correlated to GIC and CECB at the 0.01 level.

See Full Size >

In testing the mediation, this study used methods as proposed by Baron and Kenny (1986) and further deliberation by Preacher and Hayes (2004), an approach that used four steps which conduct several regression analyses and examine significance of the coefficients at each step as the followings;

A simple regression analysis was conducted with Green HRM predicting CECB. It was found that Green HRM is significantly related to CECB. This is also to test for H1, and from the analysis it was found that H1 is accepted . Refer to Table 03 .

A simple regression analysis was conducted with Green HRM predicting GIC. It was found that Green HRM is significantly related to GIC. This is also to test for H2, and from the analysis it was found that H2 is accepted . Refer to Table 04 .

A simple regression analysis was conducted with GIC predicting CECB. It was found that GIC is significantly related to the CECB. This is also to test for H3, and from the analysis it was found that H3 is accepted . Refer to Table 05 .

Finally, a multiple regression analysis was conducted with Green HRM and GIC predicting CECB. When controlling for the effects of the GIC as mediating variable on the CECB as dependent variable, the effect of the Green HRM on CECB is no longer significant. This show the effect of mediating variable of GIC, therefore H4 is accepted . Refer to Table 06 .

Conclusion

In this study, we explored the question of what the variations of CECB and how green HRM and GIC influence this variation. Based on the literature review, this study proposed a framework that draw a mediating relationship of GIC between the GHRM and CECB. This framework contributes to our understandings of the corporate environmental citizenship behaviour variation and how green HRM and green intellectual capital contribute to these variations.

As argued by many researchers in the area of GHRM (Chen, 2008), strategic and systematic HRM practices is significantly relate to the green IC and in turn contribute to high level of CECB. Data collected from this study also shows that, there is no significant relationship of between recruitment and selection to green IC and CEB. Specifically, only Training, Rewards, Performance Management, and Employee involvement are found to be significantly correlated to green IC and CEB.

This study also found that, GIC mediates the relationship between GHRM and CECB. As argued by some researchers, green HRM do not directly influence corporate environmental citizenship behaviour but instead green HRM influence green IC and in-turn green IC influence the variation of CECB.

Findings from this study is important for our understanding on how green HRM contributes to the GM initiatives and affect the behaviour of organizations in adopting and implementing GM activities. This study also revealed that not all human resources practices do really create a significant effect in implementing GM and adopting green behaviour. As in this case, data from Malaysian E & E show that recruitment and selection did not play a significant role in the green intellectual capital accumulation neither it influence the adoption of corporate environmental citizenship behaviour.

Acknowledgments

Authors would like to thank sponsors of this study, a Fundamental Research Grant Scheme (FRGS/2/2014/SS05/UNITEN/02/2) from the Ministry of Higher Education, Malaysia and Universiti Tenaga Nasional.

References

1. Baron, R. M., & Kenny, D. A. (1986). The moderator–mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of personality and social psychology, 51(6), 1173.
2. Bohlander, G., Snell, S., & Sherman, A. W. (2007). Human resource management. USA: South–Esetern College Publishing Thompson Learning, 27-54.
3. Bontis, N. (1999). Managing organizational knowledge by diagnosing IC: framing and advancing the state of the field”, International Journal of Technology Management, 18, 5/6/7/8, 433- 462.
4. Chen, Y.S., (2008). The positive effect of green intellectual capital on competitive advantages of firms. Journal of Business Ethics 77, 271–286.
5. Clark M. (2005). Corporate environmental behavior research: informing environmental policy. Structural Change and Economic Dynamics, 16: 422e31.
6. Daily, B. F., & Huang, S. C. (2001). Achieving sustainability through attention to human resource factors in environmental management. International Journal of operations & production management, 21(12), 1539-1552.
7. Davenport, T. & Prusak, L. (1998), Working Knowledge, Harvard Business School Press, Cambridge, MA.
8. Johnson, D. R. (1999). The benefits of proactive environmental quality: Tips from a successful small business. Environmental Quality Management, 8(4), 47-52.
9. Dumont, J., Shen, J., & Deng, X. (2016). Effects of Green HRM Practices on Employee Workplace Green Behavior: The Role of Psychological Green Climate and Employee Green Values. Human Resource Management.
10. Federation of Malaysia Manufacture (FMM) Directory Listing (2015) of Malaysia manufacturers. Retrieved from www.fmm.org.my.
11. Florida, R. (1996). Lean and green: the move to environmentally conscious manufacturing. California Management Review, 39(1), 80-105.
12. Garriga, E. and D. Mele´: (2004), Corporate social responsibility theories: mapping the territory, Journal of Business Ethics 53, 51–71.
13. Haden, S.S.P., Oyler, J.D. and Humphreys, J.H. (2009), “Historical, practical, and theoretical perspectives on GM: an exploratory analysis”, Management Decision, 47(7), 1041-55.
14. Hair, J. F., Black, W. C., Babin, B. J., and R. E. (2009). Multivariate Data Analysis, 7th Edition, Prentice Hall, Upper Saddle River, New Jersey
15. Huffman, A.H., Watrous-Rodriguez, K., Henning, J., & Berry, J. (2009). “Working” through environmental issues: the role of the I-O psychologist. The Industrial-Organizational Psychologist, 47(2), 27.
16. Lin, B, Jones, C.A. and Hsieh, C. (2001). Environmental practices and assessment: a process perspective. Industrial Management & Data Systems 2001;101 (2):71–9
17. Malhotra, N. K. (2010). Marketing Research: An Applied Orientation, 6th Edition, Prentice-Hall, Upper Saddle River, New Jersey
18. Masoulas, V. (1998). Organisational requirements definition for intellectual capital management. International Journal of Technology Management, 16(1-3), 126-143.
19. May, D. R., & Flannery, B. L. (1995). Cutting waste with employee involvement teams. Business Horizons, 38(5), 28-38.
20. Milliman, J., & Clair, J. (1996). Best environmental HRM practices in the US. Greening people: Human resource and environmental management, 49-74.
21. Molina-Azor´ın, J. F., Claver-Cort´es, E., L´opez-Gamero, M. D., Tar´ı J. J., (2009). Green management and financial performance: a literature review. Management Decision 47 (7), 1080-1100.
22. Özen, Ş., & Küskü, F. (2008). Corporate environmental citizenship variation in developing countries: An institutional framework. Journal of Business Ethics, 89(2), 297-313.
23. Paauwe, J., & Boselie, P. (2003). Challenging ‘strategic HRM’and the relevance of the institutional setting. Human Resource Management Journal, 13(3), 56-70.
24. Preacher, K. J., & Hayes, A. F. (2004). SPSS and SAS procedures for estimating indirect effects in simple mediation models. Behavior Research Methods, Instruments, & Computers, 36, 717-731.
25. Ramus, C. A. (2001). Organizational support for employees: Encouraging creative ideas for environmental sustainability. California Management Review, 43(3), 85-105.
26. Remmen, A., & Lorentzen, B. (2000). Employee participation and cleaner technology: learning processes in environmental teams. Journal of Cleaner Production, 8(5), 365-373.
27. Renwick, D. W., Jabbour, C. J., Muller-Camen, M., Redman, T., & Wilkinson, A. (2016). Contemporary developments in Green (environmental) HRM scholarship. The International Journal of Human Resource Management, 27(2), 114-128.
28. Renwick, D. W., Redman, T., & Maguire, S. (2013). Green human resource management: A review and research agenda. International Journal of Management Reviews, 15(1), 1-14.
29. Renwick, D., Redman, T., & Maguire, S. (2008). Green HRM: A review, process model, and research agenda. University of Sheffield Management School Discussion Paper, 2008(1), 1-46.
30. Scarbrough, H. (2003), “Knowledge management, HRM and innovation process”, International Journal of Manpower, Vol. 24 No. 5, pp. 501-16
31. Unnikrishnan, D., & Hedge, S. (2007). Environmental training and cleaner production in Indian industry–a micro-level study. Resources Conservation and Recycling, 50(4), 427-441.
32. Yang, C.-L., Lin, S.-P., Chan, Y.-H., Sheu, C., (2010). Mediated effect of environmental management on manufacturing competitiveness: an empirical study. International Journal of Production Economics 123 (1), 210–220
33. Zoogah, D. B. (2012, August). Ecological Transcendence, Rewards, and Commitment Toward Environmental Management. In Academy of Management Annual Meeting, Boston, MA.
34. Sudin, S. (2011, June). Strategic G HRM: A proposed model that supports CEC. In International Conference on Sociality and Economics Development, IPEDR (Vol. 10, pp. 79-83).
35. Yusoff, Y. M., Othman, N. Z., Fernando, Y., Amran, A., Surienty, L., & Ramayah, T. (2015). Conceptualization of GHRM: An Exploratory Study from Malaysian-based Multinational Companies. International Journal of Business Management & Economic Research, 6(3).