FROM GREEN POLICIES TO GREEN PRACTICES: HOW LEADERSHIP AND HRM SHAPE SUSTAINABILITY OUTCOMES IN PAKISTANI MANUFACTURING SMEs

Abstract

This research investigates the impact of transformational leadership on sustainability performance, recognizing the mediating role of Green Human Resource Management (Green HRM) in the manufacturing SMEs context in Pakistan. The study is underpinned by both Resource-Based View (RBV) and Social Exchange Theory (SET) to offer education about environmental leadership and the relationship between green HRM and sustainable outcomes. Primary data were collected in the form of surveys (structured questionnaire) from 370 managerial-level employees and analyzed by structural equation modelling (SEM). The analysis suggests that transformational leadership greatly influences Green HRM and sustainability performance. Important to note, green HRM practices significantly improve sustainability performance, while partially mediating the relationship between transformational leadership and sustainability performance. Overall, the findings highlight the strategic importance of leadership behaviours grounded in green HR approaches to help increase environmental sustainability in SMEs. The study has practical implications in providing managers in SMEs the necessary insight into how they can engage green HR practices in order to improve their environmental sustainability outcomes. The research also contributes to the literature with a unified framework that links leadership, HRM practices, and sustainability, and informs SME managers and policymakers who wish to engage in sustainable transformation in their respective emerging markets.

Keywords: Transformational Leadership, Green Human Resource Management, Sustainability Performance, SMEs, Pakistan