Green human resource management and business performance of MSMEs in Indonesia

Abstract

This study aims to examine the effect of the practice of green human resource management strategies on the performance of business entities, mediated by green product innovation, green employee behavior, and green process innovation. This research is important because the issue of environmental impact caused by the business processes of business entities is increasingly being discussed. The existence of this issue eventually led to several regulations from the government to implement green principles in the economy and business, such as Law No. 32 of 2009, Government Regulation No. 46 of 2017, Law No. 11 of 2020, Circular Letter of the Head of LKPP No. 16 of 2020, and Presidential Regulation No. 98 of 2021. In addition, the issue of environmental protection is also a major concern in the Sustainable Development Goals, namely points 6, 7, 13, 14, and 15. Therefore, this research needs to be conducted to capture the impact of implementing green concepts in MSME businesses on performance. This research employs a quantitative approach by conducting a causal step test. The data for this study were obtained from the results of questionnaires distributed to approximately 400 MSMEs in Indonesia using the accidental sampling method. Data analysis was carried out with the help of the Eviews application. The results of this study are expected to provide information, references, and recommendations for academics, practitioners, and policymakers related to green human resource management practices in Indonesia.