How Green HRM Enhances Sustainable Organizational Performance: A Capability-Building Explanation Through Green Innovation and Organizational Culture

This study examines how Green Human Resource Management (GHRM) is linked to sustainable organizational performance, encompassing environmental, economic, and social outcomes through the capability-building mechanisms of green innovation (GI) and green organizational culture (GOCL) in emerging manufacturing systems. Drawing on the Resource-Based View and capability-based sustainability perspectives, GHRM is conceptualized as a strategic organizational capability that enables firms in developing economies to beyond short-term regulatory compliance toward measurable and integrated sustainability performance outcomes. Survey data were collected from 446 managerial and technical respondents in Ethiopia’s garment and textile industrial parks, one of Africa’s fastest-growing industrial sectors facing significant sustainability challenges. Using Partial Least Squares Structural Equation Modeling (PLS-SEM) with bootstrapping-based mediation analysis, the results show that GHRM is positively associated with sustainable organizational performance, with GI and GOCL operating as key mediating mechanisms that translate HR-related practices into measurable sustainability outcomes. The findings highlight the role of GHRM in strengthening firms’ adaptive and developmental sustainability capabilities by fostering pro-sustainability mindsets and innovation-oriented behaviors, which are particularly critical in resource-constrained and weak-institutional contexts. The study contributes to sustainability and management literature by explicitly linking Green HRM to triple-bottom-line performance through a capability-building framework and by providing rare firm-level empirical evidence from a low-income emerging economy. Practically, the results provide guidance for managers and policy makers to design, monitor, and evaluate HRM systems that intentionally cultivate human, cultural, and innovative capabilities to support long-term organizational sustainability transitions.