Driving sustainable performance through green HRM leadership and the circular economy in Indonesia using PLS SEM and Markov Chain Monte Carlo approach

This study investigates to analyze the relationships between GHRM (Green Human Resource Management), Green Transformational Leadership (GTL), Circular Economy, Green Organizational Culture (GOC), and Sustainable Company Performance using PLS-SEM and Markov Chain Monte Carlo methods to model the relationships between variables and ensure the accuracy of the results. The study collected data through questionnaires distributed to employees and managers of companies implementing sustainability principles. The collected data were then analyzed using PLS-SEM to test the relationships between variables and MCMC to evaluate parameter uncertainty and provide more accurate estimations. The findings show that GHRM and GTL have a significant positive impact on GOC, which in turn enhances Sustainable Company Performance. Additionally, the adoption of Circular Economy practices also contributes to the formation of a green organizational culture that supports sustainable company performance. However, the direct relationship between Green Organizational Culture and Sustainable Company Performance was not significant without mediation from other green practices. The contribution of this study lies in its use of PLS-SEM and MCMC methods to analyze the complex relationships between various sustainability-focused variables. The practical implication is that companies should integrate Green HRM and transformational leadership to create a GOC that supports sustainable performance. The originality of this study lies in the application of advanced analytical methods in the context of Indonesian companies focusing on sustainability.