The Role of Responsible HRM Practices and a Culture-Related Capability on the CSR-Performance Association: A Small Firm Perspective

This chapter focuses on the role that responsible human resource management practices (HRM) play in relation to proactive corporate social responsibility (CSR) and its impact on firm performance, using evidence from small firms in the Australian manufacturing industry. The empirical evidence reveals the critical moderating contribution of responsible HRM practices in the implementation of proactive CSR and enhancement of financial performance in small firms. The study findings indicate the need for managers of small firms, who wish to boost financial competitiveness through proactive CSR, to adopt responsible HRM practices that avoid a directive approach and which foster employee participation and engagement. It is suggested that this can be done by leveraging the relative informality of work organisation and familial ties that help engender trust and reciprocity in small firms.