Effect of Green Transformational Leadership on Organizational Environmental Performance: The Role of Green Human Resource Management Practices (Study on SMEs in The Embroidery Sector)

Abstract

Every organization must actively engage in environmental sustainability efforts by incorporating practices that prioritize the careful selection and maintenance of eco-friendly inputs, processes, and outputs within their business operations. However, empirical research on the specific influence of Green Transformational Leadership (GTL) on Organizational Environmental Performance is lacking, particularly within the Small Medium Enterprises (SMEs) of the embroidery sector in Indonesia. This study aims to address this gap by examining the direct and indirect effects of GTL, utilizing Green Human Resources Management (GHRM) practices as a potential mediator in the context of Indonesian SMEs specializing in embroidery. The research, conducted on 300 employees from 150 SMEs in the prominent embroidery industry of 20 city/regency areas in East Java, employs a Structural Equation Model of Partial Least Squares (SEM-PLS). Findings show a statistically significant positive influence of GTL on Organizational Environmental Performance directly, with GHRM practices partially mediating this relationship. Bridging this research gap not only contributes to academic knowledge but also offers practical insights for organizations seeking to enhance their environmental sustainability.