Human resource management practice, corporate social responsibility and business performance: A case study of food processing enterprises in Vietnam

Article history: Received: April 29, 2020 Received in revised format: July 3


Introduction
Human resource is considered as a significant force in maintaining enterprises' competitive advantage (Wright, McMahan, & McWilliams, 1994). Human resource development practice is reflected through skill accumulation, attitude, and motivation of employees. The increase in these factors that significantly contributes to the performance development, the growth in revenue and profit is seen as improving the financial capacity of the enterprise (Gamage, 2007). Lado and Wilson (1994) define Human Resource Management Practice (HRMP) as a system of a separate set of components in relation to the activities, functions and processes that are specifically directed at attracting, developing and maintaining human resources. In the context of globalization, it is difficult to enhance business administration without the combination of HRMP and technology application to form a complex system. For this reason, the organizations are always cautious in evaluating existing HRMP and building continuous improvement so that employees can make a contribution to improving business performance. Viet Nam is a country with rich sources of raw materials such as seafood, tropical fruits, etc. This is both an opportunity and a challenge for the food processing industry in terms of a high standard in social responsibility, labor safety and environment at the threshold of deep integration. Therefore, in order to maintain a competitive advantage and sustainable development, in addition to human 1374 resources, organizations need to pay attention to social responsibility to relevant parties such as employees, customers and the environment. The reason is that the competition among the enterprises nowadays is not only about the quality, price, distribution channel or advertisement but also through the result of social responsibility practice. HRMP is an essential means to enhance employee advocacy and commitment to the implementation of Corporate Social Responsibility (CSR) policies and practices (Renee Baptiste (2008) extracted from Bučiūnienė and Kazlauskaitė (2012)). To build a scale and investigate the relationship between practical concepts of HRMP and CSR to related concepts. This study aims to analyze the relationship between HRMP, CSR practices and business performance in food processing enterprises, thereby assessing the impact of relevant factors in order to improve business performance through HRMP.

Overview of Human Resource Management
The definition of human resource management came from the United States in the 1950s, then developed in the UK in 1980 and is now widely used in many countries. Human Resource Management (HRM) is one of the necessary inputs to enhance the enterprise's business performance. Schuler and Jackson (1987) define HRMP as a system that attracts, develops, motivates and retains employees to ensure job effectiveness as well as fulfill organizational goals. Dyer and Reeves (1995) classify 4 levels of results of HRMP into employee, organization, finance and market. In addition, HRMP is also defined as a set of internal policies designed and implemented to ensure human resources of an organization, contribute to achieving its business goals (Delery & Doty, 1996), and be seen as an important function in the activities of an organization including recruitment, remuneration, development related to organizations, safety, employee motivation, health care, information sharing, effective training and management for all the activities related to employees, methods that help employees to carry out activities to achieve organizational goals (Jahanian, Nawaz, Yamin, & Nawaz, 2012). Carroll (1991) assumes that CSR is associated with the activity of an enterprise for economic advantage, legal compliance, ethics and social support. The external aspect of CSR is reflected in a business-community relationship through business activities, strict implementation of tax obligations, contract signing with local distributors, respect for human rights, and encouragement for environment protection activities. The internal aspect of CSR targeting employees is the expectation of employees to seek functional, economic, psychological, and ethical benefits from employers' organizations (Mason & Simmons, 2014). Freeman (2004) emphasizes that related parties are simply internal and external entities. Business activities of enterprises are influenced by internal factors (employees) and external factors (customers, environment, communities, and suppliers). Becker (2011) suggests that there should be a connection between CSR and HRMP because this combination can bring benefits for the enterprise in different forms such as reputation enhancement, loyalty improvement, and employee retention in the organization. Sarvaiya (2014) assumes that the interaction of HRM and CSR primarily comes from the factors in CSR, specifically, it is the scope of CSR, the development stage of CSR and the difference in each business line. HRM is one of the ways to support employees in enhancing the commitment to implement CSR policies and practices (Dyer and Reeves (1995); Bučiūnienė and Kazlauskaitė (2012)). Thus, we have the following hypothesis:

Social Responsibility
H1a. HRMP has a positive correlation with CSR in terms of employees.
However, the CRS practice of an enterprise is also influenced by external factors (Clarkson, 1995) such as customers, shareholders, suppliers, competitors, environment and community. HRMP helps to create a transparent environment for customers, boost production requirements, satisfy customer's request and business performance (Bowen (1986); Mason and Simmons (2014)). Thus, we have the following hypothesis: H1b. HRMP has a positive correlation with CSR in terms of customers. Clarkson (1995) assumes that in order to do this, the role of HRMP will have a great impact on enhancing employees' perception as well as behavior, point of view, corporate culture and leadership capabilities of the enterprise (Rimanoczy & Pearson, 2010). Agreeing with this viewpoint, Cacioppe, Forster, and Fox (2008) also assume that the environment is an important factor to consider and analyze when mentioning the CSR of an enterprise. Thus, we have the following hypothesis: H1c. HRMP has a positive correlation with CSR in terms of environment.
Organizational commitment (loyalty) represents the spiritual relationship between employees and organizations, which helps to reduce the likelihood of leaving organizations (Meyer & Allen, 1997). Only when members accept the organization and make every effort to help the organization achieve good results can the power of commitment affect the goals and results of business operations (Steers, 1977). According to Social Identity Theory (SIT) -a theory that is widely used as a basis for the relationship between CSR awareness and attitude response of employees (Tajfel, 1982) -employees will be satisfied and have a good impression on the organization that works for the benefit of society, want to recognize themselves with the organization, hence strengthen the belief and pride of employees (Hogg & Terry, 2000), which is also reflected in the research of the effect of CSR practice to the factors related to employee engagement (Peterson (2004); Turker (2009)). In addition, the research of De Roeck, Marique, Stinglhamber, and Swaen (2014) shows that CSR practice has an impact on improving employees' attitudes towards organizations or awareness of CSR practice level has a positive correlation to organizational commitment (Mory, Wirtz, & Göttel, 2016). The research of Farooq, Payaud, Merunka, and Valette-Florence (2014) or Glavas and Kelley (2014) shows that in addition to environment and customer aspects of the CSR are also positively related to the awareness and commitment of employees to the organization. Therefore, hypotheses can be clarified as follows: H2a: The level of CSR practice in terms of employees has a positive correlation on organizational commitment. H2b: The level of CSR practice in terms of customers has a positive correlation on organizational commitment. H2c: The level of CSR practice in terms of environment has a positive correlation on organizational commitment.

Business performance
The performance of business results in the market (Huselid, 1995;Buzzell, Gale, and Gale, 1987). According to Richard, Devinney, Yip, and Johnson (2009), it is highly recommended to measure business results based on the results of accounting performance, financial performance, and market factors through reports from enterprises or feedback from a Likert scale. There are many studies that have demonstrated that organizational commitment is positively correlated with business performance (Bakiev, 2013;Mansour et al., 2014)). Moreover, the research of Guest (2011), Huselid (1995, Delery and Doty (1996) mostly focuses on HRMP to improve operational efficiency by improving staff capacity and employee commitment. The research of Ali, Rehman, Ali, Yousaf, and Zia (2010) shows that apart from the influence on business performance through organizational commitment, CSR has a direct influence on the business performance of the enterprises (Rettab, Brik, & Mellahi, 2009). Responsibility towards employees, communities, environment, investors, customers and suppliers can have a positive influence on three aspects of business performance including financial results, organizational commitment and company reputation. The research of Ali et al. (2010) or Yu and Choi (2014) shows that apart from the influence on business performance through organizational commitment, CSR has a direct influence on the business performance of the enterprises. Therefore, hypotheses can be clarified as follows: H4a: The level of CSR practice in terms of employees has a positive correlation with business performance. H4b: The level of CSR practice in terms of customers has a positive correlation with business performance. H4c: The level of CSR practice in terms of environment has a positive correlation with business performance.
The research of Lado and Wilson (1994), Singh (2004), Katou and Budhwar (2010) shows that the components of HRMP have positive correlations with business performance. Dung and Anh (2019) suggest that apart from the positive influence on business performance through human resource results, HRM has a direct influence on the business performance of the enterprises. Thus, we have the following hypothesis: H5: HRM has a positive correlation with business performance.

Research model
Based on the previous studies on HRM and CSR practices together with hypothetical relationships, the author proposes a model as given in Fig. 1. Hair et al. (2006) assume that when implementing a linear regression equation, the sample size ranges from 200 -400 corresponding to 10 -15 factors. Tabachnick and Fidell (2001)assume that the minimum sample rate is 5:1 (Hoàng & Chu, 2008). With 42 observed variables in this study, the minimum number of samples is 42 × 5 = 210. Samples were selected by random stratification method by distributing answer sheets and direct surveys with an average of 3 -4 employees/ enterprises (including managers and employees who have worked for 5 years or more), corresponding to 278 food processing enterprises surveyed in the Mekong Delta and Ho Chi Minh City, the remaining samples collected and screened are 438 votes, which ensure the number of samples suitable for analysis. The questionnaire is used based on a 7-point Likert scale. Quantitative research: Continue to take 51 variables to survey employees of the food processing industry with 136 observations. After analyzing Cronbach's Alpha and EFA, the remaining results of 42 observed variables are included in the official study through the analysis of CFA and SEM.

CFA analysis for component concepts
The result in Table 1 shows that df value, Chi-Square/df; TLI and CFI index is still greater than 0.9. So the model fits with market data (J. Hair, Black, Babin, & Anderson, 2010). All of the standardized regression weights of variables are greater than 0.5, therefore the scale reaches unidirectional. Through the analysis of CFA results (Table 2), reliability testing shows that all measurement concepts are unidirectional, which ensures the convergence value and reliability.

The result of the analysis confirms the critical model
The final result of CFA in Fig. 2 shows that df value equivalent to 678, P-value equivalent to 0.000, chi-square/ df equivalent to 2.102 (<3), the suitable indexes like TLI equivalent to 0.913, CFI equivalent to 0.920 (>0.9) and RMSEA equivalent to 0.051 (<0.08). Scale is unidirectional and consistent with market data.

Testing theoretical models with SEM
The analysis result shows that the model indicator still meets the requirements such as CFA critical model (Fig. 3).

Fig. 3. The analysis result in theoretical models with SEM Source: Authors' analysis
The estimated results (standardized) on the main parameters of the formal research model presented in Table 3 show that the relationships among the concepts in the formal research model are statistically significant at 5% (p <0.05).

. Test the reliability of estimates with Bootstrap
This study uses the Boostrap method with the number of repeated samples N equivalent to 600 and the results are in Table 4. Determination principle: If | CR | = | Bias / SE-Bias | > 3, the bias appears and vice versa.  Table 5 shows that, at the significance level of 5%, the hypothetical relationships at 95% reliability level have an absolute value of CR smaller than 2, so there is no statistical significance at a 95% reliability level. Therefore, it can be concluded that the estimates in the above research model are reliable. This demonstrates that the research model can be trusted in larger samples.

Table 5
The result of direct, indirect and aggregate impacts among the concepts in the research model Source: Authors' analysis, based on path model theory (Baron & Kenny, 1986)

Discussion and conclusions
The research results show that the fact that HRMP positively affects CSR in all aspects of employees, customers, and environment, in line with previous studies on the organizations with practical HRM activities, has tremendously contributed to the implementation of policies on social responsibility (Bučiūnienė and Kazlauskaitė (2012); Sarvaiya (2014)). In particular, HRM impacts on CSR in terms of employees and natural environment is high (β weight = 0.796 and 0.794), this finding shows the importance of management and the level of CSR implementation especially in the environmental aspect, accordingly, Clarkson (1995) also thinks high of environmental factors in the implementation of CSR, which is entirely relevant to the food processing industry when most enterprises in this field are required to consider applying management standards such as SA 8000 to ensure appropriate working environment conditions for employees, customer-oriented standards are gradually improved and developed to meet food safety management standards such as GMP, HACCP or ISO 22000.

Concept
Patterns of influence In addition, all of the three aspects of CSR affect employee commitment, among those, the strongest influence towards commitment is CSR in terms of employees (β = 0.329), which is inevitable when actions towards employees will contribute to increase employee engagement in the organization, this result is consistent with the research of (Skudiene & Auruskeviciene, 2012) on internal CSR (employee orientation) that has a more positive impact on internal staff motivation than external CSR aspects of the research of Al-bdour, Nasruddin, and Lin (2010); Halim, Rahayu, and Rahayu (2016) also assume that internal CSR strongly affects organizational commitment. In addition, organizational commitment positively impacts on business performance of the enterprises (β = 0.325), this represents that organizational commitment will create a positive performance and a high-performance business result in the enterprise, similar to Gouldner's (1960) viewpoint on the benefits that a person receives from others will lead to the return of benefits in a process, or organizational commitment will positively affect business performance (Bakiev, 2013;Mansour et al., 2014).
Although CSR in terms of employees and environment is important to the enterprises, it does not have a direct impact on business performance, while only CSR in terms of customer has a positive and strong influence factor towards business results (β = 0.348), this result is the basis for the enterprises to take actions to build brand image and reputation in the minds of customers, which will affect the business performance of enterprises (Murtaza, Akhtar, Ijaz, & Sadiqa, 2014). Although HRMP does not directly affect operational results, according to the results of general impact analysis, HRMP plays an important role in positive business results (β = 0.805), the level of explanation corresponds to 82.3%, which means that the enterprises applying HRMP should focus on implementing responsibilities for related parties such as employees, customers, and environmental responsibilities. It is the interests of enterprises to factors such as working conditions, working hours, the compliance with labor protection and food safety, the enhancement of the role of enterprises for customers, the respect towards customers, the strictly carried out treatment and discharge of waste into the natural environment that positively affect the attitude of employees and contribute to improving the business performance of the enterprises. Research results are the basis to help suggest policies for the enterprises to concretize actions and improve HRMP, which primarily focuses on the quality management systems such as HACCAP, OHSAS, ISO 14001-2004 that can ensure the realization of HRM with the implementation of CSR for the related parties to help create a strong bond, maintain human resources and enhance business activities in the enterprises. Research is limited and focused only on analyzing three aspects of social responsibility for the related parties including employees, customers, and the environment. Whereas, social responsibility is also reflected in other aspects such as social responsibility towards the community, suppliers, shareholders, etc., has not been analyzed in this study. This, in turn, leads to the lack of assessing the level of social responsibility implementation for the related parties, this is a necessary direction for the next studies to better analyze the social responsibility aspects of the enterprises for the related parties.