The Link between HRM Practices and Social Purpose Outcomes in Indigenous Enterprises

Abstract

The human resource management (HRM) practices of social enterprise organizations is an under researched area of the emerging field of social entrepreneurship. This paper addresses this research gap by focusing on how the internal HRM practices of social enterprises influence their ability to deliver on their social mission and produce social purpose outcomes. We focus on HRM practices because prior research has shown that they can have an important impact on a variety of critical performance outcomes in firms (e.g., financial performance, survival, productivity, IPO performance). We theorize about the relationship between these HRM practices and other contextual factors to social purpose outcomes. We study these relationships in a unique context, Indigenous social enterprises in Australia and find that the use of high commitment HRM (HC-HRM) practices helps to drive the social purpose outcomes. We also find a positive significant two-way interaction between HC-HRM practices and the extent that the enterprise’s business strategy is driven by cultural products or services similarly drives the social purpose outcomes of these enterprises. Our final finding demonstrates that the social enterprise leaders’ risk propensity moderates the impact of HR practices on the social purpose outcomes.