Sustainable human resource practices in Indonesian family-owned listed companies

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Abstract

Given Indonesian family-owned companies’ significant economic role contribution and the increasing emphasis on sustainability, understanding sustainable human resource practices is crucial. This study investigates how leading Indonesian family-owned listed companies integrate these practices into their sustainability strategies and performance and compares their approaches with non-family-owned companies. Using a stakeholder theory lens and ethical sustainability governance framework, analyzing their sustainability reports, and comparing them with non-family-owned companies, we aim to understand the unique role of family control and governance in shaping sustainable human resource practices in Indonesia. Our findings suggest that while family-owned companies acknowledge the importance of sustainable human resource practices, their approach is driven by external regulatory pressures, resulting in limited measures for employee engagement and training. This indicates a lack of integration between dynamic capabilities and a change behavior approach to sustainability as proposed by Suhardjo et al. (2024a). Non-family-owned companies, on the other hand, tend to adopt a more systematic approach, prioritizing training and conducting regular employee surveys. This study extends the previous research of Gunawan and Koentjoro (2023). This study contributes to the literature on family-owned businesses and sustainable human resource practices, highlighting the need for a strategic approach to sustainable human resources in family-owned companies.

Keywords: Family-Owned Company, Sustainable Human Resource Practice, Stakeholder Theory, Ethical Sustainability Governance, Sustainability Strategy and Performance

Authors’ individual contribution: Conceptualization — I.S.; Methodology — I.S. and M.S.; Investigation – I.S. and M.S.; Writing — Original Draft — I.S.; Writing — Review & Editing — I.S. and M.S.; Visualization – I.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M12, M14, M50, M54

Received: 21.11.2024
Accepted: 16.01.2025
Published online: 20.01.2025

How to cite this paper: Suhardjo, I., & Suparman, M. (2025). Sustainable human resource practices in Indonesian family-owned listed companies. Corporate Ownership & Control, 22(1), 8–21. https://doi.org/10.22495/cocv22i1art1