CHAPTER ONE

BACKGROUND OF THE STUDY

1.0 INTRODUCTION

In today’s societies, the concepts like global competition, technological changes and

development, communication, environment, and environmental problems are getting more and

more common in everyday life with the acceleration of globalization. In this sense, societies,

businesses, and individuals develop new dynamics to cope with this global change. Human

resource constitutes the primary elements for change and development in organizations. On the

other hand, environmental problems occur due to the human perception that the world resources

are endless and offer free goods. Today, such problems with various destructive outcomes and

impacts have become remarkable. Several environmental disasters, ranging from global warming

to droughts, point out the severity of the problem. Significance of environmental problems has

brought up the need for environment-conscious (green) activities in individual, organizational,

and community levels. These activities are generally implemented on a voluntary basis, but

sometimes implemented within the scope of legal obligations.

There is a need for a proactive approach to environmental management across the world

(González-Benito & González-Benito, 2006; Daily et al., 2012; Jabbar et al., 2010). Earlier

success of a firm was strongly dependent on promotion of economic value. However today,

organizations have to consider for the reduction of ecological footprints and give importance to

social and environmental factors along with economical and financial factors in order to enable

the organization to be successful in the corporate sector thereby enabling attainment of profit by

the shareholders (Sroufe et al., 1998; Daily et al., 2012; Govindarajulu and Daily 2004). There is
a great deal of increase in the level of environmental pollution and waste emerging from

industries which has resulted in increase in implementation of policies by governmental and

private sector with the aim of reducing the rapid destruction to the non-renewable resources and

the ultimate negative impact it would have on societal consequences (Martinez- Fernandez, &

Hinojosa, 2010). There is enhanced adoption of environment management systems by the

corporate sector (Boiral 2006. González-Benito and González-Benito, 2006). This resulted in the

emergence of a new strategic maneuver called green management. According to Lee (2009) the

approach was considered to be quite effective and profitable since early 2000. He defined green

management to be the strategy which is adapted by an organization in order to organize the

environmental management strategies for protecting and measuring environmental aspects. Daily

and Huang (2001) recommended that organizations essentially need to balance the industrial

growth and ensuring that the environment where one lives is well preserved and promoted. The

adoption of these practices has been presented with a number of different advantages which

would ultimately benefit the firm which has led to the emergence of “green and competitive”

mantra (Wagner, 2007; Molina-Azorin et al., 2009). Some of the benefits associated with this

adoption include improvements related to firms’ operational performance (Jackson et al., 2012),

promotion of teamwork (Jabbar et al., 2010), improvements in organizational culture (Jabbar et

al., 2012) and reduction on overall cost (Hart 1997). It is identified that the management of

environmental systems will enable improvements in synchronization with other management

strategies of the firm (Wagner, 2007). From the above discussion it is identified that researchers

give importance to adoption of environmental practices as a key objective of organizational

functioning making it important to identify with the support of human resource management

practices (Jackson et al., 2011; Daily and Hung, 2001; Sarkaris et al., 2010). Today there is
debate and uncertainty associated with how green management principles can be implemented

effectively in organizations thereby arriving at improved sustainability for the organization.

Therefore, the main aim of this article is to present a review of research which helps in

identifying how corporations today develop human resource policies for promoting EMS

initiatives.

In recent times the importance of Environmental issues and Sustainable development has

increased both in the developed and developing nations. Growing concern for global

environment and the development of international standards for Environmental Management has

created a need for businesses to adopt ‘green practices’. With these concerns organizations today

have become more conscious about the growing importance of the integration of Environmental

Management and Human Resource Management i.e. ‘Green HRM’ Practices. Green HRM is the

use of HRM policies to promote the sustainable use of resources within business organizations

and more generally, promotes the cause of environmental sustainability. It involves human

resource initiatives to endorse sustainable practices and increase employee awareness and

commitments on the issues of sustainability.

Green HR consists of two essential elements: Environmentally-friendly HR practices and the

preservation of knowledge capital. It entails undertaking environment friendly initiatives

resulting in greater efficiency, lower costs, and better employee engagement and retention which

in turn help organization to reduce carbon footprints. In fact Green HR policies focus on

collective and individual capabilities to bring about green behaviour. Such policies are aimed at

developing an environmental corporate culture. Green HRM focuses on employees’

environmental behavior in the company, which in turn, could be carried on to consumption

pattern in their private life (Muster and Schrader 2011). Researchers in the area of Green
Management initiatives argued that Environmental Management System (EMS) can only be

effectively implemented if the companies have the right people with the right skills and

competencies (Daily and Huang 2001). As the implementation of these initiatives requires a high

level of technical and management skills among employees (Callenbach et. al., 1993) therefore

Green HR initiatives involves the implementation of recruitment and selection practices,

compensation and performance-based appraisal systems, and also the training programmes

aimed at increasing the employees’ environmental awareness.

In the environmental literature, the concept of Green management for sustainable development

has various definitions; all of which generally, seek to explain the need for balance between

industrial growth for wealth creation and safeguarding the natural environment so that the future

generations may thrive (Daily and Huang, 2001).Though organizations nowadays have been

working on product innovation for environmental sustainability yet the issue of how an

individual organization or entire society achieves sustainability from the green management

movement is still debatable and unclear.

1.1 STATEMENT OF THE PROBLEM

To review extensive literature in this field so as to identify gaps and scopes for further study. The

purpose of going green is to use products and methods that would not negatively impact the

environment through pollution or depleting natural resources (Robinson, 2008). If the use of

natural resources is reduced by using alternative sources, it will have positive outcomes such as

keeping the environmental footprint small, reducing waste and re-using materials as much as

possible (Dallas, 2008). In addition, it will result in using scarce natural resources efficiently and

effectively, while keeping the environment free from detrimental products. Researchers in this

area argued that environmental management system can only be effectively implemented if the
companies have the right people with the right skills and competencies (Daily and Huang, 2001).

Strategic HRM researchers argued that to achieve HR effectiveness, HR should be practiced as a

whole and must be aligned with the business strategic goals, the primary means by which firms

can influence and shape the skills, attitudes, and behavior of individuals to do their work and

thus achieve organizational goals (Collins & Clark, 2003). Previously, businesses assumed that

incorporating ‘green’ into their business strategy would cost money, but they now realize that

ignoring negative impacts on the environment will be costly in the future (Van der Zee, 2008).

The topic of the green HRM is attracting increased attention among management scholars.

Despite its importance to managers, employees, customers and other stakeholders, however,

there are very few studies that consider a complete process of Green HRM in organizations

striving to achieve environmental sustainability. There is, thus, a growing need for the

implementation and evaluation of its impact on the firm and how it can be used as a tool to

motivate the workers.

1.2 OBJECTIVES OF THE STUDY

The main objective of this thesis is to conduct a comparative study of the cost structure of the

firm and cost after implementation of green HRM in a financial company with Nine (9) branches

and the goal is to focus on specific objectives that include;

Specific objectives

1. To explore how the firm is adaptable to change from HR perspective.

2. To measure the cost impact of implementing Green HRM.

3. To explore how Green HRM can be used to motivate staffs.

4. To examine the relationship between Green HRM and firm’s sustainability

1.3 RESEARCH QUESTIONS

2. What is the cost impact of implementing green HRM?

3. How can green HRM be used to motivate staffs?

4. What is the relationship between green HRRM and Goldman Capital’s sustainability?

1.4 SIGNIFICANCE OF THE STUDY

The HR function can become the driver of environmental sustainability within the organization

by aligning its practices and policies with sustainability goals representing eco-friendly which

can contribute to organizational goals, development. It involves undertaking environment

friendly HR initiatives resulting in greater efficiencies with motivation, and lower costs and

better employee engagement and retention. In this project, I will explore how members of staff in

a typical working organization perceive HR Policies and its practices and where and when Green

management initiatives can be an important factor in forward thinking business organizations

around the world. Green HR initiatives will help companies find alternative ways to cut down

cost without losing their talent & important resources etc.

1.5 SCOPE OF THE STUDY

The study will be in a Ghanaian context, it would cover Goldman Capital and all its nine (9)

branches to engage in participant-observation over eight-weeks period

1.6 LIMITATION OF THE STUDY

This research is limited to Goldman Capital and the implementation of Green HRM in their

branches and therefore the findings, analyses and recommendations do not represent the entire
banking industry. The extension of the analysis of the study is to other banks may offer diverse

results. Cross border research may also bring out different outcomes and regulatory policies.

1.7 ORGANIZATION OF STUDY

The whole research would be organized into five research headings and the summary of each

chapter is given as follows:

Chapter One: This chapter dwells on the beginning of the research by the Introduction,

Background of the Study, Objectives of the Study, Statement of the problem, Objective of the

Study, Significance of the Study and Research Problem.

Chapter Two: This part of the study looks at the relevant literature, secondary data sources and

academic websites sources. It also has structure of the theoretical framework used for the

research.

Chapter Three: This chapter reveals the details of the covered the company in consideration

and research method for the study.

Chapter Four: This section covered the presentation and analysis of data by way of figures and

tables.

Chapter Five: The last chapter presents a summary of the studies, recommendation and

conclusion and on the deployment internet from a local and foreign perspective in the Ghanaian

economy as a case study.