When firms adopt sustainable human resource management: A fuzzy‐set analysis

Abstract Sustainable human resource management (HRM) is critical to sustainable corporate development. However, there is little systematic research examining the determinants of sustainable HRM adoption. We fill this void by identifying and introducing a configurational approach to examine when firms adopt sustainable HRM. Based on institutional theory, we develop a typology of institutional contexts associated with sustainable HRM adoption. We posit that institutional conditions in configuration facilitate firms' adoption of sustainable HRM. Thus, we hypothesize a primary institutional configuration where institutional support, institutional quality, and institutional infrastructure combine to promote the adoption of sustainable HRM. We further propose alternative types of configurations conducive to the adoption of sustainable HRM by introducing two organizational conditions: strategic leadership support and resource slack. A fuzzy‐set qualitative comparative analysis on data from 57 cases in China supports our hypotheses. We find that the combination of institutional conditions promotes the adoption of highly sustainable HRM, and the two alternative types provide functional substitutes for the primary type: (a) strategic leadership support substitutes for the combination of institutional support and institutional infrastructure, and (b) resource slack substitutes for institutional infrastructure. We build an institutional configurational model to advance a holistic understanding of the theoretical drivers of sustainable HRM, contributing to the research on sustainable HRM, institutional theory, leadership, and resource slack.