Exploring sustainable HRM and the employee-customer link under external pressures in emerging economies

This study examines how Sustainable Human Resource Management (SHRM) translates into customer satisfaction through employee satisfaction and competence in the context of rapid economic development and evolving institutional conditions in Da Nang, Vietnam. Drawing on the AMO framework and Harvard HRM model, the study incorporates external conditions as key antecedents shaping SHRM practices. Our study advances SHRM research beyond firm-level analysis by demonstrating how SHRM practices interact with both external contextual pressures and internal organizational outcomes. Using PLS-SEM, our paper analyses the data collected from 330 companies in Da Nang, Vietnam, and the results demonstrate that opportunity-enhancing SHRM practices positively influence employee satisfaction and competence, which in turn affect customer satisfaction. Among external factors, competitive pressure emerges as the most influential driver of SHRM, followed by labor market conditions. Opportunity- and motivation-enhancing HRM practices play a more decisive role than ability-focused practices. This study develops and validates an integrated SHRM framework explaining how external contextual pressures shape sustainability-oriented HRM practices and subsequently influence employee and customer outcomes in an emerging economy. The study also highlights SHRM as a strategic approach for enhancing service quality, employee well-being, and sustainable organizational performance at the firm level and contributes to United Nations Sustainable Development Goals (SDG 3 and SDG8) at the national level.