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The purpose of this study is to explore the role of employee relations and human resource management (HRM) practices on firms' commitment to sustainability in the context of micro, small and medium enterprises (MSME) in India. This paper proposes a theoretical framework, namely “awareness, action, comprehensiveness, and excellence (AACE),” to present the solutions and practices as adopted by MSME firms in meeting their sustainability objectives alongside pluralistic constraints related to human resource, capital and legitimacy risk.

The paper employs a cross-case methodology to investigate five food processing MSME firms to understand and delineate the role of employee relations and HRM practices in driving their commitment to sustainability.

The paper discusses the status of employee relations and HRM practices as practiced by MSME firms, specifically designed to meet their agenda to strengthen their commitment to sustainability. The study proposes a framework constituting four levels, namely “awareness, action, comprehensiveness, and excellence (AACE),” that reflects HRM practices as adopted by MSME firms to develop their commitment to sustainability.

MSMEs and food processing industries are critical to the growth of Indian economy and likewise for other emerging and developing economies. They are especially critical for their contribution to overall employment and sustainability comprising the second, third and fourth supplier links in supply chains. They have a major impact on sustainability outcomes and the life quality of employees. This paper makes a contribution in this direction.

The study fulfills the need to explore the role of employee relations and HRM practices to develop “commitment to sustainability” in the context of food processing MSME firms in an emerging economy of India. This paper adds an understanding of people management practices and sustainability in small firms (MSMEs), adding to the existing literature on the domain, which is mostly skewed toward large firms.

Waste management is a crucial aspect of sustainable development, but is it economically sustainable for marginalized informal firms? The study tries to answer this question by revisiting the Porter–Wagner dilemma about the association between environmental management (EM) and firm performance (FP). The study looks into the various liquid waste management practices (LWMPs) adopted by them and the overall impact of LWMPs on firms' economic performance.

The study uses the latest available cross-sectional data source on Indian informal firms by the National Sample Survey Office (NSSO), 73rd survey round 2015–16. First, ordered logistic regression was used to analyse the factors that impact a firm's adoption of a particular LWMP. Subsequently, to capture the heterogeneity among the firms based on productivity and size, a quantile regression (QR) was employed to analyse the impact of LWMPs on firm productivity. Additionally, the propensity score matching technique was used to address endogeneity concerns.

The authors find that bigger, urban-located and female-owned firms adopt cleaner LWMPs that positively impact their economic performance. Furthermore, the QR analysis observed that the most productive firms could extract higher returns from adopting cleaner LWMPs, indicating the relevance of the Porter–Wagner dilemma, i.e. environmental and economic sustainability are possibly symbiotic, thus having a feedback mechanism.

To the authors’ limited knowledge, this is the first study analysing the relationship between EM and FP among the informal sector firms, which are away from any regulations or obligations. Since sustainability is a two-way process, policies should be devised that incentivise sustainable business practices.

Ashutosh Sinha is managing VIMPL as rural distribution business involving Villgro stores and village level entrepreneurs (VLE). After spending two years in evolving the business model which provides sustainable products to improve rural livelihood, he has recently started selling FMCG products through VIMPL network. As he decides to expand the business, he has to make choices about strategic path of horizontal expansion versus vertical expansion. The expansion decision is also linked with choosing the right type of VLEs. The case provides detailed description of VLE operations and examines the challenges in building last mile delivery models using entrepreneurs.