Sustainable Human Resource Management and Organisational Performance: An Integrating Theoretical Framework for Future Research

This paper identifies and analyses six relevant approaches for the analysis of Sustainable Human Resource Management and Organizational Performance: Resource-Based View, Dynamic Capabilities View, Knowledge-Based View, Behavioral Theory, Human Relations Theory, and Cooperative Systems and Ambidextrous Organizations. They are complementarity approaches. They can all be applied to the analysis of a specific resource or capability for sustainable human resource management (HRM) and, consequently, organisational performance. However, the contributions made by the Resource-Based View and the new approach of Ambidextrous Organizations seem to be the most comprehensive approaches for studying sustainable HRM from an internal perspective of firms that allows the long-term development of their organizational and society performance.

Introduction
Sustainable Human Resource Management (HRM) has become one of the key strategic issues for organisational performance. Despite the importance of sustainable HRM, empirical application moves ahead of theoretical research, and an integrative conceptual framework is required for identifying sustainable HRM (De Prins et al., 2014;Kramar, 2014;Ehnert, 2014). Hence, the majority of research on HRM focuses on specific practices without taking into account the orientation, context, or human capabilities. Along these lines, this paper identifies and analyses the main theoretical contributions involving sustainable HRM and their implications for organisational and society performance. Therefore, the main research questions are: 1. Can there be an integrating theoretical and conceptual framework that helps to contextualize the main studies on Sustainable HRM?; 2. Can the orientation of HR practices influence the sustainable management of HRM for social and organisational performance?; 3. Can the context of HR practices influence the sustainable management of HRM for social and organisational performance?; 4. Can human capacities influence the sustainable management of HRM for social and organisational performance?.
Management literature identifies six different approaches (Resource-Based View, Knowledge-Based View, Dynamic Capabilities View, Behavioral Theory, Human Relations Theory or Cooperative Systems Theory and Ambidextrous Organizations) to the main human resources (knowledge, motivation and relationships) and capabilities (learning capability, emotional intelligence and social capability) for developing sustainable human resources and, consequently, organisational and society performance (Renwick et al., 2013). All the approaches are complementary and can be applied for analysing a specific resource or capability for sustainable HRM. The main theoretical approach is the Resource-Based View (RBV) (Grant, 1991;Barney, 1991). This approach explains the influence of sustainable and valuable resources (knowledge, motivation and relationships) and capabilities (learning capability, emotional intelligence and social capability) on organisational and society performance. In this line, Gratton and Ghoshal (2003) single out the three dimensions of human resources: intellectual capital, emotional capital, and social capital. This integrative paper examines these three dimensions and their ambidextrous resources (Raisch & Birkinshaw, 2008;Eisenhardt & Martin, 2000).
Additionally, this study is based on another five management approaches. First, the Dynamic Capabilities View (DCV) is useful for analysing human capabilities such as learning, emotional intelligence and social interaction (Eisenhardt & Martin, 2000;Song et al., 2005). These capabilities allow addressing the sustainability and development of HRM for organisational and society performance. Second, the Knowledge-Based View (KBV) (Martín de Castro & García Muiña, 2003;Grant & Baden-Fuller, 2004) allows explaining how knowledge can improve organisational performance (new information, new ideas, new practices...), as well as create free and sustainable societies. Third, Behavioral Theory (March & Simon, 1958) allows explaining how motivation can improve organisational performance (behaviour and value guide, positive attitudes, new goals and achievements, new successes...) as well as creating an ethical society. Fourth, Human Relations Theory and Cooperative Systems (Herzberg et al., 2010) allows explaining how social relationships can improve organisational performance (teamwork, cooperation, meetings…), as well as create a sustainable society through strong relationships based on trust and respect. Finally, the Ambidextrous Organizations Approach supports HRM according to its orientation (exploitation or exploration) for the development of organisational and society performance (Gibson & Birkinshaw, 2004;Halevi et al., 2015;Kauppila & Tempelaar, 2016). Human resources can therefore be oriented according to the main productive activities based on their shortterm exploitation. For example, resources such as explicit knowledge, extrinsic motivation or formal relationships are easily accumulated and manageable in the short term. However, other explorative human resources, such as tacit knowledge, intrinsic motivation or informal relationships, are more difficult to manage, although they can lead the organization and society to record an extraordinary and sustainable longterm performance.
All the approaches are complementary. However, the RBV and Ambidextrous Organizations are the most comprehensive approaches for studying sustainable HRM from the internal perspective of firms (Banks & Kepes, 2015). From the Ambidextrous Organizational approach, two important orientations for sustainable HRM are identified: exploration and exploitation. An organization's HRM orientation is very important for designing sustainable HRM practices by providing guidelines on how an organization's sustainable HRM can be shaped according to its resource orientation for internal performance (organizational) and external performance (society) in the long term (Renwick et al., 2013).
This paper makes three main contributions: 1. Providing an integrative theoretical framework for understanding sustainable HRM and its impact on organisational performance; Small Business International Review / Vol 4 Nº 2 / July -December 2020 / AECA-UPCT-FAEDPYME 3 2. Exploring the sustainable orientations and context of resources for the development of organisational performance; 3. Examining the main role of human capabilities that helps to identify the individual characteristics of sustainable HR and their development. In this sense, it is argued that sustainable HR practices are likely to be different between firms, mainly due to the distinct resources orientation, human capabilities, or other institutional, structural and context factors.
The paper is structured as follows. First, the theoretical background is reviewed. The Resource-based View and Dynamic Capabilities View are analysed as relevant approaches for understanding the internal effect between HRM, human capabilities and organizational performance. In the following sub-sections, the Knowledge-Based View, Behavioral Theory and Human Relations/Cooperative Systems are analysed for the study of the keys to sustainable HRM (knowledge, motivation and relationships). Specifically, a novel and integrative theoretical framework is proposed for analysing sustainable HRM and organisational performance, namely, the Ambidextrous Organizational Approach. It integrates the different perspectives from a twin view of HRM (exploitation and exploration) for the development of long-term organisational performance. This reveals the moderating role of human capabilities for enhancing the effects between the development of sustainable HRM and organizational performance. The next section contains a review of organizational performance and society performance. Finally, the main discussion and its conclusions are presented with the theoretical development, guides for future research, and practical implications. Figure 1 presents an integrative theoretical model for the study of sustainable HRM and organisational and society performance. In summary, through this model we propose that: a) Sustainable HRM is positively related to organisational performance; and b) Human capabilities moderate the relationships between sustainable HRM and organisational performance. We develop in the following lines these theoretical relationships.

Sustainable Human Resource Management
Organisations are increasingly taking responsibility for individual and organisational behavioural outcomes for the creation of a sustainable eco-system (DeNisi et al., 2014). Sustainable HRM has been conceptualised primarily based on the extent to which a particular outcome (internal or external) has been emphasised (Kramar, 2014). Broadly speaking, three schools of thought can be identified. The first approach emphasises the capacity for reproduction, and its focus is creating HR systems that can withstand social, environmental and demographic pressures to last longer and achieve organisational goals ). The second approach emphasises economic, environmental and social consequences. Scholars argue that HR practices oriented toward this triple bottom line (3BL) are sustainable, mainly because of their ability to create a social, ecological and economically friendly image in the minds of stakeholders (Branco & Rodrigues, 2006). The third approach emphasises the earlier two approaches together, and it considers that HR systems and external economic, ecological and social factors are interrelated (Renwick et al., 2013).
The concept of Sustainable Human Resource Management (HRM) is becoming increasingly popular among academics, practitioners and researchers. This is due to its positive consequences not only for organisations 4 Lucía Muñoz-Pascual, Jesús Galende but also for society, the economy and the environment. It makes internal HR systems last longer and effectively links them to external outcomes, the 3BL.
This paper contends that employee engagement, employee wellness, work-life balance, autonomy and empowerment, self-leadership, strategic staffing, performance and reward systems, knowledge, motivation, and greening the firm are important for advancing a sustainable HRM (Cohen et al., 2012;Jackson & Seo, 2010). There is now a need, nevertheless, to accept that at a macro level the organisation has a relationship with its economic and social environments and is linked to social and ecological sustainability. The Sustainable HRM system itself therefore becomes a 'survival strategy' for organisations dependent on employees of the highest calibre : individuals with high levels of knowledge, motivation and networks.

Resource-Based and Dynamic Capabilities Theories
The Resource-Based View (RBV) is one of the most suitable approaches for analysing the impact of sustainable HRM on organisational and society performance. This approach is very useful for understanding the joint effect internal and valuable factors have on sustainable HRM. RBV underscores the great importance of intangible resources within the firm in terms of recording extraordinary results, as a source of competitive advantage. Intangible resources and certain aspects of HRM are therefore specific unobservable assets that do not appear on corporate balance sheets or financial statements (R. M. Grant, 1991). These types of resources can help to explain the differences in innovation and organisational performance. HRM is based on knowledge, experience, motivation, relationships and ideas susceptible to multiple uses without loss of value (Itami, 1987).
Therefore, these characteristics of HRM, along with their scarcity and their unique and exclusive nature, are a source of differentiation and competitive advantage. This differentiation must be maintained over time in pursuit of a sustainable competitive advantage (Wernerfelt, 1984). In fact, HRM is based on cumulative processes, that is, it generates stock and flow at the same time. Organisational performance is therefore a relevant indicator of the achievement of a sustainable competitive advantage (Montgomery & Hariharan, 1991).
Dynamic Capabilities View (DCV), can be considered an extension of RBV in which the skills and competences of the employees and the firm (dynamic capabilities) are important for obtaining a competitive advantage. According to the DCV, knowledge is the main resource for the development of competitive advantage. Employees can develop two types of knowledge, whereby it is not only a source of stock, buy also a source of flow. It is knowledge in continuous dynamism that can lead to the creation of extraordinary capabilities, such as learning capability. The DCV therefore acquires special importance as a complementary view of the RBV (Carpenter et al., 2001;Newbert, 2005;Teece et al., 1997). Teece et al. (1997) define dynamic capability as "the capability of the firm and the employees to develop, integrate, build and reconfigure internal and external competencies in environments with a high rate of change". This means the exploitation and exploration of competencies to adapt to changing environments is very important. The proper management of resources and their adaptation to the firm and dynamic environment can therefore improve organisational performance (Martín de Castro & García Muiña, 2003). Consequently, any capability that renovates, develops and adapts skills and abilities to a new scenario can be described as dynamic (Teece et al., 1997). In short, learning capability, emotional intelligence, and social capability can be considered dynamic capabilities, that are useful for understanding the effect of human capabilities on the development of sustainable HRM.

Knowledge-Based View
The main components of the RBV are the firm's internal resources, and specifically its intangible ones (Itami, 1987). This paper analyses employees' knowledge as one of three keys to sustainable HRM that firms can manage for the development of organisational and society performance. In this vein, until the study by Spender and Grant (1996), very few authors had referred to terms related to knowledge within the firm, such as tacit knowledge, skills, or learning capabilities. However, Spender and Grant (1996) began to study the implications of knowledge within the firm.
KBV adopts a perspective on the firm and competitive advantage based on the study of knowledge. Knowledge is the most important resource within the firm, and it can be created, stored and applied, becoming the main source of competitive advantage (R. M. Grant & Baden-Fuller, 2004). Consequently, KBV is considered a fundamental part of RBV. KBV thus can be understood as an extension of RBV in which knowledge is the most relevant strategic resource for the development of long-term organisational and society performance. This approach is very important for analysing knowledge inside the firm. Nonaka (1994) has argued that it is very important for the firm to implement employee knowledge management practices, whereby this resource can play a key role within the sustainable firm. Nonaka (1994) has also pointed out that employees possess two types of knowledge: tacit knowledge (difficult to communicate and formalise) and explicit knowledge (easy to store and transmit). The interconnection between them can result in a very valuable type of knowledge for organisational and society performance.
Tacit knowledge allows employees to directly apply knowledge from various sources, such as their experience or personal life. These sources cannot be contained in books, courses or databases. This is the main reason for their validity for the firm. Explicit knowledge allows employees to accumulate knowledge through sundry other sources, such as courses, databases or degrees. Knowledge arises when individuals interpret and use information related to experiences. Consequently, knowledge is not only documents or databases, but also processes and practices found in relationships, communication, experiences or shared information (González-Álvarez & Nieto-Antolín, 2007;Oyemomi et al., 2016;Osabutey & Jin, 2016;Groza et al., 2016;Cheng et al., 2016). There are several types of knowledge: tacit and explicit, individual and collective, external and internal, and know-how and know-why (Leiponen, 2006;Garud, 1997).
This paper focuses on the classification established by Leiponen (2006), which distinguishes between tacit knowledge and explicit knowledge; on the one hand, as those practices that seek to promote decoded and informal knowledge, that is, tacit knowledge, and on the other, as those practices or training actions that seek to accumulate and manage technical or coded knowledge, that is, explicit knowledge. Both types of knowledge can help to improve organisational and society performance. Some authors, such as Hayton (2005) and Paton (2012), find a positive relationship between certain factors of knowledge and organisational performance. For example, diversity can help employees to acquire new knowledge and new cognitive approaches that promote organisational performance. Taggar (2002) indicates that employees with knowledge have a positive influence on organisational performance. Dyer and Shafer (1998) report that employees with a high level of tacit knowledge generate creative ideas and drive organisational performance.
Specifically, tacit knowledge is the knowledge employees accumulate based on experiences, culture, childhood, relationships or communication. It is not collected or stored in databases, training courses or information systems. Tacit knowledge generates efficient productive processes and greater self-learning, consequently helping to improve organisational performance. Tacit knowledge therefore helps to drive organisational performance (Leiponen, 2006). On the other hand, explicit knowledge is the knowledge that employees accumulate through training, specialised courses and databases. It seems easier to manage than tacit knowledge. The accumulation and management of both types of knowledge have an impact on organisational and society performance. Knowledge gleaned from courses or training practices can generate new learning capacities, and therefore increase the probability of driving organisational performance. Employees need technical skills to create solutions in the workplace. Although explicit knowledge is easily transferable, it can also help to drive organisational performance (Leiponen, 2006): Tacit knowledge is positively related to organisational performance.
Proposition 1b. Explicit knowledge is positively related to organisational performance.

Behavioral Theory
Behavioral Theory provides complementary theoretical support for the study of motivation management and organisational performance. March and Simon (1958) have argued that proper personnel management requires all the members to be committed. Good motivational management can be achieved through the decision-making process, obtaining satisfaction, participation and involvement. The authors argue that employees will direct their behaviour towards the decisions that are most satisfactory to them. Managers should therefore propose decision-making alternatives that may be satisfactory to their employees and align their behaviour with the firm.
Based on the concept of limited rationality, March and Simon analyse the notion of maximising behaviour. The number of alternatives that can be presented to employees to direct their behaviour is unlimited. For this reason, their tastes and preferences need to be analysed to offer them the most satisfactory options. Employees do not maximise objective functions, but actually care about satisfying their own interests; the firm's job is to offer alternatives that align their behaviour with the firm's objectives. Therefore, the firm should not only pursue the maximisation of its short-term performance, but should also constitute the sum of individual objectives over the long term. Employees' objectives differ from those of the firm, so managers play an important role in guiding employees' behaviour. For example, economic or internal incentives can help to guide the employee and organisational behaviour.
Thus, Behavioral Theory can be applied to the analysis of decision-making and how the repercussions of the attitudes and behavior are important motivational mechanisms, considering motivation as a variety of reasons that encourage the individual to activate and direct their behaviour. There are two types of motivation: extrinsic and intrinsic (Osterloh & Frey, 2000). Extrinsic motivation occurs when individuals satisfy their needs externally, mainly through monetary compensations. Intrinsic motivation provides internal satisfaction in two ways, social and self-realisation (Schein, 2015;Gerhart & Fang, 2015).
Specifically, intrinsic motivation (do Paço & Cláudia Nave, 2013;Schlechter et al., 2015;Steele et al., 2016) refers to the internal forces employees possess, such as trust or self-realisation. It is not promoted by any external force (Vancouver, 2008). A recent line of authors (Wine et al., 2012;Meisler, 2014) suggest that intrinsic motivation is a key resource for the development of organisational and society performance. Miguel-Dávila et al. (2012) contend that the application of techniques to stimulate active participation can generate greater employee involvement and improve organisational performance. Organisational performance can therefore be easier to achieve with a high level of intrinsic motivation.
On the other hand, extrinsic motivation (Vidal-Salazar et al., 2016) refers to everything instigated and fostered by external agents, such as economic incentives and promotion. Vidal-Salazar et al. (2016) consider extrinsic motivation to be a source for the generation of new ideas and organisational performance. Therefore, when employees achieve a high level of extrinsic motivation, it will be easier for them to improve their performance.
When employees have met their basic needs, they can devote their efforts to improving their performance.
Most studies have analysed employee motivation jointly or by giving special importance to extrinsic incentives (Vidal-Salazar et al., 2016;Sung et al., 2017). It is important to study both constructs separately, albeit from an integrative approach to the development of organisational performance. Amabile (1998) and Schlechter et al. (2015) consider that both types of motivation are important because there may be synergies between them that help drive organisational performance. Amabile (1998) argues that money or recognition increase selfesteem, and therefore increase intrinsic motivation and organisational performance.

Proposition 2a. Intrinsic motivation is positively related to organisational performance.
Proposition 2b. Extrinsic motivation is positively related to organisational performance.

Human Relations and Cooperative Systems Approaches
Human Relations and the Cooperative Systems Approach support the study of employee relations and organisational performance. After the experiments carried out by Elton Mayo in the Western Electric company in 1920, the author discovered that informal groups in work environments could be an important source of organisational performance and competitive advantage. Mayo concluded that the emotional aspects within human relationships at work are much more powerful elements for obtaining organisational performance than other elements or physical assets. Social participation is a key component of organisational performance. Follett (1924) stresses the importance of coordinating relationships in an efficient performance. In addition, Follett (1924) describes the positive effect motivation and social groups have on business results and organisational performance. Maslow (1954), McGregor (1957, and Herzberg et al. (2010) argue that firms must manage and integrate relationships and motivation to obtain an excellent performance.
Another important approach for studying relations and organisational performance is the Cooperative Systems Approach. Barnard (1938) presented a new management approach in which firms should be managed as cooperative systems and not as mechanical, structured or independent processes. According to Barnard, employees do not act alone when it comes to reaching their objectives, but they relate to each other, giving rise to a series of networks. Barnard pointed out that relationships are easier to manage when firms are small because the firm's objectives coincide with those of its employees, and there is cooperation. In larger firms, however, there is a greater need to manage relations because there may be conflict.
The networks and contacts established by employees can help to drive organisational performance. They can be of two types: formal and informal. Informal relations refer to the contacts employees generate in informal meetings or group sessions. They are not included in formal documents such as a labour contract. Most firms manage professional employees' formal relations (Adams et al., 2006;Blumentritt & Danis, 2006). These can be important sources of organisational performance, but there is a need to manage informal relations that help to strengthen links and complementary knowledge of relevance to organisational performance (Tödtling et al., 2009). Phene et al. (2006) find that informal relations are important for innovation and organisational performance. Relaxed environments where there is a good atmosphere and trust have a greater probability of improving organisational performance.
Formal relations refer to all those that occur within the firm's work environment, where the main reason for the relation is the exchange of work information. Gallego and Casanueva (2007) argue that both types of relations can help to obtain important cooperation processes and organisational performance. In addition, Adams et al. (2006) and Blumentritt and Danis (2006) incorporate as formal relations those that occur between other agents (suppliers or customers). These relations are marked by professional competences (formal relations). This can generate sources of knowledge, ideas and organisational performance.
Proposition 3b. Formal relations are positively related to organisational performance.

Ambidextrous Organizations Approach for sustainable firms.
This paper analyses how the ambidextrous management of three aspects of sustainable HRM (knowledge, motivation, and relations) positively influence organisational performance. The Ambidextrous Organizations Approach was introduced by Gibson and Birkinshaw (2004). These authors show that managers and employees can direct resources toward exploration and/or exploitation activities. Jarzabkowski et al. (2013) argue that firms should create the context for employees' ambition to flourish. Although the ambidextrous literature recognises the important role employees play in guiding their resources towards exploration and/or exploitation activities, most have focused their studies on the organisational context or climate as generators of ambidextrous behaviours (Jarzabkowski et al., 2013). It is therefore important to study the Ambidextrous Organizations Approach for sustainable HRM on an individual level. (2014), Mom et al. (2009) and Lavie and Rosenkopf (2006) have highlighted the important role played by sustainable HRM within the Ambidextrous Organizations Approach. It is important to take into account the type of knowledge that flows within the firm to observe whether it is oriented in an ambidextrous way. Kao and Chen (2016) show that employee motivation can influence ambidextrous behaviour. Employees must be managed to obtain ambidextrous behaviour in the firm. Brusoni and Rosenkranz (2014) argue that it is essential in changing environments for employees to have a high level of ambidextrous behaviour.

Rogan and Mors
Ambidextrous sustainable HRM should be a priority for managing managers (Halevi et al., 2015;Carmeli & Halevi, 2009;Birkinshaw et al., 2016;Turner et al., 2016). Managers must be responsible for coordinating sustainable HRM towards exploration and/or exploitation activities. Halevi et al. (2015), Jansen et al. (2016) and Kauppila and Tempelaar (2016) have reported that ambidextrous sustainable HRM helps to generate greater group cohesion and more proactive attitude towards organisational performance.
In sum, firms with ambidextrous sustainable HRM will be prepared to face new challenges and, consequently, improve organisational performance. Therefore, the Ambidextrous Organizations Approach is key to understanding the way in which HRM is oriented. Further, this approach allows to analyse productive activities that lead to long-term organisational and society performance.  (2016) Source: Own elaboration Table 1 summarises the six approaches, their main authors, their main objective, their main characteristics, and their specific application to sustainable HRM.

The Moderating Role of Human Capabilities
Human Capabilities, as moderating variables, suggest that sustainable HRM and organisational performance can be enhanced according to employees' capabilities (learning, emotional intelligence, and social). Human capabilities can improve the effects between sustainable HRM and organisational performance (Ferris et al., 2008). Employees not only accumulate resources within firms (stock) and develop capabilities (flows) to enhance sustainable HRM (Maatman et al., 2010). Firms that are concerned about sustainable HRM will seek to establish a culture for developing skills and capabilities.
The existence of human capabilities as moderating variables can be explained because they are complementary assets. Employees that achieve a certain degree of learning capability, emotional intelligence and social capability will help the firm to obtain a competitive advantage and organisational performance. Human capabilities can be considered a mechanism of imperfect imitability (Alegre & Chiva, 2008). Firms therefore need employees that have developed or have a certain potential for developing their capabilities. Thus the relationship between sustainable HRM and organisational performance can be considered a contingency relationship, with learning capabilities and emotional intelligence and social capabilities as the main moderating variables.
Learning capability. Knowledge management is one of the most important aspects for the development of competitive advantage and organisational performance. Every business process is, in itself, a knowledge process, and variables such as the learning capability can further develop the generation of new ideas, innovations and organisational performance. An employee with a high learning capability can obtain new knowledge (Alegre & Chiva, 2008). Van de Ven (1986) has argued that the facilitators of performance include context, culture and human capabilities. Salman and Saives (2005), Aiman-Smith et al. (2005) and Hegde and Shapira (2007) indicate that human capabilities, such as learning, strengthen innovation results for the development of organisational performance. Akgün et al. (2007) define learning as the ability to transfer and integrate new knowledge. Other authors, such as Subramaniam and Youndt (2005) and Cabello-Medina et al. (2006), contend that employees with easier access to information and knowledge will develop a greater learning capability, and this will be reflected in organisational performance. Employees with the capability to quickly assimilate information and knowledge will be able to adapt more easily to a changing environment. Therefore, highly trained employees absorbing new knowledge will help to develop organizational performance: Proposition 4. Learning capability positively moderates the relationships between tacit and explicit knowledge and organisational performance.
Emotional intelligence. Firms need employees trained to understand and manage feelings, emotions and motivations. It will help them to discern which motivational incentives are appealing (Riggio & Lee, 2007), so high emotional intelligence will enhance the impact motivational management has on organisational performance (Goleman, 1996;Meisler, 2013Meisler, , 2014. This paper posits that emotional intelligence can strengthen the effects between motivational management and organizational performance (Levine, 2010). Salman and Saives (2005) indicate that human capabilities, such as the ability to recognize and feel one's own and other people's emotions, can help drive organisational performance. High emotional intelligence allows clarifying tastes and preferences. Emotional intelligence is a relevant guide towards organisational performance (Ferris et al., 2008;Gabriel et al., 2016). Employees with the ability to quickly assimilate emotions or feelings will be able to recognise and adapt their tastes to organisational performance more easily (Jordan et al., 2002):

Proposition 5. Emotional intelligence positively moderates the relationships between intrinsic and extrinsic motivation and organisational performance.
Social capability. The implementation of practices that enhance relations inside the firm will have an important impact on organisational performance (Ferris et al., 2008). Employees with high social capability will have a higher predisposition toward relationships. Social capability implies having or acquiring certain capabilities destined to overcome economic and social changes. Social capability is thus a personal competence for developing social relations (Paula-Peŕez, 2000;Viitala & Kantola, 2016).
Paula-Peŕez (2000) and Moran (2005) argue that the facility with which employees are able to provide support, participating in teamwork or dialogue, can enhance existing relations between employees and, consequently, drive organisational performance. Group cohesion helps achieve the firm's goals and, consequently, organisational performance. Tsai and Ghoshal (1998) have added that communication, social events and meetings can help establish relationships and drive organisational performance (Jiang & Liu, 2015): Proposition 6. Social capability positively moderates the relationships between informal and formal relations and organisational performance.

Organisational performance and society performance
The ultimate goal of managers is to increase organisational performance (Tseng & Lee, 2014). Performance is a key issue in management research, which has no simple and unanimous definition or metrics (Maltz et al., 2003). Performance involves the effectiveness of the actions specified and required in the employee function descriptor for the achievement of organisational objectives (Janssen & Van Yperen, 2004;Menges et al., 2017). In relation to individual performance, adaptive performance involves the skills for adapting to dynamic situations (Hesketh & Neal, 1999;Saridakis et al., 2017). Regarding this concept, Charbonnier-Voirin and Roussel (2012) propose several dimensions based on the work of Pulakos et al. (2000). Two dimensions are closely related to the reaction to uncertainty and ambiguity: 'solving problems creatively' (dealing with complex or ill-defined situations) and 'handling emergencies and crises' (finding solutions to avoid threats and risks). There is a growing recognition that traditional models of performance are static and need to include "responsiveness to changing job requirements", the so-called adaptive performance (Jundt et al., 2015). These two dimensions reflect the features of the adaptability to dynamic situations, uncertain environments, and ambiguity contexts.
Knowledge management is an important source of organisational performance (McIver et al., 2012). Technical information, courses or a high level of knowledge (explicit knowledge) can help to improve organisational performance in competitive markets (Kaufman, 2015). However, other aspects such as experience, personal life or relationships, can be relevant sources of competitive advantage over the long term (Marchington, 2015). The relationship between motivation and organisational performance has greater prominence among researchers (Diestel et al., 2014;Dineen et al., 2007;Harrison et al., 2006;Springer, 2011). Happy employees that feel fulfilled in their jobs record higher performance levels, suggesting motivation is a predictor of organisational performance (Uslu, 2016). A motivated employee focuses on the quality of the tasks, shows commitment to the organisation, values clients, and is more productive (Ferreira et al., 2009). The results reported by Ouedraogo and Leclerc (2013) show a clearly positive influence of motivation on employee performance, consistent with other studies positing that motivation has a positive impact on organisational performance (Judge et al., 2001;Vermeeren et al., 2014;Wu, 2017).
Among the various influences affecting organisational performance, previous studies support a positive relationship between motivation and organisational performance (A. M. Grant, 2008;Springer, 2011). For example, high intrinsic motivation has been linked to higher achievement, while extrinsic motivation has long been associated with lower organisational performance Gagné et al., 2015). Der-Karabetian and Gebharbp (1986) conclude that employees participating in a business programme had greater knowledge and motivation, better relations and fewer absences, resulting in increased organisational performance.
In addition to the organisational performance, nowadays societies are expected to base their growth strategies on three main sustainable development goals: the economy, social inclusion, and environmental protection, which reflect the three pillars of the 3BL approach characterizing a sustainable business development (B. Cohen et al., 2008;Glavas & Mish, 2015). One of the key topics tackled by the sustainable development discourse in recent years concerns the relationship between firms and society performance. Indeed, sustainable development is deemed to be a necessary condition for following the 3BL approach, thus favouring social and environmental responsiveness, while boosting organisational performance and economic growth (Dibrell et al., 2015).
However, the 3BL approach is far from being the dominant HRM model for companies (Hall & Wagner, 2012;Schaltegger et al., 2016). The role of social issues in this discussion has been undervalued. Furthermore, sustainable development requires a 'society pool' approach in that different stakeholders (employees, customers, suppliers, and governments) are involved (Gasbarro et al., 2017;Vollenbroek, 2002;Wu, 2017). On the one hand, stakeholders' involvement helps to clarify the criteria for sustainable outcomes and operationalise new strategic practices for HRM accordingly (Cleveland et al., 2015).
Finally, an in-depth analysis of the tensions between short-term versus long-term performance should be more carefully addressed (Slawinski & Bansal, 2015). In addition, sustainable development is a society-level matter (society performance). Thus, it is also important to differentiate the effects that sustainable HRM exerts on organisations from those exerted on stakeholders and society as a whole, thus shifting attention from the organisational level to the societal level (B. Cohen et al., 2008;Longoni & Cagliano, 2018;Renkema et al., 2017). This includes, for instance, an in-depth consideration of the distribution of the economic, social, and financial merits, knowledge, mistakes, gains, and losses among all the players that may have contributed to the design of sustainable HRM and organisational performance (Buller & McEvoy, 2012). There is still considerable uncertainty over whether organisational performance actually leads to a more sustainable society (Hall & Wagner, 2012): Proposition 7. Sustainable Human Resource Management and organisational performance are positively related to society performance.

Concluding remarks and guides for future research
This paper offers several complementary approaches to analyze the importance of a specific form of sustainable HRM for organizational performance. The Resourced Based View deals with HRM from an aggregate point of view, analyzing the valuable aspects of sustainable HRM (unique, heterogeneous, difficult to imitate...). However, it does not consider the orientation of HRM (exploitation/exploration) for the development of productive activities and, consequently, for organisational and social performance.
Complementary approaches emphasises a certain sustainable HRM and its orientation.
In this study, the importance of human capabilities is analysed: (1) (6) the Ambidextrous Organizations Approach is key to understanding the way in which HRM is oriented and to approaching the analysis of productive activities that lead to long-term organisational and society performance.
In spite of this complementarity, the two main approaches that have been more concerned with analysing sustainable HRM and its effects on organisational and society performance are the Resource-Based View and the Ambidextrous Organizations Approach. Many studies on HRM are firmly based on the Resource-Based View and its derived approaches. In these studies, HRM is considered to be an accumulative activity, characterised by its complex and systemic nature and its diversity, being composed of a combination of factors. It is therefore essential to define the specific orientation of HRM and how it should be analysed. The Ambidextrous Organizations Approach, together with the specific contributions of all the other approaches, provides a suitable theoretical support for empirical research on sustainable HRM for the long-term development of organisational and society performance.
In this line, the proposed model seeks to address the following: a) providing an integrative theoretical framework for understanding sustainable HRM and its impact on organisational performance; b) exploring the sustainable orientations of resources for the development of organisational performance; c) examining the main role of human capabilities that helps to identify the individual characteristics of sustainable HR and their development (De Prins et al., 2014;Kramar, 2014;Ehnert, 2014). The study is critical of the best practices approach, and it is argued that sustainable HR practices are likely to be different between firms, mainly due to the distinct resources orientation, human capabilities, or other institutional and structural factors.

Theoretical developments
The model makes several theoretical contributions to the literature. First, it extends the literature on Sustainable Human Resource Management through internal management approaches for the development of organisational and society performance. It summarises and integrates the literature and provides directions for future research. This study's model also presents a clear conceptual distinction between three ambidextrous sustainable human resources. It distinguishes between tacit and explicit knowledge, intrinsic and extrinsic motivation, and informal and formal relations. Although both concepts are very important, the literature on Sustainable Human Resource Management should pay more attention to the tacit part of knowledge, intrinsic motivation, and informal relations. If managers direct the most internal human behaviour in companies, then both firms and society will reach a commitment to obtain sustainable long-term organisational performance. The basis of sustainable economic and social performance therefore lies in ambidextrous HRM.
Our literature review indicates that, overall, more empirical research has been conducted on explicit knowledge, extrinsic motivation, and formal relations than on tacit knowledge, intrinsic motivation, and informal relations. Furthermore, this study analyses three important human capabilities as moderating variables between the effects of HRM and organisational performance, considering that sustainable HRM can be successful if managers focus on ambidextrous HRM and human capabilities such as learning, emotional intelligence, and social skills. In addition, traditional literature has studied the effects of knowledge, motivation, and relations as separate factors. Significantly fewer studies have examined the effects of ambidextrous sustainable HRM and the effects of human capabilities on organisational performance within an integrative model.
As another theoretical contribution, it is suggested that a mixed measure of ambidextrous HRM is more suitable to capture its multidimensional and multilevel nature. It is argued that an ambidextrous approach to HRM better captures the different characteristics and behaviours that distinguish employees in firms. Ambidextrous is defined as having two dimensions: A) HRM oriented toward exploration: the most internal part and difficult management (tacit knowledge, intrinsic motivation, and informal relations). B) HRM oriented toward exploitation: the most external part and the one more easily managed (explicit knowledge, extrinsic motivation, and formal relations). Finally, the moderating effects of human capabilities are analysed. Overall, it seems reasonable that the relationships between each human resource and its dimensions and organisational performance would be strengthened, due to the capability to learn, manage emotions, and socialise.

Guides for future research and practical implications
Therefore, following the model, future research can focus on the study of a part and empirically test in national and international firms. For example: a) Three independent models with each resource (knowledge, motivation and relationships); b) A comparative study between the resources to see what type of orientation (exploration / exploitation) has a greater impact on the organization; c) It would be appropriate to analyse the mediating role of other variables in the model such as creativity or innovation; d) Finally, future researchers can study the effect of the proposed moderating variables or other influencing ones such as absorption capability.
There are several practical implications for management practice and society. First, the obvious implication is that managers should consider an ambidextrous HRM. The development of sustainable human resources requires combining their external and internal parts. For example, explicit knowledge is a significant resource in firms for technical development, but tacit knowledge is vital for obtaining unique and valuable information forthcoming from experience. Extrinsic motivation is relevant for employees, but intrinsic motivation is a direct driver of human behaviour in long-term organisational performance. Intrinsic motivation is based on internal forces such as satisfaction, self-realisation, happiness... Finally, contractual relations (formal) are relevant for regulating tasks and competencies, but informal relations are a powerful nexus of networks. Thus, firms with ambidextrous HRM systems can positively influence organisational and society performance from a sustainable perspective.
In addition, an HRM system based solely on external human resources is a weak predictor of long-term organisational performance. This means firms with socially-related information exchange, employee motivation, experiences, and creating commitment, trust and cohesion among employees, record a major longterm organisational performance. Much of this is enabled through social interaction among employees, including informal conversations, socialising outside work, and meetings. Informal interaction is less common, and interaction is more frequently characterised as formal in the context of scheduled meetings, arranged for purposes such as defining and assigning particular task contributions. Thus, firms need to endeavour to directly encourage and facilitate ambidextrous HRM systems through training and human capabilities. These efforts would be enhanced by selecting team members whose personality profiles (such as high levels of empathy, motivation, knowledge and socialisation) are positively associated with organisational and society performance.


extfieldsofstudy: Physics Business

text:
Review of green supply chain management in manufacturing: A case study

Supply Chain Management (SCM) is a series of activities related to the flow of goods, information, and finance from suppliers, manufacturers, warehouses, distributors, and retailers to end customers (users). Whereas Green Supply Chain (GSCM) is an environmental innovation that integrates environmental issues and SCM to improve the organization’s sustainable performance. Some literature uses qualitative, quantitative, and a combination of the two methods in analyzing the positive impact of GSCM. Literature study was conducted to determine the impact felt by the company if implementing GSCM in its organization. So that it can be a reference for the manager in deciding the application of GSCM processes in the organization. There are four green processes in GSCM, namely: green design, green manufacturing, green logistics, reconditioning and core disposal. Some positive impacts that can be felt by the company, such as increasing organizational productivity (financially and efficiency), improving environmental performance, and to identify trends in organizational development. This practice can be implemented well if it is supported by pressures from various interests and pressures of the organization (management). Thus forcing companies to perfect the organization’s business model.

Introduction
Supply Chain Management (SCM) includes a set of approaches in industry from suppliers, manufacturers, warehouses, distributors, and retailer to customers (final customers) [1]. Activities within the scope of SCM are all activities related to the flow of material, information, and money along the supply chain [2]. In manufacturing companies, the activities included in the SCM classification are: (1) Activities of designing new products (product development); (2) Activities to obtain raw materials (product, purchasing, or supply); (3) Planning and production planning (planning & control); (4) Production activities; (5) Activities of sending / distributing (distribution); and (6) Product return management activities.
Green Supply Chain Management (GSCM) is an environmental innovation that integrates environmental issues into supply chain management [3]. This issue has been widely discussed by previous researchers by bringing up case studies in manufacturing companies. Some researchers use qualitative methods [4][5][6][7][8], quantitative [9][10][11], as well as a combination of the two methods [12] in determining the relationship between supply chain management practices and environment practices.

Green Supply Chain Management (GSCM)
Environmental management is a key strategic issue for improving supply chain [7,[11][12][13][14]. Whereas GSCM is defined as the integration of environmental problems in supply chain management during the product life cycle [15]. The GSCM model is highly correlated with the implementation of the principles of sustainable development in business practices with regard to environmental aspects. GSCM covers environmentally friendly design and production as well as the function of technology in recycling. Islam et al. [15] categorizes green supply chain practices and initiatives into several aspects, such us: reverse logistics, industrial symbiosis, green information technology and systems (GITS), green design, carbon management, supplier environment collaboration, customer environment collaboration, ISO 14001 certification, internal management support, green purchasing, green manufacturing, green packaging, green logistics, green outsourcing, and green warehousing. Kumar et al. [16] divides green processes into four, that is green design, green manufacturing, green logistics, core reconditioning and disposal. Table 1 shows the keywords that can be used to group processes in the supply chain into green processes.

Green Design
Green design is concerned with designing products that are ecologically sustainable and produce less emissions in the manufacturing process and when used. So that it can reduce the environmental impact [16]. Green design is also considered to be able to encourage organizations to innovate, improve brand position, and better business communication [17]. In the green design process, it uses less energy and emits less emissions.

Green Manufacturing
Green manufacturing is the process of transforming products from raw materials to finished products. In the green manufacturing process, the resulting waste can be minimized both in the form of emissions and product residues (such as: metal grinding in the machining process) [16]. The purpose of green manufacturing is to reduce the bad effects of the manufacturing process. So that the green manufacturing process produces quality products to avoid a lot of returns and damage, and there is no waste/pollution which can ultimately reduce the cost of raw materials [11].

Green Logistics
Logistics is the flow of resources from upstream to downstream to meet the needs of the company or customer [16]. Activities in the distribution logistics process such as: procurement logistics, production logistics, distribution logistics, disposal logistics, and reverse logistics. While activities in green distribution logistics include green packaging and green transportation. Green logistics aims to minimize the environmental impacts that occur in the logistics process, such as by optimizing routes, maximizing transportation volume, reducing fuel consumption, and reducing fuel emissions.

Disassembly
Disassembly can reduce the environmental impact by means of product recovery [16]. The purpose of disassembly is to take part at the end of the age of the product that can be reused, recycled, and then reproduced. Thus disassembly can minimize the total amount of waste that arrives at the landfill.

Remanufacturing
Remanufacturing is the process of utilizing used components that come from the final demolition of the final product to make a new product. Some remanufacturing processes are final product life span, product separation, disassembly, cleaning, repair and reassembly [16]. The aim of remanufacturing is to improve the environmental performance of the industry by reducing the amount of material wasted. So as to reduce the need for new components, production that causes emissions and energy consumption.

Advantages of GSCM
GSCM is a corporate approach to being environmentally friendly [5]. GSCM is carried out by companies to obtain financial and environmental benefits. GSCM is carried out by companies to get financial, environmental [12] and social benefits [8]. Table 2 shows some benefits for each aspect. Vanalle et al. [12] compares the positive impact on GSCM internal practices (internal environmental management; eco-design) and external GSCM practices (green supply chain; customer cooperation with environmental concerns; and investment recovery) on corporate performance (operational performance, and economic performance). It was found that internal practices were higher than external practices.
The companies believe that by adopting green supply chain practices, they can be more competitive in the market [18]. Internal and external green supply chain practices contribute to improving environmental performance because for all companies that is a positive relationship between green practices and environmental performance in term of energy, water consumption, waste and air emissions reduction. Internal environmental practices such as: internal environmental management, green design, green purchasing, and green production. External environmental such as: environmental collaboration with customers and suppliers green packaging, and reverse logistics.
GSCM practices are carried out due to pressure from various interests and organizational pressure [5,8,10,19]. Institutional pressure influences decisions taken in organizations. Resulting in forcing companies to apply GSCM practices to perfect the organization's business model. This practice is able to have a positive impact on an organization to be wiser in using its resources and able to maintain its organization in being competitive [10,20].

A Case Study
Zhu et al. [5] using questionnaire data from managers in China manufacturing and processing companies that have an impact on the environmental. The results obtained that from a scale of 5.0, the company's mission is running GSCM became one of the drivers that the highest points with an average of 4.45. Whereas related costs have the lowest average of 4.03 which shows that managers may not see environmental programs as providing a large economic benefit for the company. Based on literature studies and the results of the distribution of questionnaires to 314 industry experts, companies in China have implemented strong GSCM practices. This is supported by the company's awareness of the environment due to pressure and regulatory encouragement.
Wu et al. [10] conducted an empirical study of textile and apparel manufacturers in Taiwan. They investigate the relationship between GSCM drivers (organizational support, social capital, and government involvement) and GSCM practices (green procurement, collaboration with customers, eco-design and investment recovery). Using a hierarchically moderated regression analysis method, the research shows that: all three GSCM practices except investment recovery are positively influenced by GSCM drivers; investment recovery is only positively influenced by organizational support; market pressure does not have a moderating effect on the relationship between drivers and GSM practices; regulatory pressure has a positive moderation effect on the relationship between drivers and GSCM practices; and competitive pressures have a negative moderating effect on the relationship between drivers and GSCM practices.
Kebenei et al. [6] made a descriptive survey research design at the Department of Textile Industry in Eldoret, Kenya. The questionnaire was used as an instrument for data collection. Then analyzed using descriptive statistics. The results showed that the three independent variables (green procurement, green manufacturing, operations and reverse logistics) showed a very strong relationship with the dependent variable (organizational productivity). So the textile industry must consider the environmental impact when making purchasing decisions. In addition, it has begun to adopt production with relatively low and efficient environmental impacts resulting in little or no waste/pollution. And logistics practices that comply with environmental regulations include the flow of products, information, and services from origin to consumption. It is hoped that further research will be carried out in other sectors.
Puryono et al. [11] applied the green supply chain at the Pabrik Gula Trangkil, Indonesia to improve the company's financial performance. They use the AHP method to measure supply chain performance. Then compare the real weight gain obtained from the SCOR model. The Du Pont Ratio Analysis method (ROA and EVA models) is used to measure the company's financial performance. The results of this study are a decision-making information system that can describe the relationship between the green supply chain and the company's financial performance. The analysis shows that when companies implement green procurement, green manufacturing, and green distribution can increase company's financial by 87.3% and efficiency by 12.7%. This application can be developed to assist managers in making decisions when planning to implement a green supply chain.
Vanalle et al. [12] used partial least squares structural equation modeling (PLS-SEM) that provided by smartPLC software to explore GSCM suppliers of a Brazilian automotive supply chain. The results show that the adoption of GSCM practices positively impacts to the economic and environmental performance. But not be proved in relationship between GSCM and operational performance. This research also identifies institutional pressures that influences GSCM practices.
Villamizar et al. [7] used a semi-structured interview method in 58 different manufacturing companies in Spain. This research shows how companies carry out manufacturing and environmental practices. The results of this study are several considerations for correctly measuring environmental efficiency in companies. These findings can be used to fully exploit the potential of environmental practices, so as to increase manufacturing productivity and environmental performance, as well as to identify trends in organizational development.
Dermawan et al. [8] devised a supply chain model to minimize resource consumption and adverse effects on the environment in the pharmaceutical industry. The method used in this research is reviewed from an industrial and management perspective that focuses on methods, measurement tools, and solutions that can be applied to the GSCM model. The results obtained from this study indicate that the value of regulatory pressure is 3.28 (not thinking) compared to 3.01 for supply chain pressure at a total point of 5.00 each. This is in line with data obtained from the Global Intelligence Alliance which states that the strictness of regulations on the environment in Indonesia is still very low with points 2.8 / 7.0. Therefore, it is necessary to increase compliance with regulations established by the government in accordance with Presidential Regulation of the Republic of Indonesia No. 61 of 2011 concerning the national action plan for reducing greenhouse gas emissions. The GSCM model framework is very important to be applied in Indonesia, especially in the pre-production, production, and post-production stages that are comprehensive and consistent in the pharmaceutical industry.
Younis et al. [13] conducted a study to investigate the relationship between Green Supply Chain Management (GSCM) and Corporate Performance (CP) practices. They designed Mixed Method (quantitative and qualitative). A quantitative survey was conducted with 140 respondents in the UAE to test a series of hypotheses. In a qualitative study found several main reasons why GSCM practices fail to affect many dimensions of company performance. This study found that quantitative research alone is not enough to describe the relationship between GSCM practices and company performance. The results of this study are a series of managerial recommendations for companies interested in improving their performance while implementing green supply chain practices.
Santos et al. [9] developed a questionnaire that would sharing to 117 respondents on GSCM practices Brazilian manufacturer. There are three hypotheses formulate in this research: (H1) the adoption of GSCM practices with suppliers or (H2) customers separately and (H3) the balanced adoption of GSCM practices with both of the (suppliers and customers) has operational benefit for organizations. The result show that the operational performance has positive effect between suppliers and/or customer in GSCM. This research offered empirical support for managers to promote environmental practices that aim to operational performance and sustainable growth.

Conclusions and Future Work
The implementation of Green Supply Chain Management (GSCM) is able to have a positive impact on several manufacturing companies, such as increasing organizational productivity (financially and efficiency), environmental performance, and to identify trends in organizational development. In the success of GSCM, full support from management is needed which can be in the form of strict regulations to encourage the concern of the p\][\arties involved.
For future research, it discusses the impact of implementing GSCM activities to improve company performance. So that researchers can discuss in detail the relationship of each activity in improving company performance. Furthermore, it can be used by management in making appropriate GSCM decisions to be applied to the organization.


The Relationships Between Managerial Overconfidence, Audit Committee, CEO Duality and Audit Quality and Accounting Misstatements

This paper discusses the relationships between managerial overconfidence, financial distress, audit committee, CEO duality and audit quality and the occurrence of material accounting misstatements by Malaysian listed companies. Managerial overconfidence and financial distress are viewed as motives for accounting misstatements in this study. Audit committee characteristics, i.e., independence and expertise of its members, CEO duality and audit quality are viewed as the „loopholes‟ in corporate governance mechanisms that provide opportunities for proprietors to issue accounting misstatements. The sample for this study consists of 237 Malaysian listed companies, which includes data from misstated company reports with its respective matched data of non-misstated company reports. The results of this study show that financial distress and CEO duality are significantly related to the occurrence of accounting misstatements. This paper contributes to the body of knowledge on how to mitigate accounting misstatements, especially with the inclusion of the managerial overconfidence variable, which is a new addition to the research on accounting misstatements in Malaysia.

Introduction
The International Federation of Accountants (IFAC) (2009) defines accounting misstatement as the dissimilarities between the representation of the reported financial statement items and the representation required by the applicable financial reporting framework. Prior studies have interpreted accounting misstatement as manipulation of financial statement disclosure that does not comply with the current established accounting framework and does not fairly present the firm"s financial condition (Dechow et al., 2011). Regardless of the reasons behind a misstatement, be it due to errors or irregularities, any misreported financial information is deemed to be an accounting misstatement (Hennes, Leone, & Miller, 2008;Hussain, Hasnan, & Sanusi, 2014;Shibano, 1990).
When an accounting misstatement is discovered and deemed to be material, a restatement will be issued to correct the misstatement. Therefore, the terms, "restatement" and "misstatement" are used interchangeably throughout this study (Abbott, Parker, & Pet, 2004;Mohamed Hussain et al., 2016). Financial restatement is defined as correction of the non-compliance to the Generally Accepted Accounting Principles (GAAP), in terms of recognition, measurement and disclosure of amounts stated in the previous financial statement (Abdullah, Mohamad Yusof, & Mohamad Nor, 2010;Efendi, Srivastava, & Swanson, 2007). ISSN 1923-4023 E-ISSN 1923 fraudulent behavior (Chen, Elder, & Hung, 2014).
Even though Malaysia has not kept proper records of accounting misstatements, reports on misstatement scandals reported by the Securities Commission (SC) Malaysia, are available (i.e., Trive Property Group Berhad, YFG Berhad and Multi Sports Holdings Berhad), which is an indication of grave concern (Saieed, 2016;Securities Commission Malaysia, 2018). The increasing number of misstatement cases might due to the weak enforcement by regulators and the absence of proper monitoring mechanisms in companies. The state of the enforcement now appears to be rather lenient as the penalties imposed on these proprietors are not commensurate with the economic consequences of these misstatements (Verschoor, 2014). Further, not only is it inadequate, the penalties are only imposed on a firm that has been found guilty of fraudulent misstatement while other firms have only to restate. Although proven guilty of fraudulent misstatement, such firms are still listed on Bursa Malaysia and can continue their operations. Without adequate punishment, it will be difficult to curb misstatement and the public would be doubtful of the reliability of financial reporting of these firms and its regulators.
Therefore, despite the fact that corporate regulations and accounting frameworks in Malaysia adhere to the international standards, the presence of misstatement cases and poor penalties imposed show that there are loopholes in enforcement. Unless stricter penalties are imposed and more stringent regulations as well as an effective monitoring mechanism are implemented, misstatements will continue and the credibility of financial reporting would be lost. This provides reasonable justification for this study to determine the causes of accounting misstatements in Malaysia. There are several studies on the issue of accounting misstatement in developed countries; however, research to identify the reasons for the occurrence of accounting misstatement is still limited, especially in developing economies (Lau & Ooi, 2016). Only a few studies on accounting misstatement have been carried out in developing countries in Asia, such as in Malaysia (Abdullah et al., 2010;Hasnan & Hussain, 2015;Wahab, Gist, & Majid, 2014). As the regulations, culture, corporate settings, legislations and financial reporting quality of each nation are unique, differences in findings can be expected, especially when comparing developed and developing countries. Prior researchers, such as also Dechow et al. (2011) and Abdullah et al. (2010) have suggested that the causes for accounting misstatement may differ between countries. Therefore, this study contributes new information for further research on material accounting misstatement in a developing country, such as Malaysia.
To help mitigate the issue of material accounting misstatements, this study examined the motives and opportunities that could contribute to the occurrence of material accounting misstatements in Malaysia. Since the litigation costs of corporate offences are quite high, offenders must possess a strong motive and the right opportunity to commit the offence. The motives for the occurrence of material accounting misstatement for this study are examined from the context of managerial overconfidence and financial distress, which are believed to influence a firm"s judgment and increase the pressure on the firm to issue a material accounting misstatement. The US GAO (2002) believes that accounting misstatement, to a certain extent, reflects the weakness of corporate governance mechanisms. As a firm"s control and monitoring mechanisms, corporate governance was examined in this study, to determine whether or not its weaknesses, in terms of its audit committee, the existence of Chief Executive Officer (CEO) duality and audit quality, could provide an opportunity for material accounting misstatements to occur.
The paper is organised as follows. Section 2 describes hypotheses development, followed by Section 3 which discusses the research methodology. The subsequent section discusses the results of the study, and the paper concludes in Section 5. Jensen and Meckling (1976) defined an agency relationship as a contract under which one or more persons (the principal(s)) engage another person (the agent) to perform some service on their behalf which involves delegating some decision-making authority to the agent. However, both principal and agent are utility maximisers and want to act for their own best interests (Shleifer & Vishny, 1989). Denis (2001) illustrated that to remain in power, managers may be inclined to engage in misstatement and fraud. The inability of shareholders to supervise all decisions made, provides the opportunity for opportunistic actions (Fama, 1980). In any fraudulent act, there must be motives and opportunities to commit it. Hence, in this study, motives (i.e., managerial overconfidence and financial distress) and opportunities (i.e., weak corporate governance mechanisms, or audit committee characteristics, CEO duality and audit quality) are used as indicators of the occurrence of material accounting misstatements.

Managerial Overconfidence and Accounting Misstatements
Overconfidence is defined as an unrealistic belief on an uncertain outcome by underestimating the probabilities of a negative outcome (Schrand & Zechman, 2008). It could cause managers to have unrealistic optimism of the company"s future performance and underestimate any influence of unexpected events that could negatively affect corporate decision-making (Hribar & Yang, 2016;Malmendier & Tate, 2005). However, there are arguments that suggest overconfidence is desirable in corporate settings as it allows firms to be more competitive and better innovators (Brunnermeier & Parker, 2005;Compte & Postlewaite, 2004;Galasso & Simcoe, 2010;Gervais & Goldstein, 2007).
Overconfidence can lead managers to utilise aggressive accounting techniques to forecast earnings, that in turn, could lead to unreasonable forecasts (Hribar & Yang, 2010) and distorted financing and investment decisions to be made (Lomwel, 2018;Zhao & Ziebart, 2017). Eventually, if the firm"s judgments are not met and to avoid being labeled as incompetent, accounting misstatement would be viewed as an option. This is especially so when overconfident managers have higher idiosyncratic risks as they have more invested wealth in the firm"s shares and their reputation and employability rely on the firm"s performance (Barros & da Silveira, 2007;Gilson, 1989;Park & Chung, 2017). Therefore, managerial overconfidence would eventually lead to an optimistically-biased financial reporting statement (Merrienboer, 2016), when the expectation from the over-optimistic judgment does not come through (Schrand & Zechman, 2008). Presley and Abbott (2013) found a significantly positive relationship when they examined the association between overconfidence and accounting misstatement. Zechman (2008, 2012) also found that misreporting firms exhibit overconfidence compared to firms without misstatements. Their studies show that the accounting misstatement is due to earnings management done to meet the overoptimistic forecast earnings, which usually starts as a small amount and escalates to a bigger amount that causes the overconfident manager to materially misstate the financial statement in order to conceal the truth about the firm"s financial performance.
In Malaysia, there are no studies on this particular area. Prior studies on managerial overconfidence in Malaysia have mostly been related to corporate debt or leverage decisions (Purhanudin & Zakaria, 2015;Ting et al., 2016;Wei et al., 2015). However, other prior studies" findings that have associated managerial overconfidence with conservative accounting (Ahmed & Duellman, 2013); overoptimistic bias in earnings forecast (Schrand & Zechman, 2012); financial restatement (Presley & Abbott, 2013); and earnings management (Malmendier & Tate, 2015), provide sufficient justification for its relationship with the occurrence of material accounting misstatement.
Therefore, the hypothesis is as follows: H1: There is a significant relationship between managerial overconfidence and the occurrence of material accounting misstatement.

Financial Distress and Accounting Misstatements
Financial distress is an insufficient state of cash flow that causes firms" failure to meet current financial obligations (Khaliq, Motawe Altarturi, Mohd Thas Thaker, Harun, & Nahar, 2014;Wruck, 1990). It is detrimental both to the firm and its management. Financial distress causes firms to decrease in value; it affects operational efficiency and performance and threatens the management"s position and reputation (Khaliq et al., 2014). If firms cannot withstand the pressure and bear the costs, the firms might be forced into liquidation or bankruptcy (Khaliq et al., 2014;Pandey, 2005). These adverse effects might motivate managers to commit accounting misstatements in order to mask their current situation from public knowledge (Desai, Hogan, & Wilkins, 2006). It motivates the firm managers to fraudulently improve the appearance of the firms" financial condition by "cooking the books" (Firth, Rui, & Wu, 2011;Spathis, 2002).
Extant literature supports the relationship between financial distress and accounting misstatement (Beasley, 1996;Hasnan, Abdul Rahman, & Mahenthiran, 2013). Arshad, Iqbal, and Omar (2015) and Firth et al. (2011) also found that business failure or financial distress contributes to fraudulent accounting statements, as distressed firms are the most likely to commit this fraudulent act. A firm would issue a misstatement to secure business opportunities (Khaliq et al., 2014); avoid debt covenant violations (DeFond & Jiambalvo, 1994); and also avoid delisting by the stock exchange (Chen, Chen & Huang, 2010). The manipulation is also done by distressed firms to secure a position in the corporate market (Beasley, 1996). With their position and reputation at stake, managers may be motivated to conceal the deteriorating performance by resorting to misstatement (Habib et al., 2013;Persons, 1995).
Thus, the hypothesis is as follows: H2: There is a significant relationship between financial distress and the occurrence of material accounting misstatement.

Audit Committee Independence
One of the major roles of the audit committee is to oversee the efforts to produce a fair financial statement by resolving any conflicts between external auditors and the firm"s management. Thus, it is important for its members to be independent (Klein, 2002). The Bursa listing requirements require that all audit committees mainly consist of independent members (Bursa . If a member of the audit committee is part of the firm"s executive team, his or her independence in overseeing the firm"s reporting process would be reduced as he or she will be bound by the management"s decisions (Abdullah et al., 2010). Therefore, to ensure the quality of financial reporting, it is best to have an independent audit committee. Abbott et al. (2004) andMohd Saleh et al. (2007) found that an independent audit committee could reduce the presence of earnings management and fraudulent accounting misstatements, as its members are not bound by the interests of the firm"s management. In the event of misstatement, the reputation and integrity of the independent members would be questioned, and thus, it is believed that the members would carry out their duties effectively (Abdullah et al., 2010) and demand greater audit scope to ensure the financial statements are free from accounting misstatement, thus supporting the findings of prior studies that an independent audit committee is negatively related to the occurrence of accounting misstatement (Abbott et al., 2004).
However, some prior studies have not found that having an independent audit committee contributes to effective monitoring of the firm"s governance (Abdullah & Mohd. Nasir, 2004;Mohd Saleh et al., 2005). Baber, Kang, and Liang (2005) also found that audit committee independence does not mitigate accounting misstatement, which shows that having an independent audit committee is not a guarantee of effective monitoring of the firm"s reporting credibility.
Hence, the hypothesis is as follows: H3: There is a significant relationship between audit committee independence and the occurrence of material accounting misstatement.

Audit Committee Expertise
The Malaysian Code of Corporate Governance (2017) states that it is preferable for the audit committee members to have financial knowledge and expertise to help monitor the firm"s financial reporting process (Securities Commission Malaysia, 2017c). Managers who are supervised by expert audit committee members tend to carry out lesser earnings management practices (Dhaliwal, Naiker, and Navissi, 2010;Mohd Saleh et al., 2007). The presence of financial experts in the audit committee also helps to improve the cooperation between the audit committee and the firm"s auditors, thus helping to maintain higher audit quality and producing a credible financial statement (Nelson and Devi, 2013;Ghafran and O"Sullivan, 2017).
A study done on audit committee characteristics in Malaysia by Wan Mohammad et al. (2018) has found that audit committee expertise reduces the likelihood of financial restatement. Other studies also support the finding as it has been found that the presence of financial experts in the audit committee can improve accounting quality and mitigate the occurrence of accounting misstatement (Agrawal & Chadha, 2005;Bedard, Chtourou, & Courteau, 2004;Shin, Xu, Lacina, & Zhang, 2014).
However, the findings on the relationship between the audit committee with financial expertise and accounting misstatement are mixed. A prior study has found that having members with financial expertise in the audit committee does not contribute to the audit committee effectively curbing earnings management (Zahn & Tower, 2004). Therefore, based on the above findings, this study hypothesises that: H4: There is a significant relationship between audit committee expertise and the occurrence of material accounting misstatement.

CEO Duality
It is recommended by the MCCG (2017) that the positions of the Board Chairman and the CEO be separated to ensure proper governance (Securities Commission Malaysia, 2017c). Drobetz, Schillhofer, and Zimmermann (2004) and Jensen (1993) found that CEO duality motivates the individual to act for his/her own interests instead of maximising the shareholders" wealth, which is supported by the agency theory. Although, there are studies that have found that the CEO, as a steward, would act in the interests of shareholders (Davis et al., 1991(Davis et al., , 2000Martin & Butler, 2017), having both governance and management power would allow the individual to manipulate the agenda of the board meeting according to his/her own best interests, which would then prevent fair disclosure (Abdullah, 2004).
Prior studies have found that CEO duality is positively associated with earnings management, fraudulent reporting and poor earnings quality (Byard, Li, & Weintrop, 2006;Dechow et al., 1996). It has also been linked to financial restatement, which indicates that duality weakens the corporate governance structure that is supposed to prevent accounting misstatement (Efendi et al., 2007). This supports the opinion of the authority received from CEO duality is  ISSN 1923-4023 E-ISSN 1923-4031 misused for personal gain and to protect the individual"s own interests, thus contributing to accounting misstatement. Therefore, separating the positions of the CEO and the board chairman is crucial to obtain more effective monitoring and governance structure (Hasnan et al., 2017).
The next hypothesis is as follows: H5: There is a significant relationship between CEO duality and the occurrence of material accounting misstatement.

Audit Quality
The firm"s management is responsible for preparing the financial statement that fairly reflects the firm"s current financial position to help users in their decision-making. However, to ensure the credibility of the financial statement, there must be proper governance. This is where the external auditors execute their role in ensuring the financial statement presents a true and fair view (Alabede, 2012). The role of the external auditors is crucial as they safeguard the investors and shareholders" interests from insider expropriation (Newman, Patterson, & Smith, 2005).
Malaysia"s big four audit firms are Deloitte, KPMG, Ernst & Young (EY) and PricewaterhouseCoopers (PWC). Prior researchers have found that big four auditors demonstrate higher audit quality (DeAngelo, 1981;DeFond & Jiambalvo, 1993). It has been shown that big four audit firms are more competent than other firms (Watts & Zimmerman, 1981). As big four audit firms have a higher reputation, they have a greater economic interest to provide reasonable assurance that the financial statement that they have audited is free from material errors as any misstatement disclosed for any financial year that they have audited would negatively affect them (DeFond and Jiambalvo, 1991).
The capabilities of big four auditors could be seen in prior findings that have indicated that hiring big four auditors could lower the litigation rate and curb earnings management practices compared to hiring non-big four auditors (Becker et al., 1998;DeFond & Jiambalvo, 1991). Zhizhong et al. (2011) found that misstatement could be mitigated by hiring strong external auditors from big four audit firms. Nevertheless, other studies have shown that there is no relationship between big four auditors" audit quality and their credibility in curbing earnings management (Yasar, 2013). This study hypothesizes that: H6: There is a significant relationship between audit quality and the occurrence of material accounting misstatement.

Sample Formation
The sample of this study comprises companies listed on the Bursa Malaysia main market from 2011 to 2017, excluding companies listed under the financial sector. The occurrence of material accounting misstatement is measured using financial restatement. As Malaysia does not have available established records of restatement, manual collection through Bursa Malaysia"s listed annual reports was done. To detect whether or not there is restatement in the annual reports, the keywords of "restatement", "restate", "restated", "comparative figure" or "prior year adjustments", were searched in each annual report to find any evidence of restatement (Abdullah et al., 2010;Hasnan, Marzuki, & Shuhidan, 2017).
As there is an absence of proper guidelines to determine material accounting misstatement in Malaysia, the GAO"s financial restatement category description was used to determine the sample for this study and misstatements caused by the changes in accounting principles, minor errors and misinterpretations of accounting rules were excluded. Matched-pair procedures were used to form a control group, comprising two non-restating firms, with matched total assets and without matched total assets. These sample formation procedures were necessary to ensure a more comprehensive sample formation. A total of 237 samples that included 79 restatement samples and 158 non-restatement samples were finalised for this study.

Variables Measurement
The source for this study"s data is mainly from firms" annual reports as disclosed on the Bursa Malaysia website. Figure 1 illustrates the timeline for data collection for proxies that represent each variable. The data for this study was collected one year prior to the material accounting misstatement incidents (labeled as "t-1"). For example, if the restatement was announced in 2010 (n) to restate the misstatement made in 2008 (t), the data collected was from 2007 (t-1) annual reports of the restating firms, matched with non-restating companies" (control firm) information for the same year. This is based on the findings by Dechow et al. (2011) that misstating firms actively manipulate their statements before and during the misstatement event period. ISSN 1923-4023 E-ISSN 1923  Referring to prior studies on accounting misstatements in Malaysia, the occurrence of material accounting misstatements, proxied by financial restatements, was measured using a dummy variable, coded as "1" for restating companies, and "0" for non-restating companies (Abdullah et al., 2010;Aziz, Mohamed, & Hasnan, 2017;Hasnan & Hussain, 2015;Hasnan et al., 2017).

Independent Variables
The independent variables for this study are the motives and opportunities that led to the occurrence of the material accounting misstatements. The motives are managerial overconfidence and financial distress. Managerial overconfidence was proxied by the firm"s capital structure variable using debt to equity ratio (Malmendier, Tate, & Yan, 2011;Schrand & Zechman, 2012). It was measured by total debt divided by the firm"s total market value from the sum of equity and book value of long-term debt and preferred stock. The ratio was compared to the industry median for the financial year, and if the value was higher, it meant overconfidence existed, and a dummy variable was used and coded "1" or "0", otherwise.
Financial distress was measured by using Altman Z-Score, which has been used in prior studies on it"s viability to measure the level of financial distress (Gul et al., 2018;Hennes et al., 2008). Altman Z-Score means that firms with a score of less than 2.073 are assumed to be in financial distress; thus, a dummy variable was used and coded as "1" for a score below 2.073 (<2.073) and "0" otherwise.
The Z-Score was calculated by using the formula prescribed by Altman (1968): Z = 1.2X 1 + 1.4X 2 + 3.3X 3 + 0.6X 4 + 1.0X 5 Where: X 1 : Working capital to total assets X 2 : Retained earnings to total assets X 3 : Earnings before interest and taxes to total assets X 4 : Market value of equity to total liabilities X 5 : Net sales to total assets The opportunities for the occurrence of material accounting misstatement examined in this study consist of audit committee independence, audit committee expertise, CEO duality and audit quality. The independence of the audit committee was determined from the percentage of independent audit committee members in the committee (Ghafran & O"Sullivan, 2017;Poretti, Schatt, & Bruynseels, 2018).
Audit committee expertise was measured from the proportion of audit committee members with financial expertise. The expertise recognised in this study included the members" qualifications or experience in accounting, and membership in professional accounting bodies (Ghafran & O"Sullivan, 2017;Zalata, Tauringana, & Tingbani, 2018).
The firm was presumed to have practiced CEO duality if the firm"s CEO also held the post of chairman of the firm"s board. A dichotomous variable was used, and coded as "1" if the posts of board chairman and CEO were combined, and "0", otherwise (Su, 2010;Zhou et al., 2018).
External auditors from the big 4 audit firms is the proxy for audit quality for this study; a dummy variable was used, and coded as "1" if the auditor is a Big 4 auditor, and "0", otherwise (Abid, Shaique, & Anwar ul Haq, 2018;Zalata et al., 2018).

Model and Data Analysis
To test the hypotheses generated in this study, the data collected was analysed using IBM SPSS Statistics 23. Pearson correlation was used to test the statistical association between two of the variables tested. To test the relationships between multiple variables and the occurrence of accounting misstatement, binary logistic regression models was used. The logistic regression model generated below was tested to determine the relationships and the effect of those variables on the occurrence of accounting misstatements. FR = β 0 + β 1 MOCi (t-1) + β 2 DISTRESSi (t-1) + β 3 ACINDi (t-1) + β 4 ACEi (t-1) + β 5 DUALi (t-1) + β6BIG4i (t-1) + εi (t-1) Notes: All p-values are 2-tailed. *Correlation is significant at the 0.05 level; and **Correlation is significant at the 0.01 level.
The statistical results above show the correlation between all the independent variables and the dependent variable. Table 1 shows that there are four significant correlations, of which three are at the 1% level, while one is at the 5% level.
In the book of Pallant (2016), Cohen (1988) suggests that a correlation that is higher than 0.5 is interpreted as having a large correlation. However, the presence of severe collinearity is only a concern if the correlation is more than 0.8, i.e., the threshold set by Cooper and Schindler (1998). Thus, none of the variables in this study was excluded.
Table 1 above shows that there is a highly significant and positive correlation (above 0.502) between managerial overconfidence (MOC) and financial distress (DISTRESS) at the 1% level. It shows that the presence of managerial overconfidence is associated with the occurrence of financial distress. This means that managerial overconfidence might lead firms to financial distress as reported by Hackbarth (2008) that overconfidence tends to lead to higher debt, that eventually contributes to financial distress.
The result also shows that there is a significantly positive correlation (0.204) between financial distress (DISTRESS) and the occurrence of material accounting misstatement (FR). This is consistent with the findings of prior literature that financial distress would motivate the issuance of accounting misstatement (Firth et al., 2011;Hasnan et al., 2013).
There is also a significantly negative association although of low correlation (-0.132) between managerial overconfidence and CEO duality. Prior studies have not found a negative association between these two variables; however, it is deemed to be insignificant (Khajavi & Dehghani, 2016). However, there is a study that has found that there is a direct relationship between duality and overconfidence (Koloub & Shoorvarzy, 2015). ISSN 1923-4023 E-ISSN 1923 The other significantly negative correlation (-0.184) is between audit quality, proxied by big four audit firms and CEO duality. The result posits that individuals who hold dual positions in a firm would prefer lower audit quality as it would allow them to act on personal interests (Zanani & Abdullah, 2008). In this study, H1 to H6 predict a significant relationship between motives (managerial overconfidence and financial distress) and opportunities (audit committee independence, audit committee expertise, CEO duality and audit quality) and the occurrence of material accounting misstatement. The results of the logistic regression model are as in Table 2.
For the predicted misstatements firms, the model has a R 2 value of 9.6 per cent, which means that 9.6 per cent of the variation in the incidence of material accounting misstatements is explained by the variation in the factors studied.
The result indicates that there are two variables which are important determinants of material accounting misstatements. The DISTRESS variable is positively and significantly associated with material accounting misstatement at the 1% level of significance, while the DUAL variable is positively and significantly associated with the occurrence of material accounting misstatement at the 5% level of significance, thus supporting hypotheses H2 and H5.
The results of logistic regression in this study do not provide support for hypotheses H1, H3, H4 and H6, since managerial overconfidence, audit committee independence, audit committee expertise and audit quality, are not significantly associated with material accounting misstatement. The insignificant association between managerial overconfidence and the occurrence of material accounting misstatement shows that managerial overconfidence is not the motivating factor for material accounting misstatement for Malaysian listed companies. However, since the addition of managerial overconfidence as a determinant of accounting misstatement is rather new, more research could be conducted in future using a different measurement to determine if managerial overconfidence might produce different results.
This study also finds that audit committee characteristics (independence and expertise) are not significantly related to the occurrence of accounting misstatement. These results are consistent with prior findings that audit committee independence (Abdullah & Mohd. Nasir, 2004;Baber et al., 2005) and audit committee expertise (Zahn & Tower, 2004) are not effective corporate mechanisms as they have failed to curb misstatement.
Audit quality, which is proxied by big four audit firms, also does not have a significant relationship with the occurrence of material accounting misstatement. Even though some studies have found that big four auditors as more competent in ensuring the credibility of the financial statement, this study supports Yasar's (2013) findings that big four audit firms do not contribute to higher credibility of financial reporting.
Financial distress has a significant relationship with the occurrence of material accounting misstatement in this study. This result is consistent with prior research conducted in Malaysia that has found that financial distress motivates firms to participate in accounting misstatement (Hasnan et al., 2013;Hasnan & Hussain, 2015). The firm"s deteriorating financial state provides an incentive for firms to participate in accounting misstatement (Beasley, Carcello, & Hermanson, 1999;Dechow et al., 2011). 26 ISSN 1923-4023 E-ISSN 1923 showing that CEO duality indicates that corporate governance is weak and has failed to curb accounting misstatement (Efendi et al., 2007).

Conclusion
The study examined the relationships between managerial overconfidence, financial distress, audit committee, CEO duality and audit quality and the occurrence of material accounting misstatement. This research contributes to the body of knowledge on the factors that could contribute to accounting misstatement and whether the corporate governance mechanisms tested, i.e., audit committee and audit quality, could act as effective control mechanisms to mitigate accounting misstatement.
As explained above, only two of the variables are significantly related to material accounting misstatement. Financial distress is a motivating factor that contributes to the occurrence of accounting misstatement due to the pressure it exerts on the firm and its management. As for CEO duality, it appears to be a loophole in corporate governance as the findings show that it has a significantly positive relationship with the occurrence of accounting misstatement.
As the financial statement is an important tool for decision-making and misstatements have been proven to be detrimental to the firm and its stakeholders, further research needs to be conducted on the determinants of accounting misstatement in order to curb its occurrence. The present model could be improved by adding variables other than audit committee, CEO duality and audit quality, which could fill the gap mentioned by Dechow et al. (2011) .
Lastly, it is recommended that further studies be done on the relationship between managerial overconfidence and the occurrence of material accounting misstatement. This study did not find any significant relationship between managerial overconfidence and accounting misstatement by using a dichotomous measurement based on debt to equity ratio of the sampled firms compared to the median industry. Therefore, more research could be done by using other measurements to determine the role that managerial overconfidence plays in the occurrence of accounting misstatements.