The Impact of ESG Management Activities on the Organizational Performance of Manufacturing Companies in South Korea: The Moderating Effect of Job Position

Abstract

This study aims to examine the impact of ESG management activities (independent variable) on organizational trust and organizational commitment (mediating variables), as well as organizational performance (dependent variable), among members of large manufacturing enterprises. Additionally, it investigates the moderating effect of job position on the relationship between ESG management activities and organizational performance. For the empirical analysis of this study, data were collected from 561 employees of three large manufacturing companies-Company L, Company H, and another Company H-all of which have implemented and are practicing ESG management. The data were analyzed using SPSS 29.0 and structural equation modeling (SEM: AMOS 29.0). The key findings from the empirical analysis are as follows: First of all, all three ESG factors-environmental (E), social (S), and governance (G)-had a positive effect on organizational trust. The environmental and governance factors had a positive effect on organizational commitment. However, the social factor exhibited a negative effect on organizational commitment. The environmental factor showed a negative effect on organizational performance. By contrast, the social and governance factors had a positive effect on organizational performance. Organizational trust was found to enhance organizational commitment significantly, confirming that employees who trust their organization are more likely to be committed to it. Fifth, a strong sense of trust in the organization was shown to contribute positively to organizational performance and competitiveness. Organizational commitment positively impacted organizational performance, reinforcing the idea that highly committed employees contribute to better outcomes. Finally, this study confirmed that job position moderated the relationship between ESG management activities and organizational performance, indicating that employees at different hierarchical levels perceive ESG management's impact differently. This study expands the research scope of ESG management beyond marketing, HR, and service industries to focus on employees in large manufacturing enterprises. This provides new insights into how ESG initiatives influence internal organizational dynamics. This study is meaningful in that it provides a foundation for expanding future research into the field of finance or other areas of the manufacturing industry. From a practical standpoint, the findings highlight the necessity of strategic initiatives to ensure that employees fully understand and engage with ESG-related policies. To successfully implement ESG management, organizations must develop effective communication and integration strategies that foster employees' recognition of ESG initiatives.