The harm indicators of negative externality of efficiency focused organizational practices

Purpose - The purpose of this paper is to propose a conceptual model of harm indicators of negative externality (NE) of organizational practices, to help practitioners and researchers identify the harmful aspects associated with the unsustainable internal efficiency focused organizational practices to achieve a sustainable society. Design/methodology/approach - Initially, the harm indicators of NE of organizational practices are theoretically explored. Subsequently, the direct costs associated with the harm indicators of NE of work intensification, one of the strategic organizational practices, on employees and the community are examined using published information. Findings - There are clear indications of direct costs for handling the psychological and social aspects of harm of organizational practices on employees, and the employee work‐related health treatment costs to the community. Research limitations/implications - The published research used in estimating the direct costs of harm indicators on employees and the community in this paper are not originally designed to examine the NE of organizational practices. Therefore, future studies need to explore the costs of harm indicators of NE of organizational practices on society. Social implications - An understanding of the costs of harm indicators of NE of organizational practices on society can help organizations to be proactive to introduce sustainable human resource management strategies, so as to minimize the harmful aspects of NE before it starts curbing employees making positive contributions to their families and the community. Originality/value - The model of harm indicators of NE provides a new insight – that over‐utilization of human resources for an organization's internal efficiency purpose – has unsustainable impact on society.