1
A STUDY ON CORPORATING SOCIAL RESPONSIBILITY (CSR) IN A
MULTINATIONAL COMPANIES OPERATING IN VIETNAM
A CASE STUDY ON UNILEVER VIETNAM
BY
NGUYEN THI VAN TRANG
Graduation Project Submitted to the Department of Business Studies, HELP
University College, in Partial Fulfillment of the Requirements for the Degree of
Bachelor of Business (Accounting) Hons
October 2011
2
Declaration of Originality and Word Count
DECLARATION
I declare that this graduation project is based on my original work except for quotations
and citation which have been duly acknowledged. I also declare that it has not been
previously or concurrently submitted for any other courses/degrees at HELP University
College or other institutions.
Word Count: 11,638 words.
NGUYEN THI VAN TRANG
Date 17/10/2011
3
Acknowledgements
Many people have helped me to finish this project. I wish to take this opportunity to
thank all the people who have helped, tough and guided me all the time.
Firstly, I want to express my deep gratitude to my supervisor, Dr Le Van Lien from
International School at Vietnam National University, Hanoi. He helped me to gather
and analyze information, guide and correct me when I'm wrong. I can learn so much
from him such as his knowledge, inspiration and attitude of working.
Secondly, I also would like to express my thanks to Ms. Sumathi, Help University
College, who initiated the project and give me so much instruction and support.
Lastly, I want to thank to all managers and employees at Unilever Vietnam, who are
very friendly and cooperative.
4
Abstract
A STUDY ON CORPORATING SOCIAL RESPONSIBILITY (CSR) IN A
MULTINATIONAL COMPANIES OPERATING IN VIETNAM
A CSE STUDY ON UNILEVER VIETNAM
BY
NGUYEN THI VAN TRANG
October 2011
Supervisor: Dr. Le Van Lien
Although there are many different interpretations, but more than a decade, the number of
companies around the world recognizes the economic benefits of CSR policies are on the
rise. CSR commitments beyond the desire to increase profits, and company was fully
aware of their responsibility to employees, customers, communities and the environment.
The main purpose of this project is to find out the level of awareness and the
implementation of CSR of a multinational company operating in Vietnam - Unilever
Vietnam. Both primary data and secondary data will be used to collect information in this
project. After collecting the information, researcher will analyze the information and
from that can give conclusion and recommend some suggestions.
5
TABLE CONTENTS
Page
Declaration of Originality and Word Count
ii
Acknowledgement
Error! Bookmark not defined.
Abstract
iv
Table of contents
vi
List of Figures and Tables
vii
List of Abbreviations
viii
CHAPTER 1 : INTRODUCTION .................................. Error! Bookmark not defined.2
1.1 Research Background...............................................................................................13
1.1.1 CSR in the world....................................................................................................13
1.1.2 CSR in Vietnam......................................................................................................14
1.1.3 CSR in multination company in Vietnam............................................................15
1.2 Problem Statement.................................................................................................. 16
1.3 Objectives and scope of the research ..................................................................... 18
1.3.1 Objectives of the research......................................................................................18
1.3.2 Scope of the research..............................................................................................19
1.4 Research Methods .................................................................................................... 19
CHAPTER 2 : LITERATURE REVIEW ................................................................... 20
2.1 Definition of CSR ..................................................................................................... 21
2.2 Caroll’s 1979 - 1991 concept ................................................................................... 23
6
2.3 Other concepts related to CSR ............................................................................... 25
2.3.1 Triple bottom line ................................................................................................. 25
2.3.2 Stakeholder theory ................................................................................................ 26
2.3.3 Business ethics and CSR....................................................................................... 27
2.3.4 Sustainable development ...................................................................................... 28
2.3.5 Social responsible investment................................................................................29
2.3.6 CSR reporting.........................................................................................................30
CHAPTER 3: RESEARCH METHODOLOGY ........................................................ 31
3.1 Research Objectives ................................................................................................. 32
3.2 Research methodology ............................................................................................. 32
3.3 Theoretical framework ............................................................................................ 32
3.3.1 Managers............................................................................................................ ... 33
3.3.2 Employees...............................................................................................................33
3.4 Data sources .............................................................................................................. 34
3.4.1 Primary data.......................................................................................................... 34
3.4.2 Secondary data ...................................................................................................... 35
3.5 Research method ...................................................................................................... 35
3.6 Research tool ............................................................................................................ 36
3.6.1 Questionnaires........................................................................................................36
3.6.2 Phone interview......................................................................................................36
3.6.3 Annual report.........................................................................................................37
3.7 Sampling ................................................................................................................... 37
3.7.1 Sample population..................................................................................................37
7
3.7.2 Sample frame..........................................................................................................37
3.7.3 Sample size...............................................................................................................37
3.8 Limitations.................................................................................................................38
3.9 Hypothesis..................................................................................................................38
3.9.1 Manager’s attitude toward CSR...........................................................................38
3.9.2 Employee’s attitude toward CSR..........................................................................39
CHAPTER 4 : ANALYSIS ........................................................................................... 40
4.1 Questionnaires collection and respond .................................................................. 41
4.2 Description of result ................................................................................................. 41
4.2.1 Age .......................................................................................................................... 42
4.2.2 Gender .................................................................................................................... 42
4.3 Managers....................................................................................................................43
4.3.1 Level of awareness..................................................................................................43
4.3.2 Implementation......................................................................................................46
4.4 Employees..................................................................................................................53
4.4.1 Level of awareness.................................................................................................53
4.4.2 Implementation......................................................................................................56
4.5 Overall evaluation.....................................................................................................59
CHAPTER 5: CONCLUSION AND RECOMMENDATION .................................. 61
5.1 Conclusion ................................................................................................................ 62
5.2 Recommendation...................................................................................................... 63
5.3 Limitation of Sutdy .................................................................................................. 64
8
5.4 Suggestion for Furture Research ............................................................................ 64
REFERENCES ( Harvard referencing system) .......................................................... 65
APPENDICES ................................................................................................................ 70
Appendix A: Questionnaire Sample ............................................................................. 70
9
LIST OF ABBREVIATIONS
CSR
Corporate Social Responsibility
VND
Viet Nam Dong
TBL
Triple Bottom Line
MNCs
Multinational Companies
NGOs
Non Government Organizations
WCED
World Commission and Environment and
Development
SRI
Socially Responsible Investment
UVF
Unilever Vietnam Foundation
CIEM
Central Economic Management
UVN
Unilever Vietnam
10
CHAP 1: INTRODUCTION
1.1 Research background
1.1.1
CSR in the world
1.1.2
CSR in Vietnam
1.1.3
CSR in multinational company in Vietnam
1.2 Problem statement
1.3 Objectives and scope of the research
1.3.1
Objectives of the research
1.3.2
Scope of the research
1.4 Research methods
11
1.1 Research background
1.1.1 CSR in the world
Globalization and the rapid advancement of technology offer opportunities for economic
development and society. Simultaneously, it also brings serious challenges as the
financial crisis, insecurity, poverty, exclusion and status inequalities among societies.
That significant obstacle to the further integration and to participate fully in the global
economy still exists in some developed countries. If the benefits of economic
development, society can not be guaranteed, there still more and more countries and areas
are marginality from the global economy. CSR in many countries has grown to the
specific level of corporate responsibility in the code of conduct and internationally
quality standards. The provisions of this standard have been adopted as the required
conditions in business. CSR is the corporate commitment to business ethics and
contribute to sustainable economic development, enhance quality of life for employees
and their families, communities and the society in common (WBCSD). Social
responsibility of business (Corporate Social Responsibility – CSR) is no stranger to the
developed country. In the United States, there is “One Percent Club” where the members
committed to use at least 1% of their profits into social work. In France, a series of
cultural funds of enterprises such as RATP (subway company), France Télécom (France
Telecom)…are sponsor for French contemporary art. CSR is considered an important
factor as other traditional factors such as cost or quality in business. CSR is integrated
into business strategy and become prerequisite for business survival and development.
CSR became the main factor to consider the decision of responsible investment. Besides
having good reputation, businesses also get other benefits such as labor relations are
12
improving, industrial accident and the rate of job quitting decrease, labor productivity
increase and workers become increasingly have a strong attachment to the business. In
countries with developing CSR activities, the majority of businesses do not consider CSR
as charity; enterprise is just like a citizen – with rights and obligations in the society,
therefore if the social is good, the business can be developed well.
1.1.2 CSR in Vietnam
Vietnam is growing rapidly; the majority of businesses in small and medium – scale
adoption and implementation of CSR has not been focused and interested. According
many Vietnamese enterprises’ explanation, it is probable because the starting point of
Vietnam’s economy is at a low level so the profitability criteria should always be in the
top priority. Therefore, enterprises are rarely considered it as an important issue. Only
after a series about Vedan polluted the Thi Vai River and the protein in powder is not
qualified…everyone begins to think about CSR seriously. Vietnamese government has
tried increased the awareness of businesses and stakeholders on CSR recently. The
international development organizations in Vietnam have tried theirs’ utmost in
promoting and implementing CSR. The programs and projects related to CSR focused on
some important issues depending on the project’s objectives, resources and experience
available. In other words, businesses should choose how to do CSR that suit their abilities
the best. The development of a business always comes with CSR. It is integrated into the
business strategy and become the conditions for enterprises to develop, improve and
maintain competitive advantage. Prof. Dr. Miriam Meckel, the world’s leading experts in
the field of Corporate Communication and CSR in his lecture on effective strategies to
13
improve business communications has shown that, CSR is still new in Vietnam, but
particularly important for the sustainable development of Vietnamese enterprises. CSR
does not depend on the extent to which it is located but in the perception of each
business. However, there are some obstacles in the implementation of CSR in Vietnam
such as the concept of CSR is still new to a lot of business in the business community in
Vietnam, while the related parties do not have long-term plan and strategies to implement
CSR programs; management capacity and expertise in implementing CSR is limited…
To succeed in the application of CSR in Vietnam, business owners should implement
CSR for their labor first as the observance of laws and policies on wages, social insurance
and then building a relationship based on trust and sympathy between the employee and
enterprise. To promote the implementation of social responsibility of business, it is best
to have an association or organization to monitor and advise businesses. Besides, the
Government should create policies to support enterprises in implementing CSR.
1.1.3 CSR in multinational company in Vietnam
Vietnam is a developing country with strong growth in economy so Vietnam has been
attracting many companies to invest in Vietnam in which there are many famous
multinational companies (MNCs) in many different areas such as Samsung, Sony, Dutch
Lady, Unilever, and Toyota… Although CSR in Vietnam has not developed strongly as
in other countries but the government of Vietnam began to care about CSR and
encourages enterprises to do their social responsibility. CSR was launched in Vietnam
through a major multinational companies investing in Vietnam. These companies often
develop codes of conduct and business cultural norms which are universal to be applied
14
in many different market areas. Therefore, the contents of CSR that multinational
companies applied in Vietnam are effective and efficient. Some typical examples are:
project “I love Vietnam” of Honda – Vietnam company, educational programs for
personal hygiene of children in the mountainous province of Unilever, computer training
program Topic64 of Microsoft, Qualcomm and HP… But not all companies investing in
Vietnam are aware of their social responsibility. Only after melamine-tainted milk from
China and Vedan discharging waste water into the Thi Vai River, people realized that a
violation of business ethics, environmental harm severely of these companies and also
realized the importance of CSR. After joining WTO, the competition with cheap goods
and the quality is not enough in Vietnam, in addition, the other factors to make good
business is CSR. This has great impact to reputation and brand products of the enterprises
especially MNCs who do not have advantages like domestic companies.
1.2 Problem statement
For enterprises in Vietnam, CSR is still new and has many difficulties to implement, first
of all understands the concept of CSR, then how to put it into production and daily
business. To do that, companies sometimes need to make changes in policies and salaries
including the improvement of factory or workplace. The commitment of the leadership is
the biggest hurdle for small and medium companies operating in Vietnam. In Vietnam,
the implementation of CSR is not active, so some enterprises think that they are required
to implement CSR, but not fully understand the nature of it. The most successful in the
implementation of CSR is the business commitment to CSR initiative, turning it into a
company’s culture.
15
Beside the company trying to do CSR, there are some companies still not fully aware of
their responsibilities to society. In particular, some companies have serious violations of
ethics in business, ignoring the environmental damage they can cause and do not care
about the health of consumers – those who directly purchase and use their product. A
typical example is the scandal that Vedan discharging untreated waste to the Thi Vai
River. Vedan Vietnam active in many fields, which generate waste likely to cause
environment pollution, such as production of MSG, starch, sugar, caustic soda (NaOH),
acid… The total volume of water discharged into the Thi Vai River over 4,000m3/day.
Moreover, Vedan has sold the waste two time to Taiwan (through the ship) with the total
volume was 130,000 tons in the day 27/09 and 10/13/2008 (Vietnam Agriculture
newspaper). After being uncovered, consumers refused to buy all the products produced
by Vedan.
A recent hot issue that is paid special attention from public is that the instant noodles
contain trans-fat. Recently, the Service Center for analysis laboratory of the Department
of Science and Technology has found that many products instant noodles sold in the
market contain trans-fat up to 38%. Trans-fat is formed during food processing at high
temperature through oil hydrogenation methods – help products to be fresh, preserved
longer and more eye-catching. Therefore, it is also understandable when manufacturers
always prefer to use oils containing trans-fat in their products. This type of fat
metabolism can cause the coronary artery becomes blocked, causing angina, stroke.
(Phunuonline) In Vietnam, there is still no rule in managing products related to trans-fat,
but some instant noodle manufacturers pioneered the specified information that does not
16
contain trans-fat on their packing products. This is seen as a step in the awareness of
businesses to protect consumer health.
Vietnam is integrating into the global economy; investors and foreign companies are
setting up operations or seek partners in Vietnam, so the problem of Vietnam’s business
competitiveness in all aspects of the global markets is becoming increasingly important
for businesses. Practice shows that awareness of CSR of the people and management is
poor and legislation is not strong enough (as the fine is low). This has lead to business
easily dodge the law, denied liability and business ethics or environmental pollution in
severity in a long time without being sanctioned.
1.3 Objectives and scope of the research
1.3.1 Objectives of the research
There are some main objectives to carry out this research:
-
Firstly is providing the concepts and definition of CSR.
-
Secondly is inspect the level of awareness of CSR in multinational company with
specific target is Unilever company.
-
The third objective is to find out what benefits can CSR brings to the company
and stakeholders.
-
The last objective is recommending a CSR framework for a multinational
company operating in Vietnam.
17
1.3.2 Scope of the research
The research is carried out in order to find out how Unilever applied CSR in Vietnam.
Unilever is a multinational company established by England and Netherlands specializing
in the production of consumer goods such as cosmetics, chemicals, detergent, toothpaste,
shampoo and food… The headquarter is in London and Rotterdam but it has many
subsidiaries all over the world such as Africa, Americas, Asia Pacific (including
Vietnam), Europe and Middle East. Unilever employs about 180,000 workers and has
sales of nearly 40 billion Euros or more than 62 billion Euros in 2005 (Unilever website).
So the research conducting place at Unilever Vietnam at 156 Nguyen Luong Bang
Avenue, Tan Phu Ward, Dist 7.
1.4 Research methods
In order to do this research, the researcher will use the investigation and survey method.
Questionnaires will be distributed to the manager and employees of Unilever Vietnam
and also consumers in Hanoi city. Questionnaires are built based on previous researches
and studies. After collecting the information, researcher will use Microsoft Excel to
analyze the data and collect the result.
18
CHAP 2: LITERATURE REVIEW
2.1 Definition of CSR
2.2 Carroll's 1979-1991 concepts
2.3 Other concepts related to CSR
2.3.1
Triple bottom line
2.3.2
Stakeholder theory
2.3.3
Business ethics and CSR
2.3.4
Sustainable development
2.3.5
Socially responsible investment
2.3.6
CSR reporting
19
2.1 Definition of CSR
CSR is considered an important factor as other traditional factors such as cost, quality
and delivery in business. CSR is integrated into business strategy and become a
prerequisite for business survival and development. Although CSR is now common but
there are still many different views about the concept, content and scope of CSR. One
famous quote about CSR is
“the fundamental responsibility of any business in a free-enterprise system is to make a
profit while conforming to the basic rules of society, both those embodied in the law and
those embodied in ethical customs.” (Carroll, 1979).
Some people believe that “There is one and only one social responsibility of business –
to use its resources and engage in activities designed to increase its profits so long as it
stays within the rules of the game, which is to say, engage in open and free competition,
without deception or fraud.” (Friedman in Turner 2006, p. 7)
And some people understand
“In its broadest sense, corporate social responsibility represents a concern with the
needs and goals of society which goes beyond the merely economic. Insofar as the
business system as it exists today can only survive in an effectively functioning free
society, the corporate social responsibility movement represents a broad concern with
business’s role in supporting and improving the social order.” (Eells and Walton in
Carroll 1999, p. 278).
According to Aaronson “Business decision making linked to ethical values, compliance
with legal requirements, and respect for people, communities, and the environment
around the world”. And in the 1990s O'Rourke writes that
“A trend also noteworthy in the late 1990s was that of shareholder activists linking their
environmental or social issue to financial performance and/or risks faced by the
company. By claiming that environmental and social issues have a direct effect on
shareholder value, shareholder activists are moving the rhetoric of their activism out of
the realm of “ethics” or good versus bad behavior, and into that of traditional issues of
profitability, risk and shareholder value” (O'Rourke 2003, p. 230).
20
- Xem thêm -