Tài liệu Corporate social responsibility in viet nam a study of stakeholders’ perceptions of corporate social responsibility.

CORPORATE SOCIAL RESPONSIBILITY IN VIET NAM: A STUDY OF STAKEHOLDERS’ PERCEPTIONS OF CORPORATE SOCIAL RESPONSIBILITY. BY PHAM VAN THUAN 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 2010 i 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: 11,523 Words. Pham Van Thuan Date ii Abstract CORPORATE SOCIAL RESPONSIBILITY IN VIET NAM: A STUDY OF STAKEHOLDERS’ PERCEPTIONS OF CORPORATE SOCIAL RESPONSIBILITY. BY PHAM VAN THUAN October 2010 Supervisor: Dr. Nguyen Thi Phuong Hoa Corporate Social Responsibility has developed through the long history and it is also expected to implement by any business entities in the world. It is no longer a new term for developing countries such as Viet Nam. However, in recent year, when the economic is open and there are a lot of scandals and critical case concerning about the Corporate Social Responsibility and ethical business as the result of the economic boom. So, there are a lot of researches on that field; however the understanding of Corporate Social Responsibility is limited in Viet Nam. Therefore, it may be as a result of motivation for the researcher to conduct the survey about the perceptions of CSR among Vietnamese individual investors in TL Securities Company’s office (TLS). In this study, the researcher wants to access the understanding of Vietnamese individual investors on the topics of CSR. Further more, the researcher will to define the three factors which contribute to the CSR perceptions such as CSR awareness, investment decision and CSR reporting base on the understanding and opinion of the investors. iii By conducting the research, the research is able to indicate that the understanding of CSR concepts and its perceptions is limited; because of the investors have little basic knowledge about the CSR. So, the investors in Viet Nam are very hard to use CSR information as a tool to value firm and it is also difficult for them to make investment decision. iv Table of contents Declaration of Originality and Word Count ..................................................................... ii DECLARATION ............................................................................................................. ii Abstract ............................................................................................................................ iii Table of contents ................................................................................................................ v List of Figures and Tables .................................................................................................ix List of Figures and Tables .................................................................................................ix List of Abbreviations.......................................................................................................... x CHAPTER 1: INTRODUCTION .....................................................................................xi 1.2 Research Background ...................................................................................... 1 1.1.1 CSR in the world ............................................................................................... 1 1.1.2 CSR in Vietnam ................................................................................................ 1 1.3 Problem Statement ........................................................................................... 3 1.3 Objectives and Sphere of Research ...................................................................... 4 1.3.1 Objectives of Research ...................................................................................... 4 1.3.2 Sphere of Research ............................................................................................ 5 1.4 Research Methods .................................................................................................... 5 1.5 Structure of Research ............................................................................................... 6 CHAPTER 2: LITRERATURE OF REVIEW ............................................................. 7 2.1.4 Investment Decision ................................................................................... 7 2.2.1 Business Ethics in Viet Nam – Reality and Solutions ...................................... 7 2.2.2 CSR in business entities in Viet Nam – Reality and Solutions ......................... 7 2.2.3 CSR – The Investors’ Perspective..................................................................... 7 2.2.4 CSR, PR of Foreign-Invested Companies ......................................................... 7 v 2.3 Researches Summary ............................................................................................... 7 2.1 Research’s related concepts .................................................................................. 8 2.1.1 Carroll's 1979-1991 conceptualization....................................................... 9 2.1.2 Wood 1991 conceptualization .................................................................. 11 2.1.3 Stakeholder theory ................................................................................... 13 2.1.4 Investment Decision ................................................................................. 14 2.1.5 Responsible Investment .................................................................................. 15 2.1.6 Investor Relation ............................................................................................. 15 2.1.7 CSR Reporting ................................................................................................ 16 2.1.8 CSR practice and challenges ........................................................................... 19 2.2 Researches and Studies .......................................................................................... 20 2.2.1 Business Ethics in Viet Nam – Reality and Solutions .................................... 20 2.2.2 CSR in business entities in Viet Nam – Reality and Solutions ....................... 21 2.2.3 CSR – The Investors’ Perspective................................................................... 22 2.2.4 CSR, PR of Foreign-Invested Companies....................................................... 23 2.3 Researches Summary ............................................................................................. 24 Table 1: Researches and Studies Summary ..................................................................... 26 CHAPTER 3: RESEARCH METHODOLOGY ............................................................. 27 3.1 Research Objectives ............................................................................................... 28 3.2 Theoretical Framework and Measurement............................................................. 28 3.2.1 CSR perceptions .............................................................................................. 29 3.2.2 CSR Awareness ............................................................................................... 29 3.2.3 Investment Decision ........................................................................................ 30 3.2.4 CSR Reporting ................................................................................................ 30 3.3 Measurement and Quality Design .......................................................................... 30 vi 3.3.1 Section 1 .......................................................................................................... 31 3.3.2 Section 2 .......................................................................................................... 31 3.3.2.1 CSR Awareness ........................................................................................ 32 3.3.2.2 Investment Decision ................................................................................. 33 3.3.2.3 CSR Reporting ......................................................................................... 33 3.4 Research Method .................................................................................................... 34 3.4.1 Sampling ......................................................................................................... 35 3.5 Hypothesis Statement ............................................................................................. 35 3.5.1 Correlation of Independent Variable ............................................................... 36 CHAPTER 4: RESULT ANALYSIS .............................................................................. 37 4.1 Collection of Questionnaires .............................................................................. 38 4.2 Description of Result.............................................................................................. 38 4.2.1 Age .................................................................................................................. 38 Table 2: Age ..................................................................................................................... 38 4.2.2 Gender ............................................................................................................. 39 Table 3: Gender ................................................................................................................ 39 4.2.3 CSR Awareness ............................................................................................... 40 Table 4: Question 1 - Result and Analysis ....................................................................... 40 Table 5: Question 2 - Result and Analysis ....................................................................... 41 Table 6: Question 3 - Result and Analysis ....................................................................... 42 Table 7: Question 4 - Result and Analysis ....................................................................... 43 4.2.4 Investment Decision ........................................................................................ 44 Table 8: Question 5 - Result and Analysis ....................................................................... 44 Table 9: Question 6 - Result and Analysis ....................................................................... 45 Table 10: Question 7 - Result and Analysis ..................................................................... 46 vii Table 11: Question 8 - Result and Analysis ................................................................. 47 4.2.5 CSR Reporting ................................................................................................ 48 Table 12: Question 9 - Result and Analysis ..................................................................... 48 Table 13: Question 10 - Result and Analysis ................................................................... 49 Table 14: Question 10 - Result and Analysis ................................................................... 50 4.3 Result Analysis ...................................................................................................... 50 4.3.1 Hypothesis 1 .................................................................................................... 51 Table 15: Hypothesis 1..................................................................................................... 51 4.3.2 Hypothesis 2 .................................................................................................... 53 Table 16: Hypothesis 2..................................................................................................... 53 4.3.3 Hypothesis 3 .................................................................................................... 54 Table 17: Hypothesis 3..................................................................................................... 54 CHAPTER 5: CONCLUSION AND RECOMENDATION ........................................... 55 5.1 Conclusion ............................................................................................................. 56 5.2 Recommendation.................................................................................................... 57 5.3 Limitation of Study ................................................................................................ 58 5.4 Suggestion for Future Research ............................................................................. 59 Reference (Harvard referencing system) ......................................................................... 60 APPENDICES ................................................................................................................. 62 viii List of Figures and Tables Table 1: Researches and Studies Summary ..................................................................... 26 Table 2: Age ..................................................................................................................... 38 Table 3: Gender ................................................................................................................ 39 Table 4: Question 1 - Result and Analysis ....................................................................... 40 Table 5: Question 2 - Result and Analysis ....................................................................... 41 Table 6: Question 3 - Result and Analysis ....................................................................... 42 Table 7: Question 4 - Result and Analysis ....................................................................... 43 Table 8: Question 5 - Result and Analysis ....................................................................... 44 Table 9: Question 6 - Result and Analysis ....................................................................... 45 Table 10: Question 7 - Result and Analysis ..................................................................... 46 Table 11: Question 8 - Result and Analysis ..................................................................... 47 Table 12: Question 9 - Result and Analysis ..................................................................... 48 Table 13: Question 10 - Result and Analysis ................................................................... 49 Table 14: Question 10 - Result and Analysis ................................................................... 50 Table 15: Hypothesis 1..................................................................................................... 51 Table 16: Hypothesis 2..................................................................................................... 53 Table 17: Hypothesis 3..................................................................................................... 54 ix List of Abbreviations FPTS FPT Securities Company CSR Corporate Social Responsibility RI Responsible Investment IR Investor Relations WTO World Trade Organization VCCI Viet Nam Chamber of Commerce and Industry NIRI National Investor Relations Institute PR Public Relations x CHAPTER 1: INTRODUCTION 1.1 Research Background 1.1.1 CSR in the world 1.1.2 CSR in Vietnam 1.2 Problem Statement 1.3 Objectives and Sphere of Research 1.3.1 Objectives of Research 1.3.2 Sphere of Research 1.4 Research Methods 1.1 1.5 Structure of Research xi 1.2 Research Background 1.1.1 CSR in the world Corporate Social Responsibility (CSR) is always hot subject for many researchers in the world. In the researches, the researcher sees that there are many companies have been pay a lot of money to have a good business systems and became has responsibility with social as the whole. In order to do that, there are so many program have been done in order to make a good thing for social such as to save energy, reduce carbon emission, school building, improve drinking waster supply, and so on. For example, there is a big retailer of consumer electronics in Canada and USA of Best Buy Co., Inc has a good recycle program. As the Deputy Manager of public relations of this company, he or she has been said that “We only feel that we will succeed in the market if we take responsibilities for society” (Saga Vietnam, 2008). Other example as Starbucks knows as a world-wide coffee company, they also have many good activities to make excellent community. The other good actions have done by the World Bank and Merck Pharmacy Company. They also paid more than 50 millions into give free Mectizan medicine to help poor people in 28 countries in Africa (Saga Vietnam, 2008). Further more, there are a lot of companies in the world have been produce production in order to protect environment or making useful products for customers and in order for develop of social and community. 1.1.2 CSR in Vietnam In the study, the researchers also see that the Corporate Social Responsibility (CSR) also is a new concept in Viet Nam; because the limited of directors’ understanding on the CSR information as the donation and performance. In order, international corporations sourcing in Vietnam has been first introduced about CSR under the form of Code of 1 Conduct or social standard requirements. According to Professor André Schmitt, Director of CFVG, “Current financial crisis show that Vietnam Economy was depended on supply chains of the world. Vietnam Economy can not evade the global competitive pressures. Thus, the task of implementing CSR is as difficult as it is in any developed countries” (CSR Vietnam Forum, 2009). Further more, with the big and important issue that Vietnam joint to the World Trade Organization (WTO) in 2007. The CSR became more important problem with the companies in Viet Nam because of the high requirement from the partners and foreign clients in the world (WTO website, 2006). Therefore, from year 2005, Viet Nam Chamber of Commerce and Industry (VCCI) has been make a program to award “CSR – towards the sustainable development” in order to reward with the companies in Viet Nam for actively implement CSR in the international economics integration circumstances. According to Dr. Doan Duy Khuong, the vice-chairman of VCCI, “CSR is a requirement for the companies and they could not reach the international market without CSR implementation” (Securities Investment Newspaper, 2008). However, in the fact we can see that these companies in Viet Nam are very difficult to apply the CSR program because of the limited of their understanding and perception about the CSR or because of the lack of financial and technical resource. It is also difficult with the small companies’ size to apply the CSR. In order to illustrate in this issue, the researcher has been give some examples. There is one firm has been make pollution in a river in Viet Nam and they also have been catch by government. In order to explain about their issue, they said that their actions want to help company avoid bankruptcy after recent economic crisis. And, the question was asked it is the end of implementation of CSR activities? Some 2 body such as directors have been think of that way; however, if the firms want to develop in the long-term basis, they should following under the CSR requirement of the CSR such as they should have been responsible with the social. From that, we can see which companies have been cares much about CSR activities under the financial crisis period. 1.3 Problem Statement Now a day, CSR know as the very hot issue in Viet Nam as in the world. It is also requirement not only from the business but also from the stakeholder related such as the government, investors and so on. In recent years, Viet Nam knows as the fastest-growing economic in the world. Therefore, CSR become an important factor to develop sustainable in business. In order to do this, the business not only care much about the how to make profit but also they should care about CSR activities. Beside, the government also has many awards for companies will be having good CSR activities such as CSR Viet Nam Award (Saigon Businessman, 2009). From that, there are a lot of companies also have actions related to CSR activities such as they pays a lot of money in order to help the poor and disadvantaged person. However, there are some companies have wrong-doing thing which have been find out in recent. The most case the Taiwan-owned company knows the named as Veda International. They have been bad action is discharging directly waste water in to the Thi Vai River in Dong Nai province. Before this action discovered, they also used two pumping system in their factory. One system was directly through refining process; however it is never used if using when have coming of the supervision from the local government office. And, one the other system also was discharging directly waste water in to the river (Invest in Vietnam, 2008). This action of the company has bad affect with 3 the environment and people in this place. In the other case related with CSR issue is Taiwanese-owned Company in Quang Minh industrial zone. They have been found that the company also was discharging waste water into river. After discovered, the firm’s deputy director general Mr. Liu Chien Lin has been explained for that the company’s action was to help the company over the financial crisis. In the statistics, the firm has been saved around US$4,209-5,261 a month by doing this action (Thanh Nien News, 2010). As the important of these issues above, the people see that as the serious problems and they are also rejecting to use or by the product from those companies. That can lead to bad affects not only of the firms, shareholders and stakeholder but also reducing the profits of investors. Therefore, with the understanding of CSR concepts, theories, and perceptions of investors are important to them before they want to invest in the companies. In this study, the researcher also wants to access the understanding of individual investors in CSR perceptions and so on. 1.3 Objectives and Sphere of Research 1.3.1 Objectives of Research In order to do the thesis, the researcher also distributes this thesis as follow: - Definitions and summarize the CSR concepts and other theory relative. - Inspect the understanding of Vietnamese individual investors about CSR concept, its perceptions and implementation. - Establish theoretical model and inspect the relationship between CSR perceptions for Vietnamese individual investors and other contributions such as CSR awareness, investment decision and CSR reporting. 4 - Enhance the understanding of individual investors on CSR issues, concepts and its perceptions. - Recommend some solutions for the organizations to raise the awareness and understanding of investors CSR concepts and its perceptions, solutions for the firms to have better investor relation. 1.3.2 Sphere of Research - Research conducting place: THANG LONG Securities Company office, Ha Noi, Viet Nam. - Object of the research: Vietnamese individual investors. - Time duration of conducting the research: from August 16, 2010 to September 20, 2010. 1.4 Research Methods In order to do this research, the researcher is used investigation and survey for the thesis. The researcher distributes the questionnaire and conducts the study from the investors in THANG LONG Securities company (TLS) office, Ha Noi, Viet Nam. TLS is known as the largest securities office in Ha Noi, Viet Nam. There are a lot of investors in here on the weekday. They come here to look at the electronic board and discuss with each other in order to make investment decision on the firms. Therefore, the researcher comes to meet each individual investor to ask them to fill and answer in the survey. The questionnaire was making from previous searches and studies. Beside that, with the sample of n equals 65 (65), the researchers also can analyze the collected data to see how investors understand about the CSR concepts and in order about the stakeholders’ perception among them. 5 Further more, researcher was use the Microsoft Excel to analyzing and check the measurement after the data has been collected. Beside that, the previous data was help the researcher more understanding and be able to use statistical and descriptive methods of analysis. 1.5 Structure of Research This project is divided into five following chapters: Chapter I: Introduction Chapter II: Literature Review Chapter III: Research Methodology Chapter IV: Result Analysis Chapter V: Conclusion and Recommendation 6 CHAPTER 2: LITRERATURE OF REVIEW 2.1 Research’s related concepts 2.1.1 Carroll's 1979-1991 conceptualization 2.1.2 Wood 1991 conceptualization 2.1.3 Stakeholder theory 2.1.4 Investment Decision 2.1.5 Responsible Investment 2.1.6 Investor Relation 2.1.7 CSR Reporting 2.1.8 CSR practice and challenges 2.2 Researches and Studies 2.2.1 Business Ethics in Viet Nam – Reality and Solutions 2.2.2 CSR in business entities in Viet Nam – Reality and Solutions 2.2.3 CSR – The Investors’ Perspective 2.2.4 CSR, PR of Foreign-Invested Companies 2.3 Researches Summary 7 2.1 Research’s related concepts Overtime, there are so many debates among academics, consultants and corporate executives to find a definition of CSR. With this, there are many CSR definitions made by different researchers, professional and organizations in the world. In the many researches and studies, there are many ways to define what the CSR, many organizations around the world is recognize the growing economic benefits of CSR activities and polices; however, there is one definition that became one of the most frequently cited definition. It is widely used by World Business Council for Sustainable Development (WBCSD). According to WBCSD (WBCSD, 1998), corporate social responsibility is defined as “the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large". According to this, from 1999 to now, there are several definitions of social responsibility of business have been introduced, however this issue of corporate social responsibility (CSR)’s definitions has bring many confusions for both society and corporation. In order, we can see that, everybody knows the concepts, they can give the appropriate definition is that these definitions can be understood with different meanings (Blanco & Souto, 2009), and Votaw and Sethi (1973) seen CSR as”it means something but not always the same thing to everybody”. Furthermore, around the world, there are so many firms fully understand its responsibility for its employees, customers, society and the natural environment. They have used CSR as competitive advantage which help their firm to improve their financial status, 8 employees’ motivation and customers’ loyalty, the company’s image, and its also help companies in long-term development.. In literature, various conceptualizations of CSR have been developed; however, researcher would like to introduction tow most famous conceptualizations: Carroll (1979) four-part definition of CSR and the Corporate Social Performance (CSP) model by Wood (1991). 2.1.1 Carroll's 1979-1991 conceptualization In 1979, there are four areas was distinguished by Carroll such as: economic, legal, ethical, and discretionary. In the first category, Carroll mentioned is economic responsibility. It also showed that providing goods and services, and making profit are the principal roles of business organizations. For example, if the organization has the responsibility to create job and pay fair salary to the workers, to promote innovation and design new products and services, etc. In other words, in this part he want said that the business organization was the basic economic unit before it was anything else. In the second category, he would liked mention about the legal responsibility, expresses the expectation of society which the business comply with the regulations and laws, and fulfill their economic missions within the legal framework set by societal legal system. The concept of fair operation established by lawmakers is the basis for the view of “codified ethics” reflected in legal responsibility (Carroll, 1979). However, the applications were fairly is very difficult while the films may be successfully forced by regulations to respond to the issue (Pratima, 2002). Besides, the opportunity for the firm to be proactive is limited by the reactive nature of the laws. Therefore, the laws attempt to 9