Tài liệu Analyse the importance and impacts of corporate social responsibility (csr) in business towards the social and environmental issues in vietnam.

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ANALYSE THE IMPORTANCE AND IMPACTS OF CORPORATE SOCIAL RESPONSIBILITY (CSR) IN BUSINESS TOWARDS THE SOCIAL AND ENVIRONMENTAL ISSUES IN VIETNAM. BY DUONG THUY ANH E0700254 Graduation Project Submitted to the Department of Business Studies HELP University College, in Partial Fulfillment of Requirements for The Degree of Bachelor of Business (Accounting) Hons OCTOBER 2011 1 DECLARATION OF ORIGINALITY AND WORD COUNT I hereby declare that the graduation project is based on my original work except for quotations and citations that have been duly acknowledged. I also declare that it has not been previously or concurrently submitted for any other course/degree at Help University College or other institutions. The word count is 11,048 words. ______________________ DUONG THUY ANH 17 October, 2011 2 ACKNOWLEDGEMENT Firstly, I want to express my sincere gratitude to my supervisor, Dr. Pham Duc Hieu International School, Vietnam National University Hanoi, who has guided me throughout this thesis. Furthermore, I also wanted to express Ms. Sumathi, Help University College, who initiated the project, provided guidance and support a lot throughout the process. Secondly, I want to thank the two managers, who have participated in my interview: Mr. Ho Duc Lam- Chairman and CEO of Rang Dong Plastic Joint Stock Company and Mr. Tran Tien Hoang- management systems distributors in the Central and Northern of Kinh Do Company have spent their precious time to help me to complete the interview. Besides, I also want to send my special thanks to the managers, employees and citizens, who helped me to carry out the investigation because they have supported me, shared their concerns, interest, and valuable suggestion. Without them, I could not finish my project. Finally, I also want to express my gratitude to my family, who are always on my side to support and believe me. 3 Analyze the importance and impacts of Corporate Social Responsibility (CSR) in business towards the social and environmental issues in Vietnam. By DUONG THUY ANH OCTOBER 2011 Supervisor: Dr. Pham Duc Hieu ABSTRACT CSR and its components have become important issues in the world as well as in Vietnam, a developing country. This study aims to understand the environmental tasks and attitudes of citizens towards environment. We realized that, beside manager, the awareness of citizens and workers about the social responsibility to the environment is increasing. The implementation of social responsibility is a task that is impossible to be neglected on the way of approach to the business integration in Vietnam, because it’s beneficial for business and society, especially in improving the competitiveness of enterprises. Therefore, day by day, Vietnam will have more responsibility for social and environmental issues due to the increasing of awareness and positive attitudes of managers, employees and citizens that shown in this survey. 4 TABLE OF CONTENTS Page DECLARATION OF ORIGINALITY AND WORD COUNT………………… 2 ACKNOWLEDGEMENT…………………………………………………………. 3 ABSTRACT………………………………………………………………………… 4 TABLE OF CONTENTS………………………………………………………….. 5 LIST OF FIGURES ...………………………………………………………………8 LIST OF ABBREVATIONS……………………………………………………… 9 Chapter 1: INTRODUCTION…………………………………………………... 10 1.1 CSR in business and environment issue in the world……………… 10 1.2 CSR in business toward social and environment issue in Vietnam.. 11 1.3 Problem statement…………………………………………………… 13 1.4 Research objective…………………………………….………………14 1.5 Thesis structures………………………………………………………16 Chapter 2: LITERATURE REVEW………………………………………........ 17 2.1 Definition and conceptualization of CSR……………………………. 17 2.2 Responsibility of the firm…………………………………………….. 20 2.3 Corporate Philanthropy_ what does it mean? ......................................... 21 2.4 Hypothesis…………………………………………………………....... 22 5 2.4.1 Manager’s awareness of CSR and CSR reporting…………….. 23 2.4.2 Employee’s awareness of CSR and CSR reporting……………. 24 2.4.3 Citizen’s awareness of CSR………………………………............ 25 Chapter 3: RESEARCH METHODOLOGY………………………………….. 26 3.1 Research methodology…………………………………………….. 26 3.1.1 Qualitative methodology………………………………………… 26 3.1.2 Quantitative methodology………………………………………. 28 3.2 Data source………………………………………………………… 29 3.2.1 Primary data…………………………………………………….. 29 3.2.2 Secondary data………………………………………………….. 30 3.3 Data collection…………………………………………………….. 30 3.3.1 Questionnaire…………………………………………………… 31 3.3.2 Personal interview………………………………………………. 31 3.3.3 Annual report………………………………………………….... 32 Chapter 4: RESULTS AND DISCUSSION……………..……………………... 33 4.1 Sampling………………………………………………………….... 33 4.1.1 Sample population………………………………………………. 33 4.1.2 Sample frame.………………………………………………….... 33 4.1.3 Sample size………………………………………………………. 33 4.1.4 Sample techniques………………………………………………. 33 4.1.5 Limitation………………………………………………………... 33 4.2 Management……………………………………………………….. 34 6 4.2.1 Finding from questionnaire survey…………………………….. 36 4.2.2 Finding from managers interview……….……………………... 38 4.2.3 Actual CSR disclosures by firm……….……………………….. 41 4.2.4 Overall evaluation of management’s respo……………………. 42 4.3 Employee………………………………….……………………….. 42 4.3.1 Finding from questionnaire survey………..…………………… 42 4.4 Citizen…………………………………….………………………... 44 4.4.1 Finding from questionnaire…………….………………………. 44 4.4.2 Overall evaluation of citizen’s responses……..………………... 46 4.5 Overall discussion…………………………..……………………... 47 Chapter 5: CONCLUSION AND RECOMMENDATIO……………………… 49 5.1 Conclusion…………………………………….…………………... 49 5.2 Recommendation…………………………………………………. 52 APPENDIX: Questionnaire…………………………….………………………. 54 Management survey……………………………………………………….. 54 Citizen survey……………………………………………………………… 57 Employee survey……………………………………………………………58 REFERENCES……………………………………………………………………..60 7 LIST OF FIGURE Figure 2-1The Business in Society Figure 2-2 Employee Compositions by Region Figure 4-1 Respondents Figure 4-2 Citizens and Employees categories Figure 4-3 Distribution of responses from management survey Figure 4-4 Distribution of responses from management survey (percentage) Figure 4-5 Distribution of responses from employee survey Figure 4-6 Distribution of responses from employee survey (percentage) Figure 4-7 Distribution of responses from citizen survey Figure 4-8 Distribution of responses from consumer survey (percentage) 8 LIST OF ABBREVIATION CSR Corporate social responsibility SRI Social responsibility investing 9 CHAPTER I: INTRODUCTION 1.1 CSR in business and environment issue in the world Corporate social responsibility is a concept that frequently overlaps with similar approaches such as corporate sustainability, corporate sustainable development, corporate responsibility, and corporate citizenship. While CSR does not have a universal definition, many see it as the private sector’s way of integrating the economic, social, and environmental imperatives of their activities. In addition the most important aspect need to consider when talking about CSR is environment aspect. It cannot be denied that nowadays of our nature environment becomes more and more polluted by the human harm thus to have better imagine in society all companies need also protect our environment. For example, Nikon Company committed against environmental pollution, making effective use of resources, and helps build a clean society, thereby protecting and improving the environment worldwide and creating sustainable development of society. Nikon is a company that has high social responsibility; Nikon is committed to protecting the environment. Nikon’s committed based on the understanding that the company is developing the environmental protection act is should do because it is important for the survival of humankind. Nikon will try to reduce CO2 emission and waste, reuse and recycle. Besides, Uno is one of the largest companies in Japan have adopted recycled goods programs. Another example is the largest beverage 10 company is Coca-cola have a lot of community activities such as recycling bottles, distributing its products in water bottles is environmental friendly. 1.2 CSR in business and environment issue in Vietnam. Corporate social responsibilities of business are an issue that is mentioned a lot in Vietnam in recent time. However, awareness of this issue of business is still quite limited, thus, the implementations of social responsibility of enterprises have many shortcomings. In recent year, although the mass media has frequently reported about violations of environmental pollution of various companies, but most authorities are not strong enough measures to handling these cases, while most businesses are finding ways to evade all responsibility. Many people believe that talking about self-discipline of enterprises in environmental protection seems like a distant story and not fact. But the environmental pollution from production and processing of products of the business now has reached alarming levels; demonstrating corporate social responsibility for environmental protection is very limited. Lack of social responsibility, lack of moral and cultural of many enterprises that were to happen a series of events related to agricultural products and food does not guarantee protection food safety, such as black soy sauce containing 3-MCPD (a substance that can cause cancer), food preservation borax, irrigated vegetable growth stimulants, fish were reared in environmental pollution, agricultural food products processed using toxic preservatives, antibiotics or pesticides in excess material and allow the most recent batch of milk products tainted with melamine- a toxic 11 substances caused kidney stones in children, can lead to death. In China on 2008, at least six children died and 300,000 others fell ill after drinking melamine contaminated. Industrial chemicals were added to milk products to make them seem to increase protein content. For above reasons, social responsibility is a very urgent problem today. However, by to endeavor, Vietnam had CSR Awards, which was organized by Vietnam Chamber of Commerce and Industry, Ministry of Labor-Invalids and Social Affairs, Vietnam Ministry of Industry and Trade since 2005, together with Vietnam Leather & Footwear Association, and The Vietnam National Textile and Garment Group, in order to honor enterprises and all limited companies that effective done of CSR and environment duties. On August 21, on Sunday has program “not nylon bag” in Hanoi, the Corporation Hanoi Trade for free environmentally friendly bags to consumers at five centers. This program by three units specialized in manufacturing non-woven products accompany Hapro. Mr. Nguyen Trung Thanh, head of business of the The Cuong. Ltd company, a unit providing cloth bags environmentally friendly, said that these products can be washed and re-used many times. “Scientists have studied, nylon bag takes 500-1000 years to decompose, causing danger to the environment, and non-woven bags can break down into humus soil within 6months should environmental pollution”, he said. The program has attracted the attention of numerous consumers. Mrs Mai Khue Anh, Director of Business Hapro said Hapro will spend nearly 2billion for the project, twice the amount invested in the “Limit manufactured using nylon bag for the environment” by 2010. Ms. Khue provide, in the near future, when consumers were aware of the use of bags to protect the environment, they will deploy Hapro sell them for only 4000-7000 per the contract, depending the size, style. 12 Monday March 26, true to the event Earth Hour 2011, Big C held on peak collection of used batteries, a type of waste disposal is difficult and dangerous for the environment, system-wide super- their market. The total number of batteries collected in one day is over 100 kg. Representatives of the unit said Big C has contracted with a company licensed to handle waste batteries. The batteries collection will be handled to protect the environment by special procedures, not through landfill. An another example for CSR in business toward social is HUB café is one of the small and medium-scale enterprise implementation of CSR by creating a community library with more than 10,000 books of customer service. HUB café also being built into a place to share knowledge, materials and help students to conduct research, organize the sessions and workshops on issues of education, work experience and vocational business. Typically, these social programs such as “6 millions cups of milk for children in Vietnam” and funds scholarships “fireflies light” of the big brand like Dutch Lady resonate and consumer support. However, in Vietnam, there are still many difficulties in the application of social responsibility and complete the task environment. First, do not have enough laws and regulations required for companies to fulfill their responsibilities to society. Second, it is also due to the lack of knowledge of the company about social responsibilities and environmental duties. They do not have enough knowledge and experience. 13 1.3 Problem statement The thesis focuses on the following problems related to CSR and environmental issues in the context of Vietnam. They are: i, How is CSR important? ii, Why should business companies engage in CSR? iii, What is CSR brings to businesses? iv, Does each person need to care about CSR? 1.4 Research objective Through this project, I want to focuses on environment degradation and the need for corporate organizations to fulfill their social responsibilities. Using the system theory, the interdependence among the environment, organization and sustainable development was examined. System theory has been modified to emphasize the need for businesses to foresee the potential environmental consequences of a process, or production activities from the planning stage to ensure the implementation strategies to respond fully and promptly. Pollution can be defined as the release of undesirable products of industrial production decreased quality of the natural environment or society. This release can be to air, water and soil, but noise pollution, light pollution, visual pollution and radioactivity can also be distinguished. Pollution can harm flora, fauna, and human health risk leading to extinction occurs. Substances, often non-existent in the natural 14 environment, are added in such quantities that balances in the biosphere are disturbed. Indisputable evidence that pollutants are affects the quality of life and cause death to humans. Pollution can cause cancer, allergies and all kinds of forms of asthma, among other things. Pollution as a problem came to the forefront mainly in the late 19th and 20th centuries. Pollution is as old as humanity though. Increasing populations and the industrial revolution with its large-scale industrial processes resulted in much more intensified impacts. Initially, pollution was seen mainly in the context of hindrance, i.e. dust and litter. The realization of the immense and often irreversible effects of pollution has led to an enormous growth in environmental regulations. In the 19th century several countries issued Clean Air Acts and Hindrance Acts. Since the second half of the 20th century, specific legislation has also been developed for water pollution, soil protection, noise control, waste management and other environmental impacts. Most of the legislation is based on direct regulation, i.e. permits. These media specific regulations have serious shortcomings, such as shifting pollution from one medium to another rather than eliminating it, constraining innovation, expensive enforcement and high transaction costs. Hence, governments have tried to develop more regulations aiming for integrated pollution control. However, there are many enterprises will not be concerned about toxic waste from the plant. It caused water pollution, polluted air of humans. This has led to the experimental efficiency in the health of human such as cancer, allergies, and other respiratory diseases. Thereby, the first goal of this project is to provide a theoretical framework for understanding the concept of environmental pollution and fulfill the social 15 responsibility of business and related components follow this area to build a framework for companies to have better understanding of CSR and they can avoid violating any issues related to CSR. The second goal of this project is to evaluate the impact of CSR in the environmental issues in companies in Vietnam. On the other hand, given what they can achieve and what their advantages when they implement CSR. The last goal of this project is to obtain views from all of industry companies in Vietnam is how the companies are related to social responsibility. This project will also try to find the components of this cognitive impact. The questions are designed to get more people thinking in receiving CSR as an annual activity of the company. Thereby, this paper also enhancing the sense of responsibility of people to society. 1.5 Thesis structure: My thesis structure is divided into chapters as follow: Chapter 2 is Literature Review Chapter 3 is Research methodology Chapter 4 is Result and discussion Chapter 5 is Conclusion 16 CHAPTER 2: LITTERATURE REVIEW 2.1 Definition and conceptualization of CSR Corporate Social Responsibility_ What does it mean? According to Khoury at al., 1999, corporate social responsibility is the overall relationship of the corporation with all of its stakeholders. These include customers, employees, communities, owners/investors, government, suppliers and competitors. Elements of social responsibility include investment in community outreach, employee relations, creation and maintenance of employment, environmental stewardship and financial performance. CSR is considered an important factor as the other traditional factors such as cost, quality and delivery in business. Integrate CSR into business strategy and become the conditions required for business survival and development. CSR describes the principle that companies can and should make a positive contribution to society. CSR is the practice of managing the social, environmental and economic impacts of the company (by sustainability the 'triple bottom line'), being responsive to 'stakeholders' (those who are affected by a business operation) and behaving according to a set of values which are not codified in law. 17 Figure 2-1 The other definitions are the World Business Council for Sustainable Development in its publication “Making Good Business Sense” by Lord Holme and Richard Watts, used the following definition “Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large”. Traditionally in the United States, CSR has been defined much more in terms of a philanthropic model. Companies make profit, unhindered except by fulfilling their duty to pay taxes. Then they donate a certain share of the profits to charitable causes. It is seen as tainting the act for the company to receive any benefit from the giving. The European model is much more focused on operating the core business in a socially responsible way, complemented by investment in communities for solid business case reasons. I think this model is more sustainable because first, social 18 responsibility becomes an integral part of the wealth creation process- which if managed properly should enhance the competitiveness of business and maximize the value of wealth creation to society. Second, when times get hard, there is the incentive to practice CSR more and better- if it is a philanthropic exercise which is peripheral to the main business, it will always be the first thing to go when push comes to shove. For instance, the CSR definition used by Business for Social Responsibility is “Operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business”. The UK Government, 2001 state that CSR recognizes that the private sector’s wider commercial interest require it to manage its impact on society and the environment in the widest sense. This requires it to establish an appropriate dialogue or partnership with relevant stakeholders, be they employees, customers, investors, suppliers or communities. CSR goes beyond legal obligations, involving voluntary, private sector-led engagement, which reflects the priorities and characteristics of each business, as well as sector and local factors. Corporate social responsibility is achieving commercial success in ways that honor ethical values and respect people, communities and the natural environment. (Business for social responsibility, 2003b) To sum up, these organizations have framed different definitions in different ways between them, although there are also significant in common. My own definition of social responsibility is the businesses voluntarily contribute to a cleaner environment and a better society. 19 2.2 Responsibility of the firm Annual statistics on charitable activities in the business of the UK magazine, The Guardian showed that 100 top companies in the stock market in London is only less than 1% of profit before tax for the operation to charitable and community projects in the past year. Although the total amount of British companies to contribute to charities rise 7% to $1.6 billion, but fewer than 34 companies supporting more than 1% of profits. Charity fund was supported of the 14 companies at the bottom of the list less than 0.01% of the profits. It is not fun is total revenues in 2004 of the charity, the contributions from the business accounts for only 4.3%, decrease 4.8% from 2003. This is the reason that most UK companies are failing on creating trust from the community. Only 15% of those surveyed believe that large companies always ensure and enforce the commitments of their social responsibility, 10% oppose the above, while more than 70% of those still skeptical about the CSR of the company. In addition, more than 80% of respondents thought that companies should have to do more to show people what they are doing to society. Environment is one such problem. Pressure from organizations such as Greenpeace has pushed companies to be more responsible with the environment and society from the 1960s. Some large companies in the U.S and Europe has made environment protection a priority in the manufacturing business, the national environment standards and international companies have been in countries development concerns. They considered the provisions on environmental protection as a burden to the production management of their business. In particular, the concept needs to factor in 20
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