Tài liệu Corporate social responsibility strategies for sustainable development for small and medium enterprises in the village of bac ninh province, vietnam

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CORPORATE SOCIAL RESPONSIBILITY: STRATEGIES FOR SUSTAINABLE DEVELOPMENT FOR SMALL AND MEDIUM ENTERPRISES IN THE VILLAGE OF BAC NINH PROVINCE, VIETNAM BY TRINH THI THANH HUYEN E0600084 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 OCT 2011 1 DECLARATION I hereby declare that the graduation project is based on my research and experiences except the acknowledged aquotations and citations. And, this graduation project has not been used at previously or concurrently submitted for any other course/degree at Help University College or other institutions. The word count is 10,968 words. _____________________ TRINH THI THANH HUYEN Date: October 2011 2 CORPORATE SOCIAL RESPONSIBILITY: STRATEGIES FOR SUSTAINABLE DEVELOPMENT FOR SMALL AND MEDIUM ENTERPRISES IN THE VILLAGE OF BAC NINH PROVINCE, VIETNAM By TRINH THI THANH HUYEN Oct 2011 Supervisor: Dr. Le Van Lien ABSTRACT The constantly innovation to improving the ability to adapt to the trend of sociaty is one of the leading principles in today’s business world. During the renovation of the country, Vietnam has faced to many challenges on the economic, political, social, environment, culture ... Especially on 7/11/2006 Vietnam has become a member 150th of World Trade Organization (WTO). The business man face to challenges, competition which will take place more severe, more competitors at broader and deeper level. That is the competition between the products in the market, between the domestic businesses and the international market. Relate to fact of small and medium enterprises, cooperatives, manufacture owners in the village of BacNinh face to a lot of difficulties in the business because small-scale trading, market relationships are limited, public management is still insufficient, the application of information technology is poor, they do not know where to start, yet? 3 How the growth of businesses like? How to develop product? How to competitive? The development of enterprises which had difficulties when it is more and more difficult to determine a direction for sustainable development, long-term benefit for the enterprise itself and managers. Besides, the challenges of the 21st century such as weather change, declining natural resources, and energy crises as well as business requirements of small and medium enterprises to change the basic way they operate. It is no longer acceptable simply to maximize profits in the short term. Instead, businesses must pay attention to the impact of economic, social and environmental aspects of their activities - known as sustainability or corporate social responsibility (CSR). The purpose of this study is to discuss the role of CSR in helping small and medium enterprises in the villages of Bac Ninh - Vietnam to achieving competitive advantage. Also research and synthesis, analysis, logic, strategy and business development for small and medium enterprises in villages in Bac Ninh province Vietnam. Simultaneously suggest directions and solutions to promote business development of special attention to products with different villages of products to create sustainable development for the enterprises. 4 TABLE OF CONTENTS Pages Declaration 2 Abstract 3 Table of content 5 List of figures 10 Chapter 1 INTRODUCTION 11 1 Definitions 11 1.1 The definition of sustainable development 11 1.2 Some models of sustainable development 12 1.2.1 Three circles model of economic and social, 12 environment of intersection of Jacobs and Sadler (1990) 13 1.2.2 Carroll's 1979 conceptualization 14 1.2.3 Model of three target groups of economic, social and environment of World Bank 1.2.4 The model of sustainable development in Vietnam 1.3 Small and medium enterprises 14 15 16 1.4 Villages, traditional villages 17 Chapter 2 LITERATURE REVIEW 17 2.1 Model three - level analysis, PEST model 2.1.1 Economic environment 18 18 2.1.2 Environmental technology 5 2.1.3 Socio-cultural environment 19 2.1.4 Natural Environment 19 2.1.5 The political and legal environment 20 2.1.6 Global Environment 20 2.2 General analytical model inside and outside – SWOT 21 23 2.2.1 SO strategy 23 2.2.2 WO strategy 23 2.2.3 ST strategy 23 2.2.4 WT strategy 25 Chapter 3 RESEARCH METHODOLOGY 3.1 Research objective 3.2 Research methodology 25 25 26 3.3 The scope of research Chapter 4 ANALYSIS AND DISCUSSION 4.1 Overview of small and medium enterprises in craft 27 27 villages in Bac Ninh 4.2 PEST model applied to analyze the business 33 environment of the handicraft industry of small and medium enterprises in the village of Bac Ninh. 4.2.1 Environmental politics and law 33 4.2.2 Economic environment 34 4.2.3 Environmental science and technology 35 4.2.4 Socio-cultural environment 6 36 Society of the population and labor 36 Population quality 37 Cultural Environment 37 4.2.5 4.3 International Environment The key issues related to the current situation and 38 39 development prospects of small and medium enterprises in craft villages in Bac Ninh: Identify strengths, weaknesses and determine opportunities and challenges; Position the stand point of industry 39 4.3.1 Current Competition 39 The pressure of new businesses entering the 40 market. 41 Pressure from customers 42 The pressure of suppliers 43 Competition among same field enterprises 43 4.3.2 The factors in the industry Relations with investors and representatives of 43 customers, relationship with joint venture partners 44 44 Manufacturers Capability Organization of production 44 Criterion on price 45 The ability to provide credit, capital 4.4 Apply the SWOT model to evaluate the general 46 position of small and medium enterprises in the villages in 46 Bac Ninh 7 4.5 Competitive strategy and strategic options 47 development of small and medium enterprises in the 48 villages in Bac Ninh 48 4.5.1 SO (strengths - opportunities) 49 4.5.2 ST (strengths - threats) 4.5.3 WO (Weakness - Opportunities) 49 4.5.4 WT (Weaknesses - Threats) 49 Chapter 5 RECOMMENDATIONS, SUGGESTIONS 5.1 Strategic Orientation for Sustainable Development of small and medium enterprises in Bac Ninh 49 50 50 5.1.1 Vision 5.1.2 Mission (functions) 5.1.3 The strategic objectives in 2011 and 2020 51 5.1.4 The strategy function 52 Product development strategy to make a difference, combining traditional elements with modern 53 elements, preserving the national identity 53 Strategy for raising capital for businesses 5.2 A number of measures to improve management structure and resources of small and medium enterprises in the 55 55 56 villages in Bac Ninh. 5.2.1 On the market 5.2.2 Technical solutions 57 5.2.3 Solution of labor 8 5.2.4 Solution development and combination of economic, production and business organizations. 5.2.5 Some measures to improve the layout using the staff 58 58 58 60 and management mechanisms 61 5.3 Recommendations to address existing problems 5.3.1 For businesses 61 62 5.3.2 For industry - State and local 5.4 Proposed measures to reduce environmental pollution 62 5.4.1 Worker training and awareness of people 63 5.4.2 Production planning area 63 5.4.3 Planning the village towards the development of 64 64 cultural tourism 5.4.4 Planning within the enterprise 65 5.4.5 The technology measures 5.4.6 Management Environmental of dirty water 5.4.7 Solid Waste Management 5.4.8 Management of air pollution 5.4.9 Solutions to environmental management Chapter 6 CONCLUSION 9 67 LIST OF FIGURES Figure Title Page Figure 1.1 Three circles model of CSR 12 Figure 1.2 A hierarchy of CSR (adapted from Carroll, 1991) 13 Figure 1.3 Three target groups of CSR 14 Figure 1.4 The model of CSR in Vietnam 14 Analysis of factors inside and outside 22 Figure 4.1 The medium and small villages in BacNinh province in 28 Figure 4.2 2008 Chapter 1 Chapter 2 Figure 2.1 Chapter 3 N/A Chapter 4 Value of production of small and medium enterprises in the 30 Figure 4.3 villages in BacNinh 30 Figure 4.4 Number of enterprises in the village Number of households - labor small industry production in Chapter 5 2008 NA NA Chapter 6 NA NA 10 31 Chapter 1 INTRODUCTION 1. Definitions 1.1 The definition of sustainable development Sustainable development is a new concept to define a development in all aspects of the current which is to ensure continued development in the distant future. This concept is currently targeted towards countries in the world, each country will base on specific economic, social, political, geographical, cultural ... own strategy to best suit that country. The term “sustainable development” first appeared in 1980 in the publication World Conservation Strategy (published by the Association for Conservation of Nature and Natural Resources International – IUCN) with a single content.Simplified: "The development of mankind can not just focus on economic development but also to respect the essential needs of society and the impact on ecological environment." This concept was popularized in 1987 by the Brundtland Report (also known as Our Common Futur Report) of the Commission on Environment and Development World - WCED (Brundtland Commission now). This report clearly sustainable development as "development that meet the current needs without compromising the damage to the ability to meet the needs of future generations ..." In other words, sustainable development to ensure the effectiveness of economic development, social justice and 11 environmental protection and conservation. To achieve this, all economic sectors social, government, civil society ... to shake hands, make aim to reconcile three key areas: economy - society - environment. The concept of "sustainable development" is commonly known in Vietnam in the late 80's early 90's. Although, appearing relatively late, but it soon be presented at several levels. In recent years, aspects of sustainable development in production and business activities of enterprises were more concerned. In five years, each year the newspaper group's language newspaper Saigon Economy News were awarded "Business and Sustainable Development" for foreign enterprises in Ho Chi Minh and southeastern provinces. 1.2 Some models of sustainable development 1.2.1 Three circles model of economic and social, environment of intersection of Jacobs and Sadler (1990) Figure 1.1 - Three circles model of CSR 12 1.2.2 Carroll's 1979 conceptualization Carroll's Pyramid is widely accepted and used in CSR literature and can be seen as a mainstream conceptualization of CSR. In 1979, Carroll CSR Divided into four separate areas: Economic, legal, ethical, and discretionary Responsibility. Each area is presented as consecutive layer of pyramid in Figure 2.1 and briefly summarized below: Figure 1.2 - A hierarchy of CSR (adapted from Carroll, 1991) 13 1.2.3 Model of three target groups of economic, social and environment of World Bank Figure 1.3 - Three target groups of CSR 1.2.4 The model of sustainable development in Vietnam: Figure 1.4 - The model of CSR in Vietnam 14 The carrying out of construction and operation concept of "sustainable development" in accordance with the actual country and the world scene is of paramount importance. Models of sustainable development in Vietnam is formed on the basis of empirical research and, in accordance with the actual and desired by local managers. 1.3 Small and medium enterprises Small and medium enterprises are the enterprises with small scale in terms of capital, labor or revenue. Small and medium enterprises can be divided into three categories based on size includes micro enterprises, small enterprises and medium enterprises. According to the criteria of the World Bank Group, micro enterprises are enterprises with the number of workers under 10 people, small businesses are the number of employees from 10 to 50 people, while medium enterprises have from 50 to 300 labor. In Vietnam, It is not depend on business sector, businesses with registered capital below VND 10 billion or an average number of employees less than 300 people annually are considered small and medium enterprises (under Article 5 of Decree 90/2001/ND-CP) Kind of small and medium enterprises among the large proportion of enterprises in Bac Ninh. A number of small and medium businesses are not concentrated in small villages, traditional villages. With a significant contribution to the growth of local economy, the business types in the village of Bac Ninh is the team unity called "the small and medium enterprises in the village of Bac Ninh". Types include: Company, Ltd., private enterprises, cooperatives, business households. Although this type of business is legal framework of different activities, but they all have in common is a 15 positive contribution to the growth of the provincial economy, generating revenue and solving the employment problem in local. 1.4 Villages, traditional villages The village is a cluster of residents in a village (the village) has one or several lines are removed from production agriculture to independent business, is the village nonagricultural sectors dominate the household, number of employees, and the income from farming. Traditional villages are villages appear long ago in history and still exist today, as the village has existed for hundreds of years, even thousands of years, is closely related to factors traditional and popular experience has been accumulated over many generations back, the paper Phong Khe commune, Dong Ho folk paintings, pottery Luy Lau. 16 CHAPTER 2 LITERATURE REVIEW 2.1 Model three - level analysis, PEST model The side effects in three levels: international, national and local relevant. The content of impact analysis (analysis of Pets): Impact Areas Politics (P) Economy (E) Technology (T) Social (S) Content Influence to - The political stability - Direction - The political line - Population and investors psychology - Economic policy - Investment Environment - Economic condition - Development conditions - The development of science and technology - Competitiveness -Research and development - Economic effective - Trend of social development - Investment Environment - The social criteria - Economic development direction PEST model used to analyze the macro environment of business. Firms must be analyzed to understand the opportunities and challenges that are of the external environment affect business. Factors: Culture and society, politics, law, economics, technology is shown through modeling PEST. 17 2.1.1 - Economic environment Current situation and economic trends affecting the future success of business strategy, the key factors that businesses usually analyzed are: The growth of the economy, interest rates, exchange rate and inflation rate. As the economy in periods of high growth will create many opportunities for investment in production expansion of enterprises, whereas when the economy is in recession reduced to reduce the cost of consumables increases the forces of competition. Usually, when the economy decline will become reason of war in the price of the manufacturing sectors, especially the adult industry. Interest rate will determine the level of investment for enterprise products. Monetary policy and exchange ratio can also create a good Olympics for business, but also as risk factors for the development of them. Inflation and fight inflation problem is also an important factor to consider and analyze. In fact, if high inflation is to control prices and wages may not master inflation, investment projects become more risky enterprises would lead to reduced investment enthusiasm, production development. Thus inflation is a threat to the enterprise. The level of economic development is the size, speed economic development of countries and regions including: GDP, GNP, annual growth, this analysis helps businesses understand the development trend of the economy. 2.1.2 - Environmental technology The small and medium enterprises in the village of BacNinh has adapted to the new mechanism from back in 1986 with market mechanisms and policies, enterprises have invested heavily in advanced technology application, transfer new technology, 18 modern manufacturing processes to modernize traditional technologies, replacing outdated technology with craft of modern technology in order to improve productivity, increase business efficiency, more moved his business, replacing old products with new products. Most enterprises in Vietnam – Chau Khe - Tu Son has moved from production to production wrought iron and steel, in Phong Khe outside firms to maintain production of traditional goods such as paper, writing paper Han Nom ... They have invested heavily in new technology, the production line paper, writing paper, duplex paper, packaging of all kinds ... 2.1.3 - Socio-cultural environment The small and medium enterprises in the village of Bac Ninh has adapted the trend of the times, businesses have kept the characteristics of the traditional products, products with artistic traditions of each villages, it is the traditional symbol of the people of Vietnam, the village has products preferred by customers as competition Dai Bai, Dong Ho folk paintings, furniture Dong Ky. 2.1.4 - Natural Environment Bac Ninh has natural conditions, a favorable geographical position have created for the Bac Ninh region soon became an agricultural civilization long development, a unique cultural region, represents a unique Kinh Bac region (Northern of Vietnam). The businesses in the village have been promoting their intellectual inheritance of the essence of his father left, forming the well-known products such as ceramic Luy Lau, 19 Dong Ky furniture. Besides, businesses know using the advantages of natural conditions for its development strategy produced a long-term business 2.1.5 - The political and legal environment The main elements of government and politic influent to the operation of the business wider and deeper. The enterprise must comply with tax regulations, lending, hiring, safety, pricing, advertising, plant location, environmental protection, joint venture or cooperation. Political stability, the consistency of policy stance is always a major attraction to investors, the legal system is built will be the perfect opportunity to stable business, such laws protect environment is that businesses must consider. With the stable political and laws environment at Vietnam, in Bac Ninh province has planned industrial zones 54 villages enabling manufacturing enterprises to focus, away from residential areas, the protection environment requires the attention of the State, and the associated responsibilities of business. 2.1.6 - Global Environment The Vietnam joined ASEAN, APEC, WTO and has officially become members of organizations that create more business opportunities, playing, enjoying mostfavored nation, do not treat you particularly international trade, but the challenges of world competition more fierce. 20
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