Tài liệu Influence of corporate social responsibilities (csr) on small and medium enterprises (smes) in vietnam

DECLARATION OF ORGINALITY AND WORD COUNT I hereby declare that the graduation project is based on my original work except for quotations and citations which 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 10.217 words. NGUYEN HONG NHUNG October 2011 -1- ACKNOWLEDGEMENT This study would not have been made without the assistance, support and encouragement of many people. I wish to take this opportunity to thank all people who helped me during the time I carried out this project. First of all, I would like to express my gratitude to my supervisor, Dr.Pham Duc Hieu, in Viet Nam Commercial University. He has kindly guided, supported, and encouraged me from the very beginning of this study. Furthermore, I would like to give my thankfulness to Ms. Sumathi and Ms. Shenba at Help University College, who initiated the project and give me instruction and support. Additionally, I would like to thank the interview participants: Mr. Dao Hung Dung, Deputy Manager of planning & investment Department of VIPACO and Mr. Phan Thanh Ngoc - Deputy Manager of planning & investment Department of Vinaconex-ITC, who helps me conduct the interview. I also would like to extend my special thanks to manager, customers, students, employers of both VIPACO and Vinaconex-ITC, and my friends to help me carry out the survey. Finally, I would like to thank all family members to support and encourage to complete my project. -2- INFLUENCE OF CORPORATE SOCIAL RESPONSIBILITIES (CSR) ON SMALL AND MEDIUM ENTERPRISES (SMEs) IN VIETNAM BY NGUYEN HONG NHUNG E0700276 OCTOBER 2011 Supervisor: Dr. Pham Duc Hieu ABSTRACT For many years ago, the concept and component of Corporate Social Responsibility (CSR) was recognized and implemented commodiously by international business environment, however this concept is quite new to Small and Medium Enterprises (SMEs) in Vietnam. Because Vietnam is the developing country and new member of WTO, thus CSR issue becomes the necessary and sufficient. Therefore, the main purpose of this study wants to discuss about the assessment of understanding of the concept, components, and implementation of CSR with (SMEs) in Vietnam. Moreover, this study wants to find out the impact of CSR within the development process of company. The result of this study is the clearly evidences by collecting data from the advisory of company, researching process and questionnaires. -3- TABLE OF CONTENT DECLARATION OF ORGINALITY AND WORD COUNT ................................ 1 ACKNOWLEDGEMENT ......................................................................................... 2 ABSTRACT ................................................................................................................ 3 TABLE OF CONTENT ............................................................................................. 4 LIST OF FIGURES ................................................................................................... 7 LIST OF CHARTS .................................................................................................... 8 LIST OF ABBREVIATIONS ................................................................................... 9 CHAPTER 1: INTRODUCTION ............................................................................ 10 1.1 CSR in Vietnam .................................................................................................... 10 1.2 CSR in SMEs company ........................................................................................ 11 1.3 Government actions .............................................................................................. 12 1.4 CSR practice and challenge ................................................................................. 14 1.5 Research questions ................................................................................................ 15 CHAPTER 2: LITERATURE REVIEW ................................................................ 16 2.1 Definition and components of CSR ...................................................................... 16 2.2 Theories related to CSR ....................................................................................... 17 2.2.1 Carroll’s “Pyramid of CSR” ........................................................................... 17 2.2.2 Wood 1991 conceptualization ......................................................................... 21 2.2.3 Stakeholder theory .......................................................................................... 23 2.2.4 Triple bottom line theory ................................................................................ 24 2.3 Responsibility of the SMEs .................................................................................. 27 CHAPTER 3: RESEARCH METHODOLOGY ................................................... 29 -4- 3.1 Research Objectives ............................................................................................ 29 3.2 Research methodology ........................................................................................ 29 3.3 Data source .......................................................................................................... 30 3.3.1 Primary data ............................................................................................... 30 3.3.2 Secondary data ........................................................................................... 30 3.4 Research strategy ................................................................................................ 31 3.5 Research instruments .......................................................................................... 31 3.5.1 Questionnaire ............................................................................................ 31 3.5.2 Personal interview .................................................................................... 31 3.6 Data collection .................................................................................................... 32 3.7 Sampling ............................................................................................................. 32 3.8 Limitation of research .......................................................................................... 32 CHAPTER 4: DESCRIPTION AND ANALYSIS OF RESULT ........................ 33 4.1 Introduction about Vinaconex - ITC & VIPACO - JSC ..................................... 34 4.1.1 Introduction about Vinaconex Investment and Tourism Development Joint – stock Company (Vinaconex – ITC) .......................................................................... 34 4.1.2 Introduction about VIPACO Joint Stock Company ( VIPACO - JSC) ...... 35 4.2 Description of Respondents’ information ........................................................... 36 4.2.1 Description of respondents’ age .................................................................. 36 4.2.2 Description of respondents’ gender ............................................................ 37 4.2.3 Description of respondent’s education level ............................................... 37 4.3 Description and Analysis the understanding CSR concept of respondents ........ 38 4.4 Evaluation of CSR implementation .................................................................... 39 4.4.1 Description and Analysis of Questionnaire about Vinaconex – ITC .......... 39 4.4.2 Description and Analysis of Questionnaire about VIPACO ....................... 41 -5- 4.4.3 Description and Analysis of Questionnaire for managers of Vinaconex – ITC and VIPACO ............................................................................................. 43 4.5 Evaluation of Sustainability development and CSR implementation ................ 44 4.5.1 Description and Analysis of Questionnaire about Vinaconex – ITC and VIPACO ........................................................................................................... 44 4.5.2 Description and Analysis of Questionnaire for managers of Vinaconex – ITC and VIPACO ............................................................................................. 47 4.6 Overall Discussion .............................................................................................. 50 CHAPTER 5: CONCLUSION AND RECOMMENDATION .......................... 52 5.1 Conclusion .......................................................................................................... 52 5.2 Recommendation.................................................................................................. 53 5.3 Limitation of study .............................................................................................. 54 5.4 Suggestion for future research ............................................................................ 55 REFERENCE ............................................................................................................ 56 APPENDIX ............................................................................................................... 59 -6- LIST OF TABLES & FIGURES Figures 2.1 Carroll’s “Pyramid of CSR” Figures 2.2 Economic & Legal Component of CSR Figures 2.3 Ethical and Philanthropic Component of CSR Figures 2.4 Triple bottom line theory Figure 2.5 Planet – People- Profit in TBL theory Table I Corporate Social Performance model Table 4.1 General information about VINACONEXT - ITC Table 4.2 General information about VIPACO -7- LIST OF CHARTS Chart 4.1 Age frequency of respondents Chart 4.2 Gender frequency of respondents Chart 4.3 Education level frequency of respondents Chart 4.4 Description of Result – Question 1 Chart 4.5 Description of Result – Question 2 – Questionnaire for V – ITC Chart 4.6 Description of Result – Question 3 – Questionnaire for consumers of Vinaconex – ITC Chart 4.7 Description of Result – Question 2 – Questionnaire for consumers of VIPACO Chart 4.8 Description of Result – Question 3 – Questionnaire for consumers of VIPACO Chart 4.9 Description of Result – Question 4 – Questionnaire for consumers of Vinaconex – ITC and VIPACO Chart 4.10 Description of Result – Question 5 – Questionnaire for consumers of Vinaconex – ITC and VIPACO Chart 4.11 Description of Result – Question 6 – Questionnaire for consumers of Vinaconex – ITC and VIPACO Chart 4.12 Description of Result – Question 4 – Questionnaire for managers of Vinaconex -ITC and VIPACO Chart 4.13 Description of Result – Question 5 - Questionnaire for managers of Vinaconex – ITC and VIPACO -8- LIST OF ABBREVIATIONS SMEs SMALL AND MEDIUM ENTERPRISES CSR COPORATE SOCIAL RESPONSIBILITY TBL TRIPLE BOTTOM LINE WTO WORLD TRADE ORGANIZATION PR PUBLIC RELATION NGOs NON-GOVERNMENTAL ORGANIZATIONS CSP COPORATE SOCIAL PERFORMANCE EIA ENVIRONMENT IMPACT ASSESSMENT -9- CHAPTER 1: INTRODUCTION 1.1 CSR in Vietnam Corporate Social Responsibility (CSR) is more concentration in the world. However, the importance role of CSR has not really high evaluated in Vietnam. Due to the today’s global CSR, companies should focus on not only good and high quality products but also human rights, labor conditions and environment. According to the director of Vietnam Chamber of Commerce and Industry, PhD Doan Duy Khuong, “CSR has become necessary requirement for each company, if the company does not embrace CRS, they cannot approach the global market” (http://www.saga.vn) Nowadays, CSR is still new concept because of lack awareness of public and business community. This issue is the main factor influences much on the CSR practices. Due to the economic integration process, the awareness of the CSR issue has been changed but has not the most effective consequence. Recently, Vietnamese enterprises become more and more actively in their social responsibility in various areas include consumer’s satisfaction and employer’s health care, student’s scholarships and environmental protection activities. They realized the vital of CSR performance and carry out CSR application in their business, since they will receives more advantages than competitors. When the companies care about employees such as their life and working conditional, it leads to raise employees’ loyalty and more productivity. Moreover, together with good implementation of protection environment and society, they will make their brand name more popular and more reliable. One more important is attracting more investors and more shareholders’ belief. That is reason why many companies identified the relationship between CSR and sustainability and step-by-step complete -10- this interactive relationship. In short, we believe that will have the positive changes CSR performance in near future. 1.2 CSR in SMEs Company The fact that most of companies in Vietnam are small and medium enterprises that withholds about 95%. SMEs devices into two groups include small enterprises have engage up to 49 employees and medium size enterprises engage up to 299 employees.This research will discuss how they carry out CSR. Most the kind of company lack CSR knowledge, therefore they always focus on annual financial statements reports and miss non-financial performance. Moreover, they just understand simply that the CSR means the charity task not starting from their own business. Besides, CSR cannot implement because of not enough financial resources and techniques to adapt to CSR’s standards. Base on the growing of economic, all the principle purpose of SMEs wants to make profit and gain revenue that is reason why the CSR’s application and implementation is not attention and concentrate. For example: The event of melamine- tainted milk from China and the Vedan Vietnam corporation discharge wastewater directly into Thi Vai river without treatment. However, Some SMEs apply successfully CSR into the business strategy such as Vinamilk with “Six million glass of milk for children fund” and “Den Dom Dom” scholarship fund of Dutch Lady. These actions were supported vigorously from society. Secondly, SMEs should consider and valuate the employees’ awareness and commitment with CRS especially the Management, Accountant, Consumers: -11- Hill and Jones (1992) define the relationship between stakeholders and managers likes “Managers are the only group of stakeholders who enter into a contractual relationship with all other stakeholders. Managers are also the only group of stakeholders with direct control over the decision making process of the firm”. Therefore, it is necessary agreement and commitment of managers to carry out and improve CSR issue. In Vietnam, two questions of management take into account CSR issue: What do managers consider the responsibility as an important part of doing business? And why do managers address CSR? Nowadays, CSR has recently tends to the marketing area. Customers want to understand firm’s social, ethical, and environmental project how influences marketplace outcomes. For example, the tendency of using the “green” product is more and more general. Accountants have significant in contribution CSR report. Due to the traditional, accountants prepared the requirement financial statement. However, many years recently, the accounting academics have been considered study and theory on social and environmental accounting practitioners, professional reporting reliable CSR information. 1.3 Government actions CSR plays an important influence in developing of economic that is reason why the government always provides not only new Acts and Regulations but also editting and supplementing ones to achieve the requirement of public. One of the edition and supplement is the replacement of Environmental Protection Law 1994 in 2005, and the polluting cases investigation done by the Environmental Police Department (C36). -12- In 1986, A policy of greater openness named “Doi Moi” was promulgated with purpose transforming Vietnam from a planned economy into “socialist market economy”. The Doi Moi and open door policies bring advantage in increase economic grow in 2006, GDP grew by 8.2% compared with last period. However, main social issues still existence especial the difference between rich and poor people, environmental degradation include air, noisy, water pollution and the rapidly raising the industrial accident. Furthermore, the conflict between the employee and bosses problem should be taken into account. The government continued to introducing new rule and regulations to control above issue and has strengthened the legal of implement mechanism however, the implement is sporadic, vary of legal interpretations and appearance corruption activities. In Vietnam, the legal framework of CSR practices focuses on environment and labor issues and company- related laws. It can see that international conventions becomes the essential factor which leads to CSR- relevent legislation. There are some Government regulations and Laws related to CSR practical. For example, the most important labor laws are Labor Code (1994, edited in 2002), Law on Trade Unions (1990), Law on Environmental Protection (1991, amended in 2005), Law on Social Insurance (2006). Besides, the Government Regulations – Laws relevant to environmental issues include Law on Special Consumption Tax (2004), Law on Environmental Protection (2006), Law on Water Resources (1998), and Electricity Law (2005). Moreover, The Grassroots Democratic Ordinance in 2007 applies the participation of stakeholders at local level with respect to social economic development, environmental protection and infrastructure planning. -13- 1.4 CSR practice and challenge According to PhD Doan Du Khuong_VCCI Vice Director, President business council for Sustainable Development of Vietnam (VBCSD) "Business associated with social responsibility not only help improve the competitiveness of enterprises on the path of integration but also the driving force contributing to growth and prosperity in every country".(http://vccinews.vn) Together with the important of CSR performance, Vietnam attains some of CSR Awards that created Vietnam chamber of Commerce and Industry, Ministry of Labor- Invalids and Social Affairs, Vietnam Ministry of Industry and Trade since 2005. Because of the above discussion, the implementation of CSR in SMEs have much difficulties. First of all, the awareness of managers about the social responsibility in the competition market, they just think voluntary contribution from one part of their profit while CSR should be in production process. Besides, Vietnamese SMEs have not accessed and applied the standard of global CSR that have effective implement in developing country. And one of important challenge which SMEs have to face is the finacial problem and the technical to carry out CRS standard. For example, the socialist system always expects companies dropping property, create more jobs, overcome obstacles and difficulties of raising disadvantaged regions and groups. However, the most of companies can not do that. Following Mr. Khuong’s suggestion, the implement of CSR has the effective result, it should have the organization’s supervises plays advisory role for companies and the Government and makes policies assistance for CSR appliance. -14- 1.5 Research questions Due to evaluate the impact of CSR in SMEs in Vietnam, there are many questions are developed and try to explain as:  What is the fact of CSR in SMEs in Vietnam?  How long does the issue relating CSR the term into Vietnamese society especially SMEs?  How does the small and medium enterprises operating in Vietnam relate to this area? -15- CHAPTER 2: LITERATURE REVIEW 2.1 Definition and conceptualization of CSR Firstly, there are various of definitions, conceptualization and relevant components of corporate social responsibilities. In general, The European Commission's definition of CSR is "A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis." 1 Another definition include Carroll (19791991) and by Wood (1991). The role of CSR was described as “Corporate Social Responsibilities has become important because globalization and the growth in competition, increased size and influence of companies, retrenchment or repositioning of government and its roles, war for talent, companies competing for expertise, growth of global civil society activism, increased importance of intangible assets” 2 (UNIDO, 2002, p.1) Besides, there are many of CSR instrument and tools for building the information structure to communicate CSR. “Corporate Social Responsibilities Reports feature and link to recently published, non-financial Corporate Social Responsibility and Sustainability reports. The CSR Reports page also lists any press releases associated with the publication of a given report.”3 The Triple Bottom Line (TBL) reporting 1 http://ec.europa.eu/enterprise/policies/sustainable-business/corporate-socialresponsibility/index_en.htm 2 http://www.csr-weltweit.de/uploads/tx_jpdownloads/FDI_CSR_Vietnam.pdf 3 http://www.csrwire.com/reports -16- was defined by Elkington (1997) presented information about economic, environmental and social within three P’s: People, Planet and Profit. In summary, almost the definition and conceptualization mention about the company should embrace responsibility with environment, customers, employers, citizens, stakeholders, and the other entire society member. Moreover, CSR implementation wants to concentrate on promoting the public interest such as encouraging community development and voluntarily eliminating activities that harm the social sphere irrespective of legality and ethical. 2.2 Theories related to CSR In order to understand more clearly and exactly about CSR, there are many concepts and conceptualization related to CSR will be mentioned below. 2.2.1 Carroll’s “Pyramid of CSR” Figure 2.1: -17- Figure 2.2: Figure 2.3: -18- Among developing conceptualization and different definition, the concept of Carroll, Archie B. named “Pyramid of CSR” which known as the popular and used widely in the world. The Carroll’s Four part definition include Economic Responsibilities (Make a profit), Legal Responsibilities (Obey the law), Ethical Responsibilities (Be ethical) and Philanthropic Responsibilities (Good corporate citizen). Basing on figure 2.1, the first category mentioned about economic responsibilities which indicated that making profit is the principal role and evaluated as the top of the business organisation. It can be said that the effective growing of the company is illustrated by the company’s profitable. However, the econmic aspect in Carroll’s concept mentions not only earning profit but also the responsibilities with their customer, shareholder. For example, each company has responsibilities to provide the goods and services with high qualities, suitable price and satisfied with customer’s demand. When company can do that, they will recieves customer’s loyal and commits the effecetive development and make the maximum of investment from stakeholder. Therefore, each company complete responsibilities in economic, it means have reliable foundation to move the next aspects. The sencond aspection which carry out the responsibilities of company is legal ones which obey the Law, Provisions, Regulars, Articles and the other legal document related which issued by Goverment and local authotities. This legal responsibilities enhance the society’s expectation which the business fullfil with the regulation, laws to achieves economic mission and legal frameworks set up by societal legal system. For instance, all the manufacturing industrial that thrown the waste of productions without disposal directly into the environment such as smoke into the sky,waste -19- water and so on which can not be knonw as well-perform of legal responsibilities. Therefore, company should improve the customer’s right protection, environment protection, fair in competion in business environment to have better performance and stand on violent competition market. The third aspection was mentioned ethical responsibilities. The fact that, because the ethical responsibilities had great influence much on the company. It is the key factor help the company to overcome with the limitation of law. Nowadays, the companies make threats against citizen because of some of company accepts to do anything to gain more profit. For example: fraudulent, bribes, discrimination in working places. Therefore, besides the legal responsibilities, company has to take into account the ethical include the human principals and human rights commitment. However, the defintion of ethical is difficult because ethics is intangible, then the company should take care the expect of social about the ethical norms and consider carefully to avoid breaking ethical standard. In short, the hightest aspection of social responsibilities is Philanthropic responsibilities or good corporate citizen. In this areas, the company can improve the people’s life include citizen and employer, moreover, it makes company’s reputation more and more popular. Each company has own strategy to perform thier responsibilities however they have the same puposes that contribute and buid in humanitaian program. For instance, company contribute thier fund to do charity for poor people and illness people such as Vinamik, Viettel, Mobifone... Another activies as the managers and staff of company has volunteer activities in local community to increase the relationship between company and citizen. One of the bad image is Vedan company, they made waste polution and evaded resonsibilities with people who live and depend much on Thi Vai river. -20-