Tài liệu Research on awareness and implementation of corporate social responsibility in a multinational company in vietnam case study nestle vietnam

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RESEARCH ON AWARENESS AND IMPLEMENTATION OF CORPORATE SOCIAL RESPONSIBILITY IN A MULTINATIONAL COMPANY IN VIETNAM CASE STUDY: NESTLE VIETNAM BY TRUONG THI THU THANH Graduation Project Submitted to the Department of Business Studies, HELP University College, in Partial Fulfillment of the Requirements for the Degree of Bachelor of Business (Accounting) Hons OCTOBER 2011 October 2011 Declaration of Originality and Word Count DECLARATION I hereby declare that this 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 courses/degrees at HELP University College or other institutions. Word Count: 11,725 words TRUONG THI THU THANH Date: 28/10/2011 1 Acknowledgements As a student, our main responsibility is to absorb and learn as much as we can from the assistance, support and encouragement of many people such as our mentors and teachers around us. They help us to learn, to apply our knowledge and to grow. And this project would not have been made without them. I wish to take this opportunity to thank all the people who have guided me in the right direction and kept me motivated during the time of completing the dissertation. First and foremost I would like to express my deep gratitude to my supervisor, Dr Le Van Lien from International School at Vietnam National University, Hanoi who guide me in my choice of assignment. His guidance throughout and inspiration for me to create new ideas has helped me to learn and grow personally. I also would like to express my thank to Ms. Sumathi and Ms. Shenba at Help University College, who initiated the project and give so much instruction and support. 2 Abstract RESEARCH ON AWARENESS AND IMPLEMENTATION OF CORPORATE SOCIAL RESPONSIBILITY IN A MULTINATIONAL COMPANY IN VIETNAM CASE STUDY: NESTLE VIETNAM By TRUONG THI THU THANH October 2011 Supervisor: Dr. Le Van Lien Corporate Social Responsibility (CSR) has become even more important for the developing countries. It has developed through the long history and nowadays many business entities over the world want to carry out the CSR in their business operation. Vietnam is one of the world‟s fastest-growing economies. Therefore, there are many multinational companies want to invest in Vietnam market. This paper aims to discover the awareness of multinational organizations in Vietnam on CSR, and the consumer attitude to social responsibility is positive or not. Besides, another objective understands the implementation, CSR reporting of CSR in a multinational company operating in Vietnam by asking respondents‟ understanding and opinion. From conducting research, it can show the understanding and awareness of CSR concept of multinational companies operating in Vietnam is unlimited, but the performance is limited. The multinational companies have found difficult to use CSR as a tool to value companies, the implementation of CSR in Vietnam as much as they 3 can, and especially have to according with law and environmental protection and better community in Vietnam. Willingness to learning and gaining more knowledge about CSR found from the survey has drawn a bright future for the implementation of CSR and awareness of CSR in Vietnam. 4 TABLE OF CONTENTS Declaration of Originality and Word Count ........................................................... 1 Acknowledgements ..................................................................................................... 2 Abstract ....................................................................................................................... 3 TABLE OF CONTENTS ........................................................................................... 5 LIST OF FIRGURES AND TABLES ...................................................................... 7 CHAPTER 1: INTRODUCTION ............................................................................. 9 1.1 Research Background........................................................................................... 10 1.1.1 CSR in the world ............................................................................................... 10 1.1.2 CSR in Vietnam ................................................................................................ 11 1.1.3 CSR in multinational companies operating in Vietnam .................................... 12 1.2 Problem Statement ............................................................................................... 13 1.3 Objectives and Sphere Research .......................................................................... 15 1.3.1 Objective of research......................................................................................... 15 1.3.2 Sphere of research ............................................................................................. 16 1.4 Research Methods ................................................................................................ 16 1.5 Structure of Research ........................................................................................... 16 CHAPTER 2: LITERATURE REVIEW ............................................................... 17 2.1 The Concepts Related to CSR .............................................................................. 18 2.1.1 Conceptual Framework ..................................................................................... 18 2.1.2 Carroll‟s 1979-1991 conceptualizations ........................................................... 19 2.1.3 Wood 1991 conceptualization ........................................................................... 21 2.1.4 Elkington‟s 1997 Triple Bottom Line ............................................................... 22 2.1.5 Stakeholder theory ............................................................................................ 24 2.2 Social accounting ................................................................................................. 26 2.3 Hypothesis ............................................................................................................ 27 2.3.1 Managers‟ perception of CSR ........................................................................... 27 2.3.2 Consumer‟s perception of CSR......................................................................... 29 2.3.3 Employee‟s perception of CSR ......................................................................... 31 CHAPTER 3: RESEARCH METHODOLOGY .................................................. 33 3.1 Research Objectives ............................................................................................. 34 3.2 Research Methodology......................................................................................... 34 3.3 Data source ........................................................................................................... 34 3.3.1 Secondary data .................................................................................................. 34 3.3.2 Primary data ...................................................................................................... 35 5 3.4 Research method .................................................................................................. 35 3.5 Research tool ........................................................................................................ 36 3.5.1 Questionnaire .................................................................................................... 36 3.5.2 Annual report .................................................................................................... 36 3.6 Data collection ..................................................................................................... 36 3.7 Sampling .............................................................................................................. 37 3.7.1 Sampling population ......................................................................................... 37 3.7.2 Sampling frame ................................................................................................. 37 3.7.3 Sampling size .................................................................................................... 37 3.7.4 Sample techniques ............................................................................................. 37 3.8 Limitations ........................................................................................................... 38 CHAPTER 4: ANALYSIS....................................................................................... 39 4.1 Responds summary .............................................................................................. 40 4.2 Management ......................................................................................................... 42 4.2.1 Finding from questionnaire survey and interview ............................................ 42 4.2.2 Overall evaluation of management's responses ................................................ 49 4.3 Consumers ............................................................................................................ 50 4.3.1 Finding from questionnaire survey ................................................................... 50 4.3.2 Overall evaluation of consumer's responses ..................................................... 52 4.4 Employees ............................................................................................................ 55 4.4.1 Finding from questionnaire survey ................................................................... 55 4.4.2 Employees' stated support for social responsible businesses ............................ 56 4.4.3 Overall evaluation of employees‟ responses ..................................................... 57 4.5 Discussion ............................................................................................................ 59 CHAPTER 5: CONCLUSION ................................................................................ 60 5.1 Conclusion ........................................................................................................... 61 5.2 Recommendation.................................................................................................. 62 5.3 Limitation of Study .............................................................................................. 63 5.4 Suggestion for Future Research ........................................................................... 63 References (Harvard referencing system) ............................................................. 65 APPENDIX: QUESTIONAIRE............................................................................. 70 6 LIST OF FIRGURES AND TABLES Figure 2.1: Pyramid of CSR (Carroll, 1979) ………………………………………..19 Figure 2.2: The Wood's CPS Model (adapted from Wood, 1991)………………….22 Figure 2.3: Elkington‟s 1997 Triple Bottom Line…………………………………..23 Figure 2.4: The relationship between firm and its stakeholders…………………….25 Figure 2.5: The important factors for employees (Ewin.com survey)………………32 Figure 4.1: Respondent ……………….……………………………………...…….40 Figure 4.2: Consumer category…………………………………………………..…41 Figure 4.3: Employee of category…………………………………………..………41 Figure 4.4: Distribution responses of manager's perception of CSR……………….42 Figure 4.5: Distribution of response of management's perception toward of CSR...45 Figure 4.6: Distribution of responses from consumer survey……………………...50 Figure 4.7: Distribution of responses from consumer survey (percentage)…..……52 Figure 4.8: Distribution of responses from employee‟s survey……………………55 Figure 4.9: Distribution of responses from employee‟s survey (chart)……………56 7 LIST OF ABBREVIATIONS CSR Corporate Social Responsibility VBLI Vietnam Business Links Initiative VCCI Vietnam Chamber of Commerce and Industry WTO World Trade Organization WBCSD World Business Council for Sustainable Development CSP Corporate Social Performance VND Viet Nam Dong CSP Corporate Social Performance TBL Triple Bottom Line GRI Global Reporting Initiative 8 CHAPTER 1: INTRODUCTION 1.1 Research Background 1.1.1 CSR in the world 1.1.2 CSR in Vietnam 1.1.3 CSR in multinational companies operating in Vietnam 1.2 Problem Statement 1.3 Objectives and Sphere Research 1.3.1 Objective of research 1.3.2 Sphere of research 1.4 Research Methods 1.5 Structure of Research 9 1.1 Research Background 1.1.1 CSR in the world Nowadays, Corporate Social Responsibility is one of the hot topics; it becomes a contemporary issue not only for companies but also for customers in the world. Companies use CSR as a tool to spread their reputation in the worldwide market. Investors use CSR as a main factor to consider in the decision of enterprises to invest responsibility. Customers consider CSR as a part of important to determine the cost, progress and the quality of an enterprise. Because of CSR can create the competitive advantage, there are many giant corporations can pay a lot of money in order to developing, become perfect business and social responsibility. Typically, Nestle, the world‟s leading nutrition, healthy, wellness Company, also has many activities for community, distributing their products in environment-friendly packing materials. Besides, Nokia Corporation has CSR report annually, moreover, 100% of the materials in their phone can be recovered and used to make new products or generate energy. Also, Best Buy Co., Inc, a retailer of consumer electronics in USA and Canada, has applied recycled goods program. Deputy Manager of public relations of Best Buy Company says, “We only feel that we still succeed in the market if we take responsibilities for society” (Saga Vietnam, 2008). On the hand, there are many companies has quality assurance of staffs‟ living standard, protect the environment, and making useful products for customers and environment. On the other hand, some companies are still not aware of the importance of CSR; they have caused damage to the environment, clients and themselves (effect on their reputation). Typically, Bp is one of the biggest oil corporations in the world. However, Bp has encountered a problem that is serious oil spill in the Gulf of Mexico. It leads to the lives of birds, fish, turtles and other sea animals became ever more fragile by the oil spill disaster in 10 the Gulf of Mexico. The cause of this incident is due to the lack of supervision, poor safety… Living environment is threatened seriously have caused more sickness, poverty for the people. In addition, marine organizations can not survive, caused ecological imbalance. 1.1.2 CSR in Vietnam Although CSR do not strange in the world, but also it is still a relative new concept in Vietnam. The reason of it is the lack of awareness of the issue from the public and business community has been considered as the key factors affecting on the implementation of CSR. Typically, the pollution in Thi Vai River, Thanh Cong River, or contaminated China milk, conflict between employees and their bosses have proved that implementing CSR is very important for sustainable economy. Nowadays, many companies in Vietnam have found that social responsibility of companies has become one of the indispensable requirements for companies, because of the context in globalization and international integration, if the business does not comply with social responsibilities, they will not be able to gain access to world markets. For instance, Vietnamese shoe manufactures and textile industries began respecting CSR norms of conduct. The Vietnamese government later began promoting corporate efforts to improve labor conditions and protect the environment, as part of its Vietnam Agenda 21 program. Private sector CSR efforts have recently begun, supported by the Vietnamese government. The Vietnam Business Links Initiative (VBLI), launched under the auspices of the Vietnam Chamber of Commerce and Industry (VCCI), promotes closes ties with international organizations, and enterprises financed with foreign capital. VBLI offers consulting services and training programs that will improve the labor environment at small and medium-size shoe manufactures and textile industries, and raises CSR awareness 11 among such enterprises. In 2004 VBLI began giving out CSR awards to the most conscientious enterprises. According to Nguyen Hong Ha, deputy director of the VCCI in Ho Chi Minh City, “CSR must be placed on the business strategies of each business. It was, is and will be an essential part to the success of the enterprise”. Beside, there are still many challenges in implementing CSR in Vietnam. First, there is lack of law enforcement as well as the cooperation. Companies are facing the challenges of adapting effectively to the changing environment in the context of globalization. Second, Vietnamese‟s knowledge about CSR is still limited. We need to increase the awareness that CSR can be of direct economic value. Companies can contribute to social and environmental objectives, through integrating CSR as a strategic investment into their core business strategy, management instruments and operations. This is an investment, not a cost, much like quality management. Therefore, business organizations can thereby have an inclusive financial, commercial and social approach, leading to a long term and strategy minimizing risks linked to uncertainly. 1.1.3 CSR in multinational companies operating in Vietnam Vietnam is a member of the World Trade Organization (WTO). The Doi Moi reforms and open-door policies have achieved high economic growth in Vietnam - in 2006, GDP grew by 8.2%. It is cause why nowadays there are many multinational companies invest in Vietnam market, such as Honda, Ford, Toyota, Nestle, Vedan, etc. Though they are multinational corporations but their acceptance and performance about CSR does not pay attention and concern; and it is the caused of many damages and disasters for environment and social. In recent time (august 4, 2011), Department Police of Crime Prevention and Environment had inspected and 12 caught the wastewater treatment plant of JSC Sonadezi services (Long Thanh Industrial Zone, Dong Nai) theft of waste discharge into Dong Nai river. According to initial estimates, the plant was discharged into the environment with the amount of 14 millions m3. In there, at high tide, the company will mix with the wastewater to dilute the tide, and when the tide go down, water and waste was mixed colors, and flows into the Dong Nai river. People living around said that the sewage canals have a black color and a very unpleasant odor. Sadly, this is a company specializing in environmental services. The incident was discovered as the warning to the awareness of enterprises on CSR. Another Vietnamese company which is well known for soy sources has been claimed for 3-MCPD chemical contained in its products. This chemical is one of the factors which can cause people cancer. As was the case broken, the agency aggressively seek new management plan for resolving the consequences of the consumer and society has suffered. Therefore, the multinational companies operating in Vietnam businesses should adopt CSR. After applying CSR, some businesses have established environments more stable and higher labor productivity. Moreover, they received many supports from consumers and society in the common interests that bring businesses to the community. 1.2 Problem Statement With the rapidly growing of Vietnam economic, it has attracted many multinational corporate operating in Vietnam. So, CSR draws attention from not only the business but also the government, media, investors, and the social as the whole. Nowadays, the business is expected not only to make profit but also care for the whole society‟s welfare. Therefore, companies want to succeeds, they must do well on implementing CSR. 13 Nevertheless, there are many wrong-doing things that have been discovered recently related to CSR which made by multinational companies. First, the hottest problem is the polluting of the environment. A typical example is polluting Thi Vai River of Vedan International Company. This company has been discharge untreated waste water into the Thi Vai River in Dong Nai province. It used two pumping systems; one is direct while other goes through refining progress. It affects nearly 2.700ha farming area along the Thi Vai River basin. Level of pollution was 90% with the range of about 10km affected along the river (Dantri, 2009). However, the later is rarely used and it is made just for inspection and supervision from the local governmental office (invest in Vietnam, 2008). Another case is that a Taiwan-owned firm, namely Tung Kuang, was caught by the environmental police for discharging directly water into the environment, concentrations of hazardous substances exceeding specified thresholds. These are two typical examples of serious violations to the environment, as well as a lack of understanding, poor of awareness about the harm caused by environmental pollution. Second, there are many unsafe products in market nowadays. A wrong-doing is a different company in Vietnam which is well-known for soy sources has been claimed for 3-MCPD chemical contained in its products. The chemical is one factor that can cause cancer of people. The interesting thing is that this product of company is compliant with Vietnam requiring standard. However, it is not the case in the Europe. The question is of ethical rather than legal issue and it draws lots attention from media and the public (Vietnamnet, 2007). Another example is the melaminecontaminated milk which is known all over the world. Although there is not much contaminated milk in Vietnam, it still makes people scared to use these products. 14 Third, another problem is the working conditions, health, and safety of employees. There are many researches about the working condition which show that health and safety at work has become a serious and hot problem that need to be solved. An example of a multinational company - Marumitsu, the workers protest strike simultaneously at the door of the company in Quang Minh Industry Zone, Hanoi city. The reason of strike are the unfavorable working conditions, bad air quality affect to the health, time of work is too much but the wage is too lower, the employees can not live with this wage, “The boss was hires the police with hooligans, using batons and put a gun to scare the workers, to force them into the company and brutally beaten, losing all spirit of the workers” (baokhongle.wordpress, April, 2011). It is a part of the working conditions of employees. Vietnam is one of the countries which the health and safety in the working environment are not good and need to be improved better. As the results, CSR issue is the matter in growing economic in Vietnam. It can affect the enterprise, the shareholders and the stakeholders in the society as the whole. The investors are those being strongly affected as their capital invested may be lost. Therefore, awareness and implementation of CSR are very necessary for the individual investors who care for their own, realtives‟ and society‟s benefits. 1.3 Objectives and Sphere Research 1.3.1 Objective of research - Provide a framework about the CSR, including the definitions, and concepts related to CSR. - Inspect the awareness and implementation of multinational companies operating in Vietnam about the concept and it‟s important. 15 - Establish the solutions for multinational companies entering in Vietnam to raise the awareness and implementation about the CSR. 1.3.2 Sphere of research - Research conducting place: Nestlé Vietnam, Ha Noi city, Vietnam - Objective of the research: Multinational Company in Vietnam - Time duration of conducting the research: from August 15, 2011 to October 27, 2011 1.4 Research Methods Investigation and survey will use for this project: The qualitative research is the questionnaire and conduct through the managers, employees, and consumers in Nestlé Vietnam, Hanoi city. The researcher comes to each individual to ask them to answer and fill in the survey. The previous researches and studies are used for making the questionnaire. The measurement is made in accordance with the past researches. By surveying the managers and employees in Nestlé Vietnam; consumers in Hanoi, the researcher can analyze the collected data by Microsoft Excel software to see the awareness and implementation of managers, employees, and consumer. 1.5 Structure of Research This project will be divided into five following chapters: Chapter1: Introduction Chapter 2: Literature Review Chapter 3: Research Methodology Chapter 4: Result Analysis Chapter 5: Conclusion and Recommendation 16 CHAPTER 2: LITERATURE REVIEW 2.1 The Concepts Related to CSR 2.1.1 Conceptual Framework 2.1.2 Carroll’s 1979-1991 conceptualizations 2.1.3 Wood 1991 conceptualization 2.1.4 Elkington’s 1997 triple bottom line 2.1.5 Stakeholder theory 2.2 Social accounting 2.3 Hypothesis 2.3.1 Managers’ perception of CSR 2.3.2 Consumer’s perception of CSR 2.3.3 Employee’s perception of CSR 17 2.1 The Concepts Related to CSR 2.1.1 Conceptual Framework The concept of CSR is found on two key questions: The first one is for whom are they responsible? And the second one is for what are corporations responsible? (Friedman, 1970). These questions have engendered much philosophical and legal debate. A precise, universally accepted definition of CSR is therefore difficult to achieve, with views on where a firm‟s responsibility to society starts and finishes as various as the names given used to describe such a notion, including corporate citizenship (e.g., Maignan, Ferrell, and Hult, 1999), stakeholder management (e.g., Freeman, 1984), corporate social responsiveness (e.g., Miles, 1987), corporate social performance (e.g., Wood, 1991), and corporate social responsibility (e.g., Carroll, 1979). There are many definitions of CSR in many researchers and organizations all over the world; however, according to World Business Council for Sustainable Development (WBCSD), CSR is defined as “the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life, in ways that are both good for business and good for development” (WBCSD, 2004). In literature, various theories of CSR have been growth; four concepts of CSR will be introduced for this study, namely: Carroll (1979) four-part definition of CSR, the Corporate Social Performance (CPS) model by Wood (1991), the Triple Bottom Line (Elkington, 1997), and the Stakeholder theory (Freeman, 1984) 18 2.1.2 Carroll’s 1979-1991 conceptualizations According to Archie Carroll (1947), there are four categories of social responsibility: Economic, Legal, Ethical, and Discretionary. And 1999, he introduced the Pyramid that is the most comprehensive hierarchy of CSR. Figure 2.1: Pyramid of CSR (Carroll, 1979) The first category Carroll is economic responsibility. The business institution is the basic economic unit before it was anything else. As such it has a responsibility to produce goods and services that society needs and sell them to make profit. Moreover, the enterprise roles are predicated on the assumption of fundamental. The second part is legal responsibility. It indicates the business is expected to the societies that comply to fulfill their economic mission with the framework of the legal system. Just a society has sanctioned the economic system by permitting 19
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