Tài liệu The impact of corporate social responsibility (csr) in vietnam case and evidences

THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY (CSR) IN VIETNAM: CASE AND EVIDENCES BY NGUYEN HA QUYEN 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 April 2011 1 Declaration of Originality and Word Count DECLARATION I declare that this graduation project is based on my original work except for quotations, theories 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. The word count is 10228 words –––––––––––––––– Nguyen Ha Quyen Date 2 ACKNOWLEDGEMENT First of all, I would like to express my sincere apprecition to my supervisor, Dr Pham Duc Hieu who has guided me throughtout this thesis. His constant guidance, insightful suggestions, and constructive ideas are the essential inputs and encouragement for me inorder to complete this thesis. Next, I would like to acknowledge to manager as well as all of employees in enterprises of Vietnam about the impact of Corporate Social Responsibility (CSR) by cases and evividences.Without their contribution, I could not be able to gather much information for my research Lastly, I would like to extemd my heartfelt gratitude to my friends for their continuous support, encouragement and contribution, which have been crucial during the presentation of this report. My thesis cannot be finished without your supports. 3 THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY (CSR) IN VIETNAM: CASE AND EVIDENCES BY NGUYEN HA QUYEN April 2011 Supervisor: Dr. Pham Duc Hieu Corporate Social Responsibility (CSR) has been the subject of substantial academic debate for over two decades. In recent year, Corporate Social Responsibility (CSR) becomes the term that might be familiar with developed countries especially capital countries. However in Vietnam, Corporate Social Responsibility is not popular with most of enterprises although some businesses have adopted CSR policies and rules of ethics, but they are often based on approaches from the top down. Suppliers apply moral rules upon request from customers rather than developing their own CSR to expand the market share. And this could require many businesses to adopt rules and ethics vary, depending on the number of customers that their transactions, and sometimes they have contradictory. Moreover, the understanding of the concept of CSR in Vietnam has significant changes, both nationally and in enterprises. However in recent years when the economy is more open and there are many critical cases and evidences concerning with Corporate Social Responsibility as the result of the economic crisis and in additional, understanding the importance as well as the role of CSR in hence the competitiveness of Vietnamese enterprises against foreign enterprises. That is the 4 motivation for the researcher to conduct the survey about the importance and perception of CSR. Through conducting the research, this research is able to indicate that the understanding the definition of CSR and its real value is limited. The investors have little basic knowledge of CSR however the understanding is somehow distorted such as thinking of CSR as regulation compliance only. Besides that, the investors in Vietnam find not easy to use CSR as a tool to value firm and it is also difficult for them to make investment decision when CSR issues are considered. 5 Table of contents Declaration of Originality and Word Count ................................................................ 2 Abstract ........................................................................................................................ 3 Table of contents .......................................................................................................... 6 CHAPTER 1: INTRODUCTION .............................................................................. 10 1.1 Research Background........................................................................................... 10 1.2 Problem Statement ............................................................................................. 12 1.3 Objective of research ......................................................................................... 13 1.4 Range of Research .............................................................................................. 14 1.5 Research Methods .............................................................................................. 14 1.6 Structure of Research ........................................................................................... 15 CHAPTER 2: LITERATURE REVIEW ............................................................... 16 2.1 Research’s related concepts .............................................................................. 16 2.1.1 CSR definition................................................................................................... 16 2.1.2 Investment Decision .......................................................................................... 17 2.1.3 CSR reporting ................................................................................................... 17 2.2 Researches and Studies ........................................................................................ 18 2.2.1 Business Ethics in Vietnam ............................................................................ 18 2.2.2 CSR, PR of Foreign Invested Companies ......................................................... 20 2.3 Researches Summary ........................................................................................... 22 CHAPTER 3: RESEARCH METHODOLOGY .................................................. 24 3.1 Research Objectives ............................................................................................. 24 3.2 Theoretical Framework and Measurement........................................................... 24 3.2.1 CSR Importance ................................................................................................ 25 3.2.2 CSR perception ............................................................................................... 25 3.2.3 Investment Decision .......................................................................................... 26 3.2.4 CSR Reporting .................................................................................................. 27 3.3 Measurement and Quality Design ........................................................................ 28 3.3.1 Section 1 ............................................................................................................ 28 3.3.2 Section 2 ............................................................................................................ 29 3.3.2.1 CSR Perception .............................................................................................. 29 3.3.2.2 Investment Decision ....................................................................................... 29 6 3.3.2.3 CSR Reporting ............................................................................................... 30 3.4 Research Method .................................................................................................. 30 3.4.1 Sampling ........................................................................................................... 31 3.5 Hypothesis Statement ........................................................................................... 32 CHAPTER 4: RESULTS ANALYSIS ................................................................... 33 4.1 Collection of Questionnaires ............................................................................. 33 4.2 Description of Result............................................................................................ 33 4.2.1 Age .................................................................................................................... 33 4.2.2 Gender ............................................................................................................... 34 4.2.3 CSR Awareness ................................................................................................. 34 4.2.4 Investment Decision .......................................................................................... 40 4.2.5 CSR Reporting .................................................................................................. 45 4.3 Result Analysis .................................................................................................... 47 CHAPTER 5: CONCLUSION AND RECOMMENDATION ............................ 48 5.1 Summary ............................................................................................................. 48 5.2 Recommendation.................................................................................................. 50 5.3 Limitation ............................................................................................................. 52 5.4 Direction for Future Research .............................................................................. 54 Reference.................................................................................................................... 55 APPENDICES .......................................................................................................... 58 7 List of Figures and Tables Table 1: Age ............................................................................................................... 33 Table 2: Gender .......................................................................................................... 34 Table 3: Question 1 - Result and Analysis ................................................................. 35 Table 4: Question 2 - Result and Analysis ................................................................. 37 Table 5: Question 3 - Result and Analysis ................................................................. 38 Table 6: Question 4 - Result and Analysis ................................................................. 39 Table 7: Question 5 - Result and Analysis ................................................................. 40 Table 8: Question 6 - Result and Analysis ................................................................. 42 Table9: Question 7 - Result and Analysis .................................................................. 43 Table 10: Question 8 - Result and Analysis ............................................................... 44 Table 11: Question 9 - Result and Analysis ............................................................... 46 Table12: Question 10 - Result and Analysis .............................................................. 47 8 List of Abbreviations FPTS FPT Securities Company CSR Corporate Social Responsibility RI Responsible Investment IR Investor Relations WTO World Trade Organization VCCI Viet Nam Chamber of Commerce and Industry NIRI National Investor Relations Institute PR Public Relations 9 CHAPTER 1: INTRODUCTION 1.1 Research Background As we know, in business, profit is placed on top but besides profit, we should to consider the interests of the community and society. So, to understand this aspect, one question is set up about “What is Corporate social responsibility” and “How does it impact on Vietnam perspective?” Corporate Social Responsibility – CSR is not strange anymore to the developed world. In the United States has club with named 'One PERCENT Club' is a collection of businesses committed to using at least 1% of their profits into social work. In France also, a series of cultural funds of enterprises such as France Télécom (France Telecom), RATP (Subway Company) is the sponsoring unit of contemporary French art and many other countries around the world in general. Beside that Corporate Social Responsibility is the commitment of business to business ethics and contribute to sustainable economic development, improve the quality of life for workers and their families, local communities and the society at large (World Council on Sustainable Development - WBCSD). Customers interested in CSR, responsible investors, policy makers and nongovernmental organizations around the world increasingly concerned about the impact of globalization on the lives of workers, environmental and community development. CSR is considered an important factor as the other traditional factors such as cost, quality in business. CSR is integrated into business strategy and becomes mandatory conditions for enterprises to survive and grow. CSR become the main factor to consider in the decisions of responsible investment. In addition to good reputation, businesses also get other 10 benefits such as labor relations are improving, labor productivity increases and workers increasingly attached to the enterprise. Moreover, with the join of Viet Nam to the World Trade Organization (WTO) in 2007, CSR is getting more concerns from businesses because of the requirements from the foreign clients and partners (WTO website, 2006). From year 2005, Viet Nam has an award “CSR – towards the sustainable development” established by Viet Nam Chamber of Commerce and Industry (VCCI) to reward the companies which actively implement CSR in the international economics integration circumstances. According to MR.Nguyen Quang Vinh- Deputy Director of the Office for the enterprise for sustainable development (VCCI) “Enterprises of Vietnam need to be backed implement CSR, manufacturing business toward sustainable development is a prerequisite, Vietnam‟s enterprise survival in the context of international economic integration. Today's economic profit can not help companies survive because consumers as well as other partners require businesses to implement their social responsibility in business processes. Through the award for "Business social responsibility" to uphold VCCI, honoring those companies have done this work, VCCI awards will be held annually as an encouragement, incentives for businesses. Enterprises for the Office of Sustainable Development - VCCI is committed to co-administration of enterprises; always support and guide the implementation of CSR companies contribute to improving the competitiveness of enterprises in the integration process.” 11 1.2 Problem Statement With the economic development of Vietnam, the majority of businesses in small and medium-scale adoption and the performance of social responsibility of enterprises have not already paid attention. Although the overview of CSR, major of enterprises in Vietnam quite identify such as CSR is maintaining and developing corporate cultures, protecting the rights for workers, anti-corruption, environmental protection, creating favorable working conditions for employees, bridging the gap staff and leadership, for the benefit community…etc , the knowledge of CSR concept of many Vietnamese enterprises and CSR expertise are limited. Even, there are some enterprises have put CSR into their business strategies. Typically, these social programs such as “6 million cups of milk for children Vietnam” and funds scholarships “fireflies light” of the big brands like Vinamilk, and Dutch Lady are focusing and consumer support…etc. Acknowledge the importance of this issue, Vietnam‟s enterprises have paid more attention to these particular areas.. According to Mr Nguyen Hong Ha, deputy director of the Chamber of Commerce and Industry of Vietnam (VCCI) in Ho. City, said that “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.” However, the implementation CSR in Vietnam is quite difficult. And the biggest problem of Vietnam enterprises at that moment is lack of information, leads to confusion, guide to mismanagement and even not know where to start before the jobs related to CSR. Therefore, many scandals occur and its influence on the developing of Vietnam enterprise in general. For instance, the lesson from China‟s milk scandal, this scandal that has already claimed the lives of four babies and sickened some 60,000 after they were fed the powder, made by the once-prestigious Sanlu Group, which has huge implications for CSR. The milk, which had been laced 12 with the industrial chemical melamine, used in plastics and glue, gave children kidney stones. This scandal caused not small affection on the production of China‟s milk in particular as well as more general that is affected on the whole milk industry of the world. 1.3 Objective of research With the objectivity is to provide the concept of CSR as a whole, this research also supports more cases and evidences aims to enhance the competitive ability of enterprises of Vietnam especially when in a period of Vietnam has become a formal member of World Trade Organization (WTO). By conducting some of the basic steps following -To sum up the concept and definition of Corporate Social Responsibility. - To survey the understanding as well as the perception of Vietnamese individual investors of CSR concept, its importance and implementation. - To Set up theoretical model and inspect the relationship between CSR importance for Vietnamese investors and other contributions such as CSR awareness, investment decision and CSR reporting. Beside that, the project searches the conceptual enhancing path of theories on corporate social responsibility (CSR) and to reflect on the implications of the development. -To improve he understanding of individual investors on CSR issues, concepts and its importance. - To recommend some solutions for the organizations to improve the perception and understanding of investors CSR concepts and its importance, solutions for the firms to have better investor relation. 13 1.4 Range of Research Because of the project has large range so the object of the research is any Vietnamese officers and the time duration of conducting the research: from Dec 18, 2010 to Jan 03, 2011. 1.5 Research Methods Corporate Social Responsibility is a topic that has many different concepts and because the nature of this project is research so that it used many reports, cases and evidences. Moreover, the methods are used that is investigation and survey for the project. In particular, the research will provide the accurate and reliable results for the empirical study by using both primary and secondary data. here are many ways to collecting primary data such as: questionnaires, interviews, focus group interviews, case-studies, diaries, observations, critical incidents, portfolio…etc. However the most suitable choice for this project in order to collect data just can be questionnaires because of some reasons like that: this method is very cheap; this method also is contributed in many ways to increase the convenience in collecting data. The questionnaires are designed for trying to obtain the employees‟ perspective as well as the accounting students‟ perspective. The researcher distributes the questionnaire and conducts the study through Vietnamese officer because the range of the research is the impact of CSR and relate to all of Vietnamese‟s perception of its. The researcher comes to each individual officer to ask them to answer and fill in the survey. The previous research and studies are used for making the questionnaire. The measurement is made in accordance with the past researches. The quantitative method is used to carrying out the research. Besides that, the sample of n equals 60 (n = 60). By surveying the Vietnamese officers the researcher can analyze the collected data to see how individual investors understand the CSR concepts and 14 CSR‟s importance. In the research, Microsoft Excel software is used to assist the researcher in analyzing and check the measurement after all data has been collected. Besides, the data from previous studies help the researcher to understand and be able to use statistical and descriptive methods of analysis. Moreover, using primary data can collection method is to provide the appropriate information that match with the requirements of this project. Beside that, secondary data will support the application Corporate Social Responsibilities in Vietnam perspective as a whole. The secondary data will be collected at the low cost as well as possible from the relating sources such as: books, Internet, newspaper, magazines, and other convenient formulation. 1.6 Structure of Research In order to understand clearer about the concepts of CSR as well as its importance this project is divided into five following chapters: Chapter I: Introduction Chapter II: Literature Review Chapter III: Research Methodology Chapter IV: Result Analysis Chapter V: Conclusion and Recommendation 15 CHAPTER 2: LITERATURE REVIEW 2.1 Research’s related concepts 2.1.1 CSR definition As far as concern above, because CSR is the quite new term for Vietnam‟s enterprises so it is necessary to understand the concept. In fact there are many definitions of CSR made by different researchers and organizations throughout the world but in all of them the most approximately exactly definition that is widely used by World Business Council for Sustainable Development (WBCSD) which is mentioned in the first part : According to World Business Council for Sustainable Development in its publication "Making Good Business Sense" by Lord Holme and Richard Watts (WBCSD, 1998) “corporate social responsibility is defined as “the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large”. Furthermore, the same report gave some evidence of the different perceptions of what this should mean from a number of different societies across the world. The definitions as different as “CSR is about capacity building for sustainable livelihoods. It respects cultural differences and finds the business opportunities in building the skills of employees, the community and the government” from Ghana, through to “CSR is about business giving back to society” from the Phillipines. From other aspect, the traditionally in the United States, CSR has been defined much more in terms of a “philanthropic model. Companies make profits, 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.” In anyways, whether many other definitions from the researchers or other sources, CSR still aims 16 to enhance the competitiveness which helps the firm to improve their financial status, employees‟ motivation and customers‟ loyalty and the company‟s image. 2.1.2 Investment Decision In any aspect of CSR or any business‟s concepts and form, all of them regular have unique target make decision for investors to bring benefit for firms generally. Investing in firms is one of the most popular ways to make investment. Investment decision traditionally involves taking financial aspects and measures to evaluate the firm only. However, in the modern world, financial status is not enough for investors to make decision. So, the new concepts are developed to meet the change and CSR becomes one of those concepts with which investors consider CSR as an importance consideration in investment decision. The investment community has been exploring the links between CSR and financial performance of businesses. 2.1.3 CSR reporting According to Tim Smith- Walden Asset Management (July 27, 2010) “CSR reporting illustrate the expanding belief that quote CSR has become vitally important for a company‟s business, and that transparent reporting is, as one CEO said, one of the prices of doing business today.” CSR reporting is emerging need for the business in the world today. That is because of the demands by investors, consumers and society for CSR reporting. There are many reporting schemes and standards which are used in different organizations and countries. Those CSR reports help the company to better communicate with the investors and other stakeholders. They also increase the image and reputation of the organizations which issue the reports. 17 2.2 Researches and Studies Although, CSR becomes popular with enterprises all over the world. In any field or any industry, when firms are establish, they must concentrate and care about their responsibility with preserving and developing cultural identity company, protect the rights for workers, anti-corruption, protection, create favorable working environmental conditions for employees, bridging the gap staff and leadership and for the benefit community. But how CSR in Vietnam? In fact, there are not so many researches conducted on this topic of CSR in Viet Nam so that the research faces with many difficulties in finding enough studies and researches to use for reference and foundation. As the limitation of conducted studies and researches, the researcher has to use some case and evidences or studies which are consisted of more than one topic. Those topics usually are quite related such as business ethics, corporate culture. However, CSR is mostly discussed, studied or even argument in those researches hence, it is still appropriate to use them. 2.2.1 Business Ethics in Vietnam Research ethics is a long tradition in human society, starting from religious beliefs, cultural and philosophical ideas. Ethics related to moral commitment, responsibility and social justice. Moral Ethics, in English, the word derives from Greek „ethiko‟ and „ethos‟, meaning custom or habit. As Aristotle said, “the concept includes the idea of the nature and how to apply. So the moral reflection of personal character and in this day and age you can tell the nature of a business, because business is the collection of individuals.” So far, researchers have made a lot of ethical concepts venture, in which the concept can be regarded as the most simple: “Business ethics are the accepted principles to define right and wrong, to regulate the behavior of traders”. Aware of the complexity of the problem, Professor Phillip V. Lewis University Abilene Christian, the United 18 States has conducted surveys and collected 185 definitions given in textbooks and research papers from 1961 to 1981 to find “business ethics” how is defined? in the research papers and in the consciousness of the business. After finding the common point of the concept, he synthesized and introduced the concept of business ethics as follows: “Business ethics is all the rules, standards, ethics or laws to provide advice on behavior and honesty standards (an organization) in certain cases” In this aspect as well as the important part that is researched by Dr Nguyen Hoang Anh – Foreign Trade University Hanoi, Corporate Social Responsibility is mentioned. According to him, to go through this issue, CSR is just concentrated about the quality of production and environment protection. And give the evidences to aims to make clearer for quality of production that is affected on the right of customers. One of the classic tales of how a company can get it right is that of Johnson & Johnson, and the company's response to the Tylenol poisoning. In particular in 1982, “Johnson & Johnson's Tylenol medication commanded 35 per cent of the US over-the-counter analgesic market - representing something like 15 per cent of the company's profits”. And at that point a mentally ill person has poison in a bottle of Tylenol analgesic brand by Johnson & Johnson (J & J). Although the case unfortunately this only happens in Chicago and parts of the security that the perpetrators just put poison in a bottle of Tylenol were sold in the supermarkets, J & J was determined to proceed with in order to test all 31 million bottles Tylenol was distributed not only in America but in the whole world, because according to J & J, “ there is no guarantee that the perpetrators just put poison in the bottle of Tylenol at was sold, but do not put in the time before manufacturing or distribution. All costs to implement the decision on the $ 100 million. However, the high expression of 19 socially responsible company Johnson & Johnson plus proper PR campaign was helped Tylenol regained the position in the market within 6 months.” CSR plays a key role in Business Ethic; this issue becomes major part to make the decision for enterprises succeed. Therefore, awareness of CSR in Viet Nam should be enhanced through not only the media, business organization and researchers but also support from governmental offices and departments. Moreover, the enterprises should be encouraged in raising their business ethics for both their and other stakeholders‟ benefits. 2.2.2 CSR, PR of Foreign Invested Companies Due to this topic of CSR, the study also is researched by many researchers of foreign countries. Almost of them have own concepts about CSR as well as comment on its. However, they are given the common theory about CSR “responsibilities of the institutions in shaping, directing and controlling the business in the direction of respecting individual rights and promote human happiness” Beside many arguments that are researched long time ago, until recent year, research consistent with a fairly complete definition of Group Development Private Sector of the World Bank, “Social responsibility of business is the commitment of businesses to contribute to sustainable economic development, through improving the quality of work life of employees and members of their families, communities and society, in ways that benefit both businesses as well as the overall development of society”. In Vietnam, according to CSR, Public Relation of Foreign Invested companies by Ho Thien Nga of Economy University Da Nang has summarized the CSR concept of many researches. And according to her, “CSR if the Public Relations (PR), the mining companies is not only have long-term 20