ANALYSE THE IMPORTANCE AND IMPACTS OF CORPORATE SOCIAL RESPONSIBILITY (CSR) IN BUSINESS TOWARDS THE SOCIAL AND ENVIRONMENTAL ISSUES IN VIETNAM BY DUONG THUY ANH E0700254 Graduation Project Submitted to the Department of Business Studies HELP University College, in Partial Fulfillment of Requirements for The Degree of Bachelor of Business (Accounting) Hons OCTOBER 2011 DECLARATION OF ORIGINALITY AND WORD COUNT I hereby declare that the graduation project is based on my original work except for quotations and citations that have been duly acknowledged I also declare that it has not been previously or concurrently submitted for any other course/degree at Help University College or other institutions The word count is 11,048 words DUONG THUY ANH 17 October, 2011 ACKNOWLEDGEMENT Firstly, I want to express my sincere gratitude to my supervisor, Dr Pham Duc Hieu International School, Vietnam National University Hanoi, who has guided me throughout this thesis Furthermore, I also wanted to express Ms Sumathi, Help University College, who initiated the project, provided guidance and support a lot throughout the process Secondly, I want to thank the two managers, who have participated in my interview: Mr Ho Duc Lam- Chairman and CEO of Rang Dong Plastic Joint Stock Company and Mr Tran Tien Hoang- management systems distributors in the Central and Northern of Kinh Do Company have spent their precious time to help me to complete the interview Besides, I also want to send my special thanks to the managers, employees and citizens, who helped me to carry out the investigation because they have supported me, shared their concerns, interest, and valuable suggestion Without them, I could not finish my project Finally, I also want to express my gratitude to my family, who are always on my side to support and believe me Analyze the importance and impacts of Corporate Social Responsibility (CSR) in business towards the social and environmental issues in Vietnam By DUONG THUY ANH OCTOBER 2011 Supervisor: Dr Pham Duc Hieu ABSTRACT CSR and its components have become important issues in the world as well as in Vietnam, a developing country This study aims to understand the environmental tasks and attitudes of citizens towards environment We realized that, beside manager, the awareness of citizens and workers about the social responsibility to the environment is increasing The implementation of social responsibility is a task that is impossible to be neglected on the way of approach to the business integration in Vietnam, because it’s beneficial for business and society, especially in improving the competitiveness of enterprises Therefore, day by day, Vietnam will have more responsibility for social and environmental issues due to the increasing of awareness and positive attitudes of managers, employees and citizens that shown in this survey TABLE OF CONTENTS Page DECLARATION OF ORIGINALITY AND WORD COUNT………………… ACKNOWLEDGEMENT………………………………………………………… ABSTRACT………………………………………………………………………… TABLE OF CONTENTS………………………………………………………… LIST OF FIGURES ………………………………………………………………8 LIST OF ABBREVATIONS……………………………………………………… Chapter 1: INTRODUCTION………………………………………………… 10 1.1 CSR in business and environment issue in the world……………… 10 1.2 CSR in business toward social and environment issue in Vietnam 11 1.3 Problem statement…………………………………………………… 13 1.4 Research objective…………………………………….………………14 1.5 Thesis structures………………………………………………………16 Chapter 2: LITERATURE REVEW……………………………………… 17 2.1 Definition and conceptualization of CSR…………………………… 17 2.2 Responsibility of the firm…………………………………………… 20 2.3 Corporate Philanthropy_ what does it mean? 21 2.4 Hypothesis………………………………………………………… 22 2.4.1 Manager’s awareness of CSR and CSR reporting…………… 23 2.4.2 Employee’s awareness of CSR and CSR reporting…………… 24 2.4.3 Citizen’s awareness of CSR……………………………… 25 Chapter 3: RESEARCH METHODOLOGY………………………………… 26 3.1 Research methodology…………………………………………… 26 3.1.1 Qualitative methodology………………………………………… 26 3.1.2 Quantitative methodology……………………………………… 28 3.2 Data source………………………………………………………… 29 3.2.1 Primary data…………………………………………………… 29 3.2.2 Secondary data………………………………………………… 30 3.3 Data collection…………………………………………………… 30 3.3.1 Questionnaire…………………………………………………… 31 3.3.2 Personal interview……………………………………………… 31 3.3.3 Annual report………………………………………………… 32 Chapter 4: RESULTS AND DISCUSSION…………… …………………… 33 4.1 Sampling………………………………………………………… 33 4.1.1 Sample population……………………………………………… 33 4.1.2 Sample frame.………………………………………………… 33 4.1.3 Sample size……………………………………………………… 33 4.1.4 Sample techniques……………………………………………… 33 4.1.5 Limitation……………………………………………………… 33 4.2 Management……………………………………………………… 34 4.2.1 Finding from questionnaire survey…………………………… 36 4.2.2 Finding from managers interview……….…………………… 38 4.2.3 Actual CSR disclosures by firm……….……………………… 41 4.2.4 Overall evaluation of management’s respo…………………… 42 4.3 Employee………………………………….……………………… 42 4.3.1 Finding from questionnaire survey……… …………………… 42 4.4 Citizen…………………………………….……………………… 44 4.4.1 Finding from questionnaire…………….……………………… 44 4.4.2 Overall evaluation of citizen’s responses…… ……………… 46 4.5 Overall discussion………………………… …………………… 47 Chapter 5: CONCLUSION AND RECOMMENDATIO……………………… 49 5.1 Conclusion…………………………………….………………… 49 5.2 Recommendation………………………………………………… 52 APPENDIX: Questionnaire…………………………….……………………… 54 Management survey……………………………………………………… 54 Citizen survey……………………………………………………………… 57 Employee survey……………………………………………………………58 REFERENCES…………………………………………………………………… 60 LIST OF FIGURE Figure 2-1The Business in Society Figure 2-2 Employee Compositions by Region Figure 4-1 Respondents Figure 4-2 Citizens and Employees categories Figure 4-3 Distribution of responses from management survey Figure 4-4 Distribution of responses from management survey (percentage) Figure 4-5 Distribution of responses from employee survey Figure 4-6 Distribution of responses from employee survey (percentage) Figure 4-7 Distribution of responses from citizen survey Figure 4-8 Distribution of responses from consumer survey (percentage) LIST OF ABBREVIATION CSR Corporate social responsibility SRI Social responsibility investing CHAPTER I: INTRODUCTION 1.1 CSR in business and environment issue in the world Corporate social responsibility is a concept that frequently overlaps with similar approaches such as corporate sustainability, corporate sustainable development, corporate responsibility, and corporate citizenship While CSR does not have a universal definition, many see it as the private sector’s way of integrating the economic, social, and environmental imperatives of their activities In addition the most important aspect need to consider when talking about CSR is environment aspect It cannot be denied that nowadays of our nature environment becomes more and more polluted by the human harm thus to have better imagine in society all companies need also protect our environment For example, Nikon Company committed against environmental pollution, making effective use of resources, and helps build a clean society, thereby protecting and improving the environment worldwide and creating sustainable development of society Nikon is a company that has high social responsibility; Nikon is committed to protecting the environment Nikon’s committed based on the understanding that the company is developing the environmental protection act is should because it is important for the survival of humankind Nikon will try to reduce CO2 emission and waste, reuse and recycle Besides, Uno is one of the largest companies in Japan have adopted recycled goods programs Another example is the largest beverage 10 completed their task environment The fact that there are policies regarding environmental duties, but Government in Vietnam has no policy to promote them Besides, the impact on social responsibility issues and the environment of investors are not strong enough; the managers think the company’s image is enhanced by complete social responsibility and task environment So, it must be a sustainable model for social responsibility and environmental reports to avoid these misconceptions lead to a phenomenon that companies only disclose CSR and environmental information to improve the reputation of their company 50 CHAPTER 5: CONCLUSION & RECOMMENDATION 5.2 Conclusion Environmental protection is a problem with the developing countries Typically is Vietnam Because, people are poor thus they must have to worry about eating before they worry about keeping clean, and clean On the other hand, business investment in environmental protection means no immediate profit, only to see costs; that they have calculate the benefits every day, especially for businesses in the developing countries which have to deal with so many other business risks They have not a fundamental education for respect nature, and especially the habit of shirking of personal responsibility for collective society Before us, Thailand, Indonesia and China are the burden of environmental disaster from the consequences of “modernization, industrialization,” in three decades GDP growth numbers are limited, if not always calculated the cost to handle the environmental consequences are negative number Recently, some reports have estimated that China spent 10% of the GDP every year to clean, restore the environment, and to pay for medical services for victims of environmental pollution Environmental problems will not be solved if only call for spirit of social responsibility of enterprises and the sanction (of course there must be, and very strict) Enterprises must find a way to protect the environment and still benefit, and society must create conditions for them to be beneficial in protecting the 51 environment Social are often strict to enterprises when having problems, but they forget that businesses is part of social and they are constitutes for our jobs, our children So, we must have social responsibility to create condition for them to right, so we not have to pay a big price when they too “aggressive” in business and neglecting social responsibility Besides, the role of these ingredients have been changed, with the private sector has become an active partner in environmental protection Government and many businesses are realizing that environmental protection and economic growth is not always a contradict matter Since the Brundtland Report was published in 1987 as a result of World Commission on Environment work, business and management scholars have been grappling with the question of how and why corporations should incorporate environmental concerns into their own strategies Today many companies have accepted their responsibility to no harm to the environment An earlier emphasis on strict governmental regulations has ceded ground to corporate self-regulation and voluntary initiatives As a result, the environmental aspects of CSR is defined as the obligation to include the environmental impact of business activities, products and facilities, eliminating waste and emissions; maximize efficiency and productivity of resources and reduce practices that can adversely affect the enjoyment of the country’s resources by future generations In the global economy is emerging, internet and media and information revolution shine light on the practical business world, companies often post up the action to protect their environment Business partners and consumers can easily 52 know their credibility This suggests, they gradually realize the important of social responsibility In recent times, the concept of CSR turned out to be important strategies for companies struggling to survive in a fierce market environment In term of the constantly changing market, customer tastes become increasingly unpredictable and complex, application CSR strategies can be a powerful tool for the struggle to survive There is a vague concept for some businesses not see the difference between the CSR with philanthropy of the companies The latter is the most popular as it is easy to comprehend and implement Other would try to adopt the concept but their involvement limited only to their core business This is understandable, because it is easier for companies to formulate interventions on a concept they can easily understand and are cost-effective to them Example, a food manufacturing company would normally prefer to implement interventions that are related to nutrition, and 53 call this as their CSR project, but in reality is still very similar to corporate philanthropy During the past decade, consumers and communities were more sensitive to business practices of businesses around where their areas or where they buy their goods and using services It was observed that the community will like and support of the companies in which they are associated with the common interests of the people in their business activities over the job opportunities it creates To achieve and maintain industrial peace is also a direct result of a good CSR strategy The world has become smaller, and the market has become more accessible than ever before, thanks to globalization Globalization however, will come into force, companies’ small and medium enterprises to apply CSR to maintain competitiveness in domestic and international markets In some countries, Government regulations such as environmental problems and social have increased, and legal standards is usually set at the supranational level 5.2 RECOMMENDATION From this paper, we can see that the environment is becoming important in modern life and the market, since it has strong impact to the company Because, when the companies have positive environmental protection action then a lot of consumers will buy their products This paper investigates the impact of social responsibility for environmental problems of enterprises under the management, employees and citizens Management plays an important role in all businesses, so, managers need to have proper awareness of the important of CSR and commitment in order to implementing CSR and environmental tasks In addition, citizens who represent 54 consumers, they are directly can affect the performance of the business because they affect the profitability and operations of the company On the other hand, the employees are directly involved in productive labor, their perceptions of social responsibility to the environment is very important That’s why this paper is focused on three groups From research, we can see that there is strong support for social responsibility and environmental task from managers and a growing awareness among employees and citizens However, there is a gap between perceptions of each group in how to act to protect environment This research provides managers a moral issue in the operating efficiency and production to bring quality product at low prices to consumers and having effective way to public CSR and environment problem to the society Managers should focus on the activities of social responsibility and environment rather than corporate profits When you talk about social responsibility and environmental issues, it is common to see good intentions rather than actions To overcome these problems, the Government of Vietnam should require companies making CSR annual report a specific and clear In addition, there should be a department responsible for checking the reliability of the information Next, to raise awareness of CSR and environmental missions deeply in citizens, Vietnam needs to improve education and social responsibility and environmental issues If the citizens have a strong positive attitude of the CSR and environment issues, all businesses will have pressure to moral action and can prevent the misconduct to the society So, to have better awareness of the citizens about social responsibility and environmental issues, there should begin education for people 55 APPENDIX: QUESTIONNAIRE MANAGEMENT SURVEY Personal Information Company: Years in holding current position: Questionnaire To what extent you agree with those statements? 5= strongly agree, 4= agree, 3= neutral/no opinion, 2= disagree, 1= strongly disagree Statements 1 Do you know about CSR? You directly take into CSR reporting process When production of the new product, your company is interested in its impact on the environment? CSR bring your company many benefits According to you, the customer will buy product of company which have good reputation in environmental protection Companies in Vietnam should gradually participate CSR as an annual activity of the company When company breaches their duties, they will be willing to pay remedy easily 56 Additional personal comments (option): 57 CITIZENS SURVEY Personal Information Age: Marital status:  Married   20-30  Single   30-40 Number of children:  None  40-50 1  50-60 2  Above 60  Above Education: _ Current employment: Questionnaire To what extent you agree with those statements? 5= strongly agree, 4= agree, 3= neutral/no opinion, 2= disagree, 1= strongly disagree Statements 1 You know what CSR and what environment issue are You also have a very high awareness in environmental protection The enterprise must help society to solve environmental problems Even if the economy becomes depression, businesses still must complete their environmental responsibilities If companies make environmental pollution provide products cheaper, and another company does not pollute the environment and produces are higher price, you will chose to buy cheap product 58 Companies around where you live make good of their social responsibility Businesses around where you live, they are having good programs to enhance environmental protection Through which channels you know about CSR especially environmental activities of companies? How you think about quality of the information? _ Other opinion (option): 59 60 EMPLOYEE SURVEY Personal Information Company: Years in holding current position: Questionnaire To what extent you agree with those statements? 5= strongly agree, 4= agree, 3= neutral/no opinion, 2= disagree, 1= strongly disagree Statements 1 You awareness about CSR are clearly CSR is important in Viet Nam Protecting environment companies should be received prevail capital policies from Government The image of company would be better if the staff in the company concerned environmental protection Your business should join the environmental protection activities You use products of companies make to environment pollution Your company guidance for all employees to deal with CSR issue and environment issue Additional personal comments (option): 61 62 REFERENCES http://www.ykhoanet.com/binhluan/nguyenvantuan/080929_nguyenvantuan_suamel anin.htm http://www.dunghangviet.vn/hv/doanh-nghiep/trach-nhiem-xa-hoi/2011/08/sieu-thidua-nhau-bao-ve-moi-truong.html http://www.bayvut.com.au/nh%E1%BB%8Bp-s%E1%BB%91ng/tr%C3%A1chnhi%E1%BB%87m-x%C3%A3-h%E1%BB%99i-c%E1%BB%A7-doanhnghi%E1%BB%87p-csr http://www.mallenbaker.net/csr/definition.php http://onlinelibrary.wiley.com/doi/10.1002/csr.132/pdf http://www.enotes.com/business-finance-encyclopedia/social-responsibilityorganizational-ethics http://jacobkuttyta.hubpages.com/hub/Social-Responsibilities-of-Management http://www.konicaminolta.com/about/csr/employee/index.html http://www.russcomm.ru/eng/rca_biblio/m/matveev01_eng.shtml http://www.scribd.com/doc/3934672/Importance-of-CSR-to-Business http://www.rhemagrouponline.com/samples/91.pdf http://www.krepublishers.com/02-Journals/JHE/JHE-23-0-000-000-2008-Web/JHE23-2-000-000-2008-Abst-PDF/JHE-23-2-101-08-1747-Okafor-E-E/JHE-23-2-10108-1747-Okafor-E-E-Tt.pdf http://books.google.com.vn/books?id=woqEDQQzGp0C&pg=PT442&lpg=PT442& 63 dq=CSR+of+enterprises+about+pollution&source=bl&ots=rS90V4jJh&sig=fahRlE7Ej7eBAkNKiAIwmZv79oQ&hl=vi&ei=kfPATeOoGoSyvgOmho21B A&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCAQ6AEwAA#v=onepag e&q=CSR%20of%20enterprises%20about%20pollution&f=false 64 ... Chamber of Commerce and Industry, Ministry of Labor-Invalids and Social Affairs, Vietnam Ministry of Industry and Trade since 2005, together with Vietnam Leather & Footwear Association, and The Vietnam. .. related to CSR The second goal of this project is to evaluate the impact of CSR in the environmental issues in companies in Vietnam On the other hand, given what they can achieve and what their advantages... neglected on the way of approach to the business integration in Vietnam, because it’s beneficial for business and society, especially in improving the competitiveness of enterprises Therefore,