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 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 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 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 TABLE OF CONTENTS Declaration of Originality and Word Count Acknowledgements Abstract TABLE OF CONTENTS LIST OF FIRGURES AND TABLES CHAPTER 1: INTRODUCTION 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 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 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 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 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 known about CSR Although limiting knowledge about the CSR issue, the employees still believe that it can bring benefit for them In a flat organizational structure like Nestle, the career development of “vertical” (hierarchical) is supplemented and replaced by the growth of “width”, it is driven by getting more new skills With the scale of a global corporation, Nestle bring to employees the opportunity to develop their talents maximum depending on the active network without border Nestle gives for the employees that a salary system and welfare are dynamic That is competitive with the market in all respect, including salary, short-term bonuses and / or long-term benefit, and the benefit of society Almost employees in Nestle realize that it is a stable working environment, a lot of opportunities and very clearly defined business objectives of Nestle Vietnam And what they like best about Nestle Vietnam is its people -focused policies, including a strict commitment to employee‟s social insurance and a premium health care package that benefits its employees a great deal Moreover, the employees indicate a strong support that the company have programs to subsidize for employees who are killed or injured by the hazard works and help the employees who are disabled at work in financing problems Company support the employees the daily meals which have enough nutrition so that they can have enough health to work There is not discrimination in Nestlé‟s working environment Managers in Nestle always treat to employees equally, not having discriminations in the working place 58 Because of the finding are general along with the increasing awareness of CSR in Vietnam, and therefore, Employee are positive inclined toward CSR issue 4.5 Discussion To sum up, there are some key collecting about CSR perception among managers, consumers and employees The managers show a strong positive attitude toward CSR, they think that issues related to environment, quality of product, safety of employees, etc, are very important and want the companies to undertaken activities to shown their responsibility for the society Besides, the awareness of consumers about the CSR are depends on the personal background such as education, relationship as well as the living environment However, consumer can still awareness that choosing products from a company that has a social responsibility reputation are intelligent choosing A large number of employees not know about the CSR However, employees show a positive perception toward CSR issues, and they are willing to learn more about the CSR information Therefore we can see that CSR is very important, companies will not be comprehensive development without CSR 59 CHAPTER 5: CONCLUSION 5.1 Conclusion 5.2 Recommendation 5.3 Limitation of Study 5.4 Suggestion for Future Research 60 5.1 Conclusion Nowadays, CSR is always a hot topic in the world It includes such activities as have safety quality product; take care the employees, create an interest working environment, and good living condition; protect the environment; and raising funds for charity and donation for the development of society and community CSR gives the company a sustainable development, reputation and profitability However, CSR is still new concept in Vietnam The globalization put strong pressure on Vietnam economy to comply with many international standards and cope with the high development speed of the world Since Vietnam joined the WTO in 2006, production issues, working environment as well as product quality and consumers are increasingly more concerned This research has focuses on the awareness and implementation of CSR in multinational company - Nestle Vietnam under the managers‟, consumers‟, and employees‟ view From the results of the research, it is easy to realize that there is a strong support for CSR from managers and a growing awareness among consumers and employees It is a big question for managers in Nestle that bring a quality product at low price as well as communicate CSR in the efficiency ways Besides that, managers also have many CSR activities to satisfy the expectation of society in high level such as taxation programs, contributing for community, helping the poor, protecting the environment Although the awareness of consumers and employees does not high, but their support for responsible business are very strong because there is a lack of the knowledge But with the education of the government and multinational companies operating in Vietnam, it is hopeful that their awareness will be increase more and more 61 To sum up, CSR draws many attentions from public in Vietnam With the highly positive perception toward the important of CSR, it is hoped to have a bright future for Viet Nam people 5.2 Recommendation After the findings of the awareness and implementation of CSR in a multinational company - Nestle Vietnam, may find that the perception of employees and customers about CSR are low, and the performance did not really clear Therefore, researcher has some ideas to solve these problems Firstly, Company need to have the CSR disclosure on the website of Vietnam; they should have the specific numbers in the report about the social responsibility Moreover, it is important to supplement and complete the legal frame of Vietnam to create firm legal foundation for the activities of CSR Nestle Vietnam as well as other multinational companies operating in Vietnam, they need to comply with the regulations and laws in Vietnam Moreover, they must to pay taxation fully and creating in friendly environment way to protect the environment Besides that, completing the regulations will prevent the firms exploit the law lost to the wrong things which harm for the community At the violations of environmental and scandal happened need proper handling and openly with consumers Secondly, it is important to enhance the awareness of the consumers and employees in multinational companies operating in Viet Nam The education plays an important role in enhancing the awareness on CSR The more attention and awareness the public have, the more the companies act responsible and ethical From that the 62 environmental and scandals will be decrease in the future Enhancing their awareness, it is necessary to start with education in school and university Employees should aware and understand the role of CSR More than that, Vietnam‟s government should have the meetings, activities to promote communication So that can make the sustainable development 5.3 Limitation of Study This study has some limitations:  Firstly, there is highly potential of bias in the responses because the respondents may have exaggerated their commitment and understanding about CSR  Secondly, the research used with the small samples With the large number of managers, employees, and consumers in many places coming in and out everyday, small samples may not represent sufficient the population  Finally, the scope of the research is narrow The survey is only taken with managers and employees in Nestle Viet Nam and consumers in Hanoi If the research is taken in many places in Viet Nam, the result would be significantly different Because the education and living standards in many places are different such as remote areas and big city, young people and old people, married and unmarried 5.4 Suggestion for Future Research Due to the limitation of the research, there are some suggestions for the future research on the similar or related topics: 63  Firstly, the research should pay attention to the other objects of research besides business such as investors, accountants, and other stakeholders  Secondly, the research should have larger size of sample which would give a more accurate result The sphere of research should be bigger which can conduct in many places in Viet Nam  Finally, the characteristics of the objects could be used more for understanding the other objects with different values 64 References (Harvard referencing system)  Abdeen AM (1991) Social responsibility disclosure in annual reports Bus 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