the relationship between corporate social responsibility implementation and the development of five selected companies in hanoi

i

DECLARATION OF ORGINALITY AND
WORD COUNT


I hereby declare that the graduation project is based on my original work except for
quotations and citations which have been duly acknowledged. I also declare that it
has not been previously or concurrently submitted for any other course/degree at
HELP University College or other institutions. The word count is 10,048 words.








HO PHAM QUYNH NGA
28 March, 2011


ii

ACKNOWLEDGEMENT

This study would not have been made without the assistance, support and
encouragement of many people. I greatly appreciate their kindness and want to take
this opportunity to thank all people who help me during the time I carry out this
study.
First of all, I would like to express my gratitude to my supervisor, Dr.Pham Duc

Hieu, in Viet Nam Commercial University. He has kindly guided, supported, and
encouraged me from the very beginning of this study.
Furthermore, I would like to give my thankfulness to Ms. Sumathi and Ms. Shenba at
Help University College, who initiated the project and give me instruction and
support.
Lastly, I also want to thanks my friends, who support and encourage me to finalize
this research, and managers of Tam Viet Ltd., and Vietnam Dairy Products Joint –
Stock Company, and other people who spend time to answer my questionnaire.

iii

THE RELATIONSHIP BETWEEN CORPORATE SOCIAL
RESPONSIBILITY IMPLEMENTATION AND THE
DEVELOPMENT OF FIVE SELECTED COMPANIES IN HANOI

By
HO PHAM QUYNH NGA
April 2011
Supervisor: Dr. Pham Duc Hieu
ABSTRACT
Corporate social responsibility (CSR) was introduced years ago and became familiar
concept in international business environment, but it is quite new to Vietnamese
enterprises. Therefore, with the intension to find out CSR implementing situation of
companies in Ha Noi, this study is conducted. The objective of this study is to assess
the understanding of Vietnamese individual people and company on CSR concept,
the CSR implementation of companies in Ha Noi and its impacts to the development
of the companies. And in order to collect data for the research, questionnaire will be
used as helpful method. After that, some recommendation for selected companies
and future research is presented.

iv

TABLE OF CONTENTS

DECLARATION OF ORGINALITY AND WORD COUNT……………………… i
ACKNOWLEDGEMENT……………………………………………………………ii
ABSTRACT…………………………………………………………………………iii
CHAPTER 1: INTRODUCTION……………………………………………… …10
1.1 Research background……………… ………………………………………11
1.2 CRS in Vietnam……………………………………………… ……………12
1.3 Problem statement……………………………………………………………13
1.4 Research questions…………………………………………………… ……14
1.5 Research objectives……………………………………………………… …14
1.6 Research structure…………………………………………………….… …15
CHAPTER 2: LITERATURE REVIEW……………………………………………16
2.1 Definition and components of CSR……………………………… … ……17
2.2 The concepts related to CSR…………………………………… ….………18
2.2.1 Business Ethics……………………………………….……….…………18
2.2.2 Environment Protection…………………………………………….……19
2.2.3 Sustainability Development……………………… ….…………………19
2.2.4 Public Relation…………………………………… ……………………20
2.3 Theories related to CSR…………………………………… ………………21
2.3.1 Carroll’s “Pyramid of CSR” ……………………………………………21
v

2.3.2 Stakeholder theory………………………………………………………23
2.3.3 Triple bottom line theory……………………………… ………………24
2.3.4 Three P's theory……………………………………….…………………26
CHAPTER 3: RESEARCH METHODOLOGY……………………………………28

3.1 Research Objectives……………………………………………………….…29
3.2 Research methodology……………………………………… … ……….…29
3.3 Data source……………………………………………… ……………….…30
3.3.1 Primary data…………………………………………………… ………30
3.3.2 Secondary data……………………………………….…………… ……31
3.4 Research strategy………………………………….…………… ….………32
3.5 Research instruments…………………………………………… …………32
3.6 Data collection………………………………………………………….……33
3.7 Sampling………………………………………………… ….… …………33
3.8 Limitation of research………………………………………… …… ……33
CHAPTER 4: DESCRIPTION AND ANALYSIS OF RESULT………….… ……35
4.1 Introduction about Vinalmilk and Tam Viet…………………………………38
4.1.1 Introduction about Vinamilk……………………………………………38
4.1.2 Introduction about Tam Viet…………………….………………………39
4.2 Description of Respondents’ information……….………………… ………39
4.2.1 Description of respondents’ age …………………….………… ………40
4.2.2 Description of respondents’ gender…………………… ………….……40
vi

4.3Description and Analysis of respondents’ understanding about CSR concept.41
4.4 Assessment on CSR implementation……………………… ………………41
4.4.1 Description and Analysis of Questionnaire about Vinamilk……….……41
4.4.2 Description and Analysis of Questionnaire about Tam Viet……….……44
4.4.3 Description and Analysis of Questionnaire for managers of Vinamilk and
Tam Viet………………………………………………………………….…………46
4.5 Assessment on the development of company and CSR implementation.……47
4.5.1 Description and Analysis of Questionnaire about Vinamilk………….…47
4.5.2 Description and Analysis of Questionnaire about Tam Viet…………….49
4.5.3 Description and Analysis of Questionnaire for managers of Vinamilk and
Tam Viet…………………………………………………………………….………52

CHAPTER 5: CONCLUSION AND RECOMMENDATION………… …………55
5.1 Conclusion…………………………………………………… ……………56
5.2 Recommendation………………………………………… …… …………57
5.3 Limitation of study…………………………………… ……………………57
5.4 Suggestion for future research………………………… ……………… …58
REFERENCE…………………………………………………….…………………59
APPENDICES………………………………………………………………………62





vii

LIST OF FIGURES AND TABLES

Figure 2.1 The Carroll’s “Pyramid of CSR” 12
Figure 2.2 The triple bottom line 15
Figure 2.3 Planet – People- Profit in three P’s theory 17
Table 4.1 General information about Vinamilk 29
Table 4.2 General information about Tam Viet 30

viii

LIST OF CHARTS

Chart 4.1 Age frequency of respondents 31
Chart 4.2 Gender frequency of respondents 31
Chart 4.3Description of Result – Question 1 32
Chart 4.4 Description of Result – Question 2 – Questionnaire for consumers of
Vinamilk 33
Chart 4.5Description of Result – Question 3 – Questionnaire for consumers of
Vinamilk 34
Chart 4 6Description of Result – Question 2 – Questionnaire for consumers of Tam
Viet 35
Chart 4.7Description of Result – Question 3 – Questionnaire for consumers of Tam
Viet 36
Chart 4.8Description of Result – Question 4 – Questionnaire for consumers of
Vinamlik 38
Chart 4.9Description of Result – Question 5 – Questionnaire for consumers of
Vinamilk 39

Chart 4.10Description of Result – Question 6 – Questionnaire for consumers of
Vinamilk 39
Chart 4.11Description of Result – Question 4 – Questionnaire for consumers of Tam
Viet 40
Chart 4.12Description of Result – Question 5 – Questionnaire for consumers of Tam
Viet 41
Chart 4.13Description of Result – Question 6 – Questionnaire for customers of Tam
Viet 42
Chart 4.14Description of Result – Question 4 – Questionnaire for managers of Tam
Viet and Vinamilk 43
Chart 4.15 Description of Result – Question 5 - Questionnaire for managers of Tam
Viet and Vinamilk 44

ix

LIST OF ABBREVIATION

CSR
WTO
WBCSD
SD
PR
TBL
Corporate Social Responsibility
World Trade Organization
World Business Council for Sustainable Development
Sustainability development
Public relation
Triple bottom line

1

CHAPTER 1: INTRODUCTION

In this chapter, the whole picture of this research is presented in order to help readers
feel easy to understand. This chapter includes six parts, which are summarized as
follows:
1.1 Research background
1.2 CRS in Vietnam
1.3 Problem statement
1.4 Research questions
1.5 Research objectives
1.6 Research structure










2

1.1 Research background
In the early 1970s, the concept of “Corporate Social Responsibility” (CSR) has
appeared, and become popular concept in business environment. With the time CSR
is considered as an important factor like others, such as cost, products and/or services
quality, shares prices, to evaluate the development of a company.

In general, CSR focuses in three issues which are labor, environment, and finance.
And by combining fluently these three issues, a company not only performs CSR but
also increase advantages in the market. By carry out CSR and aligning CSR concepts
into business strategy, a company can have more advantages than competitors who
do not. A company which cares about employees, their lives, and their working
environment can raise employees’ loyalty, increase productivity. By protecting
environment and contributing back to society, the company makes itself more well-
known and more reliable. Therefore, the company guarantees shareholders’ profit
from their investment. From these benefits, it can be said that there is a relationship
between CSR and sustainability development of company. Many companies in the
world have recognized this relationship, and in order to join international business
environment, Vietnamese companies should pay attention to CSR implementation.





3

1.2 CSR in Vietnam
Since Vietnam joined World Trade Organization (WTO) in 11
th
January 2007, the
competition between foreign companies and local companies becomes stronger than
ever. According to Dr. Le Dang Doanh, Member of the Board and Senior Research
Fellow of the Vietnam Institute of Development Studies, joining WTO, Viet Nam
has to accept higher level in competition, but this competition will enhance economic
development. So, in order to survive in the strong competition, Vietnamese
companies should have more understanding about CSR, and apply CSR in making
business decision.

However, the concept of CSR is quite new to Vietnamese companies and their
managers, so the application of CSR in Vietnam still limit, and people who
understand the concept is not so much. Only after cases of business fraud appeared,
attention about CSR is raised. These cases are related to environmental pollution
(case of Vedan Vietnam, the sewage disposal goes directly to Thi Vai river, polluted
this river, and affected to people who lives along Thi Vai river); food poisoning (case
of Melamine infected in infant milk); and other cheating in selling products to
customers (the fraud in selling fuel).
After suffering these cases, society requires company to perform CSR, and
Government also amended and supplemented some Acts and Regulations to adapt
the requirements of public. The replacement of Environmental Protection Law 1994
in 2005, and the investigation of polluting cases made by the Environmental Police
Department (C36) can be considered as one of the changes. Together with
regulations issued by Government, the propaganda about CSR via mass media
4

channels also improves the awareness of Vietnamese companies about CSR. In near
future, there are positive changes expected to appear in business performance of
Vietnamese companies.

1.3 Problem statement
Since the concept of CSR is newly in Vietnamese business environment, the
Government encourages domestic companies to self-search about CSR, and award
companies, which well applied CSR in business operation, in “CSR award towards
sustainable development” since 2005. Vietnam CSR Forum are also created in
websites such as the address or
, these forums bring CSR understandings not only
for company’s managers but also for employees and customers, thus it helps
domestic companies building and implementing CSR easier.
Besides research of international organizations, CSR research in Vietnam is quite

few. Then this project is formed with the willingness to contribute in Vietnamese
CSR research. However, in Vietnam there are many companies, with limited time
and capacity, the scope of this research only focuses on five selected companies in
Ha Noi.



5

1.4 Research question
With the purpose of analyze the relationship between CSR implementation and the
development of company, sub-problem of the research is considered as follows:
Sub-problem 1: Why and how does CSR related to company’s growth?
Sub-problem 2: What actions considered as CSR actions did these selected
companies do?
In order to accomplish this research, primary data source and secondary data source
will be used as data to analysis.

1.5 Research Method
In order to reach above objectives, the research will answer the following questions:
1, In general, how does CSR implementation affect business development?
2, In detail, how does CSR implementation affect business development of
selected companies in Ha Noi or have branch in Ha Noi?
Together with figuring out the answer, the research will help selected companies to:
3, Realize the strong relationship between CSR implementation and business
development.
4, Reconsider and make more reasonable plans to perform their CSR.
6

1.6 Research structure

In this research, there are five (5) chapters as follows:
 Chapter 1: Introduction
 Chapter 2: Literature review
 Chapter 3: Research methodology
 Chapter 4: Description and analysis result
 Chapter 5: Conclusion and recommendation
The first chapter is the introduction. Chapter two mentions literature of CSR concept,
which brings CSR definition, components of CSR and theories related. After that, the
third chapter presents the research methodology used to conduct this study. In
chapter three, the research objectives, research method, research instruments,
research data will be stated. Chapter four describes and analyzes collected data
through primary and secondary data source. Lastly, in chapter five, conclusion for
this study and suggestion for future research is gave out. Besides that, each chapter is
divided into sub-headings in order to make it easier to follow. These sub-headings
are listed in the beginning of each chapter.




7

CHAPTER 2: LITERATURE REVIEW
Chapter 2 provides information about CSR, concepts and theories related to CSR as a
background of the research. Structure of chapter 2 is as follows:
2.1 Definition and components of CSR
2.2 The concepts related to CSR
2.2.1 Business Ethics
2.2.2 Environment Protection
2.2.3 Sustainability Development
2.2.4 Public Relation

2.3 Theories related to CSR
2.3.1 Carroll’s “Pyramid of CSR”
2.3.2 Stakeholder theory
2.3.3 Triple bottom line theory
2.3.4 Three P's theory




8

2.1 Definition of CRS
The concept of CSR has appeared for a long time, but it is hard to find one common
definition about CSR. In different continents, people define CSR in different ways;
even in different countries, there are ways to define CSR. Even there is a research
about thirty-seven (37) ways to define CSR in “How Corporate Social Responsibility
is Defined: an Analysis of 37 Definitions” of Alexander Dahlsrud, a PhD fellow in
Department of Industrial Economics and Technology Management, Faculty of Social
Science and Technology Management, Norwegian University of Science and
Technology, Trondheim, Norway. According to Alexander Dahlsrud, there are “37
definitions of CSR were found and analyzed, among them definitions were primarily
of European and American origin, but definitions from India and Canada were also
included”, they “originated from 27 authors and covered a time span from 1980 to
2003, although most definitions were published from 1998 onwards”. So in this
research, definition of CSR, which are stated, can be considered as the popular
definition.
CSR can be defined simply by Mallen Baker, a writer, speaker and strategic advisor
on corporate social responsibility and Founding Director of Business Respect as
“how companies manage the business processes to produce an overall positive
impact on society”. CSR also can be understood as "social responsibility of

enterprises, including the expectations of society on economic, legal, ethics and
philanthropy for organizations in a given time" (Archie.B Carroll, 1979). Or the
World Business Council for Sustainable Development (WBCSD) defined
"Corporate social responibility is the continuing commitment by business to
contribute to economic development while improving the quality of life of the
9

workforce and their families as well as of the community and society at large" (CSR:
Meeting changing expectations, 1983, pg.3).

In short, CSR can be considered as the interaction of three dimensions, social,
environment, and economic. A modern company has to understand CSR concept,
balance these three dimensions, and adapt this concept into business strategy. Then
the company can satisfy higher and higher demands of customers, and be able to
sustainability development in business competition environment.

2.2 The concepts related to CSR
In order to understand more clearly about CSR, some concepts related to CSR will be
mentioned. These concepts are (1) Business Ethics, (2) Environment Protection, (3)
Sustainability Development, and (4) Public Relation.

2.2.1 Business Ethics
As mentioning above, a company should perform actions according to the
expectations of society in societal mores and ethical norms. This means business
ethics is considered as vital factor to gain success in operating business. Through
business ethics performance of a company, the attitude of company to basic values
can be figured out, thus, the company may be considered as honest, fairness, or
deceitful, unfair. Each values of company will be reflected in its decision-making,
10

policies, and business strategies. So, when a company has good values, it will have
business ethics, will obey the law better, and more successful in performing CSR.

2.2.2 Environment Protection
Even environment issue does not stay separately in CSR concepts, but it becomes the
most interest of society and the whole world recently. Therefore society,
governments, and environment organizations require companies to include suitable
plans in production process in order to protect environment. Environment
responsibility of company can be performed by actions which is to save natural
resources by saving materials, increasing productivity; reduce negative effects on
environment by eliminate exhaust to the air and disposal to river, local community.
Besides that, company can produce environment-friendly products, which certainly
get positive respond from customers and society.

2.2.3 Sustainability Development
“Sustainability development” (SD) has related to CSR concept, SD means taking
actions to guarantee better life quality for every people at the moment and next
generations. SD contains three components which are social equity, economic
growth, and environment, when these three components are intersected, SD is
reached. Social equity means the needs of people in society is recognized, and basic
human rights is protected. A company can contribute to SD by issuing supporting
policies and protecting employees’ rights. Economic growth is a sustainable way to
11

increase living standard of people in society, and companies has responsibility to
create wealth contributing to society, increase life quality of company’s staffs.
People cannot survive in low quality environment, where there is tsunami,
earthquake, flood, or drought. Therefore, environment needs improving, companies
and society should use recycled productions and input materials instead of natural
resources.

2.2.4 Public Relation
Public relation (PR) is familiar concept in marketing environment, and with the time
business man has realized the relationship between PR and CSR. CSR is about
performing social responsibility of company, company should fulfill responsibilities
to employees, shareholders, customers, society, the environment. Naturally, company
wants to announce these good actions to the world, then PR is used as one of useful
tools. PR will be used to report these actions, make company be more well-known in
community, and in society. But as in the interview done by Matthew Rochte in 4
th

May 2009, PR can be “both a blessing and a curse to CSR”. PR can bring company
either famous or harmful when company misunderstands about CSR and has mistake
in PR campaign.




12

2.3 Theories related to CSR
2.3.1 Carroll’s “Pyramid of CSR”
The more definitions about the concept of CSR exist, the more viewpoints on CSR
appear. But among many different viewpoints, the concept of Carroll, Archie B.,
which is called the “Pyramid of CSR” can be considered as the most well-known and
used widely in the world. The Carroll’s “Pyramid of CSR” includes responsibilities
of a company in four aspects, which are economic, legal, ethical, and philanthropy.

Figure 2.1 The Carroll’s “Pyramid of CSR”
(Source: Crane et al, 2008, pp. 57-58; Carroll, 1991, pp. 39-48)
In Figure 2.1, Carroll pointed out four responsibilities of a company, they are: (1) Be
profitable, (2) Obey the law, (3) Be ethical, (4) Be a good Corporate citizen. The first
responsibility, be profitable, is the goal of any company when establishing, it also
considered as the priority target because any company wants to earn profit. Being
profitable is illustrated by the effective growing of the company. But the economic
aspect in Carroll’s concept mentions about other things rather than only the profit
13

earned by company. Under economic aspect, a company has responsibility to provide
high quality products and services that serve customers’ needs and wants at
acceptable price to both the company and customers. And by supplying products and
services required by customers, company also commits to the efficient development
of company, and carries out the promise of maximize the investment of shareholders.
In short, one company should fulfill responsibilities in economic aspect before
moving to other aspects.
The second aspect which sets responsibility of company is legal aspect. In this field,
company has responsibility to obey the law, implement all related Laws, Provisions,
Regulations, Articles, or any other legal documents issued by the Government and
local authorities. Similarity, the process of manufacturing or performing products
and services of company are also meet legal requirements. A company which throws
all disposal of production process directly into environment cannot be considered as
well-performed responsibility in legal aspect. By obeying the law, company will
contribute in customers’ rights protection, environment protection, building fair
competition business environment. And it will help company stay longer in fierce
competition.

Business ethics is mentioned many times, especially in today business environment
where customers are harm by business frauds. This situation appears because some
companies accept to do anything to increase profit, earn more money, even basic
business ethics is crossed. Therefore, besides obeying the laws, company has to be
ethical. So, what is ethics, and how to be ethical? These questions are hard to answer
because ethics is intangible, and set by the understanding about just and fair of the
society. Then a company should take actions which are expected by societal mores
14

and ethical norms, and not break ethical norms to reach any goals. Moreover,
company should pay attention to the changing or supplementing in societal mores
and ethical norms, because, like other things, the society changes time to time.
After all, the highest aspect of social responsibility of a company is Philanthropy. By
doing philanthropy, company can improve people’s life, and make their reputation be
more well-known. There are many ways for company performs responsibility in this
aspect, for example company can raise a fund or contribute in other funds to do
charity for people who need help. Or in better way, company managers and staffs do
volunteer activities in local community, it helps closer the relationship between
company and people in the community, between people and people. By any action
company takes, the most important responsibility of company in this aspect is to
increase life quality for people.

2.3.2 Stakeholder theory
As everyone knows, a company is established with desire to earn profit, but to whom
the profit will be shared? There are two view-points for answer this issue,
shareholder view and stakeholder view. Under shareholder view, theorists state that
shareholders (or stockholders) of company are group of people whose the needs is
served first. It means that managers of company have duty to increase as much
wealth as possible for shareholders, the managers should maximize profit for
shareholders. However, recently, stakeholder view is appeared and attracted theorists

and researchers. In contrast to shareholder view, stakeholder view argues that
company should increase the benefits of other parties rather than only focus in
15

shareholders. Stakeholder theory states that besides relationship with stockholders,
company also has relationship with employees, suppliers, customers, government,
and society as a whole. Without any of these relationships, company cannot exist for
a long time in competitive business. Therefore, managers of company should include
the goals of increase welfare policies for employees, increase products or services
quality for customers, protect environment, and others into company strategy.

2.3.3 Triple bottom line theory
The meaning of “Triple bottom line” (TBL) was firstly mentioned in 1981, by Freer
Spreckley, but until 1998, in a book of John Elkington “Cannibals with Forks: the
Triple Bottom Line of 21st Century Business” concept of TBL was coined. In TBL
concept, theorist mentions three bottom lines, which are economic line, social line
and environmental line.






Figure 2.2 The triple bottom line
(Source: Susan Patel, Triple Bottom Line and Eco-Efficiency: Where to Start?
1
)

1

16

In traditional view of company managers and theorists, a company was established
in order to serve only profit making objective which is related to financial line. But
company managers should think above financial issue, they had better figure out how
to earn long term profit, sustainable profit. It is the time to consider social line and
environmental line together with financial line.

As everyone knows, a company cannot develop without good relationship with
employees and with local community, therefore considering social line is very
important. For short term, company can encourage employees by improving current
working conditions. But for long term, company should develop welfare policies,
apply activities or awards for hard-working employees, build corporate culture in
order to attract and employ high skills employees. In one research, company is
advised that with the purpose of having close relationship with local community,
company should do volunteer and communicate with local people. Taking actions
under this aspect, company creates healthy working environment, and ensures the
sustainability development of its business.

Environment line in TBL related to how companies reduce their negative impacts
into environment, and what actions companies take to reduce them. Company can
protect environment, which is the same priority of entire society, by applying
strategies. These strategies may be saving raw materials, reducing exhaust to the air,
recycling disposals. The International Association for Impact Assessment issued a
process to assess impacts of company to environment which called as Environmental
Impact Assessment (EIA). EIA is used to assess effects of actions, policies, projects,