ĐẠI HỌC QUỐC GIA HÀ NỘI TRƯỜNG QUẢN TRỊ VÀ KINH DOANH --------------------- LEE GWANHYEONG SUPPORT STRATEGIES OF INDUSTRIAL BANK OF KOREA FOR CORPORATE SOCIAL RESPONSIBILITY: A FOCUS ON KOREAN COMPANIES IN MANUFACTURING INDUSTRY IN VIETNAM CÁC CHIẾN LƯỢC HỖ TRỢ CỦA NGÂN HÀNG CÔNG NGHIỆP HÀN QUỐC VỀ TRÁCH NHIỆM XÃ HỘI CỦA DOANH NGHIỆP: TẬP TRUNG VÀO CÁC CÔNG TY HÀN QUỐC TRONG NGÀNH SẢN XUẤT Ở VIỆT NAM LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH Hà Nội - 2024 ĐẠI HỌC QUỐC GIA HÀ NỘI TRƯỜNG QUẢN TRỊ VÀ KINH DOANH --------------------- LEE GWANHYEONG SUPPORT STRATEGIES OF INDUSTRIAL BANK OF KOREA FOR CORPORATE SOCIAL RESPONSIBILITY: A FOCUS ON KOREAN COMPANIES IN MANUFACTURING INDUSTRY IN VIETNAM CÁC CHIẾN LƯỢC HỖ TRỢ CỦA NGÂN HÀNG CÔNG NGHIỆP HÀN QUỐC VỀ TRÁCH NHIỆM XÃ HỘI CỦA DOANH NGHIỆP: TẬP TRUNG VÀO CÁC CÔNG TY HÀN QUỐC TRONG NGÀNH SẢN XUẤT Ở VIỆT NAM Chuyên ngành: Quản trị kinh doanh Mã số: 8340101.01 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS. Hoàng Đình Phi Hà Nội - 2024 DECLARATION The author confirms that the research outcome in the thesis is the result of author‟s independent work during study and research period and it is not yet published in other‟s research and article. The other‟s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given. The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business, and the laws for above-mentioned declaration.
Date 29th April 2024 Gwanhyeong Lee ACKNOWLEDGEMENT One day, I had the thought of studying in Vietnam. My company IBK provided the opportunity, and my family gave me the courage to pursue it. When I look back, my heart is filled with happy memories, mixed with a touch of regret for how quickly time flew by. First, I would like to express my deepest gratitude to Prof.
Hoang Dinh Phi for his invaluable support in helping me complete my thesis. He was consistently student-focused, never hesitating to offer passionate and genuine advice. Without the invaluable guidance he provided throughout the thesis- writing process, I would not have been able to complete my work. Beyond academics, his thoughtful consideration was evident in various aspects of school life, allowing me to study for two long years without any difficulties.
I am also grateful to everyone I met in Vietnam, both within and outside the school. I gained a wealth of personal experiences, participating in major school events and joining various large and small festivals where I got to interact with my fellow students. The experience of studying with them in Vietnam and sharing their culture and emotions will be a great asset for me in the future. Lastly, I want to say thank you to my beloved wife, Seo Jin-Young, who has always believed in me and supported me.
Without her encouragement, my life in Vietnam would not have been possible. And I believe that my greatest joys, my children Lee Jae-Yul & Jae-A, also gained significant insights in Vietnam that they might not have experienced in Korea. I was truly happy during the time I spent studying as a student. Date 29th April 2024 Gwanhyeong Lee TABLE OF CONTENTS LIST OF ABBREVIATION.
i LIST OF TABLES. iii LIST OF FIGURES. iv TITLE CHAPTER. Aims of Research.
Objects of Research. Scope of Research. BASIC THEORY ON SUPPORT STRATEGY AND CSR MANAGEMENT. Concept and Origin of CSR Management.
Corporate Motives and Advantages of CSR Adoption. Banks and Corporate Social Responsibility. Support Strategy of Banks for CSR. Revitalization of CSR Performance-linked Financial Intermediaries 20 1.
Improve CSR Value Measurement and Evaluation Infrastructure. Revitalizing the Market Transaction of CSR Value. ANALYSIS OF CSR MANAGEMENT OF SOUTH KOREAN INDUSTRIAL FIRMS IN VIETNAM. Vietnam's Economic Growth and Industrialization.
Characteristics of Vietnamese Companies. Characteristics of Korean Companies Operating in Vietnam. Vietnam‟s Social Issues and the Need for CSR. Characteristics of CSR of South Korean Manufacturing Companies Operating in Vietnam.
CSR Adoption and Practice by Companies in Vietnam. IBK'S STRATEGY TO SUPPORT CSR MANAGEMENT OF KOREAN MANUFACTURING COMPANIES OPERATING IN VIETNAM 49 3. The Need for Institutional Financial support for CSR Management. Strategies for Financial Support of Industrial Bank of Korea for CSR Management of Korean Companies Entering Vietnam.
IBK and CSR activity. Evaluation and Selection of IBK support strategy for CSR of South Korean Manufacturing Companies in Vietnam during 2025-2030. Proposal of Solutions to implement IBK Strategy to support CSR of South Korean Manufacturing Companies Operating in Vietnam. 66 CONCLUSION, LIMITATION AND IMPLICATION.
77 LIST OF ABBREVIATION AEC ASEAN Economic Community CEO Chief Executive Officer COVID-19 Coronavirus disease 2019 CSR Corporate Social Responsibility CSV Shared Value Creation DEA Data Envelope Analysis DJSI Dow Jones Sustainability Index EFE External Factor Evaluation ESG Environmental, Social, Governance FDI Foreign Direct Investment FIC Firm's innovation capability GRI Global Reporting Initiative HKCSS Hong Kong Council of Social Service IBK Industrial Bank of Korea IFE Internal Factor Evaluation ILO International Labor Organization ISDA International Swaps and Derivatives Association ISO International Organization for Standardization KIET Korea Institute for Industrial Economics KoTRA Korea Trade-Investment Promotion Agency MPI Ministry of Planning and Investment PLS-SEM Partial Least Squares Structural Equation Modeling PwC Price Waterhouse Coopers SME Small and Medium-sized Enterprise STEM Science, Technology, Engineering, and Math TPP Trans-Pacific Strategic Economic Partnership i UN United Nations VCCA Vincom Center for Contemporary Arts VIOD Vietnam Institute of Directors VNU Vietnam National University VPV Volunteers for Peace Vietnam ii LIST OF TABLES Table 1. Advancement of theory and basic background of the CSR. Examples of CSR performance-linked financial derivatives. Comparison of major CSR valuation agencies.
Example of CSR valuation criteria. Summary of survey results on CSR performance status of Vietnamese companies. Regulation bills for social issues in Vietnam. Example of CSR activities in Vietnam.
Summarized IFE for IBK‟s CSR financial support. Summarized EFE for IBK‟s CSR financial support. General Assessment and Comparison of Firm‟s Competitiveness. TOWS matrix for IBK‟s CSR financial support strategies.
Greenhouse Gas Emission Trading Scheme: IBK Transaction Volume and Proportion. 68 iii LIST OF FIGURES Figure 1. CSR pyramid for advanced country and developing country>. Firm‟s Sustainable Competitiveness Pyramid.
CSR management of financial institutes. A scheme representing CSR performance-linked financial intermediation. A schematic representing Carbon Emission Allowance Trading Market. Actions across seven sectors in Vietnam could result in net-zero emissions by 2050.
GDP growth rate and per capita GDP by stage of Vietnamese reform and openness Policy. Industrial structure of Vietnam. Status of Foreign Investment in Vietnam by Major Industries. Top 100 Vietnamese companies (a) classified by type of ownership and (b) by industry.
Survey on business prospects in Vietnam for the next 2~3 years. Example of CSR activity: Samsung. Example of CSR activity: Hyundai Motor. Example of CSR activity: Honda Vietnam.
Example of CSR activity: Vin group. IBK's CSR Management Policy. CSR activity of IBK: 2022 well-digging. Survey results: Which of the following is the bank's support strategy that you think is most urgent?.
Survey results: Which method of CSR performance-linked financing is most preferred by the company you work for?. Survey results: What is the most important criterion for selecting CSR value measurement and evaluation criteria for Korean manufacturing companies in Vietnam?. Survey results: (a) Do you know that Vietnam plans to introduce a carbon emissions exchange by 2028? (b) Is the company you work preparing for a carbon credit transaction?. Composition of Shareholders and Credit Rating of the IBK.
Scheme of IBK-type CSR Self-Diagnostic Tool. Rationale In an era marked by intensified global competition, corporations are progressively penetrating international markets, sparking heightened interest in these global entities within consumer markets. Notably, Corporate Social Responsibility (CSR) initiatives undertaken by companies in new locales are acknowledged as crucial for their success. Beyond mere profit-oriented endeavors, CSR activities—rooted in adherence to both domestic and international legislation, ethical standards, and attuned to the diverse needs of stakeholders, including consumers—yield significant societal benefits.
The burgeoning demand for CSR, driven by increasing consumption patterns and a growing awareness of ethical consumerism globally, underscores its importance. For global corporations entering local markets, maintaining a reputation as a 'good company' becomes pivotal in assessing sustainable growth and regional development, thus positioning CSR as integral to a company‟s viability beyond mere ethical governance. In 1987, Vietnam introduced the Foreign Investment Law, a strategic move to attract foreign capital, catalyzing significant economic growth and the formulation of diverse economic development policies. Despite such progress, Vietnam's economic landscape faces scrutiny for its market management deficiencies, giving rise to various societal challenges, including income disparity, labor rights protection, environmental issues, and educational inequalities.
Consequently, an increased consumer interest in CSR activities has emerged, positioning CSR management as a vital strategy for numerous international firms in Vietnam. Since 2014, Korea has led in Foreign Direct Investment (FDI) in Vietnam, fueled by significant investments from conglomerates like Samsung and LG, making it a leading investor nation in 1 Vietnam. This investment has substantially contributed to Vietnam's export sector and employment, supporting approximately 700,000 jobs. Hence, CSR management has become critical for Korean enterprises operating in Vietnam.
However, the implementation of CSR practices presents challenges, particularly concerning the costs associated with CSR initiatives, prompting delays in adoption among many firms. In this context, financial institutions play an indispensable role in mitigating these financial hurdles and promoting the effective integration of CSR measures. This paper examines Vietnam's economy, companies, and their CSR management status, and analyzes Industrial Bank of Korea (IBK)'s support strategies for efficient CSR management of Korean companies entering Vietnam. The financial support strategy presented in this study can be expanded to all companies in Vietnam, not only Korean companies that have entered Vietnam, and ultimately aims to strengthen the competitiveness of financial institutions in Vietnam to expand their business networks.
Literature Review According to the research results of Wook Bin Leam (2019), companies are gaining long-term advantages such as image improvement and stakeholder conflict reduction through CSR activities. From these results, corporate social responsibility activities contribute to the improvement of corporate value. This study increased the validity through a wider sample and analysis of various detailed items, highlighted the importance of corporate social responsibility activities, and contributed to providing information to stakeholders. According to the study of Dongphil Chun et al.
(2020), a study on how much CSR activities affect management performance was conducted in consideration of the growth stage of venture companies. Data envelope analysis (DEA) was examined to classify the growth stages of Korean venture companies and examine the effects of CSR activities by growth stage on management 2 performance. As a result of the analysis, it was found that CSR activities did not affect management performance during the start-up and early growth periods. It was confirmed that companies that have performed active CSR activities since the high growth period have superior management performance compared to companies that have not conducted CSR activities.
Finally, the scale efficiency of venture companies from the high growth period was found to be the best when they did not do CSR. Meanwhile, looking at the preceding literature on CSR management in Vietnam, Horim Choi (2019) said that the application of CSR in Vietnam requires cooperation from various stakeholders such as the government, local communities, and foreign-invested companies. He argued that the government should improve the national legal system to promote CSR and prevent companies from avoiding social responsibility, and that international cooperation should be promoted by upgrading related regulations and laws. It is also important to apply CSR to the university-level curriculum and improve the working environment, and that companies should improve their internal perception and consider long-term sustainable development.