MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS CORPORATE SOCIAL RESPONSIBILITY IN THE VIETNAMESE FOOD INDUSTRY: SITUATION AND POLICY RECOMMENDATIONS Specialization: International Trade Policy and Law LE THI KIM PHUNG Hanoi – 2019 MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS CORPORATE SOCIAL RESPONSIBILITY IN THE VIETNAMESE FOOD INDUSTRY: SITUATION AND POLICY RECOMMENDATIONS Specialization: International Trade Policy and Law FULL NAME : Le Thi Kim Phung Student ID’s number : 1606060030 Supervisor : Dr. Ly Hoang Phu Hanoi – 2019 i DECLARATION I hereby declare that this master thesis is the scientific research of my own which made on the basis of the theoretical studies, field surveys and under the direction and supervision of Dr. Ly Hoang Phu. The research contents and results of this thesis is completely honest.
These data and documents for the analysis, review and evaluation were collected from various sources which are fully listed in the reference list. I am fully responsible for the content of this master thesis as well as this declaration. Hanoi, 14 March 2019 Author Le Thi Kim Phung ii TABLE OF CONTENTS DECLARATION i TABLE OF CONTENTS ii ACKNOWLEDGEMENT v LIST OF ABBREVIATIONS vi LIST OF TABLES vii LIST OF FIGURES vii ABSTRACT viii INTRODUCTION 1 1. Scope of research 7 6.
Thesis outline 7 CHAPTER 1: THEORETICAL BACKGROUND OF CORPORATE SOCIAL RESPONSIBILITY 9 1. Determinants of CSR. Models of CSR 13 1. Carroll’s CSR pyramid.
Wayne Visser’s CSR 2. The Consumer-driven Corporate Responsibility (CDCR) Model. CSR Practices in Developing Countries 18 1. Various drivers for CSR in developing countries.
CSR Pyramid for developing countries.23 iii 23 CHAPTER 2: CSR APPLICATION IN VIETNAMESE FOOD INDUSTRY 26 2. Overview of Vietnamese food industry 26 2. Vietnam research context 29 2. CSR in Vietnam.
Key stakeholders in CSR in Vietnam. CSR in Vietnamese food industry 37 CHAPTER 3: CASE STUDIES 40 3. Vietnam Dairy Products JSC 40 3. Overview of Vietnam Dairy Product JSC.
Human nutrition and safety. Environment and energy. Local economic development. Support and community development.
Overview of CP Vietnam. Overview of Heineken Vietnam. Prosperity of people. Prosperity of planet.
Overview of Vedan Vietnam. Social responsibility activity.55 iv CHAPTER 4: POLICY IMPLICATION 56 4. Evaluation of CSR application in Vietnam food industry 56 4. Future CSR development and challenges in Vietnamese food industry 65 4.
Recommendations to the companies. Recommendations to the government bodies.70 CONCLUSION 72 REFERENCES v ACKNOWLEDGEMENT During the completion of this master thesis, I received the guidance and valuable help from the lecturers, siblings and friends. With great respect and deep gratitude, I would like to express sincere thanks to: Dr. Ly Hoang Phu, who wholeheartedly helped, supported and encouraged me from the initial to the final level of this dissertation.
He provided me with comprehensive guide from choosing the topic, outlining the thesis and editing this research. Professors and lecturers, who not only spread profound knowledge and information in the fields of economy and law but generated strong motivation for me while I was taking this course as well. Last but not least, I would like to express my sincere thanks to my family, my colleagues and my friends, who have always by my side encouraging, supporting, contributing valuable ideas and giving me favourable conditions for me to complete this scientific research. vi LIST OF ABBREVIATIONS Abbreviation Full name ASEAN Association of South East Asian Nations CIEM Central Institute for Economic Management CDCR Consumer-Driven Corporate Responsibility CSR Corporate Social Responsibility FDI Foreign Direct Investment GDP Gross domestic product GMP Good Manufacturing Practices ISO International Organization for Standardization HACCP Hazard Analysis and Critical Control Points SME Small-and-Medium-Size Enterprise VCCI Vietnam Chamber of Commerce and Industry VGCL Vietnam General Confederation of Labour UN United Nations UNIDO United Nations Industrial Development Organization WB World Bank WTO World Trade Organization vii LIST OF TABLES Table 3.1: Occupational health and safety index in Vinamilk 43 Table 3.2: Occupational health and safety index in Vinamilk 45 Table 4.1: Summary of CSR system and activities of Vinamilk 57 Table 4.2: Summary of CSR system and activities of CP Vietnam 59 Table 4.3: Summary of CSR system and activities of Heineken Vietnam 61 Table 4.4: Summary of CSR system and activities of Vedan Vietnam63 LIST OF FIGURES Figure 1.1: Era of CSR 9 Figure 1.2: Carroll's CSR Pyramids 14 Figure 1.4: The Consumer-drive Corporate Responsibility model (Claydon 2011) 17 Figure 1.
CSR Pyramid for developing countries (Visser, 2008, 489) 23 Figure 3.1: Production cycle of Vinamilk 41 Figure 3.2: The supply chain system of CP Vietnam 47 viii ABSTRACT Corporate social responsibility is the corporates commitments for stable economic development through that improve the quality of life of workers, their family, community, and society in a manner that benefits both corporate and social development. The good application of CSR by the companies does not only ensure their sustainable development but also the society. Today big enterprises in Vietnam often brings the CSR into their own business strategy and the ones with export market. Meanwhile, opportunities and benefits of the CSR have not been seen by the medium and small enterprises, some of them have even misunderstood or intentionally misunderstood the importance of CSR.
It is the fact that for public businesses who implement social responsibility well, their benefits do not decrease but increase. The benefits that businesses gain when implementing social responsibility include reducing costs, growing revenue, increasing brand value, decreasing the rate of quitting jobs, improving productivity and more possibilities to access the new markets. This thesis focused on analyzing the corporate social responsibility, roles of the implementing the CSR and some matters of implementing the CSR in Vietnam food industry. Using qualitative methodology with a multiple case-study approach, this thesis explores the driving factors of CSR strategies and implementation in the Vietnamese food industry, which is intended to conduct only four cases of big corporations.
The thesis contributes to the body of knowledge and slight reality on CSR practices in a developing-country context as well as Vietnamese food industry. Research Rationale Corporate social responsibility (CSR) has attracted the unprecedented attention of governments, non-government agencies, civil society and businesses in developing countries. The interest was heightened when recent significant economic growth has been accompanied by unsustainable and irresponsible business practices and their consequent environmental and social problems in these countries. For more than a decade, the number of companies all over the world recognizes the economic benefits of CSR practices.
CSR commitments go beyond the desire of profit growth and show that the company is fully aware of its responsibility to employees, customers, communities and the environment. A variety of companies have used CSR as a new business strategy when they realize that it can help improve the financial situation, employees' motivation and boost customer loyalty as well as company trademark. When markets become more and more difficult and consumers become "smarter", products are not only required to ensure quality but also require to ensure environment. In the context that Vietnam is integrating more and more deeply into the world economy, the issue of CSR needs even more attention.
Now, companies not only compete with price and quality of products but also compete with commitments to take care of life, working environment for employees, activities that contribute to the development of community, protecting consumers' interests, protecting the natural environment towards sustainable development. Although CSR is a relatively new concept for many Vietnamese enterprises, it is really an urgent requirement today. In order to successfully penetrate large but fastidious markets such as Japan, the United States and Europe, companies need to strengthen their research into the ability to apply international standards of CSR such as the ISO14000, SA8000 or near standards. This is ISO26000 to express our responsibility to society.
Many Vietnamese enterprises believe that CSR standards are technical barriers to enter the international market and they are reluctant to implement CSR (Twose and Rao, 2003). However, the benefits of CSR bring to businesses are very big. The 2 immediate benefit is to have more orders from purchasing businesses that require CSR standards, and long-term benefits for businesses themselves such as improving business relations, reducing costs and increasing productivity, reducing recruitment costs and train new employees, increasing revenue, brand value and access to new markets. Therefore, enterprises need not only to raise awareness of CSR but also to implement CSR effectively in enterprises.
In fact, CSR awareness of Vietnamese enterprises is not comprehensive and the implementation of CSR in Vietnamese enterprises appear passive and reluctant in the uptake of CSR because foreign partners requires compliance with their code of conduct (Twose and Rao, 2003). Some businesses understand that CSR is for charity purpose. Some businesses hesitate to implement CSR because they assume CSR programs are very expensive. There are not many businesses being fully aware of CSR and integrate CSR activities effectively in the production process of the enterprise.
They still view CSR as a cost or a compliance issue pushed by global buyers rather than a sustainable investment to gain a competitive advantage. Therefore, in the last few years, we have seen many cases of violation of CSR exposed and condemned by the social community. There is a need for CSR studies in Vietnam to promote the implementation of CSR in the business community because CSR have been a part of increasing importance in the development process of enterprises. CSR programs can be considered in the strategic management process of the business, which can be integrated into the daily operations of the business and thereby create a competitive advantage for the business.
The Vietnamese food industries are the focus of this research because of their economic and social significance as well as prevalent social issues. These industries play a significant role in the economy of Vietnam. Vietnam’s food sector accounts for 20% of GDP and Vietnam’s food manufacturing sector grew at 9. However, current production and management practices of industry players have worrying social implications.
Concerns related to human rights, labour issues (minimum wages, insurance, occupational safety) and environmental problems have been raised by international 3 governance agencies (Vietnam, 2010). Therefore, raising awareness and promoting CSR implementation in the Vietnamese food industry is really an urgent issue. The most typical cases include violations of CSR in food safety. The thesis contributes to the body of knowledge on CSR practices in a developing-country context.
First, the prominent form of implicit and informal internally-focused CSR in labour strongly reflects the national institutional context and political economy in which the notion of employee and social welfare is embodied in socialist ideology and the perceived role of businesses as job and income generators in a developing country. Moreover, the thesis adds a nuanced understanding of CSR development in a developing-country context in which CSR concept is diffused, translated and adapted at the State, industry, company and manager levels and manifested in variations of CSR expressions. From the above reasons, the author selected the topic "Corporate social responsibility in the Vietnamese Food Industry: situation and policy recommendations". Literature Review While a significant amount of researches have been conducted in the fields of CSR, there are not many researches focusing on CSR in Vietnamese Food Industry.
The main reason is that the current literature on CSR in Vietnam reveals a sketchy picture of how CSR is conceptualised, driven and implemented by business. However, researches on international CSR as well as CSR in Vietnam are really huge collection. This section shall make a general assessment on several typical and prominent researches. First of all, Social Responsibilities of the Businessman (Howard R.
Bowen, 1953) is a book which the term CSR officially appeared for the first time for the purpose of propaganda and appealing to property managers and charity to reimburse damages caused by businesses harming society. The A to Z of Corporate Social Responsibility (Wayne Visser) is really a must-have textbook in economics of lecturers, students, economists and lawyers.