VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS * Master of business administration thesis Le Thi Quynh Anh A STUDY ON CORPORATE SOCIAL RESPOSIBILITY OF VIETNAMESE CORPORATIONS * Le Thi Quynh Anh Master of business administration thesis 2008 Hanoi - 2008 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS LE THI QUYNH ANH A STUDY ON CORPORATE SOCIAL RESPOSIBILITY OF VIETNAMESE CORPORATIONS Major : Business Administration Code : 60 34 05 Master of business administration thesis Supervisor: Dr .VU XUAN QUANG Hanoi – 2008 i LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENT ACKNOWLEDGEMENT. iv TABLE OF CONTENT. vi LIST OF ABBREVIATIONS. viii LIST OF TABLES.
ix LIST OF FIGURES AND GRAPHS .1 Statement of the study .2 Objectives and Aims .4 Scope of Work .5 Data Sources and Processing .7 Significance and implications .5 CHAPTER 2 THEORETICAL FOUNDATION .1 The meaning of Corporate Social Responsibility .2 History of Corporate Social Responsibility .3 Fundamental Principles of Corporate Social Responsibility .4 The significance of Corporate Social Responsibility .5 Modern Forms of Corporate Social Responsibility .6 Benefits of CSR .7 Overview of Corporate Social Responsibility in the World .18 CHAPTER 3 RESEARCH AND DISCUSSIONS .23 vi LUAN VAN CHAT LUONG download : add luanvanchat@agmail.1 Review of Corporate Social Responsibility studies .2 The Case study of FPT .1 The case of FPT .2 CSR in FPT .3 The case study of Vinamilk.1 The case of VNM .2 Social activities in VNM.4 The case study of Asia Commercial Bank (ACB) .1 The case of ACB .2 CSR in ACB .5 The case study of ITA Group .1 The case of ITA Group .2 CSR in ITA Group .1 Overview of CSR implementation in Vietnamese Corporations .2 Comparisons among case studies .57 CHAPTER 4 CONCLUSIONS AND RECOMMENDATIONS .1 For the Studied Corporations .2 For the Vietnamese Government and Social –oriented organizations .67 vii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF ABBREVIATIONS ACB Asia Commercial Bank AFTA ASEAN Free Trade Area APEC Asia-Pacific Economic Cooperation CBT Computer-Based Training CEO Chief Executive Officer CoCs Code of Conducts CSR Corporate Social Responsibility EU European Union FDI Foreign Direct Investment FPT FPT Corporation IFC International Finance Corporation ITA Tan Tao Group MOLISA Ministry of Labor, Invalids and Social Affair SAP Social Action Program SMEs Small and Medium Enterprises VNM Vinamilk Corporation UNIDO United Nations Industrial Development Organization WTO World Trade Organization viii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES Table 2.1 Foundation principles of CSR and their modern expressions 14 Table 3.1 Challenges at different levels to CSR application in Vietnam 24 Table 3.2 Highlight from social activities of FPT Corporation 32 Table 3.3 Comparisons among case studies 53 Table 3.4 Similarities and Differences 54 ix LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURES AND GRAPHS Figure 2.1 All about CSR 22 Figure 3.1 CSR tools and instruments in Vietnam 25 Figure 3.2 Organization chart of FPT 28 Figure 3.3 Corporate structure of Vinamilk 35 Figure 3. CSR cost of FPT 56 Figure 3.5 ACB’s Funds for social activities 58 x LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 1 INTRODUCTION 1.1 Statement of the study Corporate Social Responsibility (CSR) has become an inescapable demand made by society for businesses all over the world. Whether the business is large or small, makes goods or provides services, operates at home or abroad, always tries to be socially responsible. Many companies have already done much to improve the social and environmental consequences of their activities and are being encouraged by the society, government and related organization to become more socially responsible.
As a result, these companies gain more and more benefits from CSR such as being more productivity, more loyalty of employees and fame without spending much money on advertising. In Vietnam, CSR is still reported mostly being applied by textile and shoe production companies as a way to enter international market like USA or European Union. These activities are supported with many training courses held by organizations like World Bank, UNIDO and Ministry of Labor and Social Welfare. In fact, CSR has been applied more widely in business community under multiple kinds from sponsorship or philanthropy activities to environment protection or social works.
For a better knowledge, this study will look into the theory of CSR, compare it with undergoing CSR activities and then give a full picture of CSR application in Vietnam. However, CSR is still a very new concept to many Vietnamese enterprises; a few large corporations have enough willingness and financial conditions to implement it. As a result, four leading corporations representing for 4 industries like Information Technology - FPT Corporation, Food and Beverage -Vinamilk, Banking - Asia Commercial Bank and Real estate - ITA Group will be taken 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com as examples to identify how Vietnamese corporations have applied CSR along with their business and what benefits they have achieved through CSR.2 Objectives and Aims In order to get a full knowledge of CSR application in Vietnam, the study will aim to achieve the following objectives: 1. Understanding the definition of CRS and its elements in term of theory.
Figuring out what modern activities related to CSR all over the world. Analyzing CRS activities of certain Vietnamese corporations and their achievements. Giving conclusions and recommendation for promoting CSR activities in Vietnamese business community.3 Research questions To fulfill the objectives of the study, the following research questions need to be answered: • What is CSR and what are its forms? • How does CSR develop and achieve all over the world and in Vietnam? • How have Vietnamese corporations applied CSR in their businesses? • What do these corporations aware about CSR and what do they gain from CSR implementation? 1.4 Scope of Work Four case studies will be taken in the research to describe and to discuss on CSR implementation in Vietnamese Corporations. They include: • Information Technology – represented by FPT Corporation (FPT) • Food and Beverage – represented by Vinamilk (VNM) 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com • Banking – represented by Asia Commercial Bank (ACB) • Real Estate – represented by Tan Tao Group (ITA Group) 1.5 Data Sources and Processing • Documents/Reports of UNDP/World Bank/ UNIDO on CSR from 2002 to 2008 • Reports of Vietnamese government on CSR in 2003, 2005 and 2007 • Documents of FPT, VNM, ACB and ITA Group from 2002 to 2005 1.6 Method This study is an empirical research which applied 2 methods: • Review of related literature/documentation.
• Interviewing relevant person. Review of Related Literature/Documentation: This will examine the multidisciplinary theories of and empirical studies on corporate social responsibility in the literature. Beside, it will help to compare between theory and practical activities. Interview: Questions will be developed and structured interviews are conducted.7 Significance and implications This study will contribute to the body of knowledge and understanding on CSR in Vietnam.
It will also help Vietnamese enterprises enrich their knowledge on CSR for better application in cooperation with business activities.8 Limitations While the study examines 4 different industries, represented by 4 leading corporations, there are limitations on data sources for analyzing and giving 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com out discussions and conclusions. Besides, the inconsistent reporting system of different corporations on CSR is also another limitation for the study.9 Expected Results The study will give a better understanding on the CSR definition and its elements as well as the modern CSR activities in the World and in Vietnam. Vietnamese corporations’ CSR awareness, implementation and achievements is also figured out through successful case studies. Moreover, some suggestions for promoting CSR in Vietnamese enterprises and the management of the Vietnamese government and social-oriented organizations are recommended at the end of the study.10 Disseminations The result of study will be useful for many target groups.
Many Vietnamese enterprises might be interested in the recommendations and the conclusions of the study, from which they can get useful information on how to react in CSR-related issues and how to benefit from them. The frame of reference on the other hand could be interesting for NGOs and Vietnamese government because of the more general information about CSR and different view of enterprises on CSR. The findings in the theory will help them to set up a more suitable and appropriate scheme for their CSR training and evaluating programs.11 Follow-up Further study will be taken on improvement of CSR understanding and implementation among Vietnamese enterprises based on the experience and achievements of large corporations. Other way of study will be analyzing the impact of understanding level to CSR implementation in Vietnamese enterprises in some provinces particularly and all over Vietnam generally.
4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.12 Short Introduction The research is divided into 3 parts which are including: Chapter 2: Theoretical Foundation: will give a relevant theoretical background to the study. Chapter 3: Research and Discussions: In this chapter, CSR application in Vietnam will be reviewed. Four leading corporations representing for four industries will be analyzed on their awareness, real activities, cost and benefits. They are including FPT Corporation, Vinamilk, Asia Commercial Bank and Tan Tao (ITA) Group.
At the end of this part, discussions will be given out after comparisons. Chapter 4: Conclusions and Recommendations: Conclusions and recommendations will be noticed for better implementation of CSR in Vietnamese enterprises. 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 2 THEORETICAL FOUNDATION 2.1 The meaning of Corporate Social Responsibility Corporate Social Responsibility (CSR) means that a corporation should be held accountable for any of its actions that affect people, their communities, and their environment. It implies that negative business impacts on people and society should be acknowledged and corrected if at all possible.
It may require a company to forgo some profits if its social impacts are seriously harmful to some of its stakeholders or if its funds can be used to promote a positive social good. Although the concept of CSR has been developing since the early 1970s, there is no single, commonly accepted definition of CSR. Below some examples of CSR definitions are showed: "CSR is defined as operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business. CSR is seen by leadership companies as more than a collection of discrete practices or occasional gestures, or initiatives motivated by marketing, public relations or other business benefits.
Rather, it is viewed as a comprehensive set of policies, practices and programs that are integrated throughout business operations, and decision-making processes that are supported and rewarded by top management." Source: Business for Social Responsibility (http://www.org) "CSR is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large” First definition of CSR in WBCSD CSR dialogue in The Netherlands. 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com "CSR is a public movement, which has gained more momentum as citizens demand corporations to be accountable for their impacts. Consumers, investors and employees alike are recognizing the power held by corporations and efforts are being made on several levels to create global change with the hope that earth will become a better place." Source: CSR Wire “CSR is the concept that an enterprise is accountable for its impact on all relevant stakeholders. It is the continuing commitment by business to behave fairly and responsibly and contribute to economic development while improving the quality of life of the work force and their families as well as of the local community and society at large.” Source: European Union “CSR is a term describing a company's obligation to be accountable to all of its stakeholders in all its operations and activities.