UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Le Thanh Truc CORPORATE SOCIAL RESPONSIBILITY AND EMPLOYEE SATISFACTION: A STUDY OF VIETNAMESE FIRMS IN HCMC MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2012 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Le Thanh Truc CORPORATE SOCIAL RESPONSIBILITY AND EMPLOYEE SATISFACTION: A STUDY OF VIETNAMESE FIRMS IN HCMC ID: 104214046 MASTER OF BUSINESS (Honours) SUPERVISOR: Assoc. LE NGUYEN HAU Ho Chi Minh City – Year 2012 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com DECLARATION I certify that the work in the thesis entitled “Corporate Social Responsibility and Employee Satisafction: A study of Vietnamese Firms in HCMC” is the result of my own research and has not been submitted for a higher degree to any university or institution other than University of Economics HCMC. I also certify that the thesis has been written by me. Any help and assistance that I have received in my research work and the preparation of the thesis have been appropriately acknowledged.
In addition, the thesis was approved by ISB - University of Economics HCMC. Signed Date: December 2012 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKOWLEDGEMENTS Firstly, I would like to thank sincerely to The ISB Mbus Program, The ISB board in VietNam and all the professors who have been helping me a lot to equip me the intellectual knowledge, the most favorable environment conditions during the study and implementation of this thesis. With respect and deep gratitude, I would like to express my great gratitude to Assoc. Le Nguyen Hau – my supervisor, for his instruction, enthusiastic helping, intensive support, caring and oriented advises on my writing.
Secondly, I would like to take this opportunity to thank all the organizations, individuals and businesses which have collaborated to share information, give me a lot of resources, responses and useful material for the subject of my study, especially for the fulfilling of research questionnaires. Without these help, I could not believe that my study would come to an end as today. Lastly, I would like to send my deep gratitude to my family, friends, colleagues who have encouraged and supported me very much during the learning process, work and completion of this thesis. Ho Chi Minh City, Vietnam December 30th 2012 Le Thanh Truc iii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT Corporate social responsibility (CSR) has received an increasing amount of attention from practitioners and scholars alike in recent years.
The growing awareness of this issue has raised the questions about how responsible behavior of firms would impact employees’ well-being. Because employees are primary stakeholders who directly contribute to the success of the company, understanding employee reactions to CSR may help answer lingering questions about the potential effects of CSR on firms as well as illuminate some of the processes responsible for them. Based on the survey of 391 employees and managers in Ho Chi Minh City (HCMC), measures of internal and external social responsibility are found to be positively associated with job satisfaction. There are 7 factors effect positively employees’ job satisfaction: CSR to environment and generation, CSR to society, CSR to customer, CSR to employee life, CSR to government, CSR to employee development opportunity and CSR to competition.
CSR to society and CSR to employee life are found to be two most important factors, other factors are sequenced as CSR to environment and generation, CSR to employee development opportunity, CSR to customer, CSR to competition, CSR to government. The analysis results also show that CSR factors which impact on employee satisfaction and CSR factors which impact on manager satisfaction (middle and low level managers) have the same trend. Based on the statistical result, managerial implications have been dicussed and recommendations are provided to improve CSR activities in firms in Ho Chi Minh City. iv LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENT Acknowledgement Abstract List of tables List of figures Chapter 1 Introduction.
6 Chapter 2 Literature Review .1 The concept of Corporate Social Responsibility .2 Corporate Social Responsibility Theories .2 Caroll’s CSR conceptualization - Carroll’s CSR Pyramid .3 Previous research about Corporate Social Responsibility and Employees’ satisfaction. 12 v LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Chapter 3 Research Methodology .1 The primary data .3 Field Work Organization .4 Assessment of Scale Reliabiliy .5 Assessment of Scales’ Unidimensionality, Discriminant Validity and Convergent alidity .6 Multi Regression Analysis. 29 Chapter 4 Data Analysis .1 Sample Descriptive Statistic .2 Assessment and Refinement of Measurement Scales. 31 vi LUAN VAN CHAT LUONG download : add luanvanchat@agmail.1 Refinement of Measurement Scales .2 Exploratory Factor Analysis (EFA) .1 The Independent Factors .2 The dependent Factor .3 Revised Conceptual Model .1 Regression analysis and Hypotheses testing .3 Moderators: Regression analysis with employees’ view and managers’ view .1 Regression analysis with employees’ view .2 Regression analysis with managers’ view.
56 Chapter 5 Conlude and Recommendation .2 Summary of findings .4 Limitation and further research. 63 References Appendix 1: Questionnaire (English Version) vii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Appendix 2: Questionnaire (Vietnamese Version) Appendix 3: Rotated Component Matrix Appendix 4: Charts of testing Hypotheses Appendix 5: Charts of testing Moderators viii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES Table 4.1 Gender of respondents, Working experience, Enterprise ownership .2 Reliability testing results .3 KMO and Bartlett’s Test .4 Total Variance Explained .5 Rotated Component matrix .6 Cronbach’s Alpha for new factors .7 KMO and Bartlett's Test for employees’ satisfaction .8 Total Variance Explained .10 Results of hypotheses testing .12 Results of hypotheses testing with employees’ view.13 Results of hypotheses testing with managers’ view. 57 ix LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURES Figure 2.1 The Pyramid of Corporate Social Responsibility (Carroll, 1991) .2 The proposal research model .1 The research process. 17 x LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 1 Chapter 1 INTRODUCTION This chapter introduces the research background, raising the problems, the objectives, scope and the process of the research were defined in order to solve.1 Overview The growing of global economy makes the quality of life rising fast and more comfortable.
However, in that process people destroy environment and human life. The world development is accompanied by wrong side of society such as: natural disasters, environmental pollution, resource depletion, discriminatory treatment, labor exploitation and toxic products, etc. Our earth will be quickly destroyed soon by ourselves. So is it reasonable to continue to maximize profits at any cost? Will we accept to have a short life left on earth? Or is it time we all get the same serious look about developing world responsibly and sustainably? The question has made a major concern from 1953 to date in the process of business development and the concept of Corporate Social Responsibility (CSR) also was originated.
Currently, CSR has become a real movement and growth in worldwide. For the current Euro-American countries, consumers are interested in not only the quality of end product but also the way that production method which are friendly with environment, community, human healthy or not. For example, there have been many movements to boycott products such as fringe food, carbonated soft drinks, fur products, etc. With social pressure, the enterprise has made CSR initiative as one of the essential and serious activities, even drafting for their own CSR strategy.
For example, a series of programs have been implemented such as saving energy, reducing carbon emissions in the production and using recycled materials, solar energy, improving water sources, building schools, building epidemic diseases research center in developing countries, LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2 improving the working environment of employees and helping surrounding communities. Companies are known as CSR leaders: TNT, Google, Intel, Unilever, Coca-Cola, GE, Nokia , HSBC, Levi Strauss, Bayer, Dupont, Toyota, Sony, Samsung, etc. With the ongoing effort to implement CSR, corporations in the world today have achieved a lot of success from the increasing employee satisfaction, reducing operating costs to enhance the prestige image in public. Therefore, the implementation of the CSR is as a key strategy for sustainable development of enterprises.
CSR in Vietnam The state of CSR in Vietnam is intimately linked to doi moi (renovation) and the effects of globalization. In December 1986, Vietnam’s Community Party adopted a ‘market- oriented socialist economy under state guidance.’ Since then, the Vietnamese state and society have undergone dramatic transformations. Vietnam has been transformed from a state-led economy to a more market-oriented one. There were challenges to state- owned enterprises, including foreign investment and donor pressure.
Joining the World Trade Organization (WTO) continued to drive the shift from state to market orientation. With this shift, CSR, an initiative of the market, comes to the fore. CSR plays a major role in the environmental and social sustainability of the country. The forces of doi moi and globalization brought the pressure of international codes of compliance to Vietnamese firms.
Not only did citizens become more aware of the importance of social responsibility, but the legal code of the country now had greater need to adapt to meet and enforce international standards. Although Vietnam did not adopt an explicit CSR policy, the government began to address some CSR-related issues within the sustainability strategy called Vietnam Agenda 21. This document, officially signed by the prime minister in 2004, provides a strategy for sustainable development in Vietnam. It puts people at the center of development, but says that environmental protection is inseparable from benefits for people.
It aims at a balance LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3 between the interests of present and future generations so that actions taken now do not imperil the well-being of the future. The strategy calls for training, workshops and media outreach to improve understanding of sustainable development and the management capability to achieve it. Agenda 21 allocates budget for these activities and calls for efforts to strengthen international cooperation on sustainable development. In Asia, the trend of interest in CSR is increasing but the development of CSR is still relatively low.
In particular, Vietnam is one country that CSR concerns have been risen fast. CSR was first introduced into our country through the activities of multinational companies investing in Vietnam. The contents of CSR performance in these companies are basic and effective: "I love Vietnam" - Honda Vietnam, educational programs for personal hygiene for children in the mountainous provinces of Unilever; computer training program TOPIC64 of Microsoft, Qualcomm and HP; supported programs surgery of congenital heart defects and supporting victims of Can Tho bridge collapse by VinaCapital, Samsung; vision rehabilitation program for poor children by Western Union's, etc. For domestic enterprises, the initial concern for CSR in the export enterprises such as garment and footwear (focusing on the treatment of workers and applying the good work).
The Vietnam Business Links Initiative, a multi-stakeholder initiative, developed a local code of conduct for the footwear sector in the late 1990s. The Initiative now provides annual CSR Awards for the footwear, garment and textile industries, and recently initiated an award for CSR in the marine products industry. In addition, large corporations in Vietnam also implement CSR initiative and build a good image with the public such as Mai Linh, Duy Loi, ACB, Sacombank, Kinh Do, etc. However, these activities lack of depth.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 4 Most small and medium enterprises in Vietnam is still relatively inactive in CSR issues such as soy sauce 3MCPD, melamine-tainted milk, petrol station fraud or causing serious environmental pollution, etc. So clearly, the perception about CSR is incorrect and not enough that makes the Vietnamese enterprises losing competitive advantages on their playground and ruin the business environment from indirectly to directly. What is the reason? Do not managers of the enterprises have fully aware of the importance of CSR for sustainable development?