a study on awareness and implementation of csr in a multinational companies operating in vietnam

A STUDY ON AWARENESS AND IMPLEMENTATION OF CSR IN A MULTINATIONAL COMPANIES OPERATING IN VIETNAM BY DINH THI HUYEN TRANG Graduation Project Submitted to the Department of Business Studi

A STUDY ON AWARENESS AND IMPLEMENTATION OF CSR IN A MULTINATIONAL COMPANIES OPERATING IN VIETNAM

BY DINH THI HUYEN TRANG

Graduation Project Submitted to the Department of Business Studies, HELP University College, in Partial Fulfillment of the Requirements for the Degree of

Bachelor of Business (Accounting) Hons

April 2011 Declaration of Originality and Word Count

DECLARATION

I declare that this graduation project is based on my original work except for quotations

and citation which have been duly acknowledged I also declare that it has not been

previously or concurrently submitted for any other courses/degrees at HELP University

College or other institutions

Word Count: 16,970 words

DINH THI HUYEN TRANG

Date 28/03/2011

Acknowledgements

As a student, our main responsibility is to absorb and learn as much as we can

from the assistance, support and encouragement of many people such as our mentors and

teachers around us They help us to learn, to apply our knowledge and to grow In

addition, this project would not have been made without them I want to thank to thank

all the people who have guided me in the right direction and kept me motivated during

the time of completing the dissertation

 First, I would like to express my deep gratitude to my supervisor, Dr Le Van Lien from International School at Vietnam National University, Hanoi who guide me

in my choice of assignment His guidance throughout and inspiration for me to

create new ideas has helped me to learn and grow personally

 I also would like to express my thank to Ms Sumathi and Ms Shenba at Help University College, who initiated the project and give so much instruction and

support

Abstract

A STUDY ON AWARENESS AND IMPLEMENTATION OF CSR IN

A MULTINATIONAL COMPANY OPERATING IN VIETNAM

BY DINH THI HUYEN TRANG

April 2011

Supervisor: Dr Le Van Lien

As we know that CSR (Corporate Social Responsibility) is no longer a familiar term for

the developing countries in the world CSR has had a long history and developed more

and more all over the world Nowadays, many business entities want to implement CSR

in their business operation Although CSR has became a new trend in the world but it is a

new term with Vietnamese and many business entities The knowledge of CRS in

Vietnam is limited because there are not many researchers on the CSR field Many recent

years, taking part in many organizations and political economy in the world WTO,

ASEAN has attracted many investors and business organizations to operate in Vietnam

that CSR is familiar with them Their awareness can be consider is full but some

multinational companies operating in Vietnam took advantages of unknown of

Vietnamese to not implement CSR such as polluting environment The economy is so

open that there are many critical case and scandals concerning about CSR such as case of

Vedan Company, Thanh Cong Company, Sabeco Song Lam Company and Tung Khuang

Company It can be consider as the result of the economic boom This means that CSR

has become a hot title for the researchers to conduct the survey about CSR

The objective of the research is to access the understanding the completed concept of

corporate social responsibilities and other relevant components under this area Besides,

the objective understands awareness and implementation, CSR reporting of CSR in a

multinational company operating in Vietnam by asking respondents' understanding and

opinion

From conducting the research, it is able to show the understanding and awareness about

CSR concept of multinational companies operating in Vietnam is unlimited but their

implementation is limited These multinational companies have to find hard to use CSR

as a tool to value firm, implement CSR in Vietnam as much as they can, and especially

have to follow Vietnam regulation and law to protect the environment and community to

be better

TABLE OF CONTENT

Declaration of Originality and Word Count ii

Acknowledgements iii

Abstract iv

TABLE OF CONTENT vi

List of Figures and Tables x

List of Abbreviations xi

CHAPTER I: INTRODUCTION 1

1.1 CSR in the world 2

1.2 CSR in Vietnam 3

1.2.1 Government actions 3

1.2.2 CSR practices and challenges 4

1.3 CSR in multinational companies operating in Vietnam 4

1.4 Reasons for further investigation 5

1.5 Problem statement 5

1.6 Objectives and Sphere of research 7

1.6.1 Objectives of research 7

1.6.2 Sphere of research 7

1.7 Research Methods 8

1.8 Structure of research 8

CHAPTER II: LITERATURE REVIEW 9

2.1 CSR definition 10

2.2 Research related concepts 10

2.2.1 CSR and Business ethics 10

2.2.2 CSR and Socially responsible investing 11

2.2.3 CSR and Sustainability investing 11

2.2.4 CSR reporting 12

2.3 Researches and Studies 12

2.3.1 Carroll's 1979-1991 conceptualization 13

2.3.2 Wood 1991 conceptualization 16

2.4 Hypothesis 18

2.4.1 Management's attitude toward CSR 18

2.4.2 Consumers' attitude toward CSR 19

2.4.2 Workers' attitude to CSR 19

CHAPTER III: RESEARCH METHODOLOGY 22

3.1 Research objectives 23

3.2 Research methodology 23

3.3 Data source 23

3.3.1 Primary data 23

3.3.2 Secondary data 24

3.4 Research method 24

3.5 Research tool 25

3.5.1 Questionnaire 25

3.5.2 Annual report 25

3.6 Data collection 26

3.7 Sampling 26

3.7.1 Sample population 26

3.7.2 Sample frame 26

3.7.3 Sample size 27

3.7.4 Sample techniques 27

3.8 Limitations 27

CHAPTER IV: FINDING AND ANALYSIS 29

4.1 Responds summary 30

4.2 Management 31

4.2.1 Finding from questionnaire survey and interview 31

4.2.1.1 Management's attitude toward CSR 31

4.2.1.2 Implementation of CSR 34

4.2.2 Actual disclosure by Dutch Lady 40

4.2.3 Overall evaluation of management's responses 41

4.3 Consumers 41

4.3.1 Finding from questionnaire survey 41

4.3.1.1 Consumers' attitude toward CSR 41

4.3.1.2 Consumers' stated support for social responsible businesses 44

4.3.2 Overall evaluation of consumer's responses 47

4.4 Employees 50

4.4.1 Finding from questionnaire survey 50

4.4.1.1 Employees' attitude toward CSR 50

4.4.1.2 Employees' stated support for social responsible businesses 52

4.4.2 Overall evaluation of employees' responses 54

4.5 Discussion 55

CHAPTER V: CONCLUSION AND RECOMMENDATION 58

5.1 Conclusion 59

5.2 Recommendation 61

5.3 Limitation of study 62

5 4 Suggestion for the future research 62

REFERENCES 64

APPENDICES 72

Appendix A: Questionnaire sample 72

List of Figures and Tables

Figure 2.3a: A hierarchy of CSR (adapted from Carroll, 1991) 15

Figure 2.3b: The Wood's CPS Model (adapted from Wood, 1991) 17

Table 1: The important factors for employees (Ewin.com survey)……….21

Table 2: Respondents 30

Table 3: Consumer category 31

Table 4: Employee of category 31

Table 5: Distribution responses of management's attitude toward CSR………32

Figure 4.2: Distribution of response of management's attitude toward of CSR 34

Table 6: Question 1 - Result and analysis consumer's attitude toward CSR 42

Table 7: Question 2 - Result and analysis consumer's attitude toward CSR 42

Table 8: Question 3 - Result and analysis consumer's attitude toward CSR 43

Table 9: Question 4 - Result and analysis consumer's attitude toward CSR 44

Table 10: Question 5 - Result consumers' stated support for social responsibility 45

Table 11: Question 6 - Result consumers' stated support for social responsibility 45

Table 12: Question 7 - Result consumers' stated support for social responsibility 46

Table 13: Question 8 - Result consumers' stated support for social responsibility 46

Figure 4.3a: Distribution of response of consumers' attitude toward of CSR 48

Figure 4.3b: Distribution of response of consumers' stated support for social responsibility 48

Table 14: Distribution of responses from employees' survey……… … 50

Figure 4.4: Distribution of response from employees survey 52

List of Abbreviations

CSR Corporate Social Responsibility

WTO World Trade Organizations

ASEAN Association of Southeast Asian Nations

IMF International Monetary Fund

APEC Asia - Pacific Economic Cooperation

ASEM Asia - Europe Meeting

VCCI Chamber of Commerce and Industry of Vietnam

OSHA Occupational Safety and Health Administration

WBCSD World Business Council for Sustainable Development

SRI Socially responsible investing

PR Public relation

CHAPTER I: INTRODUCTION

1.1 CSR in the world

1.2 CSR in Vietnam

1.2.1 Government actions

1.2.2 CSR practices and challenges

1.3 CSR in multinational companies operating in Vietnam

1.1 CSR in the world

Corporate Social Responsibility (CSR) is longer a familiar in the world but it is still a hot

term to not only enterprises, investors but also customers, entire society Everyday, there

are many activities related to CSR Enterprises use CSR as a tool to develop their

reputation in the global market Investors use CSR as a main factor to consider in the

decision of enterprises to invest responsibility Customers and entire society consider

CSR as an important factor to determine the cost, quality and progress of an enterprise

Because of the important of CSR, many corporations can pay a lot of money for CSR to

become a perfect business model, responsible for society, and to have beliefs of

community Implementing CSR includes having quality assurance of staffs' living

standard, protecting environment, making useful products for customers and

environment, raising fund for charity and donation for society and community In making

useful products for customers and community, there are many evidences of companies

which have done well such as Best Buy co., Inc ( applying recycled goods program), or

Abbott ( distributing their products in environmentally friendly packing materials) In the

area of making quality assurance of staff's living standard, a web search “Google" which

treats their staff as golden is a best example More than that is many corporations raise

funds for charity and donation such as Microsoft, World Bank Especially, the

billionaires use their fortune to contribute in social activities as Bill Gates, Warren

Buffett

1.2 CSR in Vietnam

The globalization is a trend, which has created many development

opportunities for all countries in the world Vietnam is in the process of

industrialization and modernization in order to create facilities for a period of

transition to socialist household in many areas such as economy, education,

culture…The evidences is taking part in many organizations and political economy in the world such as World Bank, IMF, APEC, ASEM, ASEAN This encourages

Vietnamese economic development rapidly in the harmony way with the global trend

However, CSR is still a relative new concept The awareness and implementation

about CSR is limited According to Nguyen Hong Ha, deputy director of the Chamber

of Commerce and Industry of Vietnam (VCCI) in Ho Chi Minh City “CSR must be

placed on the business strategies of each business It was, is and will be an essential

part to the success of the enterprise"

1.2.1 Government actions

Vietnam is a potential to many investors all over the world With open-door

policies and Doi Moi reforms, which are implemented in 1986, Vietnam economy has

attracted many investors to operate and then achieve high economic growth Besides

many achievements, Vietnam has to face may problems, especially social problem With

the commitment " Sustainable development and protecting the environment" which was

set in the national strategy SRV 1993: 45, Vietnam government had created many

regulations to solve these problems Environmental Protection Law and Vietnam Agenda

21 were established to protect the environment for sustainable development Besides that,

the companies, which pollute the environment, have to pay monetary penalties and

managed by Environmental Police In order to protect the labor, Vietnam government

also gave Labor law Although there are many new regulations to solve social problems

but Vietnam government does not require companies operating in Vietnam formally issue

CSR reporting Thus, all multinational companies operating in Vietnam have to follow

the law and regulations in Vietnam

1.2.2 CSR practices and challenges

With acknowledging the important of CSR from many successful corporations in

the world, which implement CSR, almost multinational operating in Vietnam also knows

the way to go It is easy to see that their awareness is full, but their implementation about

CSR is not enough Many companies built many charitable funds for community such as

Honda, Dutch Lady, and Abbott But many multinational companies have created many

scandals related to CSR, which the community is caring A big question needs to be

answered

Implementing CSR has still a lot of challenges It requires many times and money The

first challenge is that there is lack of law enforcement The second challenge is that

Vietnamese's knowledge about CSR is limited so that these multinational companies did

not implement CSR

1.3 CSR in multinational companies operating in Vietnam

With the growing of Vietnam economy, it has attracted many multinational

companies to operate in Vietnam such as Dutch Lady, Honda, Vedan Although they are

multinational companies but their adoption and implementation of CSR have not paid

attention and concern Some mercenary businesses, which did not have sense of social

responsibilities, have caused many damages and disasters for environment and social

The last lesson was Vedan and China's Melamine Milk As was the case broken, the

agency aggressively seek new management plan for resolving the consequences of the

consumer and society has suffered So multinational companies operating in Vietnam

businesses should adopt CSR After applying CSR, some businesses have established

environments more stable and higher labor productivity Moreover, they received many

supports from consumers and society in the common interests that bring businesses to the

community

1.4 Reasons for further investigation

Vietnam is among the world's fastest-growing economy so that CSR become even

more important to develop sustainably All companies include Vietnam companies or

multinational companies operating in Vietnam have awareness and implementations

about CSR

1.5 Problem statement

With the joint of Vietnam to the World Trade Organization (WTO) in 2007, CSR

is getting more concerns from businesses because of requirements from foreign clients

and partners (WTO website, 2006) Nowadays, the open-door policy of Vietnam

government attracts many multinational companies operating in Vietnam Therefore,

CSR draws more attention from not only businesses, investors but also media, customers,

society With the commitment " Sustainable development and protecting environment",

Vietnam government always expect that businesses operating in Vietnam not only make

profits but also protect the environment and care for the society's welfare Many

multinational operating in Vietnam try their best to implement CSR in their business

However, there are many wrongdoing things related to CSR which made by

multinational companies The first one is related to polluting the environment The hottest

scandal, which draws attention from society, is polluting Thi Vai river of Vedan

International company-Taiwan-owned firm This company was caught by the

environmental police for discharging directly water into Thi Vai river in Dong Nai

province It used two pumping systems: one is direct while other goes through refining

process (Invest in Vietnam, 2008) After this issue, the customers have been rejected to

buy products from Vedan

The second one is related to unsafe products Recently, there are many discoveries

about 3-MCPD chemical contained in the products This chemical is considered as a

factor that causes people cancer The interest thing is that the companies' products are

compliant with current Vietnam requirement standards; however, it is not the case in the

Europe The question is of ethical rather than legal issue and it draws lots attention from

media and the public ( Vietnamnet, 2007) More than that, there is much information

related to unsafe products from international media such as the melamine-contaminated

milk in China which make people scare of using the products

The third one is related to working condition of employees There are many

researches about the working condition, which show that health and safety at work has

become a serious and hot problem that need to be solved The number of occupational

hazards is awesome and generally unrecognized "According to the U.S Census Bureau,

5000 workers are killed on the job each year The director of the Occupational Safety and

Health Administration (OSHA) says that 32 workers are killed on the job each day, more

than doubling the Census figure In Viet Nam the researchers show that in 2009 there

were 6200 working accidents (increased 7, 09 %) The causes of these accidents are

mainly from the human (employers’ mistakes are 75%, the employees' mistakes are 18, 5%) Total damage to property is more than 42 billions and more than 450,000 working

days In the whole country, 26,700 workers have had occupational diseases In general,

Viet Nam is one of countries, which the health and safety in the working environment are

not good and need to be improved better

1.6 Objectives and Sphere of research

1.6.1 Objectives of research

- Summarize the CSR concepts and its definitions

- Inspect the awareness of multinational companies operating in Vietnam about

CSR concepts, its importance and implementation

- Recommend some solutions for multinational companies operating in Vietnam to

raise the awareness and have better CSR implementation

1.6.2 Sphere of research

- Research conducting place: Dutch Lady Vietnam, Binh Duong Province,

Vietnam From Foremost to Dutch Lady, the name of the operating company

Dutch Lady Vietnam (DLV) has a rich history of significant milestones The

dream to build a healthy community has long existed since the first 150 cartons of

Dutch Lady Sweetened Condensed Milk were imported and sold in Vietnam in

1924 In 1993, the representative office of Dutch Lady Vietnam was established at

No 27 Don Dat Street, Ho Chi Minh City On 28th February 1996, the first

Commercial Invoice was officially issued marking its journey of wining

Vietnamese consumers’ hearts and minds Many of Dutch Lady Vietnam products

were launched into the market and quickly welcomed by consumers

- Objective of the research: multinational companies operating in Vietnam

- Time duration of conducting: from February 12, 2011 to 4 March 4, 2011

1.7 Research Methods

The project will use the investigation and survey:

The research distributes the questionnaire and conducts the study among the managers

and employees in Dutch Lady Vietnam, and consumers in Hanoi city The research will

come to each individual to ask them to answer and fill in the survey The previous

researches and studies are used for making the questionnaire The measurement is made

in accordance with the past researches The quantitative is used to carrying out the

research By surveying the managers and employees in Dutch Lady Vietnam; consumers

in Hanoi, the researcher can analyze the collected data to see the awareness and

implementation of managers, consumers and employees

1.8 Structure of research

This project will be divided into five following chapters:

Chapter I: Introduction

Chapter II: Literature review

Chapter III: Research Methodology

Chapter IV: Finding and Result Analysis

Chapter V: Conclusion and Recommendation

CHAPTER II: LITERATURE REVIEW

2.1 Definition of CSR

2.2 Research’s related concepts

2.2.1 CSR and Business Ethics

2.2.2 CSR and socially responsible investing

2.2.3 CSR and Sustainability investing

2.4.1 Management's attitude toward CSR

2.4.2 Consumer's attitude toward CSR information and disclosure

2.4.3 Worker's attitude toward CSR information

2.1 CSR definition

The nature and scope of corporate social responsibility has changed over time

CSR has only been used widely since 1960s In that time, all societies had expectation

that all organization would act responsibly With the development of CSR through many

years, there have been many CSR definition introduced by many researchers and

organizations all over the world Everybody can know the concept of CSR, and they can

give the suitable definitions under the understanding of each person “CSR means

something but not always the same thing to everybody" ( Votaw and Sethi, 1973)

According to World Business Council for Sustainable Development ( WBCSD),

the definition of CSR is that " the continuing commitment by business to contribute to

economic development while improving the quality of life of the workforce and their

families as well as community and society at large" ( WBCSD, 1998)

Nowadays, when the economy is a boom development, each organization can have

its awareness and definition about CSR but they cannot deny that the importance and

affect of CSR on their performing, financial status, employees' motivation, customers'

loyalty and company's image They really realize that they only become perfect business

model and responsible for employees, customers, society and the nature environment if

they fully understand CSR

2.2 Research related concepts

2.2.1 CSR and Business ethics

It can deny that CSR represents a new perspective on traditional notions of morality

in the business world Benjamin W Heineman, a senior vice president for law and public

affairs at General Electric Co., describes three elements of CSR: “1 Strong, sustained

economic performance 2 Rigorous compliance with financial and legal rules three

Ethical and other citizenship actions, beyond formal requirements, which advance a

corporation’s reputation and long term health” Business ethics is expressed as the standards and principles are social as well as the business world recognizes, as the rules

of behavior, the professional relationship between managers with one another, or between

managers value to society in the process of conducting business activities, allowing

managers to behave honestly and responsibility to the community and with each other

Business ethics is a manifestation of the balance between the interests of managers in

implementing the business objectives with the interests of the employees work for

managers, customer benefits, the partners and the interests of the community in general

2.2.2 CSR and Socially responsible investing

Socially responsible investors include individuals and also institutions, such as

corporations, universities, hospitals, foundations, insurance companies, public and private

pension funds, nonprofit organizations, and religious institutions Institutional investors

represent the largest and fastest growing segment of the SRI world SRI recognizes that

corporate responsibility and societal concerns are valid parts of investment decisions SRI

considers both the investor's financial needs and an investment’s impact on society SRI investors encourage corporations to improve their practices on environmental, social, and

governance issues

2.2.3 CSR and Sustainability investing

Sustainability investing (SI) is the explicit recognition that social, economic,

environmental, and ethical factors directly affect business strategy It is also a responsible

investing It requires investors to consider their investment how to have ethical and

sustainable investing In the modern world, financial status is not enough for investors to

make decision, they need to sustainability investment and protect environment

2.2.4 CSR reporting

With the development of CSR during many years, there are a lot of ways and tools

for building the CSR information Both direct and indirect ways have been introduced

with the society According to Schultz et al (2005), the direct ways are external and

formal channels such as reports, brochures and websites The indirect ways are less

formal channels such as articles in local newspapers, or the word of mouth from

employees, customers and local community persons ( Schultz et al, 2005)

Nowadays, CSR becomes a familiar concept with society so CSR reporting is a

model, which is used widely all over the world CSR reporting has become important

because it help the companies to communicate with society, consumers, workers,

investors The CSR reporting will show the companies develop sustainably and protect

environment or not From the information in CSR reporting, investors will consider to

invest or not A good CSR report will increase the image and reputation of one business

However, the organizations know the advantages of CSR reporting so some

organizations did not show the true information about the responsibility with the society,

consumers, workers, natural environment in their CSR reporting Although they did not

implement CSR well but they said in CSR reporting, they had done well to attract the

investors and increase their reputation

2.3 Researches and Studies

Because of the importance and effect of CSR in the globalization, there are many

conceptualizations of CSR have researched such as Arthaud-day (2005); Carroll (1979);

Jones& Goldberg (1982); Clarkson (1995); Friedman (1970); Wood (1991); Argandona

and Hoivik (2010) Besides, many researches in the world, many researches of CSR in

Vietnam introduced in many recent years such as researches of authors Nguyen Hoang

Anh (2008); Tran Ngoc Chau (2009); Ho Thien Nga (2008)

In the research, only some conceptualizations of CSR are developed and introduced

In the literature review They are the most famous conceptualizations known in the CSR

area: Carroll's 1979-1991 conceptualizations, Wood 1991 conceptualization, Quazi and

O'Birien (2000) conceptualization

2.3.1 Carroll’s 1979-1991 conceptualizations

The Carroll's conceptualization was introduced in 1979 as one of the most

comprehensive and widely used in the CSR area According to Carroll, CSR was

distinguished into four areas: economic, legal, ethical and discretionary, which put into

pyramid

The first category is economics responsibility.Economic responsibilities reflect the

belief that companies have an obligation to produce goods and services that consumers

need and want, and to be profitable in the process (Carroll, 1999) Economics

responsibility means that the business organizations have roles to providing goods and

services, which the societies need and want to make profits for the organizations More

than that, the organizations need to care about looking for sources of labor supply,

discover new resources, promoting advances in technology, product development;

distribution is the source of production of goods and services They are really CSR

activities because beside the organizations ensure the existence and development of the

business; they also contribute to increase social welfare For workers, the economic

aspect of business is to create jobs with remuneration deserve equal job opportunities, job

opportunities and professional development, adequate remuneration, environmental

effects labor safety and hygiene and ensure the privacy and individuals in the workplace

For consumers, the economic responsibility of business is to supply goods and services,

economic responsibility of the business also related to issues of quality, product safety,

pricing, information on product (advertising), distribution, sales and competition

The second category is legal responsibility.Legal responsibilities indicate that

companies are expected to pursue economic responsibilities within the confines of

written law (Carroll, 1999) It is the expectation of society about the following law and

regulations of the organizations Everywhere and every country have its own law and

regulation so that each organization operating in one place has to follow the law and

regulation of that place If the organization wants to survive, they have to show their legal

responsibility Besides making profits for the societies, the societies expect the

organizations act in the legal system to give the true and fair decisions

The third category is ethical responsibility Ethical responsibilities indicate a

concern that companies meet society’s expectations of business conduct that are not

codified into law, but rather are reflected in unwritten standards, norms, and values

implicitly derived from society (Carroll, 1999) According to Novak, ethical

responsibility is mainly rooted in human principals and human rights commitment, is not

necessary codify into law, but rather than it expected by societal members (Novak, 1996)

Ethical responsibility is often represented through principles and moral values in the

mission and strategies of the organizations

The final category is discretionary responsibility Companies’ discretionary

responsibilities are volitional or philanthropic in nature, in the sense that they represent

voluntary roles assumed by companies for which society’s expectations are not as

clear-cut as in the ethical responsibilities (Carroll, 1999) This category consists of all activities

that the business shows to be responsible for society Discretionary responsibility is

voluntary for the business even there is always expectation that the business provide it

This is the following hierarchy of CSR provided by Carroll:

Figure 2.3a: A hierarchy of CSR (adapted from Carroll, 1991)

Carroll (1991) argues that these four categories of corporate social responsibilities

can be depicted as a pyramid, in which economic responsibilities is the foundation upon

which all other responsibilities are predicated and without which they cannot be

achieved, and discretionary responsibilities are the apex Notwithstanding, companies are

expected to fulfill these four social responsibilities simultaneously An important

consideration regarding this perspective is that, contrary to the common belief that

economic responsibility is related to what the companies do for themselves, and the other

responsibilities are related to what they do for others, “economic viability is something

business does for society as well.” (Carroll, 1999, p 284)

2.3.2 Wood 1991 conceptualization

Although Wood's conceptualization appeared after the Carroll's conceptualization,

but it is known widely This conceptualization was adapted by McAdam and Leonard in

1991 In his model, there are three steps: principles of social responsibility; processes of

social responsiveness; policies, programs, and observable outcomes as they relate to the

firm's societal relationships The first step" principles of social responsibility” is one

which motivate the firm act and have responsible for the society and community There

are three levels in this step: Institutional principal, Organizational principal, and

individual principal This step shows that each organization has responsible for society,

each manager in each organization also has responsible for his own decisions to become

responsible for community

The second step is processes of social responsiveness In this step, Wood shows

that it consists of activities to reply the motivation of social responsibility: environmental

assessment, stakeholder management and issues management The organizations have to

have strategies to adapt the changing of the environment Besides that, the stakeholder

management is very important to organizations The organizations can manage their

stakeholders through some management devices such as employee newsletter, corporate

social reporting which are very useful to stakeholder management On the other hand,

issues management plays an important role in this step In order to do this activity, it

requires investigating the approach firm used to respond to social issues

The third step is outcomes of corporate behavior There are three types in this step:

the social impacts of corporate behavior, the programs firms used to implement social

responsibility and the policies developed by the firms to handle social issues and

stakeholder interests ( Jamali, 2008)

This is the following model of Wood:

Principals of CSR 1

Institutional principal: legitimacy

Organizational principal: Public responsibility

Individual principal: managerial discretion

2.4 Hypothesis

2.4.1 Management's attitude toward CSR

In organizations, managers play important roles for making decision, setting

strategies of the organizations They have right to control directly over the decision

making process of the organization The managers’ eyes affect the values of the

organizations In addition, managers' eyes are influenced by their characteristics So that

each organization has different operations because of the different characteristics of each

managers One organization will be only responsible for society, consumers, workers and

environment if its manager has awareness and commitment to CSR According to Harris

and Crane, they argued, “If managers are at least partly the proponent of the corporate

culture, and integrating SR requires culture change, therefore, it is difficult to imagine

CSR becoming institutionalized in the organization without the active support of

management (Harris and Crane, 2002)

Nowadays, managers use CSR as a tool to increase their organizations' reputation;

to improve the relationship of organization with society, consumers, workers; to increase

the efficiency and effectiveness in their operation However, managers in Vietnam

organization do not have enough knowledge about the importance of CSR, so there is

only little amount of companies in Vietnam integrate CSR However, although

multinational companies operating in Vietnam have a fully basic understanding about

CSR, but they did not implement CSR in Vietnam well It means that manager is an

important person to give the right decision to build the reputation for the organization

According to Lacy and Salazar, one survey showed that among corporate managers, there

are only ten percent of all companies integrate CSR in their core operation (Lacy and

Salazar, 2006) The implement CSR requires many time to do but the society, consumers,

workers and environment can not wait the organizations any more “It is clear that many

companies continue to be longer on CSR words than actions"( Moskowstz, 2002) Thus,

the following hypothesis is developed:

"H1: Managers' attitude toward CSR is positive"

2.4.2 Consumers' attitude toward CSR

For consumers, CSR is reflected in the sale of products to satisfy demand of

consumers, affordable, delivery, and safe for use In fact, if the products meet consumer

demand, images of products and organizations will be in the minds of consumers In

business, Donimo psychological effects are essential, "oral communications" also has a

very strong effort spread Maintaining customer and expanding market share is the goal

of any business, which reflects the spirit of "customer is God" (anonymous author) Mrs

Lurita Doan, the first woman head of the Service Delivery and Technical Supervisor of

the U.S government (General Services Administration) has also said, "the customer is

king, if you do not provide services well, you will not have a second chance, and as such

will not be sustained.”It is brand building and consumer confidence, the business became

much more favorable

How does CSR influence consumers' behavior? To answer this question, Knox and

Maklan argued that the surveys about consumer behavior shifting to reward socially

responsible companies are analyzed in attitudes and trade off basis rather than observed

behavior The second hypothesis is:

H2: Consumer behavior is affected by companies’ CSR practices and disclosures

2.4.2 Workers' attitude to CSR

For workers, the evaluation criteria for the implementation of CSR includes the high

salary (according to the survey of Ewin.com, there are 68% workers who considered

salary is one of the three most important factors), not discrimination, treatment policy and

good training, and acceptable working conditions

Although the basic conditions above are simple but there are not so many

enterprises can make full Most of the employees love their jobs because of good working

conditions and reasonable compensation regime Businesses meet this requirement also

means that the organizations create a team to receive the bond, loved, proud of the

company's image and determination to work for the common benefits of organizations

and society These gains are obviously out here significantly; improved productivity there

is a cultural cohesion in the enterprise Culture is a strong positive factor, which impact

on not only the operation of organizations but also on business community This is what

all businesses are keen to build

Moreover, actual costs, opportunity costs, and energy plus losses due to continuous

spiritual search and training of new personnel (in case of resignation by former personnel

of public policy lack of appropriate company) will be eliminated Better treatment

policies, good culture and environment shape resonance effect "attractive" to find

qualified staff to the company It will be a chain of success

This is the following table, which reflects three important factors to workers (Ewin.com

survey:

Table 1: The important factors for employees (Ewin.com survey)

Thus, the third hypothesis is developed:

H3: Workers' attitude toward CSR is positive

CHAPTER III: RESEARCH METHODOLOGY

3.1 Research objectives

In the Literature Review section, the researcher has collected, summarized and

discussed the researches and theories related the topic of a study on awareness and

implementation of CSR in multinational companies operating in Vietnam From the

Literature Review in chapter II, we can see that the awareness and implementation is very

important all over the world This research is designed to explore how multinational

companies operating in Vietnam have awareness and implementation about CSR It will

show a view of society, community, consumers, management, investors about the CSR

The research also aimed to discover the level of multinational companies operating in

Vietnam’s awareness and implementation about CSR In addition, the research is done to collect the opinion such as from managers, consumers, and workers about

implementation CSR of this multinational company- Dutch Lady Vietnam

3.2 Research methodology

This study includes qualitative method The qualitative method research is

conducted through reviewing annual reports of this Dutch Lady Vietnam as well as is

carried out by the questionnaire survey on managers, consumers and workers

3.3 Data source

In order to provide the accurate and reliable results for the empirical study, this

project will use both of primary and secondary data

3.3.1 Primary data

Primary data consists of information collected for the specific purpose

at hand (Amstrong & Kotler, 2007).There is many way to collecting primary data

such as questionnaires, interviews, focus group interviews, case-studies, diaries,

observations, critical incidents, portfolio The questionnaires will be used as the most

proper way to collect data because of some reasons like that: this method is very

cheap; this method also is contributed in many ways to increase the convenience in

collecting data One of the advantages of primary dada collection method is to

provide the appropriate information that match with the requirements of this project

Primary data has many advantages It is reliable form of data; it represents less

biased form of data Besides, using primary data, researcher can have direct

interaction with the consumers However, primary data is usually expensive and time

consuming Additionally, if it is not conducted properly, the false result will be

created

3.3.2 Secondary data

Secondary data consists of information that already exists, having been

collected for another purpose ( Amstrong & Kotler, 2007) This source of data will

provide the overall picture about application Corporate Social Responsibilities of

multinational companies operating in Vietnam The secondary data will be collected

at the minimal cost from the relating sources such as: books, websites, newspaper,

magazines, and so on…Comparing to primary data, there are may be more quickly and lower cost to obtain secondary data However, secondary data has disadvantage,

which is that the information may be not available Thus, if the researchers want to

get effective secondary data, they must evaluate carefully

3.4 Research method

In the way to collect the primary data, it is necessary to describe the information The

survey research will be used widely and considered as the best-suited approach The

research will use the survey method to collect primary data, which includes questionnaire

and personal interview from managers, customers and workers about awareness and

implementation CSR of Dutch Lady Vietnam Besides that, the research will also use

collect the secondary information from its annual reports

3.5 Research tool

3.5.1 Questionnaire

There are three patterns of survey: for managers and for workers who work in Dutch

Lady Vietnam; and consumers in Hanoi Survey pattern designed for managers includes

10 questions When analyzing the results, those questions are divided into two parts:

managers' attitude toward CSR, implementation of CSR The pattern for consumers

contains 10 questions and has two parts: consumers' attitude toward CSR, consumers'

stated support for social responsible business In addition, the one, workers, there will

have nine questions in pattern with three parts: workers' attitude toward CSR, workers'

stated support responsible business The Five-points Likert scales which is includes: 1=

"strongly disagree"; 2= "disagree"; 3 = " neutral/no opinion"; 4 = " agree"; 5 = "strongly

agree" will be used for three pattern survey From this five-points Likerts scales, the

research will indicate the extent to which the respondents If there is more opinion from

interviewed people, an additional opinion part, which is optional for them to write, will

be added more

3.5.2 Annual report

CSR report is considered as an independent variable From the CSR annual reports

of companies, investors will have a better understand about the companies' activities and

objectives to decide for investment or not The companies also may use the CSR reports

to built their believes and communication with society and investors through the

information in CSR annual reports

The research will choose CSR annual report of Dutch Lady Vietnam From the

determination and evaluation, the level of actual CSR disclosure, activities and

implementation in this company will be shown

3.6 Data collection

In order to get needed information, this research will be based both primary data

and secondary data

In this research, primary data will be used majority The three patterns of survey:

for managers, consumers, workers will be sent to interviewed people Firstly, the survey

questions for managers will be sent to mangers of Dutch Lady Vietnam by email, post

office The collected managers from many departments such as headquarter department,

purchasing department, IT department, receiving department, cashier's department

Secondly, and the survey questions for consumers will be sent to many people Thirdly,

survey questions for workers also will be sent to employees who are working in Dutch

Lady Vietnam

In this research, the secondary data will also be used to get the information They

are collected from the CSR annual report of Dutch Lady Vietnam The CSR annual report

will be evaluated and compared to get the useful information

3.7 Sampling

3.7.1 Sample population

The target population is citizen in Hanoi city and Binh Duong Province

3.7.2 Sample frame

The sample frame is the managers and employees Binh Duong Province, workers in

Hanoi city

3.7.3 Sample size

The questionnaire patterns which have been sent out to interviewed people include

20 questionnaire patterns for managers , 150 questionnaire patterns for consumers and

200 workers questionnaire patterns

3.7.4 Sample techniques

The two techniques: convenience sampling and judgment sampling will be used to

manage sampling For the questionnaire survey, it is the best way to use convenience

sampling However, it is suitable to use judgment sampling for interview managers in

Dutch Lady Vietnam

3.8 Limitations

In the period of doing the research, few problems related to survey research are existed

They are the following problems:

 Firstly, the survey researches are sent to many people in the society so there is lacking of the knowledge of interviewed people They cannot have ability to

answer the survey questions or misunderstand the questions

 Secondly, although the interviewed people do not understand the survey questions, they still answer them by randomly tick in order to appear smarter or

informed This will lead to have the unuseful information

 Thirdly, the interview adopted for this study represents the limitation of which the reliability of information may be comprised through interviewer or respondent

bias

 Finally, people may be unwilling to respond to unknown interviewer or about issues, they consider sensitive People may refuse to spend time to answer the

questions