corporate social responsibility in viet nam a study of stakeholders’ perceptions of corporate social responsibility

CORPORATE SOCIAL RESPONSIBILITY IN VIET NAM: A STUDY OF STAKEHOLDERS’ PERCEPTIONS OF CORPORATE SOCIAL RESPONSIBILITY.. In this study, the researcher wants to access the understanding of

CORPORATE SOCIAL RESPONSIBILITY IN VIET NAM: A STUDY OF STAKEHOLDERS’ PERCEPTIONS OF CORPORATE SOCIAL

RESPONSIBILITY

BY

PHAM VAN THUAN

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

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: 11,523 Words

Pham Van Thuan

Date

Supervisor: Dr Nguyen Thi Phuong Hoa

Corporate Social Responsibility has developed through the long history and it is also expected to implement by any business entities in the world It is no longer a new term for developing countries such as Viet Nam However, in recent year, when the economic

is open and there are a lot of scandals and critical case concerning about the Corporate Social Responsibility and ethical business as the result of the economic boom So, there are a lot of researches on that field; however the understanding of Corporate Social Responsibility is limited in Viet Nam Therefore, it may be as a result of motivation for the researcher to conduct the survey about the perceptions of CSR among Vietnamese individual investors in TL Securities Company’s office (TLS)

In this study, the researcher wants to access the understanding of Vietnamese individual investors on the topics of CSR Further more, the researcher will to define the three factors which contribute to the CSR perceptions such as CSR awareness, investment

By conducting the research, the research is able to indicate that the understanding of CSR concepts and its perceptions is limited; because of the investors have little basic knowledge about the CSR So, the investors in Viet Nam are very hard to use CSR information as a tool to value firm and it is also difficult for them to make investment decision

Table of contents

Declaration of Originality and Word Count ii

DECLARATION ii

Abstract iii

Table of contents v

List of Figures and Tables ix

List of Figures and Tables ix

List of Abbreviations x

CHAPTER 1: INTRODUCTION xi

1.2 Research Background 1

1.1.1 CSR in the world 1

1.1.2 CSR in Vietnam 1

1.3 Problem Statement 3

1.3 Objectives and Sphere of Research 4

1.3.1 Objectives of Research 4

1.3.2 Sphere of Research 5

1.4 Research Methods 5

1.5 Structure of Research 6

CHAPTER 2: LITRERATURE OF REVIEW 7

2.1.4 Investment Decision 7

2.2.1 Business Ethics in Viet Nam – Reality and Solutions 7

2.2.2 CSR in business entities in Viet Nam – Reality and Solutions 7

2.3 Researches Summary 7

2.1 Research’s related concepts 8

2.1.1 Carroll's 1979-1991 conceptualization 9

2.1.2 Wood 1991 conceptualization 11

2.1.3 Stakeholder theory 13

2.1.4 Investment Decision 14

2.1.5 Responsible Investment 15

2.1.6 Investor Relation 15

2.1.7 CSR Reporting 16

2.1.8 CSR practice and challenges 19

2.2 Researches and Studies 20

2.2.1 Business Ethics in Viet Nam – Reality and Solutions 20

2.2.2 CSR in business entities in Viet Nam – Reality and Solutions 21

2.2.3 CSR – The Investors’ Perspective 22

2.2.4 CSR, PR of Foreign-Invested Companies 23

2.3 Researches Summary 24

Table 1: Researches and Studies Summary 26

CHAPTER 3: RESEARCH METHODOLOGY 27

3.1 Research Objectives 28

3.2 Theoretical Framework and Measurement 28

3.2.1 CSR perceptions 29

3.2.2 CSR Awareness 29

3.2.3 Investment Decision 30

3.2.4 CSR Reporting 30

3.3.1 Section 1 31

3.3.2 Section 2 31

3.3.2.1 CSR Awareness 32

3.3.2.2 Investment Decision 33

3.3.2.3 CSR Reporting 33

3.4 Research Method 34

3.4.1 Sampling 35

3.5 Hypothesis Statement 35

3.5.1 Correlation of Independent Variable 36

CHAPTER 4: RESULT ANALYSIS 37

4.1 Collection of Questionnaires 38

4.2 Description of Result 38

4.2.1 Age 38

Table 2: Age 38

4.2.2 Gender 39

Table 3: Gender 39

4.2.3 CSR Awareness 40

Table 4: Question 1 - Result and Analysis 40

Table 5: Question 2 - Result and Analysis 41

Table 6: Question 3 - Result and Analysis 42

Table 7: Question 4 - Result and Analysis 43

4.2.4 Investment Decision 44

Table 8: Question 5 - Result and Analysis 44

Table 9: Question 6 - Result and Analysis 45

Table 11: Question 8 - Result and Analysis 47

4.2.5 CSR Reporting 48

Table 12: Question 9 - Result and Analysis 48

Table 13: Question 10 - Result and Analysis 49

Table 14: Question 10 - Result and Analysis 50

4.3 Result Analysis 50

4.3.1 Hypothesis 1 51

Table 15: Hypothesis 1 51

4.3.2 Hypothesis 2 53

Table 16: Hypothesis 2 53

4.3.3 Hypothesis 3 54

Table 17: Hypothesis 3 54

CHAPTER 5: CONCLUSION AND RECOMENDATION 55

5.1 Conclusion 56

5.2 Recommendation 57

5.3 Limitation of Study 58

5.4 Suggestion for Future Research 59

Reference (Harvard referencing system) 60

APPENDICES 62

List of Figures and Tables

Table 1: Researches and Studies Summary 26

Table 2: Age 38

Table 3: Gender 39

Table 4: Question 1 - Result and Analysis 40

Table 5: Question 2 - Result and Analysis 41

Table 6: Question 3 - Result and Analysis 42

Table 7: Question 4 - Result and Analysis 43

Table 8: Question 5 - Result and Analysis 44

Table 9: Question 6 - Result and Analysis 45

Table 10: Question 7 - Result and Analysis 46

Table 11: Question 8 - Result and Analysis 47

Table 12: Question 9 - Result and Analysis 48

Table 13: Question 10 - Result and Analysis 49

Table 14: Question 10 - Result and Analysis 50

Table 15: Hypothesis 1 51

Table 16: Hypothesis 2 53

Table 17: Hypothesis 3 54

VCCI Viet Nam Chamber of Commerce and Industry NIRI National Investor Relations Institute

1.2 Research Background

1.1.1 CSR in the world

Corporate Social Responsibility (CSR) is always hot subject for many researchers in the world In the researches, the researcher sees that there are many companies have been pay

a lot of money to have a good business systems and became has responsibility with social

as the whole In order to do that, there are so many program have been done in order to make a good thing for social such as to save energy, reduce carbon emission, school building, improve drinking waster supply, and so on For example, there is a big retailer

of consumer electronics in Canada and USA of Best Buy Co., Inc has a good recycle program As the Deputy Manager of public relations of this company, he or she has been said that “We only feel that we will succeed in the market if we take responsibilities for society” (Saga Vietnam, 2008) Other example as Starbucks knows as a world-wide coffee company, they also have many good activities to make excellent community The other good actions have done by the World Bank and Merck Pharmacy Company They also paid more than 50 millions into give free Mectizan medicine to help poor people in

28 countries in Africa (Saga Vietnam, 2008) Further more, there are a lot of companies

in the world have been produce production in order to protect environment or making useful products for customers and in order for develop of social and community

1.1.2 CSR in Vietnam

In the study, the researchers also see that the Corporate Social Responsibility (CSR) also

is a new concept in Viet Nam; because the limited of directors’ understanding on the CSR information as the donation and performance In order, international corporations

Conduct or social standard requirements According to Professor André Schmitt, Director

of CFVG, “Current financial crisis show that Vietnam Economy was depended on supply chains of the world Vietnam Economy can not evade the global competitive pressures Thus, the task of implementing CSR is as difficult as it is in any developed countries”

(CSR Vietnam Forum, 2009)

Further more, with the big and important issue that Vietnam joint to the World Trade Organization (WTO) in 2007 The CSR became more important problem with the

companies in Viet Nam because of the high requirement from the partners and foreign

clients in the world (WTO website, 2006) Therefore, from year 2005, Viet Nam

Chamber of Commerce and Industry (VCCI) has been make a program to award “CSR – towards the sustainable development” in order to reward with the companies in Viet Nam for actively implement CSR in the international economics integration circumstances According to Dr Doan Duy Khuong, the vice-chairman of VCCI, “CSR is a requirement for the companies and they could not reach the international market without CSR

implementation” (Securities Investment Newspaper, 2008) However, in the fact we can see that these companies in Viet Nam are very difficult to apply the CSR program

because of the limited of their understanding and perception about the CSR or because of the lack of financial and technical resource It is also difficult with the small companies’ size to apply the CSR In order to illustrate in this issue, the researcher has been give some examples There is one firm has been make pollution in a river in Viet Nam and they also have been catch by government In order to explain about their issue, they said that their actions want to help company avoid bankruptcy after recent economic crisis

body such as directors have been think of that way; however, if the firms want to develop

in the long-term basis, they should following under the CSR requirement of the CSR such

as they should have been responsible with the social From that, we can see which

companies have been cares much about CSR activities under the financial crisis period

1.3 Problem Statement

Now a day, CSR know as the very hot issue in Viet Nam as in the world It is also

requirement not only from the business but also from the stakeholder related such as the government, investors and so on In recent years, Viet Nam knows as the fastest-growing economic in the world Therefore, CSR become an important factor to develop

sustainable in business In order to do this, the business not only care much about the how

to make profit but also they should care about CSR activities Beside, the government also has many awards for companies will be having good CSR activities such as CSR Viet Nam Award (Saigon Businessman, 2009) From that, there are a lot of companies also have actions related to CSR activities such as they pays a lot of money in order to help the poor and disadvantaged person

However, there are some companies have wrong-doing thing which have been find out in recent The most case the Taiwan-owned company knows the named as Veda

International They have been bad action is discharging directly waste water in to the Thi Vai River in Dong Nai province Before this action discovered, they also used two

pumping system in their factory One system was directly through refining process; however it is never used if using when have coming of the supervision from the local government office And, one the other system also was discharging directly waste water

the environment and people in this place In the other case related with CSR issue is

Taiwanese-owned Company in Quang Minh industrial zone They have been found that

the company also was discharging waste water into river After discovered, the firm’s

deputy director general Mr Liu Chien Lin has been explained for that the company’s

action was to help the company over the financial crisis In the statistics, the firm has

been saved around US$4,209-5,261 a month by doing this action (Thanh Nien News,

2010)

As the important of these issues above, the people see that as the serious problems and

they are also rejecting to use or by the product from those companies That can lead to

bad affects not only of the firms, shareholders and stakeholder but also reducing the

profits of investors Therefore, with the understanding of CSR concepts, theories, and

perceptions of investors are important to them before they want to invest in the

companies In this study, the researcher also wants to access the understanding of

individual investors in CSR perceptions and so on

1.3 Objectives and Sphere of Research

1.3.1 Objectives of Research

In order to do the thesis, the researcher also distributes this thesis as follow:

- Definitions and summarize the CSR concepts and other theory relative

- Inspect the understanding of Vietnamese individual investors about CSR concept, its

perceptions and implementation

- Establish theoretical model and inspect the relationship between CSR perceptions for

Vietnamese individual investors and other contributions such as CSR awareness,

- Enhance the understanding of individual investors on CSR issues, concepts and its perceptions

- Recommend some solutions for the organizations to raise the awareness and

understanding of investors CSR concepts and its perceptions, solutions for the firms to have better investor relation

1.3.2 Sphere of Research

- Research conducting place: THANG LONG Securities Company office, Ha Noi, Viet Nam

- Object of the research: Vietnamese individual investors

- Time duration of conducting the research: from August 16, 2010 to September 20,

2010

1.4 Research Methods

In order to do this research, the researcher is used investigation and survey for the thesis The researcher distributes the questionnaire and conducts the study from the investors in THANG LONG Securities company (TLS) office, Ha Noi, Viet Nam TLS is known as the largest securities office in Ha Noi, Viet Nam There are a lot of investors in here on the weekday They come here to look at the electronic board and discuss with each other

in order to make investment decision on the firms Therefore, the researcher comes to meet each individual investor to ask them to fill and answer in the survey The

questionnaire was making from previous searches and studies Beside that, with the sample of n equals 65 (65), the researchers also can analyze the collected data to see how investors understand about the CSR concepts and in order about the stakeholders’

Further more, researcher was use the Microsoft Excel to analyzing and check the

measurement after the data has been collected Beside that, the previous data was help the researcher more understanding and be able to use statistical and descriptive methods of analysis

1.5 Structure of Research

This project is divided into five following chapters:

Chapter I: Introduction

Chapter II: Literature Review

Chapter III: Research Methodology

Chapter IV: Result Analysis

Chapter V: Conclusion and Recommendation

CHAPTER 2: LITRERATURE OF REVIEW

2.1 Research’s related concepts

2.1.8 CSR practice and challenges

2.2 Researches and Studies

2.2.1 Business Ethics in Viet Nam – Reality and Solutions

2.2.2 CSR in business entities in Viet Nam – Reality and Solutions 2.2.3 CSR – The Investors’ Perspective

2.2.4 CSR, PR of Foreign-Invested Companies

2.3 Researches Summary

2.1 Research’s related concepts

Overtime, there are so many debates among academics, consultants and corporate

executives to find a definition of CSR With this, there are many CSR definitions made

by different researchers, professional and organizations in the world In the many

researches and studies, there are many ways to define what the CSR, many organizations around the world is recognize the growing economic benefits of CSR activities and polices; however, there is one definition that became one of the most frequently cited definition It is widely used by World Business Council for Sustainable Development (WBCSD) According to WBCSD (WBCSD, 1998), corporate social responsibility is defined as “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 of the community and society at large"

According to this, from 1999 to now, there are several definitions of social responsibility

of business have been introduced, however this issue of corporate social responsibility (CSR)’s definitions has bring many confusions for both society and corporation In order,

we can see that, everybody knows the concepts, they can give the appropriate definition

is that these definitions can be understood with different meanings (Blanco & Souto, 2009), and Votaw and Sethi (1973) seen CSR as”it means something but not always the same thing to everybody”

Furthermore, around the world, there are so many firms fully understand its responsibility for its employees, customers, society and the natural environment They have used CSR

as competitive advantage which help their firm to improve their financial status,

employees’ motivation and customers’ loyalty, the company’s image, and its also help companies in long-term development

In literature, various conceptualizations of CSR have been developed; however,

researcher would like to introduction tow most famous conceptualizations: Carroll (1979) four-part definition of CSR and the Corporate Social Performance (CSP) model by Wood (1991)

In the second category, he would liked mention about the legal responsibility, expresses the expectation of society which the business comply with the regulations and laws, and fulfill their economic missions within the legal framework set by societal legal system The concept of fair operation established by lawmakers is the basis for the view of

“codified ethics” reflected in legal responsibility (Carroll, 1979) However, the

applications were fairly is very difficult while the films may be successfully forced by regulations to respond to the issue (Pratima, 2002) Besides, the opportunity for the firm

to be proactive is limited by the reactive nature of the laws Therefore, the laws attempt to

circumscribe the limits of tolerable business behavior, but they neither define ethics nor

do they “legislate morality” (Solomon, 1994)

In next part, because of the companies have depended on the ethical responsibility to overcome the limitation of law; so the ethical responsibility which is mainly rooted in human principals and human rights commitment It is not necessary codified into law, but rather it is expected by the societal members (Novak, 1996) However, the blurred

definition of ethical responsibility makes it very difficult for the organization to deal with

it properly (Carroll, 1979)

The final category, discretionary responsibility, includes activities that response to the society’s expectation of businesses be good corporate citizens The key point to

differentiate between discretionary and ethical responsibility is that the public’s

expectation is not based on ethical or moral sense under discretionary area The

community desires firms to contribute to or build in humanitarian programs; however the firm is not regarded as unethical if it does not satisfy such desires Discretionary

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

Carroll has put four categories of CSR into pyramid:

Figure 2.1 A hierarchy of CSR (adapted from Carroll, 1991)

Under this perspective, economic and legal responsibilities are socially required, ethical responsibility is socially expected, and discretionary responsibility is socially desired (Windsor, 2001)

Carroll’s conceptualization is useful and timely, however it still has limitation According

to Clarkson (1995) states that:” Carroll’s model in the form of a three dimensional cube was complex and difficult to test It did not lend itself to the development of a

methodology that could be used in the field to collect, organize, and evaluate corporate data”

2.1.2 Wood 1991 conceptualization

In 1991, following Wood conceptualization, he had created broader context for CSR than just a mere definition And, there were three steps in his model The first step is the principal which is the motivation for the firm to act socially responsible at three levels: institutional, organizational, and individual The motivation may come from the principal

of legitimacy, the organizational sense of public responsibility, or the managers’ personal responsibility preferences and attitudes

The second one is the responsiveness that includes an action dimension which

complements the motivation of social responsibility It comprises environmental

assessment, stakeholder management and issues management The strategies for adapting

to or changing the environment can be generated based on the knowledge of the external environment On the other had, particular types of stakeholder management devices, for example employee newsletter, corporate social reporting, are useful in investigating stakeholder management Besides, issues management requires investigating the

approach firm used to respond to social issues

Figure 1.2 The Wood’s CSP Model (adapted from Wood, 1991)

Principals of CSR 1

Institutional principal: legitimacy Organizational principal: public responsibility Individual principal: managerial discretion

Processes of CSR 2

Environmental assessment Stakeholder management Issues management

Outcomes of corporate behavior

Social impacts Social programs

The last step is the outcomes of corporate behavior which is consisted of three types: the social impacts of corporate behavior, the programs firms use to implement social

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

stakeholder interests (Jamali, 2008)

Although Wood’s model had made great strides in CSR research, the importance of stakeholder impacts, according to Waddock (2004), had not been considered fully

Further more, Meehan et al (2006) state that:” While Wood’s 1991 model represents a significant piece of scholarship, it nevertheless failed to address the needs of practicing managers charged with implementing CSR/CSP programs and crucially measuring their impacts”

2.1.3 Stakeholder theory

In order, with the profit making orientation is the main concern under the classical view

of an organization’s activities, there is an alternative concept that focus on the mutual relationship between business and society, and with a range of stakeholders (Freeman, 1984).During the last two decades, Stakeholder Theory has been increasingly mentioned

as the common frame of reference in the CSR debate According to Freeman and Reed

(1983)’s stakeholder definition as “any identifiable group or individual who can affect the achievement of an organization’s objectives, or is affected by the achievement of an organization’s objectives”, following that, many people can be classified as stakeholders,

such as, shareholders, creditors, employees, government, media, consumers, local

communities, and so on

In the litter of review, the researcher was seen that there are two branches in the

Theory, all stakeholders have the right to be treated fairly by the organization (Deegan, 2009) The impacts the organization has on the life of stakeholder will determine the organization’s responsibility to that stakeholder, rather than the power of that stakeholder has over the organization On the other hand, the managerial branch of Stakeholder Theory shows that instead of responding to all stakeholders equally, the organization will

only respond to stakeholders that are deemed to be “powerful” (Buhr, 2002) Friedman

and Miles (2002) point out that the greater the importance of the stakeholders supports to organization, the greater the probability that the organization’s operation will embrace that particular stakeholder’s expectation From this perspective, there are so many

activities taken by the organization are related to particular stakeholder groups’

expectations However, many empirical tests of Stakeholder Theory show that instead of being at one or other of the absolute extremes of the ethical or managerial branch, many managers are driven by both ethical considerations and market considerations (Deegan, 2009) So, in order to deliver the CSR information to stakeholders, there is necessary to have the knowledge and commitment of, not only managers, but also accountants 2.1.4 Investment Decision

According to Richard Butler (1993), the investment decision making is the process whereby all resources are allocated in organization in anticipation of future gain

However, in the little research, the researcher see that individual investment decision is just the same thing by which the investor make decision to allocate their scarce resources

to gain in the future In order to make investment, the invested in the firm is most

popular In the past time, investment traditionally involves taking financial aspects and

investors to make decision in the modern world In order to make decision, CSR becomes

a new concept with which the investors consider CSR as a “central” or “important” consideration in investment decision (Economist Intelligence Unit, 2005)

2.1.5 Responsible Investment

In 2005, Louche C has been defined responsible investment is “investment strategy which seeks to generate both financial and sustainable value” According to this, we can see that it’s was not the single concept but the bunch of investment manners that include social, governance and environmental and ethical issues These elements also are used to put into the financial analysis process and decision making In the traditionally, RI is used for equities market only; however, in the modern time, the concept which is also known ethical investing or sustainable investing can be used in many investment asset categories throughout the time of development In order, RI is not only the target but also the

process It is the target in the sense that investors want to achieve that Farther more, it is also the manner with which RI is used to identify the performance, sustainability and responsibility of the investment

2.1.6 Investor Relation

According to NIRI (2001), Investor relation (IR) is defined as “a strategic management responsibility using the disciplines of finance, communication and marketing to manage the content and flow of company information to financial and other constituencies to maximize relative valuation” During the research, the researcher see that NIRI as the first recognized profession investor relations body defines its main reason for existence is

to maintain the firm’s fair relative marker value From that, that the role of investor

perspectives with which the researchers believe that IR includes three phases: simple communication, focus on financial results and active marketing (Marcus and Wallace, 1997) Further more, in the research, the researcher also want focus not only on financial aspects only but also the CSR activities and practices which will be delivered to the investors

2.1.7 CSR Reporting

In the litter of review, the researcher see that, there is an increase of CSR instruments and tools for building the information structure to communicate CSR According to the Schultz et al (2005), he was distinguishing between direct and indirect communication of CSR In order, while external and formal channels such as reports, brochures and

websites are often seen as direct ways to communicate CSR; less formal channels such as articles in local newspapers, or the word of mouth from employees, customers and local community persons are often used as indirect communication Further more, according to Dierkes and Antal (1985) suggest that a basis for dialogue with stakeholders can be provided by publicly disclosing information about how company carries out its social responsibilities

In 1999, Preston et al are showed the importance of this open communication between

managers and stakeholders as, “Managers should listen to and openly communicate with stakeholders about their respective concerns and contributions, and about the risks that they assume because of their involvement with the corporation” According to this, the

researcher seen that for communicating with stakeholders, financial statements and other information included in the company’s annual reports is the primary instrument under an

accounting perspective From a stakeholder perspective “social disclosure is seen as part

of the dialogue between the company and its stakeholders” (Gray et al, 1995)

Further more, with the Triple Bottom Line (TBL) reporting, which is defined by

Elkington (1997) as reporting that provides information about the economic,

environmental, and social performance of an entity, is widely used approach by

organizations in order to inform report readers how sustainable organizations are

So, CSR report is one way in which organizations use to communicate information about social and environmental issues to different stakeholders CSR reports can be mandatory, solicited or voluntary (Van der Laan, 2004; Woodward et al, 1996) In order to supporters for mandatory reporting argue that voluntary self- regulation of CSR is ineffective in preventing damaging social and environmental consequences resulted from corporate activities and decision So, protecting citizens and ensuring adequate CSR information is issued require the action from government to mandate CSR reporting (Doane, 2002) Beside that, even still in relatively underdeveloped form, solicited reporting is slowly gaining acceptance among scholars The demand for CSR information from particular group of stakeholders is the core in solicited reporting This type of reporting enables stakeholders to obtain better information through the symmetric and dialogical forms of communication (Van der Laan, 2004; Woodward et al, 1996) On the other hand, the most widely recognized form of CSR reporting is voluntary Since 2002, this form has risen significantly (Kolk et al, 2005) However, as this form is characterized in the

voluntary nature, companies might use it as a means to paint their image in a favorable light (Stittle, 2002) In order to meet the stakeholders’ demand on CSR information,

different models or frameworks for CSR reporting, such as SA 8000, AA 1000, ISO

14000, GRI, etc

In the current situation, both social accounting and CSR are lack of legislative support and generally accepted standard, it makes CSR reporting loses worth The stakeholders have to doubt about the reliability, fairness and the content interpretation of the report There is a need to complete the cycle with independent and professional assurance in order to give CSR reporting the importance and position it deserves There are several attempts to establish a common framework of CSR reporting (Owen, 2003) M.A.Levine

(2008) affirms that “some stakeholders, including non-governmental organization

(NGOs) that focus upon human rights issues, have called for a legal framework to make CSR programs mandatory They are concerned that existing CSR obligations are

insufficient and voluntary CSR programs are inadequate” The GRI is a possible global

framework for an accepted CSR reporting standard The years ahead will be very

important for achieving commitment to this matter And, as one of the high potential market in the world, Vietnam cannot eliminate itself from the global trend Achieving one worldwide accepted framework for CSR reporting will clearly affect Vietnam

economy and the way in which Vietnam companies operate

In the Literature Review section, the researcher want indicate that all of the studies cited above are taken place in Western countries, there are very few CSR researches conducted

in Asia country, especially in Vietnam where the CSR concept is relatively new

2.1.8 CSR practice and challenges

In the current time, we can see that Vietnam also has CSR practice From 2005, Vietnam had CSR Awards, which was organized by Vietnam Chamber of Commerce and Industry, Ministry of Labor-Invalids and Social Affairs, Vietnam Ministry of Industry and Trade, together with Vietnam Leather & Footwear Association, and The Vietnam National Textile and Garment Group, in order to honor enterprises that well done of CSR in

context of global integration In 2006, there are more than 50 companies of Vietnam Leather & Footwear Association, and The Vietnam National Textile and Garment Group took part in this prize According to PhD Doan Duy Khuong - Vice-Director of Vietnam

Chamber of Commerce and Industry, “CSR has become necessary requirement for each company, if the company does not embrace CSR, they can not approach the global

market” (Saga Vietnam, 2008)

However, there are still lots of challenges in implementing CSR in Vietnam In order, the researcher would like to show three reasons for this issue Firstly, there is lack of law enforcement as well as the cooperation The evaluations of CSR effectuation are set in Code of Conduct and standards such as SA8000, WRAP, ISO 14000, GRI, etc However, the standards are not agreement among Governments or regulations in international convention As this result, ties are only among export or import companies or companies' rules Secondly, the companies' knowledge about CSR is still limited They understand that CSR is only charity and they do not understand that this is a need to implement CSR right from the inside of the organization Thirdly, the companies are lack of money and technique to apply criterions of CSR, especially with the in medium and small companies

Vietnamese are also limited, giving less incentive for companies to embrace CSR and disclose CSR information

However, there are some companies that have started to produce clean vegetables, clean aquaculture, clean coal etc It also become a good action to develop the company in the long time and helps them connect to the world

2.2 Researches and Studies

As the researcher mention above there are very few CSR researches conducted in Asia country, especially in Vietnam; therefore, the research also faces with difficulties in finding enough studies and researches to use for reference and foundation As the result, the researcher has to use some studies which consist of more than one topic In order, the researcher sees that those topics usually are quite related such as business ethics,

corporate culture However, CSR is mostly discussed and studied in those researches; therefore, it is still appropriate to use them

2.2.1 Business Ethics in Viet Nam – Reality and Solutions

In the first one of this section, the researcher also wants to interpret meaning the word

“ethic” As you know that ethics is concerned with moral obligation, responsibility and social justice and the word ethics is rooted from the Geek words “ethikos” and “ethos”, meaning custom or usage However, business ethics is only four decades old despite the fact that it is self-conscious academic discipline According to Nguyen (2008), business ethics has become a one of most topic of discussion by American business officers, employees, shareholders, consumers and college professors Therefore, the study of business ethics has expanded widely to almost all countries in the world

In the Nguyen’s research, the researcher sees that one major part of this research is about corporate social responsibility According to this, he also conducts into emphases on corporate responsibility of production quality and corporate responsibility in environment protection Further more, following to this matter, the researcher will be conducts a survey with which questions on CSR topic is used to ask From those questions was ask, the researcher want to access the understanding of students, investors and managers on the term of CSR For example, the researcher was raise one question about 3- MPCD rate that complies with Vietnamese regulations but exceeds EU permissible levels is

appropriate or not From this question, the researcher wants to know the perception of stakeholders who mostly think of a vague delimitation between regulations and CSR Moreover, during the study the researcher seen that Nguyen (2008) has made several proposals for developing and completing CSR in Viet Nam In order of this, the

researcher also wants to show two of most representative Firstly, he also was indicated that the regulations and laws should be strengthened to eliminate the wrong-doing things

of the business entities Secondly, the issue about the awareness of CSR in Viet Nam should be introduction and performance through not only the media, business

organization and researchers but also support from governmental offices and

departments; And, its should be encouraged in raising their business ethics for both their and other stakeholders’ benefits

2.2.2 CSR in business entities in Viet Nam – Reality and Solutions

According to Tran (2009), he was concludes that there are two ways to define CSR In the first one, there is only one responsibility It also used to solve the issue of scarce

performance And the main idea is to approach the goals and objectives that the managers desire in the borders of law and regulations Further more, he also was said that the social welfare is directly guaranteed through business operation in term of usage and

distribution of benefits from business activities In next one, he was define the CSR is that the CSR is practiced and implemented not only through the economic operation but also on non-economic activities So, this perception also was considers CSR as a social responsibility outside both the laws and regulation’s requirements In order to

development, Tran was concluded that the two perceptions above can be understood that the firm should be able to not only balance the economic benefits and social interest but also on the other CSR activities such as healthcare, environmental protection, and so on Moreover, Tran (2009) also discusses about the responsible investment as a strategy with both economic and long-term values are performance In the study, it is concluded that the responsible investment is relative new term to Vietnamese investors although the usage of this concept has lasted for decades in other developed countries (Tran, 2009) And, there are several actors who following to responsible investment such as investors, rators, and connectors Investors are persons who invest their capital into funds, stocks, and other equity and non-equity market Connectors are initatives and platforms related

to the term of responsible investment And, rators are ranking group which rate business entities and responsibility investment

2.2.3 CSR – The Investors’ Perspective

In this part, the researcher sees that there is no significant difference between investors and other stakeholders in whole In order to making investment decision, CSR is

Céline Louche (2009) quoted that the fund of managers are able not only to use CSR for accessing the firm’s potential viability; however its also effectively use CSR related information in valuing firms (Taylor Nelson Sofres, 2003; Ambachtsheer, 2005; Guyatt, 2005; PLEON, 2005; Jaroski, 2007) Because of this, there are two questions accessing the above issue will be use in this research However, researcher should not expect that individual investors are the same as fund managers; because of the difference in

background and understanding of different type of investors In the study, we can see that the managers of fund usually have long-term investment strategy rather the short-term objectives of individual investors So, the researcher also used new concepts and theories are mostly done by the institution investors

Further more, according to Céline Louche (2009), the investors also can recognize in both financial and long-term values generation is the result of managing social and

environmental risks So, the social and environmental risks were used as the

questionnaires in this research Through it, the investors understand that the company will develop more in the future if it implements CSR activities From these activities the investors can evaluate the long-term development of the company And, when the firm has efficient and effective about the CSR program, that means the firm care about the investors and others stakeholders in the society So, the CSR repost from the company is very important and need for stakeholders as investors

2.2.4 CSR, PR of Foreign-Invested Companies

As the researcher was mention above, CSR is very important for the company Because,

it was responds to the expectation from society, is regarded as a type of investment

of customers, and build up the brand-name of the company Moreover, the CSR also was important with the foreign-invested company as: crisis management, employment

relationship improvement, brand-name development, social sustainable development and government and local relationship improvement So, the CSR reporting is important and need for providing information for the investors and society CSR reporting also help the investors or other stakeholders were more understanding about the company either care about the CSR or not However, CSR reports are relatively new; there is an existing need for CSR reports (Ho, 2008)

2.3 Researches Summary

In this section, the researcher also was summarizing all the information above researches From that, the researcher wants to comparison among those researches and shows the difference in presenting the theoretical framework of CSR in different geographic areas

Author Area Covered Country Summary

- Solutions to raise

CSR understanding and implementation

in Viet Nam

Viet Nam There is understanding of

business ethics and CSR concepts among investors;

it is usually limited to the incomplete knowledge on the topic CSR sometimes

is thought as regulation compliance only

- Responsible

investment

Viet Nam The join of Viet Nam to

WTO is major factor by which CSR is widely understood and required The current CSR scandals raise the understanding and awareness of investors and society as the whole

Lastly, responsible investment is not familiar

Belgium Basic understanding and

related theories on the topic

of responsible investment and investor relation The investors tend to use CSR

as tool to access company’s potential viability rather than to value firm

- The needs of CSR

reports

Viet Nam Foreign-invested firms in

Viet Nam tend to be more social responsibility than the local ones Even though there is lack of CSR

reports, there is an existing need from investors and the society as the whole

Table 1: Researches and Studies Summary