corporate social responsibility in vietnam; a study of its importance

CORPORATE SOCIAL RESPONSIBILITY IN VIETNAM; A STUDY OF ITS IMPORTANCE Vietnamese economy has been integrated with global economy, and then CSR has become more important issues for busin

CORPORATE SOCIAL RESPONSIBILITY IN VIETNAM; A

STUDY OF ITS IMPORTANCE

BY PHAM THUY LY E0700048

BACHELOR OF BUSINESS (ACCOUNTING) HONS

HELP UNIVERSITY COLLEGE

MARCH 2011

DECLARATION OF ORIGINALITY AND WORD COUNT

I hereby declare that the graduation project is based on my original work except for quotations and citations which have been duly acknowledged I also declare that it has not been previously or concurrently submitted for any other course/degree at Help University College or other institutions The word count is 10,758 words

I would like to express my deep gratitude to my supervisor Dr Le Van Lien, International School, Vietnam National University Hanoi He has kindly helped me and supported me all the way through I also would like to express my thank to Ms Sumathi and Ms Shenba, Help University College, who initiated the project and give so much instruction and support

Additionally, I also would like to extend my special thanks to managers, accountants, my friends, and other people who have help me to carry out the survey I want to thank them for all their support, interest and valuable hints

PHAM THUY LY

CORPORATE SOCIAL RESPONSIBILITY IN VIETNAM; A

STUDY OF ITS IMPORTANCE

Vietnamese economy has been integrated with global economy, and then CSR has become more important issues for business to develop sustainably and competition with internal and external partners In order to develop CSR concept and disclosure further, perception on CSR

of stakeholder groups is a unique factor This study aims to discover how organization view CSR and CSR issues, whether behavior or attitude of manager‟s business organization and consumers, as well as accounting students toward CSR The results of the study suggest that there is strong support for CSR from managers and a growing awareness among consumers and accounting students Nevertheless, there is expectation gap between how people perceive

enthusiastic support actions from consumers due to the barriers in living expenses, and low effective CSR communication tools that companies use However, with highly positive attitude toward CSR and the willingness to learn about CSR of people, CSR concept and practice will be popular and developed further in the future

2.1 The definition and conceptualization of CSR 5 2.1.1 Zenisek‟s conceptualization (1979) 6 2.1.2 Carroll‟s conceptualization (1979) 6 2.1.3 Wood 1991 conceptualization 9 2.2 Stakeholder theory 11 2.3 Social accounting 13

2.4 CSR reporting 15

2.5.1 Manager‟s perception on CSR conceptualization 17 2.5.2 Consumer‟s perception on CSR conceptualization 18 2.5.3 Accounting student‟s perception on CSR conceptualization 20

3.1 Research objective 22 3.2 Applied research methodology 22 3.3 Data source 22 3.3.1 Primary data source 23 3.3.2 Secondary data 23 3.4 Research method 24 3.5 Research tool 24 3.6 Data collection 25

3.7.1 Sample population 25 3.7.2 Sample entity 25 3.7.3 Sample size 26 3.8 Language in questionnaire 26

4.1 Findings 27 4.2 Result analysis 28

4.2.1.1 Result of manager‟s questionnaire survey 28 4.2.1.2 Discussion 30 4.2.1.3 Conclusion 31 4.2.2 Consumers 32

4.2.2.1 Result of questionnaire survey 32 4.2.2.2 Discussion 34 4.2.2.3 Conclusion 36 4.2.3 Accounting students 36

4.2.3.1 Result of questionnaire survey 36 4.2.3.2 Discussion 38 4.2.3.3 Conclusion 39 4.3 Implementation 39

5.2 Recommendation 42 5.3 Limitation of study 43

APPENDIX: QUESTIONNAIRE 56

LIST OF FIGURES

Figure 2.1 A hierarchy of CSR (adapted from Carroll, 1991) 8

Figure 2.2 The CSP Model (adapted from Wood, 1991) 11

Figure 4.1 Respondents 27

Figure 4.2 Distribution of responses from management survey 28

Figure 4.3 Distribution of responses from consumer survey 32

Figure 4.4 Distribution of responses from accounting student survey 36

CHAPTER I: INTRODUCTION

1.1 Idea for Corporate Social Responsibility

In recent time, CSR concept is not new to people in over the world CSR is concerned by not only enterprises, but also relevant parties, and stakeholders (“stakeholder” is the people are directly affected by the business operation) In the past, most of firms only concern for profit maximize wherever their factories caused some negative effects on environment and local citizen around their location However, this attitude has been changeable, as most of firms need to care about their responsibilities toward society This is also the foundation for

appearance the concept of “CSR” that is the way business balance between their operations and their effect on environment and society In other words, managers also take strategies to meet the expectations of shareholders and stakeholders relating to their attitude toward

society The key word of this concept is “Social Responsibility” including organization‟s interaction with environment and organization‟s treatments for employees also Based on concentration on CSR, managers expect that they will involve their firms into sustainable developments For more clear understanding about the concept of CSR, the following parts will provide more detailed information about CSR in the world, the fact of CSR in Vietnam, and the reason for conduct this research

1.2 CSR in the world

As mentioned above, most firms focus on CSR strategies in their operations Besides

financial reports, they also concern about CSR report CSR report or we call Sustainability report is the strategic tool help managers evaluate what they done to meet stakeholder‟s expectations, and what they need to improve better stakeholder‟s expectations Sustainability reports are not new and this type of report is published by over two-thirds of the Fortune Global 500 companies Sustainability reports also help manager evaluate the economic and social performance (http://www.environmentalleader.com) We know some reputation

corporation that issued its CSR reports every year such as: Philips Electronics, Facility

Service Company ABM, Coca-Cola, Dell, and Hitachi… Most of firms tried to conduct some strategic methods to improve the quality of its CSR report every year We just look at some examples including: Philips Electronics, Toshiba Groups Philips Electronics always focus on

in its carbon footprint Between 2009 and 2010, this corporation also reduced this element by seven percent, and increased operational energy efficiency by six percent In addition, green innovation has been invested of 450 million for the purpose of improve CSR toward society (www.environmentalleader).Another example comes from Toshiba Group This group has issued CSR Report 2010 in which Toshiba Group strives to act with the highest level to protect environment and solves the social issues facing by this corporation

(http://www.toshiba.co.jp) Besides that, Toshiba focus on the third party commends on the CSR 2010, as well as getting CSR Report back issues Doing that, Toshiba Group‟s managers can learn from the existing issues and improve their responsibility toward the society There are two of many examples relating to corporations that focus on CSR and pursue sustainable development

1.3 CSR in Vietnam

The word “CSR” was appeared in Vietnam for long time; nevertheless Vietnamese citizen and Vietnamese‟s enterprises do not understand it completely More detail, through twenty six (26) Vietnamese Accounting Standards, we have no any Vietnamese Accounting Standard mentions the necessity of conducting CSR Report or Social accounting; whereas most of the international firms involve the social accounting system in its report system However, in recent year, Vietnamese government has taken some significant steps to raise the awareness

of business men Vietnamese government also set up some forum about CSR to educate most business should act in stakeholder‟s perspective This is shown that Vietnam is trying to make CSR as an important factor in sustainable development Not only Vietnamese

corporations, but also international corporations in Vietnam have to care about their

stakeholders when they conduct their business operations Besides that, Vietnam set up the CSR awards in order to improve organizations operating in Vietnam territory to improve their responsibilities toward society Vietnamese government made some detail plan and strategy and projects concerned in CSR based on its resources such as working conditions, safety, hygiene, environment, quality and productivity, labor relations and manpower resources management (http://www.bpsc.com.vn) Nevertheless, we face some interferences and

challenges in developing CSR in Vietnam, such as: the concept of CSR is not still updated to most of the Vietnamese businessmen circles The concerned sides do not identify long term plan and strategy to conduct the programs of CSR in practice On the other hands, this is lack

of companies‟ management ability and professional knowledge in concept of CSR.The topic

of CSR becomes the burn topic when we found that pollution for Thi Vai River from Vedan Vietnam Corp This river is polluted seriously by untreated wastewater, and this caused the bad effects on the local people (http://english.thesaigontimes.vn).Another aspect of CSR violation in Vietnam is issue relating to labor standards Most of Vietnam‟s labor are paid

with the low cost and treated unfair by both of private domestic and foreign-invested

enterprises According to Ho Chi Minh City LA our officials, Vietnamese labors are dealing with the serious violations of the Vietnamese Labor Law that increasing continuously

Besides that, one report on May 26 showed that thirty four domestic and foreign-invested limited companies revealed numerous violations related to labor contracts, payment policies, overtime hours, annual leave, and pregnancy and sick leave (http://www.csr-asia.com).These examples again dedicate that it is the time for Vietnam government and Vietnamese relevant parties need to improve completely knowledge about CSR, as well as define some solution for CSR violations happening in Vietnam, contribute to strategy for sustainable development

1.4 The reason for conduct this research

As we know, after “Doi moi” policy in Vietnam in 1986, Vietnam developed rapidly

Moreover, Vietnam has joined World Trade Organization (WTO) shows evidence for

Vietnam need to pursue strategies for sustainable developments in long term The research is conducted with purpose of improvement CSR knowledge for managers, consumers, and accounting students Managers need to know clearly the overall picture of CSR to act in the effective way, whereas stakeholders need to know how the CSR support for their life from the bad effect of business operations More importance, accounting students, they need to aware about the concept in CSR as they will be the future general develop country better

CHAPTER 2: LITERATURE REVIEW

2.1 The definition and conceptualization of CSR

For past few decades, an examination of literature on CSR continues to be an interesting issue for researchers and academics Over the last three decades, many academics and economic consultants have debated finding the definition of social responsibility of doing business Two decades ago, Neli Chamberlain( 1953) defined social responsibility in terms of action that the leadership in business and unions are expected to take with the respect to their

following in a given situation as mater of right, whether legal or non-legal Against the

feature of Chamberlain‟s definition, William Frederick (1960) expressed that social

responsibility is not simply to narrow benefit and interest of individual persons or companies that is to combine of human and economic resources for social benefits Philip Klein (1978) explains the meaning of social responsibility as relating to internal and external

organizational problems In which, internal problems are stockholders and labors rights while external problems are responsibilities dealing with the affect of the products or services on the community, the relationship among firm and society

The above discussion of different authors leads to one conclusion that any definition of

phenomenon of corporate social responsibility must involve the relationship between social ideology and business ethic in both ideological and operational aspects (Zenisek J,1986) Nevertheless, the developing definition of CSR is complex process because it could

understand different meaning to different stakeholder groups For example, shareholders could define CSR is maximization of profits or high earnings To customer CSR may mean high quality product or services at a good price and perhaps ethical behavior

In this paper, there are three studies which are introduced including Zenisek (1979); Carroll (1979) and Wood (1991)

The second component is attitudinal which is fit between social expectations and what a business manager‟s regard to be legitimate societal demands This component represents ideological aspect of the firm‟s ethics

2.1.2 Carroll's CSR model (1979)

Carroll‟s model in 1979 perhaps the most oft-cited definition of corporate social

responsibility Carroll‟s CSR model contains four categories of corporate responsibility arranged from most to least important including economic, legal, ethical and philanthropic Firstly, according to Carroll‟s model, all business responsibilities are based on the

corporation‟s economic responsibility It indicates that business organization‟s principal role provides product or services what customer‟s need and want and making acceptable profits in the process In other words, before business organization was anything else, it was the basic

economic in the community The motivation of profit was considered as the primary

motivator for companies

Secondly, legal responsibility is principal expectation of society to business that include implying with laws and regulations issued by federal, state and local governments as ground rules which business must operate Besides that, business and society firms are expected to pursue their economic missions within the legal framework of the law as a partial fulfillment

of the social contract In other concept, legal responsibility reflects a view of “codified

ethics” that embody basic notion of fair operation

Third part, ethical responsibilities combine those standards, norms, or expectations that reflect a concern, for what consumers, employees, shareholders, and the community regard as fair, just, or in keeping with the respect or protection of stakeholders' moral rights In another sense, ethical responsibilities may be seen as newly emerging values and norms society expects business to meet, even though higher standard of performance of such values and norms Besides that,ethic responsibility is important to perform in a manner consistent with expectations of societal mores and ethical norms or to recognize and respect new or evolving ethical moral norms adopted by society

Finally, philanthropic responsibilities encompass those corporate actions in respond to

society‟s expectation to make companies to be good corporate citizens For example, those activities are business contribution of finance resources or executive time to art, education or the community The different feature between philanthropic and ethical responsibilities is that society‟s expectation is based on ethical or moral sense In other word, communities expect companies to provide their money, facilities, and employee time to humanitarian programs However, firms are regarded as ethical if it does not satisfy the desired level Therefore, on

the part of business, philanthropy responsibility is more discretionary or voluntary even through businesses always provide societal expectation

Figure2.1: Carroll (1991) CSR Pyramid

There is no research or study to be exact and conceptualization CSR model of Carroll is the same situation Carroll‟s conceptualization is either a durable or useful model for defining and exploring CSR However, this model has some lacking of conceptual clarity and

questions about its descriptive accuracy, especially in different cultural contexts.Secondly, it

is very simplistic and static, failing to capture the complexity of CSR in practice Besides that, definition of CSR/CSP in this model domains but not the nature of responsibility or performance (Wood, 1991)

2.1.3 Wood 1991 conceptualization

Wood (1991) took similar approach concepts of corporate by proposing a conceptual model social responsibility Corporate social performance or CSR is defined more completely than

Carroll‟s once as: “a business organization’s configuration of principles of social

responsibility processes of social responsiveness, and policies, programs and observable outcomes as they related to the firm’s societal relationships” (Wood, 1991)

Wood (1991) argued that business and society are interwoven rather than distinct separate entities Hence, society has certain expectations of business behavior and outcomes with regard to business.These expectations can be divided into three groups with corresponding principles (figure 2.2) The first group includes expectations of all businesses because their roles play as economic institutions The principle that applies to institutional level of analysis

is that of legitimacy The principle of legitimacy is to concerns business as a social institution and frames the analytical view of the inter-relationship of business and society This principle

is based on the premise that “society gave business its charter to exist, and that charter could

be amended or revoked at any time that business fails to live up to society's expectations.”

(Davis & Blomstrom,1971)

The second group expectations are placed in individual firms This principle is for

organizational level of analysisthat the principle of public responsibility applies.According

to this principle, Wood (1991) states that businesses do not have responsibility to solve all social issues but they are responsible for their stakeholders and to solve problems related to their activities that they have caused and they are responsible for helping to solve problems and social issues related to their business operations and interest

The third group of expectations relates to the manager as a moral agent It is for individual

level of analysis that is of managerial discretion This principle is based on that “managers

exist in an organizational and societal environment that is full of choices, their actions are not totally prescribed by corporate procedures, formal job definitions, resource

availabilities, or technologies They are moral actors on the job as well as in other domains

of their lives” (Wood, 1991) This principle states that business‟s managers face ethical

concern when they make decisions Basing on this principle, society expects managers to focus both on the companies‟ interests and on the implications that their decisions have for society

In general, business organizations adopt their social responsibilities on above three levels that will contribute to environmental improvement and sustainable development and will enjoy consumer loyalty, as well as improving human resources management These principles state

that responsibility of organizations is for “their primary and secondary areas of involvement

with society” and that managers are “moral actors obliged to exercise such discretion as is available to them, toward socially responsible outcomes.” (Wood, 1991)

Furthermore, Wood (1991) also suggests that companies use three main of processes to apply these principles into practice: environmental assessment, issues management, and stakeholder management In the process of CSP model, Wood presents the outcomes of bringing

principles into practice within the economic, legal, ethical, and discretionary domains,

categorizing them in terms of social impacts, social programs, and social policies

In the contrast, there are some limitations of Wood principle of CSR.The first limitation Wood (1991) acknowledged is that terms such as legitimate functions, obligations, and social well-being are neither universal nor absolute in their meaning; they are time and culture bound It implies that a firm may have different responsibilities in different countries and at different points in time.A second limitation is that these principles are defined variously by relevant stakeholder groups even within a specific time and culture, concepts As result, a

firm may face conflicting expectations A third limitation is that organizational and

individual-level concepts including options, opportunities, constraints, and choices are bound

by different conditions and perceptions among organizations and people Due to these

limitations, Wood (1991) concludes that “the principles of CSR should not be thought of

absolute standards, but as analytical forms to be filled with the content of explicit value preferences that exist within a given cultural or organizational context and that are

operational zed through the political and symbolic processes of that context”

Figure 1.2 Corporate Social Performance Model (Wood, 1991)

Principals of corporate social responsibility

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

Processes of corporate social responsiveness

Environmental assessment Stakeholder management Issues management

Outcomes of corporate social behavior

Social policies Social programs Social impacts

2.2 Stakeholder theory

The term” stakeholder” is now popular word for most executives The term implies various stakeholder groups who can affect or be affect by the organization‟s activities.Freeeman (1998) defines stakeholders as “groups and individuals who benefit from or are harmed by,

and whose rights are violated or respected by, corporate actions” Stakeholders include

creditors, employees, customers, suppliers, and the communities at large Hence,

stakeholder‟s legitimacy and power are influenced on the firm For CSR perspective, their legitimacy may be the most important Hence, the concept of stakeholder personalizes social and society responsibility should consider in CSR orientation (Carroll, 1991)

Deegan and Unerman (2006) states that “ more correctly, the tem stakeholder Theory as an

umbrella term that actually represents a number of alternative theories that address various issues associated with relationship with stakeholders, including considerations of the rights stakeholders the power of stakeholders or the effective management of stakeholders”

In other research, Jones and Wicks (1999) attempts to discuss the current state of stakeholder theory which are summarized as following First, the corporation has the relationships with many stakeholder groups who can affect and can be affected by its decisions Second, the nature of these relationships in term of both processes and outcomes for the firm and its stakeholders are main purpose of theory Third, the interests of all stakeholders have intrinsic value and no set of interests is assumed to dominate the others Last, stakeholder theory focuses on managerial decision making

There are two branches of Stakeholder Theory namely ethical branch (moral) and the positive (managerial) branch (Deegan 2009) Under the ethical perspective, business organization must treat fairly all stakeholder groups by their right and business‟s managers should operate organization for the benefit of all shareholders Due to companies‟ moral obligations, hence, they will expose information to their shareholders In the contrast, the managerial perspective

of stakeholder theory attempt to distinguee that corporate disclosure is driven by the level of power or control which are obligated by the specific stakeholder groups over the firm‟s resources And so, corporate management will attend to focus on expectations of particular stakeholder groups (Freeman, 1984)

Donaldson and Preston (1995) defined three themes in their formulation of a stakeholder theory of the firm First, this theory is descriptive in which it describes a corporation as interacting with a wide range of groups with different interests and demand Second, this theory is instrument that provides a basic for exploring a relationship between a firm‟s CSR activities and other corporate performance parameters such as profitability, revenue, return on investment Third, stakeholder theory is normative which recognizes that groups other than shareholders, employees, suppliers and customers who may not have contractual relationships with the firm but they are also legitimate stakeholders

In contrast, there are some problems with this theory First limitation is its static character The considering multilateral construction of relationships among an organization and its stakeholders are essential However, stakeholder theory is not well filled out to account for the dynamics of multilateral stakeholder interaction The second limitation concerns the role specified to stakeholders in the theory.The aim of an organization is both management of the relationships with its stakeholders and reaching specific goals, taking into consideration their presence and the influence they can exert on the decision-making process Hence, stakeholder theory should expand specific stakeholder groups, not only concentrated on managers Third limitation is the bias of this theory towards the implicit assumption that stakeholders

constitute homogeneous groups

2.3 Social accounting

Social accounting began developing in the UK in the early 1970s.At that time, the concept of

social accounting accepted by a most cited paper by Mobley (1970): “social accounting

refers to the ordering, measuring and analysis of the social and economic consequences of governmental and entrepreneurial behavior So defined, social accounting is seen as

encompassing and extending present accounting.” Gradually, social accounting has shifted to

a broader range of society‟s concern Quarter, Mook and Richmond( 2003,p.3) defined social

accounting as “ a systematic analysis of the effect of an organization on its communities of

interest or stakeholder, with stakeholder input as part of the data that are analyze for the accounting statement” This definition is consistent with others in the field (Estes, 1976,

Gray, Owen and Adam, 1996, Institue of Social and Ethical Accountability, 2001; Mathews and Perera, 1995)

The purpose of social accounting are identifying and measurement the net social contribution

of an organization; second, determining whether the individual firm‟s strategies; third,

making available in an optimal manner, relevant information about company‟s goals,

programs (Quarter, Mook and Richmond 2003) This study claims that there are two

constituents in social accounting including social cost and social benefit In which, social costs are sacrifice of the societywhether internal or external economic, in which the business firm is responsible like environment pollution, destruction of animal resource, deforestation, monopoly and social losses, ect Whilst social benefit is compensation made to the society in the form of increase in per capital income, development of educational facilities, construction

of public roads, and protection of natural resources, employment opportunities Hence, social cost-benefit analysis is considered to measure corporate social performance

Objective of traditional accounting is only record all affects of actions upon organization itself As a consequence, organizations take activities significantly and to be recorded while other activities are seemed as irrelevant and ignored Traditional accounting remains

concentrated on the activities of the organization and dismisses the affects of the organization over its external environment (Crowther and Hosking, 2009) Since 1970‟s a larger number

of researchers had argued that one of the roles of accounting should be to report on the

impact of external environment In the side of economic view, accountability considers the social performance of a business as a member of society at large

Historically, social accounting was concerned with local communities, employees, consumers and environmental issues Nowadays, awareness is raised regarding issues such as fair trade, transfers of wealth, trade with repressive regimes among developing and developed countries Social accounting extends to other issues including unsafe products and work places, cost padding and fraud in defense contracting

2.4 CSR reporting

Silberhorn and Warren (2007) examines that CSR means different thing for whether

managers from different countries Data on CSR reporting is obtained using content analysis

on the company‟s websites Annual reports are used for measuring disclosure but they do not provided correct all respect of CSR activities within organizations ( Unerman, 2000; Holland and Foo, 2003) It is because literature documented significant use of company websites in CSR reporting.For example, various factors such as the development level of country,

globalized process, and national business system lead to homogeneous of CSR (Chapple and Moon (2005) Hence, CSR website reporting varies between different countries Similarly, Frost et al (2005) also find that the annual report is the least valuable source of information

on CSR The CSR stand-alone report and websites provide greater levels of information on CSR

In a feminine society, CSR reporting is expected to be better in terms of quality and extent, as opposed to a masculine society because this society puts more attention on social goals such

as relationships, helping others and the physical environment (Hofstede,2001).Hence, Van

Der Laan Smith et al (2005) finds that culture is inferred as important in explaining the variations of quality and extent of CSR reporting

CSR reporting brings some benefit firms First, this report help enhance stakeholder relations and credibility by meeting rising expectation for disclosure and transparency Secondly, it also protects and improves the brand image of company, dismissing possible negative

campaign and upgrading the company image Third, companies may use reporting as internal communications, educating and motivating employees In responding to a growing demand for socially responsible investment, reporting provides for better accessibility to capital market

Based on the arguments by Van der Laan (2004) and Wooward et al (1996), reports can be made into three different types CSR including mandatory, solicited or voluntary Mandatory reporting is issued by state for protecting citizens and ensuring the provided appropriate information (Doane, 2002) Solicited reporting gains slowly social acceptance, then it is still underdeveloped form The core of solicited reporting is to provide information which is issued by a particular stakeholder group (Van der Laan, 2004) Voluntary reporting is the most recognized form of reporting

Dierkes et al (2002) identify several problems facing the company when preparing the CR report: the problems of quantifying, limiting, measuring, and evaluating It is difficult to find operational definitions and practical indicators, suitable methods and information techniques Comparing data may turn out to be impossible

Several international standards and guidelines that have been adopted by companies in

reporting their CR activities are GRI, AA1000, and UNGC First, the Global Reporting Initiative (Hopkins, 2003; Owen, 2003) developed in 1997 by the Coalition for

Environmentally Responsible Economies (CERES) in cooperation with the United Nations

Environment Program (UNEP) The mission of GRI is the Global Reporting Initiative The aim of this standard is to provide reporting guidelines for the content of sustainability reports covering economic, social and environmental factors of an organization Second, the United Nations Global Compact (UNGC) is an international initiative to encourage businesses

worldwide to adopt sustainable and socially responsible policies, and to report on them.UNGC is aimed at bring together companies, UN agencies, labor organizations and civil society in support of 10 principles covering human rights, labor, the environment, and

corruption Third, Accountability AA1000 assurance standard has also been introduced by the Institute for Social and Ethical Accountability (ISEA) (Owen, 2003) AA1000 is seemed

as a foundation standard which comprises principles and a set of process standards

Moreover, there are several other international standards and such as code of product (e.g., OECD Guidelines, ILO Declaration), Management standards (e.g., SA8000; ISO 14000), Screenings and rankings (e.g., Dow Jones Sustainability Index, FTSE4Good)

2.5 Hypothesis

2.5.1 Manager’s perception on CSR conceptualization

Comparing relationship among stakeholders, corporate managers played a unique role in business organization Based on stakeholder- agency theory, managers provide the firm with time, skills and human capital conditions Managers are unique role of management because

of their position at the nexus of contracts This theory states that “Managers are the only

group of stakeholders who enter into a contractual relationship with all other stakeholders Managers are also the only group of stakeholders with direct control over the decision

making process of the firm‟ (Hill and Jones (1992)

Executive and managers of organizations make decision and plans for CSR programs Wood

(1991) states that: “A company’s social responsibilities are not met by some abstract

organizational actor; they are met by human actors who constantly make decisions and choices, some big and some small, some minor and others of great consequence” Hence,

Wood concludes the basis for a situational relationship between managers and their

organizations that managers exercise discretion within the context of an organization‟s

definition of public responsibility

Furthermore, CSR reporting can be obstructed if managers lack knowledge and experience on management, practicing CSR, understanding how the CSR goals and reporting practices can

be integrated into strategic planning process, choosing a reporting framework

Besides, behavior of manager on CRS is impacted by their general feelings in the society Normally, society‟s expectations reply on firm‟s social responsibilities which are decided by manager‟s actions toward CSR Therefore, we can confident to assume that manager‟s

behavior toward CSR is positive influence on CSR practice of organizations The following hypothesis is developed:

Assumption 1: Manager’s behavior toward CSR is to influence positively on CSR practices

2.5.2 Consumer’s perception on CSR conceptualization

Maignan (2001) defines consumer„s perception of CSR as “differentiate between corporate

economic responsibilities on one hand and corporate legal, ethical, and philanthropic

responsibilities on the other hand” She also seeks that consumers distinguish these same four

components but that they regard the economic component as fundamentally different from other components including legal, ethical, and philanthropic components

Consumers concerns not only simply quality of product at low price, but also expecting organizations to demonstrate congruence with some social values as contribution to the community (Handelman and Arnold, 1999) It is because consumers are not only economic beings but also members of a community They can choose to evaluate a company based on whether the organization acts in consistence with the welfare of the community and society Consequently, they can be willing to offer their support for socially responsible companies (Bhattacharya, Rao and Glynn, 1995).Hence, Consumer knowledge of a firm's CSR

initiatives may lead to a higher evaluation of the company and a more positive evaluation of the company's product (Brown & Dacin, 1997)

Moreover, consumers increase expectation business to go beyond delivering economic outcomes and also contribute to society‟s welfare and sustainability by being socially

responsible Consumer will support to business if they also do so (Dawkins 2003).Therefore, pro-social marketing initiatives as CSR claims that become a market specialize strategy, building brand equity and leading to customer loyalty and other positive post-purchase

outcomes (McWilliams and Siegel, 2001, Hoeffler and Keller, 2002, Bhattacharya and Sen, 2003) And consumer knowledge and commitment of a firm's CSR initiatives may lead to a higher evaluation of the company and a more positive evaluation of the company's product (Brown and Dacin, 1997)

Before consumer consider a firm‟s CSR initiatives in order to make their purchasing

decisions They must be not only aware of those initiatives, but also aware of social issues that firms are engaging in ( Maignan 2001) As the result, consumers' personal support, and awareness for a CSR domain to be a key determinant of their sensitivity to a company's CSR efforts ( Sen and Bhattacharya,2001) According to above discussion, there is reasonable to assume that behavior of consumer toward company„s CSR practices is confident

Assumption 2: Behavior of consumer toward company’ CSR practices and disclosures is positive

2.5.3 Accounting student’s perception on CSR conceptualization

Radebauh and Gray (2002) emphasise that CSR refers to“accountability to society as a whole

with respect to matters of public interest such as community welfare, public safety, and the environment” Besides that, Gray et al (1996) considers CSR as a mean by which an

organization can discharge what they view as its social accountability Hence, He/she defined

the term accountability as “the duty to provide an account (by no means necessarily a

financial account) or reckoning of those actions for which one is held responsible” In other

term, Crane and Matten (2004) defines corporate accountability has also been recently

referred “to whether a corporation is answerable in some way for the consequences of its

actions” Therefore, in finance function, accountant may face social responsibility in

everything from investment appraisal to environmental accounting

Concept of accounting is social and not limited to economic issues (Williams, 1987) Hence, responsibility of accountant provides information for the needs and interest of society at large In order to follow this concept, practicing accountants, especially accounting students should understand “needs and interest of society”

Furthermore, Ijiri (19830 state that accountability is predicated in the right-to-know which mean all stakeholders have right to get business information such as legal, financial, social

activities Accountability is based on the principle “show me”, rather than just “trust me”

(Zairi and Peters, 2002) Hence, accountability is very important in society It can be seen as

a key factor for engaging the wider community as an important stakeholder in business

activities Hence, behavior of accountants on CSR and CSR‟s issues can be expected

positively

Accountability information play important role in business‟s manager making decisions as well as other stakeholder groups Hence, potential accountants (current accounting students) and practicing accountants have social responsibilities to prepare and to report reliable

accountability information, CSR information as well to all stakeholders The third hypothesis

is assumed:

Assumption3: Accounting student’s behavior is also positive toward company’s CSR

activities

CHATER 3: RESEARCH METHODOLOGY

3.1 Research objective

The objective of this research is to focus on three main factors such as: management‟s

perception on CSR conceptualization; consumers‟ perception on CSR conceptualization; accounting student‟s perception on CSR conceptualization Accordingly, this research‟s objective is the information collected to clarify three assumptions as follows:

Assumption 1: Manager’s behavior toward CSR is to influence positively on CSR practices Assumption 2: Behavior of consumer toward company’s CSR practices and disclosures is confident

Assumption 3: Accounting student’s behavior is positive toward company’s CSR activities

3.2 Applied research methodology

For each research, selection the most appropriate research methodology is very important; as this is the effective tool help the writer express the ideas, as well as collect the necessary information The main research methodology applied in this research is based on the

questionnaire, as this method takes low cost, and is easy to conduct

3.3 Data source

This research will gather information through two main data sources such as: primary data and secondary data

3.3.1 Primary data sources

Primary data is concerned with the sources of data gathered in the direct way Or in other words, this source of data will serve the researcher‟s expectation by gathering at hand for specific purpose One of the ways to collect primary data is collecting information from questionnaire The writer can base the objective of the research to create the specific

questionnaire paper and distributes for number of selected people Using primary data, the researcher can be more active in collecting information, directly communicate with people received questionnaire Nevertheless, it is too difficult to collect information from primary data, as this requires the expertise and knowledge about the topic, and take a lot of time to complete and gather information

3.3.2 Secondary data sources

If primary data sources need to conduct for collecting information, secondary data sources is often available on newspaper, journal, internet, and other sources The most advantages of secondary data source are low cost and take a short time to collect information Nevertheless,

as the secondary data is too much, required information might not be found, or the entire needed information might be not available on internet To meet the researcher‟s need, the researcher need to collect the information from secondary data sources carefully such as: reading all information, limiting the needed information, classification the finding

information, analyst information, and the final stage is to evaluate the finding information in order to meet the requirements of each research

As mentioned in research objective, survey involves three patterns to clarify three

assumptions relating to managers‟ perception, consumers‟ perception, and accounting

students‟ perception toward the concept of CSR Management survey consists of seven (7) questions to measure the managers‟ knowledge about the concept of CSR and how company act to response this concept Consumer survey includes six (6) questions to expose the

consumers‟ attitude toward the concept of CSR such as: knowledge about CSR, buying behavior products that come from the companies follow the CSR Accounting student survey consist of seven (7) questions is to measure their awareness about CSR, and their ideas about CSR education and practice in universities

The measurement for all of three survey models is five-points Likert scales (I= “strongly disagree”; V= “strongly agree”) to indicate that how the respondents approach and

understand about the concept of CSR Besides that, the additional opinion part is added for respondents want to write more clearly their ideas

3.6 Data collection

Major information of this paper is primary data from result of survey The management surveys are sent to mangers of ten companies including financial services (Vietinbank, An Binh Bank, Ha Noi Stock Exchange), consumer goods and services (Vissan Company,

Thuong Dinh Footwear Company, Vincom Megastar Cinema), and industrial ( Hanel

Company, Honda Vietnam Limited company).The consumer‟s questionnaire survey are delivered to people who was customers/buyers in branches of Vietin Bank, Ho Noi stock exchange, Parkson Plaza, Vincom Megastar Cinema Surveys for accounting students are done by students of International School, Vietnam National University Hanoi (IS-VNU) and Foreign Trade University (FTU)

The secondary data are collected from annual reports of business organizations or

3.7.3 Sample size

Total 380 questionnaire surveys are introduced including 100 management questionnaire patterns, 150 consumer questionnaire patterns and 130 accounting student questionnaire patterns have been sent out

3.8 Language in questionnaire

The questionnaire used the plain English for the most effective understanding In addition, the phrase used in questionnaire is short and easy to give the answers in some minutes.The researchers distribute the questionnaires for group leaders good at English, and then they will help other members in their group complete the questionnaire in the most effective way to avoid misunderstanding