the importantce and effect of csr reporting on the performance of vietnam companies

The objective of this study was to assess consumer awareness of Vietnames' consumers, managers, accountants and employees of companies on the concept of social responsibility, CSR perfor

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 13,290 words

_

Kieu Trung Kien

17 October 2011

ACKNOWLEDGEMENT

I will not be able to complete this study without the assistance, support and

encouragement of many people I appreciate their kindness and would like to take this opportunity to thank everyone who helped me during my performance in this study First, I want to express my gratitude to the person who instructed me directly me, Dr.Pham Duc Hieu He was pleased to guide, support, and encouraged me from the beginning of this study Moreover, I want to say thank you to Ms Sumathi and Ms Shenba of Help University, who initiated the project and provided me guidance and support Finally, I would like to thank my friends who supported and encouraged me to complete this study, and managers, accountants and employees of the companies I surveyed, the consumer has to spend time to answer my question Thanks all

THE IMPORTANTCE AND EFFECT OF CSR REPORTING ON

THE PERFORMANCE OF VIETNAM COMPANIES

to the business in Vietnam So I want to do this research to find out the implementation

of the company's CSR in Hanoi in particular and Vietnam in general The objective of this study was to assess consumer awareness of Vietnames' consumers, managers, accountants and employees of companies on the concept of social responsibility, CSR performance of companies in Ha Noi and its impact on the development of the company Then, recommends that companies should implement CSR to obtain long term benefits including financial and reputation

TABLE OF CONTENTS

DECLARATION OF ORGINALITY AND WORD COUNT………1

ACKNOWLEDGEMENT……… ……….2

ABSTRACT……… …………3

TABLE OF CONTENT …… ……….4

Chapter 1: Introduction ……… 8

1.1 Research Background ……… ……….8

1.1.1 CSR in the world ……….8

1.1.2 CSR in Vietnam ……….9

1.2 Existing problems facing Vietnam in the field of CSR ………11

1.3 Problem Statement ………… ……… 12

1.4 Research question ……… ……… 13

1.5 Reason for choosing topic… ………13

1.6 Structure of Research ………14

Chapter 2: Literature Review……… 15

2.1Definition and conceptualization of CSR………15

2.2 The concepts related to CSR ……….16

2.2.1 In term of state management ……… 16

2.2.2 Business ethics……….17

2.2.3 Corporate cultural……… ….17

2.2.4 Environment Protection……… ……17

2.2.5 CSR reporting……… ……… 18

2.2.6 Public Relation……… ………… 19

2.3 Theories related to CSR……… …… 19

2.3.1 Carroll`s “Pyramid of CSR”……… …….19

2.3.2 Stakeholder theory……… ………22

2.3.3 Legitimacy Theory……… 23

2.3.4 Triple bottom line………23

2.4 Hypothesis……… 24

2.4.1 Managers` attitude toward CSR reporting……… 24

2.4.2 Consumers` attitude toward CSR reporting………24

2.4.3 Employees` attitude toward CSR reporting……….25

2.4.4 Accountants` attitude toward CSR reporting……… ………27

2.5 Effect of CSR on the performance of Vietnam companies………27

2.6 Methods of effective implementation of CSR……… 29

Chapter 3: Research Methodology ………31

3.1 Research Objectives ……… 31

3.2 Research Method ……… 31

3.3 Data sources……….32

3.3.1 Primary data……… 32

3.3.2 Secondary data………34

3.4 Research tool ……….33

3.4.1 Questionnaires……… ………….33

3.4.2 Personal interview ……… …….33

3.4.3 Annual report……… ……… 34

3.5 Data collection……… ……….34

3.6 Sampling……… ………… 34

3.6.1 Sample size………35

3.6.2 Sample techniques……… … 35

3.7 Limitation……… ………36

Chapter 4: Result Analysis ……… 37

4.1 Collection of Questionnaires ……… 37

4.2 Description of Result……… ……… ……39

4.2.1 Manager……… ……39

4.2.1.1Findings from questionnaire survey……… ….39

4.2.1.2 Implementation of CSR: ……… …….42

4.2.2 Consumer……… ……….45

4.2.2.1 Finding from questionnaire survey……… ….45

4.2.2.2 Consumers „attitude toward CSR……… ………45

4.2.2.3 Consumer` stated support for CSR……… …….48

4.2.3 Employee……… ……….50

4.2.3.1 Finding from questionnaire survey……… 50

4.2.4 Accountant……… ………53

4.2.4.1 Finding from questionnaire survey……… 53

Chapter 5: Conclusion and Recommendation ……….…….56

5.1 Conclusion ……….……… 56

5.2 Recommendation ……….………58

Reference……….……… 60

APPENDIX A:……….…….63

APPENDIX B:……… 70

Chapter 1: Introduction

1.1 Research Background

1.1.1 CSR in the world:

CSR has become a real movement and growth and development worldwide Tens

of thousands of articles, studies, books, magazines, forums, websites, academies,

business, consulting, media and government talk about CSR topics If we look up the original phrase "social responsibility of business" in English on Google, we will see more than 70 million searches (not to mention the terms of CSR in the country-specific) Consumers in the European and American countries today are not only concerned with product quality but also value the way companies make products that are

environmentally friendly eco-community, humanitarian, and healthy However, Annual statistics on charitable activities in the business world of the British magazine, The Guardian showed that 100 leading companies in the stock market in London is only less than 1% of profit before tax for the operation charitable and community projects in the past year Although the total amount of British companies to contribute to charities rose 7% to $ 1.6 billion, but only less than 34 companies supporting more than 1% of profits Forward and support the charities of the 14 companies‟ ranked bottom of the list less than 0.01% of the profits Looking at the other side of the coin, according to the research center on the management of Ashridge, the management of 10 senior executives, up to 9 people believes that CSR is critical to the business operations of the company More than three quarters of managers said that the company should operate according to the

consider CSR as a cost rather than an opportunity in many developed countries, such as U.S., South Korea, companies are actively applying the technology investment-friendly environment has significantly increased revenue: Corporation of America produce light, Haitech Group investment in 1994 was USD 4.3 billion on pollution controls, from which the prestige of the company increased rapidly and in 1999 exported $ 8 billion Or

in Korea, demonstration projects of cleaner production techniques developed from 7 /

1999 to 8 / 2000, with the participation of 15 companies, there were 13 successful

companies They estimated to save $ 770,000 / year, while only $ 140,600 to invest We can see that CSR has been applied to companies in developed countries made long time ago As the world's major markets are increasingly more difficult, not only products are required to ensure quality but also require "cleaner" To successfully penetrate the large but difficult market such as Japan, America and Europe, companies need to strengthen research capacity to apply international standards such as ISO 14000 environmental and standards about environment of the market to penetrate

1.1.2 CSR in Viet Nam:

CSR is known in Vietnam through the activities of multinational companies

investing in Vietnam These companies have taken the lead in putting CSR on the

commercial activities of the company They are always interested in environmental protection, working environment of workers and many other social problems So the content of social responsibility in the foreign company has basically done and highly effective We can take some prominent examples like the "I love Vietnam" of company's Honda-Vietnam; program "a million cups of milk" for the poor children of Vinamilk, building charity houses for poor people of the Song Da; surgical programs to support

VinaCapital, Samsung; vision rehabilitation program for poor children of the Western Union

For domestic enterprises, the export company is probably the first to reach the CSR Most orders from Europe-US-Japan business require garments, footwear must apply the good work (SA8000 standard) or to ensure food hygiene and safety (for the joint

fisheries) In addition, many private companies in the CSR issues catch pretty

complex There are many companies actively implement CSR and create a good image

discharge of wastewater to water pollution and many other environmental problems There were some interesting conference on topics such as CSR Asia Forum on social responsibility of enterprises 6 th, was held on 13/10/2007 at TP Ho Chi Minh; and workshop on "Improving the competitiveness of Vietnam through the social

responsibility of business" in collaboration with the Embassy of Denmark held on 08/1/2008 In addition, Vietnam also has the authorized forum committed to introduce and discuss CSR at: http://www.vietnamforumcsr.net/ by the Center for Development and Integration (a private consulting firm people) building, under the sponsorship of international aid organization Action Vietnam

On state management in the field of labor, we have the Labor Code in 1994, and

subsidies, laid off employees) and 2006 (the contents of labor disputes and strikes) CSR activities in our country has changed greatly after the Environmental Protection Law enacted in 2005 replaced the old law in 1994 had almost no effect Next, a series of decrees were issued in time to guide the law, putting content on the environmental protection investment procedures, and institutionalize the work of state management on construction materials, water charges industrial waste, mining, solid waste management

In the state of environmental protection, we have the Department and the

environmental protection department under the central and local levels Remarkably, after a year since the law was enacted, the last in 2006, the Ministry of Public Security established the Environmental Police Department and Environmental Police Department

in the provinces Up to now, the agency has investigated and found hundreds of

pollution caused indignation in public opinion

The fact that consumer` awareness of CSR is not high The managers have not

focused, respect and implement CSR in the lax management of the state, the legal documents are unrealistic, which has led to business easily spleen law, rejecting moral responsibility of business (M3CPD infected cases sauce, milk contaminated with

melamine) or polluting the environment in severity in a long time without being

processed (for Hyundai Vinashin, Vedan, Miwon)

1.2 Existing problems that Vietnam faces in the field of CSR:

- After the process of rapid economic growth, many countries have paid on the

environment Fast growth and ecological environment are two very different aspects of the growing economy By commitment to the objectives of CSR Vietnam proved not

sacrifice quality of life of people for the purpose of rapid growth in the short term Through the service of food poisoning (soy milk), we see that state agencies are often in the passive and documents are not adhere to the law practice But, it requires accurate law system

- But even if the law Vietnam has relatively strict rules on the implementation of CSR issues in many companies, the pollution cases occurred more than ten years without being detected and managed, that agencies do not take their responsibilities This is perhaps the key issues that need our immediate solutions

- Civil complaint mechanism in our country is almost very little used Sense of

community and sense of protecting the interests of the people is very low It can be said

in front of large businesses, local people feel alone, weak and they lack the support of government

1.3 Problem Statement:

Nowadays, CSR is more important to the business in Vietnam through a series of

alarming cases of corporate responsibility to the environment and society There are many recently examples such as environmental damage Vedan River Market Fabrics, for the purchase of raw milk at low cost Vietnam Milk Company, for use of expired

ingredients of Tan Hiep Phat, bitter taste of potato company Pepsico Vietnam and most recently in the case withdrawal of milk allergy company FrieslandCampina All the above companies are big business and have many CSR activities as the development programs of dairy Vinamilk and FrieslandCampina This is beyond the limits of the

taxpayers, create jobs and protect the environment The scholarships, study promotion is done So what has caused things to go down pretty picture of corporate capital? The incident not only demonstrates a lack of corporate responsibility but also a weakness in identifying the challenges and issues to protect the interests of the business environment

in which businesses are participating Business So, many corporations and big business

in Vietnam build CSR set criteria are central to the overall business strategy to promote and support business creatively solve problems and challenges in the business CSR approach can support both enterprise development and sustainable business and

contribute to the protection and improvement of social standards

1.4 Research question

The purpose of research question is to analyze the relationship between the importance and effect of CSR reporting on the performance of Vietnam companies – It includes:

Sub-problem 1: Why is CSR very important for operating of a company?

Sub-problem 2: What is effect of CSR on the performance of Vietnam companies?

Sub- problem 3: What are methods of effective implementation of CSR?

1.5.Reason for choosing topic:

In developed countries like Europe and America, there are many researches about CSR But in Vietnam the number of research projects on CSR is very limited I hope

my graduation project can play a part to clarify the importance and impact of social responsibility for the financial activities of companies in companies in Vietnam

1.6 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: Literature Review

2.1 Definition and conceptualization of CSR

There are many different definitions of CSR Each organization or company, the government recognizes CSR as the angle and point of view, depending on the conditions and characteristics Keith Davis (1973) offered a broad concept of "CSR is the interest

of the business and react to problems beyond satisfying the legal requirements,

economic and technology".According to Matten and Moon (2004) "CSR is a concept cluster includes several other concepts such as business ethics, corporate philanthropy, corporate citizenship, sustainability and environmental responsibility It is a concept and always be challenged in every economic situation, political and social characteristics

"Thus, the essence of CSR is the view of the role of business in relation to the role state that the concept of CSR is always changing, always new range depends not only time but also space where the debate on CSR takes place The World Business Council for Sustainable Development defines the CSR as “business commitment to contribute to sustainable economic development, working with employees, their families, the local community, and society at large to improve their quality of life” Under this point of view, the CSR rests on the fundamental pillars of both the economic growth and the quality of life as an engine for “sustainable” development Besides, British Government said "CSR is the voluntary action by business performance, in addition to compliance with minimum legal requirements, to satisfy the competitive needs of business and social interests." According to the Corporate Social Responsibility Newswire Service:

the CSR is “the integration of business operations and values whereby the interests of all stakeholders including customers, employees, investors and the environment are

reflected in the company‟s policies and actions.”

2.2 The concepts related to CSR

2.2.1 In terms of state management:

Today, in the world, many countries have put the contents of CSR into laws and regulations in many different forms All these countries are keen to implement corporate social responsibility will be implemented in all countries in the world and it has become

a common international goals In 1999, a global agreement (Global Compact) has been Secretary General of the United Nations (UN) Kofi Annan proposed at the World

Economic Forum and May 7 / 2000 was officially launched as a code of UN's handling

of social responsibility of multinational companies This rule sets, including 10 rules to ensure respect for human rights, welfare, anti-child abuse, forced labor, environmental protection, fight against corruption but not the documents are binding but is

recognized as a formal framework discussed in the UN forum For the institutions of the region, CSR was the European Commission formally recognized early on, "is that businesses take social concerns and environment on business activities and relationships with their own shareholders, on a voluntary basis"

2.2.2 Business Ethics:

It is undeniable that CSR is regarded as an aspect of ethics in the business world

recognized business, as the rules of communication, relationships between staff and management, or the value of the management and community in the implementation of the enterprise, allowing management to behave in an honest and responsibility to the community and each other Business Ethics is an expression of balance between the interests of management in the implementation of business objectives with the interests

of employees in the company, the interests of consumers and public interest

2.2.3 Corporate cultural:

Corporate culture is the values about culture need to be built in the survival and

improvement in business, becoming the values, perceptions and practices Corporate culture rooted in the traditional activities of enterprises and governs emotions, thoughts and behavior for all members of the business Corporate culture is the behavior and communication of the members of a business and creating a culture for that business Corporate culture also contributes to the difference between the business and created no small advantage in business

2.2.4 Environment Protection:

Many people believe that pollution is not the result of economic growth However, no one can deny that economic growth may cause environmental pollution Although we see a lot of national economic development leads to environmental degradation and pollution, but we need to assure that environmental protection and sustainable

development is never the result of economic growth which is the result of policy choices and implementation The problem posed to those who are in charge, we must do and how to have a special policy of developing the economy and environmental protection

and sustainable development Chemical industry, we are faced with many challenges in environmental protection There are figures given Hanoi losses each year up to USD 23 million due to air pollution To be able to achieve all the objectives of environmental protection and sustainable development of the company should be more responsible for environmental issues like air pollution, water pollution caused by smoke, dust and emissions from chemical plants

consequences resulting social and environmental activities and decisions of the

company Therefore, to protect citizens and ensure full information social responsibility requirements issued from government actions authorized CSR report (Doane, 2002) Besides, even in the form is still relatively underdeveloped, reporting is required is gradually accepted among academics The report has been deemed necessary especially

with the stakeholders Because stakeholders will be informed more through the

symmetrical, form of communication and dialogue (Van der was, in 2004, Woodward et

al, 1996)

2.2.6 Public Relation

Public relation is very popular in the business It is very important for managers to recognize the relationship between public relation and CSR CSR is the implementation responsibility to community Companies should make full responsibility for employees, shareholders, customers, society and environment It is undeniable that the company expects to publish the best action on CSR to customers, shareholders, consumers and social support for the company and so public relation is used as a helpful tool Public Relation is the way to make the company famous in the community However, in an interview conducted by Matthew Rochte in May 4, 2009, Public relation can be "good luck and a curse to CSR" Public relation can bring well-known company or a company

or risky misconceptions about CSR and public relation error in the operation”

Figure1 Models "pyramid" of Carroll CSR [4]

According to Caroll, CSR includes responsibilities about economic, legal, ethical and charitable:

(i) the biggest concern of all businesses is to maximize economic profit, competition, efficiency and growth They founded the first search engine of profit Moreover, the economic enterprise is the basic cell of society Therefore, business functions must always be placed on top The remaining responsibilities shall be based on a sense of responsibility of the business economy

(ii) Responsibility for compliance with the provisions of the law is part of the "contract" between business and society State have responsibility "coding" of social norms and ethics in the legal documents, to pursue business in the framework of a fair economy and meet the standards and prices expectations of society Responsibilities for economic and legal are two indispensable basis of a business

(iii) Responsibility is a code of ethics, values, social acceptance, but has not been included as a content of law In general, the law can only go after reflecting changes in the rules of the new social behavior Moreover, in social ethics has always existed in their errors, mistakes are not clear The mistakes that impact significantly on society but are not regulated under the law Therefore, to comply with the law can only be

considered as meeting the required standards at least social setting Enterprises also need

to make commitments outside the law Moral responsibility is voluntary, but is at the heart of every business For example, no overtime work, safe working conditions,

sufficient information for consumers, not to use genetically modified foods, have

credibility with partners, community relations, shareholders minorities, competitors are all open issues and the level of commitment depends on the moral responsibility of business like

(iv) Responsibility for charities is the behavior of enterprises based on social

expectations, such as contributions to support poor families, funded scholarships for gifted students are disadvantaged, to contribute for community projects such as building hospitals, schools Unlike business ethics is to create a good product and does not violate social norms of business, charity responsibility is entirely voluntary If they do not perform the level of social responsibility, they are still considered as meeting the standards that society wants This model is comprehensive and feasible, can be used as a framework for reflection on the status of CSR policies Moreover, the boundary between the standards of responsibility is always overlapped, interact In conformity with the provisions of law and good order will certainly affect the economic cost to businesses Therefore, the companies made responsible for social charity are always appreciated

2.3.2 Stakeholder theory

The stakeholder theory, originally detailed by Freeman (1984), is a theory of

organizational management and business ethics that addresses morals and values in managing an organization In this theory, the concept “stakeholders” refers to any group

or individual who influenced directly or indirectly, by the actions of the firm In the traditional view of the firm, the shareholders view, the shareholders or stockholders are the owners of the company, and the firm only addresses the needs and wishes of its owners However, stakeholder theory argues that there are other parties involved,

including governmental bodies, political groups, trade associations, trade unions,

communities, associated corporations, prospective employees, prospective customers, and the public at large From the ethical perspective,organizations are obliged to deal fairly between the stakeholders (Deegan, 2009), that is, organizations should be

responsible to the interests of shareholders because they are capital in invest in

companies they have a right to know and inform the company's CSR situation In case of conflict stakeholders, the board is tasked to explain and inform to achieve balance the interests of shareholders Based on the theory of Freeman, Baron (1995) has divided the parties into two groups, known as market and non-market.Group market includes

customers, competitors, employees, partners and suppliers in general By contrast market groups, including non-governmental organizations, government, security

non-management, organizational and environmental standards, media, society or community

Both groups have created their influence at different levels to implement the social responsibility of companies From this perspective, many activities conducted by

companies related to the expectations of stakeholders (Friedman and Miles, 2002) This created a great attention of the stakeholders because the CSR situation directly affected the company's interests and the interests of stakeholders Therefore, managers need to inform not only the financial situation but also to inform both the implementation of CSR to stakeholders

2.3.3 Legitimacy Theory

Legitimacy theory is understood as the implementation of CSR by companies will help companies avoid legal trouble A company is considered legal when that company fulfills its social responsibilities and meets the expectations of the community So the responsibility for disclosing information about the CSR will be made to become a legal entity The legitimacy of the theory can also explain the influence of culture on CSR reporting This theory contributes to improving the relationship between accounting and the community from the perspective of a company A company will voluntarily report

on operations management recognized that the specific information requested by the society in which it works (De Villiers and Van Staden, 2006)

2.3.4 Triple bottom line

Triple bottom line can be defined as one of the support mechanisms for reporting on CSR Triple bottom line was defined by Elkington (1997) report provides information on economic performance, environmental and social, of an entity The concept of three

reports on economic, environment and society is directly associated with the concept and objectives of sustainable development

2.4 Hypothesis

2.4.1 Managers` attitude toward CSR reporting

Today, businesses recognize that social responsibility is directly related to reputation and brand of the company However, combining social responsibility (CSR - Corporate Social Responsibility) and the branding is not a suitable route can lead to disastrous consequences The managers are responsible for the results of business operations before the Board of Administration, to enforce the proper strategy has been through the

Executive Council In Vietnam, due to the characteristics of Vietnam's new economy shift from subsidies to market, the role and functions of directors and chairman of the board of a company sometimes is not explicitly clear separation Chairman of the board usually is considered as director (CEO) of the company, and directors often rely heavily

on chairman of the board as executive decisions This reflects quite well in state owned enterprises, private enterprises have come up from households and small production, family business Therefore, managers must understand the importance of reporting and the implementation of CSR with business operations of the company And then, the following hypothesis is developed:

: Managers’ attitude toward CSR and CSR reporting is positive

H 0: Managers’ attitude toward CSR and CSR reporting is negative

2.4.2 Consumers` attitude toward CSR reporting

Consumer confidence for businesses that are hurt seriously before doing fraudulent situation, lack of responsibility to the community has become so popular The world financial crisis has rapidly spread worldwide and is becoming major obsession of the business community in the country But for ordinary people, still an obsession other equally serious, that the threat of poor quality goods, especially those products directly related to health, and environmental conditions life seriously damaged Perpetrators of this situation are that businesses do not implement CSR Such events sauce contains urea, or growth stimulants infused cattle through animal feed but would not settle up, then back outbreak of melamine contaminated milk story, wine is produced with alcohol fatal industrial accidents, along with fake fertilizer and poor quality of gas stations and trade fraud In additional, with environmental destruction and action, showing that business ethics and social responsibility in an enterprise component is degraded They are run by profit, despite its consequence for customers, for whom business will be confirmed to be treated as "God" In business, confidence is important With a more competitive market today, choosing the right products to the consumer and of course everyone wants to buy the product matches the quality of money With such a situation, the hypothesis for consumer behavior can be developed:

: Consumer behavior is influenced by companies’ CSR practices and

disclosures

H 0: Consumer behavior is not influenced by companies’ CSR practices and

disclosures.

2.4.3 Employees` attitude toward CSR reporting

There are many different definitions to explain CSR (Corporate Social CSR of the company) One of the definitions is used most commonly defined by the World Business Council for Sustainable Development sustainable (World business Council for sustainable development) It is launched "CSR is the company's commitment

Responsibility-to contribute Responsibility-to sustainable economic development, through the observance of standards

of environmental protection, gender equality, safety labor, labor rights, equal wages, training and staff development, community development In a way, that benefits both the company and the overall development of society "Treatment well with employees is one

of the basic content of most CSR standards Accordingly, we were aware that "there is one and only one social responsibility of business - that is using its resources and engage

in activities to increase profitability" (this is a famous declaration of Milton Friedman's

in 1970) This statement asserts that the labor force plays an important role in the

development of a company They are the direct labor of creating wealth for society Moreover, today, a company not only uses manual labor but also hide those workers with high qualifications Especially, in a highly competitive environment such as in Hanoi-the capital of Vietnam, the workers have skill to work under a competitive

environment and dynamic This has created for workers knowledge about CSR and effect of CSR with society So, the hypothesis for employees‟ behavior can be

developed:

H 3 : Employees behavior is influenced by companies’ CSR practices and

disclosures

H 0: Employee behavior is not influenced by companies’ CSR practices and

disclosures

2.4.4 Accountants` attitude toward CSR reporting

Accounting attitudes towards CSR reporting is very important as they are preparing the report If they showed a negative attitude, there will be very difficult to make statements without supporting CSR fully from them However, accountants are directly affecting the financial statements of the company so they must take responsibility before law for company reports There were many lessons for those who do not support the accounting performance of the company's CSR or advice the board of directors released a report on CSR, so the attitude of accounting for CSR reporting will be assumed as follows:

H 4 : Accountants’ attitude toward CSR reporting is positive

H 0: Accountants’ attitude toward CSR reporting is negative

2.5 Effect of CSR on the performance of Vietnam companies:

Social responsibility is a business process implementation action to make benefit for society to meet the requirements and expectations of stakeholders about the economic benefits, benefits and impact on reputation of the social environment There are three important concepts to consider achieving sustainable development: economic growth, ecological balance and social evolution With the corporate social responsibility (CSR)

business can contribute to sustainable development objectives of the local activities through his association with the community to achieve positive results for all parties

Putting the concept of social responsibility in the daily operations bring many benefits to the enterprise For small and medium enterprises in Vietnam, the application of the concept of CSR can bring significant benefits in the market This could create the

support of Majority of customers, including international customers The productivity of enterprises is also enhanced through improving the working conditions of workers

The benefits of adopting CSR on businesses are huge First, the investor shall indicate the corresponding performance of the social aspects of a business environment Positive response of investors in developing countries and the developing countries are

considered the environmental performance of organizations Similarly, the

multi-national organizations are focused on environmental performance and the social partners before selecting potential investments The basic trend in investment in future business requires Vietnam to consider the application of CSR In Vietnam, the concept of CSR is very new Moreover, understanding the concept of CSR in Vietnam has changed

dramatically, both in society and in business This may require a lot of business through the rules and ethics are different, depending on the number of customers that their transactions Some companies have adopted corporate social responsibility policies and ethics rules, but they are often based on approaches from leading suppliers to apply moral rules upon request from customers, not CSR should be developed to expand their market share This makes the application of CSR in Vietnam as passive

According to recommendations from a study of CSR in Vietnam has urged the

government to provide businesses and stakeholders information about the rules of CSR

in order to raise awareness and capacity, the government need to set up a support fund for the application of CSR Research by the World Bank at the level of enterprises in Vietnam have identified a positive trend in the organization adopted the CSR, such as improved image and reputation of the enterprise, conditions to work better and working

to improve the quality of workers These organizations also have contracts and a more stable and improved the satisfaction of workers (thus reducing the rate of firing /

replacement staff) Specifically, the company has implemented CSR in Vietnam have recognized that the positive impact to their business environment These companies use CSR said has helped them improve their product quality, reduce defects in products and improve the ability to meet customer requirements related to stable delivery deadlines goods

2.6 Methods of effective implementation of CSR:

There are several methods implemented CSR that some companies in the world have adopted and successfully Responsible for customers is the foundation for all activities, and attract customers to participate in CSR activities of enterprises For example, with the introduction of the basis for Johnson & Johnson in 1943, Robert Johnson, founder and president of Johnson & Johnson, deserves to be called "father" of the CSR activities

of his company when the target user must be responsible business In this background, first, the role of shareholders to be taken to the bottom and the interests of customers is

paramount This is completely contrary to what Milton Friedman, U.S economist who won the Nobel in 1976, released in 1970

According to Friedman, the enterprise must put profit above all to demonstrate

responsibility to the shareholders And business is to create self-aware people can take responsibility Community responsibility and accountability to the state of the

shareholders should use individual roles to perform their responsibilities to society Friedman also said that CSR is the upgraded version of PR

Johnson & Johnson is a good example to prove fully implement social responsibility to the community This has helped Johnson & Johnson is the Wall Street Journal Magazine (USA) voted "century of business ethics" in 1999 Until now, the company has a

successful business responsibility towards the brand

In addition, employees should be treated as internal customers to implement business social responsibility by building a safe working environment, open, friendly and

growing At Ben & Jerry, a "fun team" was established Members of volunteer groups, have to assist the daily work of employees in the company is not boring with programs such as "pizza and enjoy the day relaxing massage"

When using social resources to survive and grow, companies must see themselves as

"corporate citizens", is responsible to contribute to reconstruction, maintenance and community development With this awareness, Ben & Jerry spent 7.5% pre-tax profit annually to support and fund community projects The company also launched the non-profit projects such as "One percent for peace" on behalf of the client object to open the

nuclear power plant in Seabrook (New Hampshire, USA) in 1990, or annual festival, "a heart - a world" in honor of art, food, music and other social activities

The use of green materials and methods of application or manufacturing recycled products consume less energy will help the business to sustainable development "Until one day, people like me can be thrown into prison," Ray Anderson, CEO of Interface Corporation, specializes in manufacturing carpets, chemicals, textiles with annual sales over $ 1 billion, has been revealed in a speech to 500 interior design in Boston (USA) in 1996 In his book editor Sai Way: Toward a sustainable business, he realized his business a huge impact on the environment and divert by the increasing use of organic materials from the carpet factory instead of inorganic materials such as oil as previously

Chapter 3: Research Methodology

3.1 Research Objectives :

All my research was done to learn about CSR, the importance of CSR and CSR

reporting affect the performance of companies in Vietnam It has a look on the

manager's attitude to social responsibility, as well as how the managers aware of the relationship between business and its stakeholders such as consumers, the stock

shareholders and employees of the company In addition, studies aimed at discovering the level of awareness of customers and employees of CSR, whether they care about social responsibility, and social responsibility has influenced purchasing decisions

customers and their work The study also aims to gather expert opinions on CSR

reporting and find out how companies in Vietnam to implement CSR well

3.2 Research Method :

In this study, I used qualitative methods Qualitative researches were conducted through interviews with managers and review the annual reports of companies In addition, the survey questionnaire was sent to consumers, employees, management and accounting

experiments Primary data gives users many advantages This is the most reliable form

of data by the primary data often have been modified and changed Besides, by using the data, I can directly interact with customers However, primary data is often expensive and time-consuming search Also, if it is not done properly, incorrect results will be generated The primary data required skills and expertise of the researchers However, I

do not have practical experience so I have spent so much time Moreover, the survey in the company is also a very difficult job for me

3.3.2 Secondary data:

Secondary data consists of information already exists, has been collected for another purpose (Armstrong & Kotler, 2007) I collected secondary data from TV, newspapers, magazines and internet Compared with the primary data, I gather secondary data

quickly, easily and at lower cost However, while founding secondary data sources that I were unable to collect by myself or because they are too expensive for me to obtain Moreover, there are a number of issues related to secondary data Firstly, the necessary information I need may not be So, it is rarely for me to obtain all the information I need from secondary sources Secondly, even if the data can be found, its usefulness is the problem To make secondary information becomes relevant, accurate and unbiased, I must evaluate it very carefully

3.4 Research tool

3.4.1 Questionnaire:

This study was designed to explore the impact of CSR on the financial activities of companies through questionnaires I have divided the questionnaire into four groups including employees, customers, managers and accountants The questions are given to employees and customers have been used to understand perceptions and attitudes of CSR activities The question for managers and accountants that the practical application

of social responsibility within the company as well as the attitudes of managers In my survey, I often pose questions short and simple Each interviewee can answer all

3.4.2 Personal interview:

In addition to filling out the survey, I also interviewed the director and chief accountant

of the company on the CSR of the company The question is to play a close look at the financial situation of the company and the impact of CSR activities to the financial operations of the company Besides, I have provided the financial statements of the company for many years Through these reports, we can assess the level of CSR through business indicators such as social insurance, health insurance, trade union fees

In seven companies, two of them are biggest Vietnam banks, which are Vietcombank, BIDV (Bank for investment and development of Vietnam) There are three

manufacturers, which are Vinaconex Co Ltd, Dongtam Co Ltd., and Vicem Joint Stock

Co, Ltd Another three tourism companies are Sao Mai Joint Stock Corporation, Viettran Tourism Company and Sai Gon Tourism Joint Stock Corporation

Besides, the researcher also referred to secondary data which was collected from journals, books, sources from internet These data were combined with researcher‟s knowledge to come out with the idea of doing project

3.6 Sampling:

This study should be investigated over an area considerably larger However, because conditions and difficult circumstances, I shall be made only within the limits of Hanoi because of the time and cost Besides, I have little experience in accounting reports Regional surveys conducted in Hanoi, a cultural center, politics and economics of Vietnam

3.6.1 Sample size:

There are 7 questionnaire patterns for 80 managers, 10 questionnaire patterns for 200 customers 5 questionnaire for 100 employees and 7 questionnaire patterns for 70 accountants have been sent out

3.6.2 Sample techniques:

To survey effectively, I have divided into four groups surveyed include: the

management, accountants, employees and customers Moreover, for each of a group I

use different methods For management, I divide into three smaller groups including banking manufacturing and tourism For clients, I share the different age groups to survey For accountants and employees, I divided into two groups of male and female

3.7 Limitation:

There are numbers of problems presented in survey research

 Firstly, research survey was sent to many people in society so lack of

understanding of the interviewee They may not be able to answer the survey questions or misunderstand the question

 Secondly, although the interviewee did not understand the survey questions, they answered them by randomly checking the answers This will lead to useless 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, interviewees may not be ready to deal with unknown or interviews on issues they consider sensitive They can refuse to take the time to answer other questions

Chapter 4: Result Analysis and Discussion

- Banking institute` students

- Students in Foreign trade University

- Big C and Coop mark` customers

Figure 4.2 Consumer, employee and accountant category

Age range No of customers

20-30 30-40

63

76

40-50 50-60 Above 60

4.2.1.1Findings from questionnaire survey

Figure 4.3 Distribution of responses from management survey

Statements

Management’s attitude toward CSR issues

1 I am aware of the term “corporate social

Management’s perception on CSR reporting

3 Company may have benefit from CSR disclosure

The first question of management‟s attitude toward CSR asked the respondents were" I

am aware of the term” Corporate Social Responsibility" In this question, the answers almost (84%) are either “strongly agree" or "agree" However, there are also respondents which have" no opinion" (16%), and nobody chooses "disagree" or "strongly disagree"