THE DEVELOPMENT OF CSR IN VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY VINAMILK

CHAPTER 1: THE THEORETICAL BASIS OF CSR...11.1 Some concepts related to CSR:...1 1.2 Overview of CSR...1 1.3 Reasons that businesses perform social responsibility...3 1.4 Conclusion...3

Ho Chi Minh City, 2021

CHAPTER 1: THE THEORETICAL BASIS OF CSR 1

1.1 Some concepts related to CSR: 1

1.2 Overview of CSR 1

1.3 Reasons that businesses perform social responsibility 3

1.4 Conclusion 3

CHAPTER 2: IMPLEMENTATION OF SOCIAL RESPONSIBILITIES AT VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY VINAMILK 4

2.1 Overview about Vietnam Dairy Products Joint Stock Company Vinamilk 4

2.2 Current status of CSR implementation at Vinamilk 5

2.2.1 For partners, shareholders, investors: 5

2.2.2 For staff/ for employees: 7

2.2.3 For customer/consumer: 9

2.2.4 Suppliers: 11

2.2.5 For environment/ Social: 12

2.3 Vinamilk CSR implementation budget: 13

2.4 Evaluate the implementation of CSR of Vinamilk 14

2.4.1 Economics responsibilities: 14

2.4.2 Legal responsibilities: 15

2.4.3 Ethical responsibilities: 15

2.4.4 Philanthropic Responsibilities: 15

CHAPTER 3: RECOMMENDATIONS FOR ADVANCED CSR 16

REFERENCES 19

CHAPTER 1: THE THEORETICAL BASIS OF CSR

Corporate social responsibility: is known as one of the factors that make a lot ofbenefits for businesses such as increasing sales, profits, reducing turnover, or expandingmarket development opportunities Corporate social responsibility is not a new conceptand on the world level, since the 1980s, CSR has become an important strategy in thedevelopment process of enterprises each company Since then, CSR has gradually provedits great role in the overall development of enterprises as well as in harmony with theinterests of society Therefore, the concept of CSR is receiving more and more attentionand investment from businesses

1.1 Some concepts related to CSR:

“CSR is an enterprise's commitment to contribute to sustainable economicdevelopment, through jobs that improve the quality of life of employees and members oftheir families; community, and society as a whole, in a way that benefits both businesses

and society as a whole” (What Is Corporate Social Responsibility?, n.d.)

As the market competition is getting more and more fierce, the requirements anddemands from customers are getting higher and higher, and therefore, society has anincreasingly strict view of businesses about their obligations and responsibilities to thecommunity In order to achieve sustainable development in society, businesses that want todevelop sustainably must always adhere to not only standards on ensuring production -business must be profitable, even super-profitable, but also standards on environmentalprotection nature, working environment, gender equality, occupational safety, labor rights,training and development benefits of employees, contributing to community development,including practical activities social security, humanitarian, charity, (Woods, 2018)(“Corporate Social Responsibility for Your Business,” 2018)

1.2 Overview of CSR

- Economic responsibility: profit maximization, competitiveness improvement,

business efficiency, and growth are prerequisites This is natural because the business isestablished first of all to seek profit from the entrepreneur Besides, business is a

component of society, so business functions need to be prioritized and put on top It canalso be said that economic responsibility is a fundamental element and the remaining

responsibilities must be based on the economic responsibility of the enterprise (What Is Economic Responsibility | IGI Global, n.d.) (Learn About Economic Model Of Social Responsibility | Chegg.Com, n.d.)

- Legal responsibility: also known as the responsibility to comply with the law is a

part of the commitment between businesses and society The State has the responsibility toencode social and ethical rules and standards into legal documents Enterprises, on that basis,will pursue their economic goals based on the standards and rules in the promulgated laws.Along with economic responsibility, legal responsibility is the two fundamental, most basic,

and indispensable parts of CSR (Corporate Social Responsibility [CSR] Law and Legal Definition | USLegal, Inc., n.d.)

- Ethical responsibility: these are standards and rules that are recognized by

society but not yet present in legal documents Social norms are always changing andtherefore legal policies can only be followed during this transformation Therefore, the lawcannot fully reflect the requirements of the codes of conduct of society Therefore, theresponsibility to comply with the law is the minimum requirement for businesses In addition,businesses also need to fulfill obligations and rules beyond the law or ethical responsibilities.Ethical responsibility is voluntary for all businesses but is central to CSR (e.g.,implementation of weekends, payment for overtime workers, reputation for customers),

cooperation, good relationship with customers…) (Writer, n.d.) (Ethical Responsibility | Global Learning Qualifications Framework | SUNY Empire State College, n.d.)

- Philanthropic responsibility: are the activities of the business that have

exceeded the expectations of the society Some examples are giving gifts to orphans,sponsoring scholarships for students, etc Charitable responsibilities are different from ethicalresponsibilities in that, businesses perform this responsibility "completely voluntarily" Ifbusinesses do not implement CSR to this extent, they are still considered to have fully

fulfilled their social responsibility (Philanthropic Responsibility - PDF,

n.d.) (Iwannanda et al., 2017) (Ethical And Philanthropic Responsibility Myassignmenthelp.Com, n.d.)

-(Thacker, 2019) (Corporate Social Responsibility (CSR), n.d.)

1.3 Reasons that businesses perform social responsibility

The activities performed the most and are almost considered a common standardthat every business need: Environmental protection, waste treatment by standards toensure rights and benefits for employees; producing products that are safe for consumers,and fulfilling obligations to suppliers; ensuring the interests of shareholders Businessesthat perform well on social responsibility will create more competitive advantages for

themselves (5 Reasons Why Social Responsibility Matters in Business, 2013)

An enterprise is like an individual, if it wants to survive and thrive, it cannot onlythink for its benefit but must strive to bring benefits to society Business and society aretwo inseparable categories, it always supports and promotes each other's development

(Horoszowski, 2015) (Arguments for and against Social Responsibility of Business, n.d.)

1.4 Summary

The content of CSR includes many aspects related to the behavior of businessestowards relevant subjects and objects in the process of business operations, fromproducers, marketers, consumers, and consumers to local suppliers of raw materials andmaterials; from officers, employees to shareholders of the enterprise In which, there isboth responsible for the protection of natural resources and the environment, but in fact, it

is also a common responsibility for the interests of the community and society, includinghumanitarian activities, charity activities, donation activities for the general development

of the country

CHAPTER 2: IMPLEMENTATION OF SOCIAL RESPONSIBILITIES AT VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY VINAMILK

2.1 Overview about Vietnam Dairy Products Joint Stock Company Vinamilk

The company was established in 1976 based on taking over 3 dairy factories left bythe old regime, including Thong Nhat dairy factory (formerly Foremost factory); TruongTho Dairy Factory (formerly Cosuvina Factory); and Dielac Powdered Dairy Factory(Nestle)

The company's head office is at No 10 Tan Trao Street, Tan Phu Ward, District 7,

Ho Chi Minh City The organizational structure includes 17 affiliated units and one office.The total number of employees is 4,500 people

Vinamilk mainly operates in the field of production and trading of milk and dairyproducts including liquid milk, powdered milk, condensed milk, yogurt, ice cream, cheese,currently Vinamilk has developed a beverage segment Vinamilk's products are mainlyconsumed in the Vietnamese market (accounting for 75% of the domestic dairy market)and also exported to foreign markets such as Australia, Cambodia, Iraq, the Philippines,and the US With its efforts, Vinamilk has become the leading dairy producer in Vietnam

in terms of both sales and output

Vinamilk was voted top 5 largest enterprises in Vietnam, top 200 largest enterprises

in Asia Vinamilk has achieved these results because of having the right vision andbusiness philosophy:

- Vision: "To become the number one belief symbol in Vietnam about nutrition and health

products serving human life"

- Mission: “Vinamilk is committed to providing the community with the best and most

quality nutrition with its respect, love, and high responsibility for human life and society”

- Core values:

+ Integrity: Integrity, Honesty in conduct and all transactions;

+ Respect: Respect yourself, respect your colleagues, respect the company, respect

your partners, cooperate in respect;

+ Fairness: Be fair to employees, customers, suppliers, and other stakeholders; + Compliance: Comply with the Law, the Code of Conduct, and the Company's

regulations, policies, and regulations;

+ Ethics: Respect established standards and act ethically.

- Business Philosophy: Vinamilk wishes to become the most popular product in all

regions and territories Therefore, the company always keeps in mind that quality andcreativity are Vinamilk's companions Vinamilk considers customers as the center and iscommitted to meeting all needs of customers Towards the goal of becoming one of the Top

30 largest dairy companies in the world in terms of revenue (Chiến lược phát triển | Vinamilk Việt NamChiến lược phát triển | Vinamilk Việt Nam - Vinamilk, n.d.-a) (Công ty Vinamilk | Vinamilk Việt Nam - Vinamilk, n.d.) (Lịch sử phát triển | Vinamilk Việt Nam - Vinamilk, n.d.)

2.2 Current status of CSR implementation at Vinamilk

Vinamilk soon put action programs into CSR implementation through theimplementation of Vinamilk's Code of Conduct Although it was not until January 2010that Vinamilk's Code of Conduct was officially applied in the entire company But, manyyears ago, Vinamilk actively implemented policies related to CSR and was later included

in the Company's Code of Conduct Such policies include the company's policies towardsshareholders, investors, and employees, policies towards suppliers, customers, and

consumers; policies towards the environment and the community 5de3a6cc3ae07fc9ec8e0cef7b1d74ba5bb0e7de0512377edfe83cca2c725c73.Pdf, n.d.)

(1447926623-2.2.1 For partners, shareholders, investors:

Vinamilk's viewpoints and policies:

Vinamilk always keeps in mind that respecting mutual benefits is an important andessential motto in Vinamilk's relationship with partners, investors, and shareholders.Whereby:

• Partners: Vinamilk is committed to respecting the interests of partners and makingefforts to protect assets and human resources participating in cooperation, joint ventures, andassociation.

• Investors: Vinamilk is committed to creating equal investment opportunities for allinvestors in exchanging and disclosing information and creating a transparent businessenvironment by publicizing the investor selection process

• Shareholders: Vinamilk's principle is to consider the interests of shareholders asits own

Vinamilk is committed to the fair and honest treatment of partners, investors, andshareholders All partners, investors, and shareholders are provided with information fromthe Company in the most honest way At the same time, Vinamilk is committed toensuring the confidentiality of private information of partners, investors, and shareholders,except for cases required by law enforcement agencies

(VnExpress, n.d.) (Nhà cung cấp của Vinamilk | Vinamilk Việt Nam - Vinamilk,

n.d.)

Vinamilk action program:

Vinamilk ensures to fulfill its commitments by providing the most transparent andhonest financial statements and annual reports to partners, investors, and shareholders.Vinamilk has been maintaining an information channel to investors, partners, andshareholders through the annual general meeting of shareholders; post information forthem through the website http://vinamilk.com.vn/; regularly send news-letters to them andthe company maximizes the role of the Investor Relations (IR) department with

shareholders and potential investors (Chiến lược phát triển | Vinamilk Việt NamChiến lược phát triển | Vinamilk Việt Nam - Vinamilk, n.d.-b) (Vinamilk và Kido Chi 400 Tỉ Đồng Lập Liên Doanh - Tuổi Trẻ Online, 2021)

The IR department has the role of providing information about Vinamilk mostunderstandably and transparently to investors, including parameters of Vinamilk's position

in the market, Vinamilk's strategies and initiatives in creating and maintaining value.Vinamilk's IR also always listens and receives feedbacks from investors to capture the

psychology of investors to ensure parallel interests between Vinamilk and investors as well

as the company's shareholders company (Nam, 2021)

In addition, Vinamilk always avoids violating the interests of shareholders Forexample, in increasing charter capital in 2010, Vinamilk increased its capital from bonusshares due to its surplus rather than forcing shareholders to contribute any more

2.2.2 For staff/ for employees:

According to the code of conduct, Vinamilk implements CSR standards foremployees by ensuring three basic principles: respect, fairness, and working environment.Specifically:

• Respect: Vinamilk respects the human rights and dignity of all employees andbelieves that Integrity is inherent in every individual Respect means that we value eachother's differences, respecting each other's differences opinions stem from those verydifferences

• Fairness: Vinamilk is committed to treating employees fairly, which means:

- Fairness in assessing the capacity of employees despite the existence of different views and opinions at work

- The recruitment, work arrangement, and determination of salary and otherbenefits for all Vinamilk's employees are based on the appropriate basis of responsibility,ability and self-expression, experience as well as results rating of each employee

- Vinamilk provides equal opportunities for employees in different aspects of labor:

- Firstly, is committed to setting appropriate work goals, always bringing

satisfaction and challenges to each employee's ability

- Second, is committed to providing training, coaching, and promotion

opportunities to facilitate employee affirmation and development

- Third, conduct performance evaluation to obtain frank and accurate feedback

based on exchange (a280004, 2020) (Nhìn Lại 2020 Với Câu Chuyện Của Vinamilk: Khi Trách Nhiệm Cộng Đồng Trở Thành Một Phần Trong Văn Hóa Doanh Nghiệp, n.d.)

Vinamilk will always provide and maintain a secure, safe, healthy, and friendlyworking environment An environment that always attracts and retains talented peopledespite their different starting points It is an environment where:

- All employees have the opportunity to discover and realize their potentials at thehighest level as well as reach their destination to develop and contribute to the success ofVinamilk

- All employees have the best working conditions in both physical and mentalaspects Employees are provided with a convenient working space, work equipment as well

as always feel comfortable to promote their abilities and contribute personal ideas Anenvironment that ensures the spiritual aspect also means that, in which each employee feelsrespected, everyone has the opportunity to socialize and have fun regardless of individualdifferences in talent or personality

- All employees are guaranteed health and safety Vinamilk always strictly adheres

to the regulations on safety and health to ensure the best health for each person so that theyare ready to develop their capacity (ONLINE, 2019)

Vinamilk action program:

Vinamilk has gradually used the overall human resource management system torealize the rules in the company's code of conduct The overall human resourcemanagement system is coordinated by Vinamilk with Tinh Van Consulting Joint StockCompany (Tinh Van Consulting) - an experienced company and a partner of many largeenterprises in the field Human resource management consulting based on informationtechnology (IT)

With the application of the overall human resource management system Histaff

(from June 13, 2011) (Tinhvan Group - Tinhvan Consulting sẵn sàng Golive hệ thống HiStaff tại Vinamilk, n.d.) in sync with the enterprise management system ERP (Enterprise

Resource Planning), Vinamilk was able to manage data efficiently centralized andsynchronized The system helps the company to monitor changes in regular personnelchanges of member units and branches spread across the country; Applying a flexible

timekeeping system such as: Assigning work shifts, monitoring entering and leaving hours,leaving late, leaving early, working overtime, overtime, overtime ; Support policies oncalculating the income of workers such as Product delivery, Line productivity, dailyperformance, revenue calculation (KPI), Monthly salary fund allocation, effective salarymonthly performance,

2.2.3 For customer/consumer:

Consumers are the decisive factors for the success or failure of a business.Therefore, Vinamilk is always conscious of implementing policies to promptly meet theneeds and bring the most satisfaction to consumers That is clearly shown in the company'scode of conduct: Winning the trust of consumers is always the goal that businesses aimfor Likewise, Vinamilk considers the trust and love of customers for Vinamilk's products

as a measure of success and a valuable motivation for the company to continue operatingand developing

Set the highest standards for products:

Vinamilk commits to always making products that meet the standards of quality,safety, and hygiene; always diversifies products and provides products with competitiveprices The company has complied with and applied regulations/standards related toquality, equipment, workers, raw materials in the production process Vinamilk alwaysstrictly adheres to the standard production process including the stages from raw materialreceipt, selection, initial treatment to processing, filling, packaging, and preservation To

do so, Vinamilk has been proactive in all stages from the source of clean raw materials tothe closed production process meeting international standards

• Satisfying consumers:

Vinamilk always focuses on consumers to meet and satisfy needs and tastes whencreating products Consumers' needs are always changing, the best way to do that is toalways respect consumers' opinions, as well as create a comfortable, friendly, and timelyenvironment to exchange information with consumers use Vinamilk is committed toalways receiving information from consumers such as product contributions, concerns,questions, or complaints with the most respectful, polite, and timely attitude as well ascommitment will promptly investigate and appropriately resolve issues related to productand service safety

• Preservation of consumer information: Vinamilk always respects and preserves

the privacy of consumers' information (Vì Sao Vinamilk Luôn Là Thương Hiệu Rất Thành Công Trên Kênh Digital?, n.d.) (SONHKND, 2014)

Vinamilk action program:

- The cow raising process is also guaranteed to meet quality standards: The cows areall fed according to the TMR (Total mixing ration) method, with a mixed diet consisting of:grass, fresh or composted corn, molasses, bran, hummus… ensure rich nutrition, in order toproduce more milk and quality (PLO.VN, 2013)

- Vinamilk dairy farm meets international standards Global GAP

- Honesty in advertising: Complying with commitments in the code of conduct foradvertisements (Clips, information posted on the mass media, milk trial campaigns ) ofVinamilk always emphasize the quality of products such as real milk, clean milk, 100% purefresh milk The company's product packaging also clearly states the origin, nutritionalingredients, or recommendations related to the product In addition to the fact that Vinamilkrespects honesty in advertising, Vinamilk also ensures to sell the right quality products toconsumers as announced as a way to prove the truthfulness of the company's advertising

- Quality assurance is always top and hygienic