the effect of corporate social responsibility on company’s financial performance

On worldwide, there are many large companies paying a lot of money to become an ideal business model, and to be accountable to society such as Best Buy with the application of product re

THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON

COMPANY’S FINANCIAL PERFORMANCE

“A case study of NamTrieu Company"

BY NGUYEN HAI MINH

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

Bachelor of Business (Accounting) Hons

Otc 2010

Declaration of Originality and Word Count

DECLARATION

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

quotations and citation which have been duly acknowledged I also declare that it has not been previously or concurrently submitted for any other courses/degrees at HELP University College or other institutions

Word Count: 10,845 words

Nguyen Hai Minh

Date

Abstract

THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON

COMPANY’S FINANCIAL PERFORMANCE

“A case study of NamTrieu Company"

BY NGUYEN HAI MINH Oct 2010

Supervisor: Dr Le Van Lien

Globalization and the rapid advancement of technology offer many opportunities for economic development and social, especially with developing countries such as Vietnam Globalization also brings serious challenges such as financial crises,

insecurity, and poverty Settlement of social problems is the condition for stability and economic development In business, too, the development of a business is always accompanied by Corporate Social Responsibility that business must address

concerns The successful implementation of social responsibility particularly as businesses becomes more meaningful in the current period of integration when Vietnam became an official member of the World Trade Organization

3.2 Sphere of Research……….………25

3.3 Data collection………26

3.4 Research method 27

3.5 Sampling ………28

3.6 Hypothesis……… 28

CHAPTER 4: RESULT ANALYSIS 4.1 The employees of Nam Trieu Company appreciate the company‟s CSR implementation……… 30

4.1.1 Figures and general discussions ……….… … 30

4.2 There is a significant positive relationship between CSR and financial decision making……… ………….37

4.2.1 Figures and general discussions……….……… 37

CHAPTER 5: CONCLUSIONS AND RECOMMEDATIONS 5.1 Conclusion……… …43

5.2 Recommendations……….…… …44

5.3 Limitations……… …46

REFERENCE……… 47

APPENDIX………50

List of Figures and Tables

Exhibit 1: 10 Principles of UN Global Compact ……….4

Exhibit 2: Carroll‟s pyramid……… 17

Table 1: Question 1 – Result analysis……….31

Exhibit 3: Question 2 – Result analysis………….……… ……… 32

Table 3: Question 3 – Result analysis……… ………… 33

Table 3: Question 4 – Result analysis……… ……… 34

Exhibit 4: Question 2 – Result analysis……… ……… 37

Table 4: Question 6 – Result analysis……… ……… 38

Table 5: Question 7 – Result analysis……… ……… 39

Table 6: Question – Result analysis……… 32

List of Abbreviations

 CSR  Corporate Social Responsibility

 RI  Responsible Investment

 IR  Investor Relations

 WTO  World Trade Organization

 VCCI  Viet Nam Chamber of Commerce and Industry

 SME  Small and medium enterprises

 PR  Public Relations

capabilities as well as new challenges Recognizing the interest of consumer

worldwide development of production methods, working conditions and

environmental impacts, there is a growing demand of combined CSR strategy with the company‟s production

On worldwide, there are many large companies paying a lot of money to become an ideal business model, and to be accountable to society such as Best Buy with the application of product recycling program or Starbucks, the coffee companies are present across the corner of the planet, has embarked on a series of community activities Evian, the famous French mineral water, distributes products in the water bottle-friendly environment To Search engine Google Company, in Googleplex headquarters, the employees are treated like a very precious asset General Electric use $ 2 billion annually to research new technologies to protect the environment

Deputy Head of Public Relations of Best Buy, Prahl Paul has stated that "We just feel we will succeed in the marketplace if we take social responsibility." In many corporate, CSR report often accompany with the annual report In developed

countries, the cost of social responsibility for the research and development accounts for more than the cost to a charity, although the cost of philanthropy is not small

In addition to ensuring the quality of life for employees, environmental protection, and development of products that create benefits for consumers and the environment Many companies also built charity funds and contribute to the development of

society and community Royall Dutch Shell established charity funds, including the construction of educational centers Early Learning Centre in South Africa to educate children and teach skills for adults

World Bank and Merck pharmaceutical company has launched an initiative to raise the fund of U.S $ 50 million including the donation of Mectizan products to help 28 African countries eliminate disease The billionaire, along with the company's funds also contributed a lot to do charity work like Bill Gates or Warren Buffet

Consumers today are not only interested in product quality but also appreciate the way the company created the products whether the product is environmental friendly and safety In many countries, there are many community trends are trying to protect consumers such as boycott fringe foods aimed at companies producing fast food, fizzy drinks, Fairtrade trends (ensuring fair material price of product, safety working conditions in factories from the 3rd countries), avoiding to use of fur products,

products of exploitative child labor by Nike and Gap and shopping with a

Conscience Currently most companies have a Code of Conduct which emphasizes

the issue of CSR thus it helps to improve the company image in the community and help companies improve sales

In the survey by McKinsey in 2007, 84% of senior administrators wanted to give contribution to the community should for improving shareholder value, 16% said that making profit is the only goal When asking about the negative impacts that large companies can effect to the community, 65% replied that environmental pollution, 40% replied that put business interests than to human health, 30% answered

companies are putting pressure on politicians1

Under pressure from society, most large companies have taken proactive CSR into their program activities in earnest Thousands of programs have been implemented, such as saving energy, reducing carbon emissions, using recycled materials, solar energy, civil architecture and environmental improvement of living water, literacy, school construction, relief victims of natural disasters, the establishment of funds and research center on AIDS Vaccines Some leading companies can be name at the forefront of these activities, such as TNT, Google, Intel, Unilever, Coca-Cola, GE, Nokia, HSBC, Levi Strauss, GlaxoSmithKline, Bayer, DuPont, Toyota, Sony, UTC, Samsungs According to Gingving USA Foundation, the amount of business to contribute to the social activities worldwide is up to 13.77 billion USD (2005) and nearly 1,000 companies are rated as good corporate citizens Especially in the case of Grameen Bank by TS, Muhammad Yunus has provided credit to 6.6 million people, 97% of them are poor women in Bangladesh borrowing money to improve their lives He was awarded the Nobel Peace Prize in 2006

In terms of state management, many countries have institutionalized CSR contents into the laws and regulations in many different forms On the wider scope, the efforts

1 Manh Kim (2008), "Corporate citizen" on “Tuoi Tre” 10/12/2008

to make CSR become an international practice have become a reality In 1999, a

global compact was proposed by the UN Secretary Kofi Annan at the World

Economic Forum On July 2000, United Nations Global Compact (UNGC) was

officially launched This rule set consists of 10 rules such as to ensure respect for

human rights, child abuse prevention, and environmental protection Although it is

not a binding document, it is recognized as a formal framework to discuss on the

forums of the United Nations SCR is also recognized very early on by the European Commission officially In addition, CSR has been also put on the agenda official

APEC summit in November 2008 in Lima, Peru

Table 1: 10 Principles of UN Global Compact

1 Businesses should support and respect of human rights has been published

internationally

2 Make sure not complicit with the abuse of human rights

3 Businesses must support the freedom of association and the recognition and rights

of collective labor agreements

4 Eliminate all forms of forced labor and forced labor

5 Eliminate the use of child labor

6 Eliminate discrimination in employment and occupation

7 Businesses must support the plan for the prevention of environmental challenges

8 Implementation of initiatives to further improve the environmental responsibility

9 Encourage the development and dissemination of technology-friendly environment

10 Enterprises must combat corruption in all its forms, including demanding bribes and accepting bribes

1.1.3 CSR in Vietnam

In How to report the company is accountable for tracks in 2008, Plesch and

Blankenburg stated that society needs successful businesses, but businesses are now gradually controlled society Like a child too that is coddled by their parents and he gradually have more freedom, until the parents can not control him anymore

Everyone wants the child to develop well, so no one has put any limits on him Until things are broken, the whole house now will suffer the adolescent boy The

comparison that reminds us to the Vedan case, the Taiwan MSG manufacturer has caused serious pollution to the ThiVai river in Dong Nai province This

environmental crisis has destroyed Vedan brand name, a precious intangible asset that the company has built for many years In this crisis, the company was lack of community responsibility and social responsibility is not binding the company's strict CSR is becoming one of the most important issues in developed countries but

it has not been considered adequately in attention Vietnam

In recent years, Vietnam‟s economy has integrated into the world economy

Economic growth in Vietnam in the past two years has exceeded 8% per year and is aiming for the national median income in 2010 (ITPC, 2007) Vietnam is suffering from a shortage of skilled labor and an appropriate system of laws in order to

increase competition and investment in infrastructure As CSR is getting more

attention around the world, Vietnam has a lot left to learn considering that many companies in Vietnam do not really see the importance of CSR To be able to

compete on the world today, companies must be able to ensure human rights, labor conditions and safety requirements, providing quality products faster and higher

Although the goal is such policies must come to corporate to generate initiatives for companies in Vietnam

CSR was introduced into Vietnam through the activities of multinational companies investing in Vietnam These companies often have Code of Conduct which can be applied in many different markets CSR of almost foreign companies has

implemented efficiency in Vietnam To name some examples such as “I love

Vietnam” of Honda Vietnam, the educational programs for personal hygiene for children in central provinces of Unilever, the computer training programs TOPIC64

of Microsoft, Qualcomm and HP, the program of surgery for congenital heart defects Samsung, the program recovery of eyesight to the poor children of the Western Union

For domestic companies, almost exporting companies have access to the CSR

Orders from US, Japan, EU require businesses of footwear must be applied to

application of good working condition labor (SA8000 standards) or sanitary and food safety for seafood businesses Besides, many domestic private companies have implemented CSR fairly well, for example Mai Linh Corporation, Tan Tao Group, Duy Loi, ACB, Sacombank, Kinh Do Bakery2

Aware of the CSR, there were some notable seminars and conference discussing topics such as the 6th Asian CSR forum discuss about the social responsibility of enterprises (Diễn Đàn Châu Á trách nhiệm xã hội của doanh nghiệp) on October 13th

2007 at HoChiMinh City, the conference “Improving the competitiveness of Vietnam through the social responsibility of enterprises “was held on 8th

January 2008 by VCCI Every year, Chamber of Commerce and Industry of Vietnam (VCCI)

2 McBarnet Doreen, Voiculescu Aurora, Campbell Tom Ed (2007), The New Corporate Social

Accountability: Corporate Social Responsibility and the Law, Cambridge University Press, the UK

collaborate with the Ministry of Planning and Investment, Ministry of Industry and Trade, Ministry of Natural Resources and Environment, the General Confederation

of Labour of Vietnam holds a press conference to give "CSR Award" This award honors and praises the businesses implement Corporate Social responsibility and raise awareness about the role and benefits of corporate social responsibility for sustainable enterprises In 2006, there were 50 textile enterprises and footwear

participated According to Dr Doan Duy Khuong - Vice President of Chamber of Commerce and Industry of Vietnam, "CSR is becoming one of the requirements for the enterprise if the enterprise does not comply with CSR will not be able to gain access to global markets World."

But in Vietnam, the implementation of CSR is still relatively difficult First is the understanding of the business of CSR is not fully understood The manager simply think CRS is doing charity works and they do not understand that CSR comes from within the company Second impact due to the implementation of CSR is a

businesses lack financial resources, and techniques to implement CSR standards, especially small and medium enterprises, where most of Vietnam enterprises are SMEs

The evaluation of CSR implementation specified in the rules of the Code of Conduct (Code of Conduct or Code of Ethics) and standards such as SA8000, WRAP, ISO

14000, GRI but these standards not an agreement between the government and the provisions of international conventions, therefore, is binding only between the export

or set by the companies themselves We already have companies producing clean vegetable production, aquaculture clean, clean coal production But these actions

carry more mandatory or spontaneous than a voluntary employment associated with business operations and business image

Our country has made good business people associated with the image of businesses that Duong Thi Bach Diep, Chairman Diep Bach Duong Co., Ltd., have supported the fund, "the poor" of the Vietnam Fatherland Front Committee 18 billion VND Nguyen Thi Dieu Hien, director of aquatic products processing Co Peace in addition we also support the activities of natural disasters, flooding of businesses and entrepreneurs

In addition, Vietnam also had an official forum to discuss about CSR at: http: / / www.vietnamforumcsr.net/ which is designed by Action Aid International Vietnam Growth and ecological environment has always been two opposing problems of developing economies After the process of rapid economic growth, the environment

of many countries has been destroyed Vietnam Government has expressed particular concern about this issue in the "Orientation for Sustainable Development in

Vietnam" to the country's sustainable development on the basis of economic

development, social development, environmental protection (Article 1, Decision No

153 / QD / CP-TTg, 17th August, 2004) By commitment to the Millennium goals to show that Vietnam doesn‟t ignore people's quality of life for the target growth in the short term But that requires the system of law rules must be strictly controlled and highly accurate In terms of state management, Vietnam has the labor law in 1994, and amended two times in 2002 (the regulations on labor agreements, overtime, social security, unemployment benefits) and 2006 (the contents of labor disputes and labor strikes) In the area of environmental performance, CSR activities in Vietnam

has made great strides after the environmental protection laws enacted in 2005

replaced the flip-old has almost no effect in 1994 Subsequently, a series of decrees were issued in time to guide inclusion of environmental protection into the

investment registration procedures, management of construction materials, industrial wastes, mining Apparatus of state management on environmental protection,

Vietnam has particular environmental protection at all local level Notably, in early

2008, the Police Department has established Environmental Police (C36) and the Environmental Police Department (PC36) in the provinces and cities Until now the agency has investigated, detected and handled hundreds of pollution violates, created good image in public opinions

However, even when laws are sufficient, then the effect is still low Many cases of environmental pollution occurred more than ten years without being detected and processed to prove that the state agency had not done their full responsibilities In some cases, when facing with violations of environmental business, citizens often do not receive any support from local governments Add to that a sense, community consciousness and self-protection consciousness of the Vietnamese community is low That leads to some companies easily spleen, such as M3CPD sauce, milk

contaminated with melamine or environmental violates for long periods without detection of Hyundai, Vedan, Miwon

In additional, there are not many representatives or intermediary institutions in

Vietnam, for example non-governmental organizations Those associations and organizations play a huge role in developed countries But, the roles of associations and NGOs are still low in Vietnam The head of associations are usually retired

officials who want to extend their working time Actually, there was no association

in the presence of consumers in cases of food contamination, environmental in the past

1.2 Reason for Future Research

While there are many studies on CSR in Europe, the Americas, just only a small number of research articles on CSR in Vietnam This paper can contribute small detail to clarify the impact of CSR on the financial operations of the company

through specific examples

1.2.1 Objectives of Research

 To summary of the CSR concept and its definition,

 To understand the importance of CSR,

 To gain insight into SCR applications in business operations of NamTrieu

This chapter will explain the theory and experimental results related to the

problem that research subjects

Chapter 3: Research Methodology

This chapter will present the method used to solve the problem posed by the subject in order to achieve overall objectives

Chapter 4: Result Analysis

This chapter will test the hypotheses which have been proposed

Chapter 5: Conclusion and Recommendation

This chapter will summarize the content of the graduation project and draw conclusions

CHAPTER 2: LITERATURE REVIEW

2.1 The overview of CSR

The first to implement CSR, we can say he was Norris; the first CEO of the company Control Data He had outlined the first idea of CSR in 1955 According Norris, enterprises should use the talents and their resources to meet the needs of society The idea is to show the connections and responsibilities between business and

community But he did not succeed in implementing his ideas United Way has developed the idea of Norris into successful strategies to help businesses increase competitive advantages and long-term community development

Attention to the consequences arising from the operation of enterprises in particular, the economic activity in general has a long life, but the concept CSR only appeared

in the years 50s of the 20th century in the USA with H R Bowen The spread of model Ford - Taylor in corporate governance and the development model of the welfare state (instead of the employer‟s charity) has obscured the issue of social responsibility of business industry Until the early 90s of the 20th century, before the threats that people think the culprit is the operation of large enterprises and economic activity in general such as destruction birth rights, family crystal, increases inequality threatens the social structure, but the damage to public health have done away up the concept of social responsibility of the business On the other hand, the response of the main associations, non-governmental organizations, the civil society in general, have created a movement of social pressures caused by businesses, especially

corporations, the multinational companies to take action reflected business social

responsibility Theoretical, starting from identifying the business relationship

between the environment around us, the notion of responsibility was extended from responsibility of improving profitability for shareholders, who ownership, to a place with responsibility for the ingredients involved (stakeholders)

R E Freeman (1984) said: “that the components that are related to individuals may affect or be affected by the realization of the goals of the organizations (enterprises) According to A B Carroll (1989), CSR can be divided into relevant sections into two categories: components that are mainly related such as shareholders, employees, suppliers, customers and indirect related components, including the relationship of the ingredients voluntarily or involuntarily to business with an escrow or implied ethical, such as associations, communities, local territorial, non-government

organizations

Today, there are many different definitions on CSR Every organization, company, government recognition has different CSR perspective and personal views,

depending on conditions, characteristics and development levels of their operations

Keith Davis (1973) gave broad concept: “CSR is the interest of the business and

reaction to beyond problems satisfying the needs of legal, economic and technology.”

Meanwhile, Caroll (1999) said that CSR has a larger scope, “CSR is all about legal

issues, economics, ethics and other areas where society expected of businesses in each certain time.” According to Matten and Moon (2004):” CSR is a concept that including of many different concepts such as business ethics, business philanthropy, sustainable development and environmental responsibility” The European

Commission defines CSR as “a concept whereby companies decide voluntarily to

contribute to a better society and a cleaner environment.” (Simms 2002) It is a

broad concept, and always be challenged in the context of each economic, political and social characteristics

In the book “Corporate Responsibility - a critical introduction”, Murray and

Blowfield mentioned some well known definitions below:

A responsible company is the one that listens to stakeholders and responds with honesty to their concerns (Starbucks, CRS Report, 2004)

CSR commits us to operate in a socially responsible way everywhere we do business, fairly balancing the rising needs so such stakeholders – all those who impact, are impacted by, or have a legitimate interest in the Company’s actions and

executive director of Rior Tinto, and Philip Watts, former chair of Royal Dutch Shell)

CSR requires companies to acknowledge that they should public accountable not only for their financial performance but also for their social and environment record CSR encompasses the extent to which companies should promote human rights, democracy, community improvement and sustainable development objectives

throughout the world (Confederation of British Industry, 2001)

[CSR is] a concept whereby companies integrate social and environmental concerns

in their business operations and in their interactions with stakeholders on a

voluntary basis (European Commission, Directorate General for Employment and

Social Affairs)

CSR is the commitment of business to contribute to sustainable economic

development, working with employees, their families, the local community and

society at large to improve their quality of life, in ways that are both good for

business and good for [international] development (World Bank, 2004)

In general, the concept of CSR always changes, always new, depending on space and time when CSR takes place The business must have responsibility to contribute to the sustainable development of the economy along with environmental protection and promotion of human resources, as the two main resources of the society A business with social responsibility should be linked to the expectations of the

elements related to their decisions These orientations are both a business goals and see the benefits of the materials involved as a condition to ensure effective business and finance, is also a moral orientation of the business This attitude has brought something new to the business operations of a component of social capital is

considered the "only profitable" According to Friedman, "The company has one and

only one social responsibility it is to use the inherent resources and engage in

activities to increase profitability in the long run as possible." However, from when

it appears the concept of "triple bottom lines" (including the development of

economic, human and natural) by John Elkington (1977), things started to change completely

Accordingly, the object approach and the responsibilities of a business are extended outside of sales, profits and customers The businesses must also take responsibility for those businesses which are affected by the activities of production in the local area, as well as responsibility to demonstrate their contribution as part of that

community This view was Archie B CSR Carroll developed in 1979 with four fields

of economics, law, morality and the obligations voluntarily Additionally, Michael J and Blowfield Frynas George gave an overview of CSR concepts and new priorities

of the role of business in society so far

Carroll’s pyramid

Carroll's CSR Pyramid is widely used because it represents the most comprehensive content and scope of CSR The pyramid is composed of four elements: Economic,

legal, Ethical and discretionary responsibilities

 Economic Responsibility includes maximizing profit, compete effectively for growth is a prerequisite of the business because the business is established

with primarily purpose of profit-seeking Moreover, the enterprise is the

economic fundamental cell of society so that business functions are always

top priority The remaining liability should be based on economic sense of

responsibility of enterprises

 Legal Responsibility is part of the covenant between business and society

The State shall provide social rules and ethics in the legislation for the

enterprises to pursue economic objectives within the fair framework

Economic responsibility and liability are two basic parts, indispensable of CSR

 Ethical Responsibility is the rules, values which are accepted by social

without being encoded in legislation The morality always exist the rights and wrongs which are not clear Hence they caused much debate in society and they have never been put into law Moral responsibility is voluntary, but it is the heart of CSR, for example: good working condition, using clean raw materials and food safety

 Philanthropic Responsibility is the behavior of businesses beyond the

expectations of society, such as donations to support the poor, funding

scholarships, contributions to community projects The biggest difference between Ethical Responsibility and Philanthropic Responsibility is the

enterprise completely voluntary without any requirement or condition If an enterprise does not implement CSR principles to this extent, it is still

considered to meet the standards that society expects

Boundaries between layers in the pyramid is always growing encroachment,

interacting each other Compliance with certain provisions of law will cause

additional costs for businesses That compliance costs will directly affect the cost of production and business operations In a competitive environment, the enterprises can not increase selling price but they have to high downsize the operations thus narrowing down profits to survive Shrinking profits will lose business reinvestment, thereby leading to reduce competitiveness, and undermine the attractiveness of the business market On the other hand, to protect the interests, some monopolist will transfer all cost of production to product price So it can be said that the customer is

the only one people who pay for the costs of legal compliance of the business

Higher prices will decrease consumer demand This in turn causes the monopolist to maintain their income by preventing new business activities

As the result, balancing the interests of stakeholders is set as a content key in

business administration The managers of the enterprises must find the way to

balance the interests of stakeholders such as employees, shareholders, customers, government and community Each stakeholder has interests in each level are

different in economic, legal, ethical and discretionary responsibilities of the business

2.2 CSR motivates Financial Performance

CSR bring many opportunities to business enterprise Short term benefits are more orders will be get from companies that require purchase of CRS standards Long term benefits for the company will be improving relationships at workplace, reducing costs, increasing productivity of employees, reducing employee leave, quit, reduce costs and recruiting and training new employees, increasing revenues, adding value

to brand, and more opportunities to reach new markets Practicing CSR in local economic can create a better workforce, supply cheaper and more reliable

Cost and production efficiency

A business should consider other things more out of profits if the business wants to protect its reputation, and increase more competitive advantages for businesses Reality has proven, many multinational corporations have been subjected to heavy criticism from the public and customers This reduced the corporation images to

suggestion that CSR and corporate reputation is nothing important at all The most typical example is the boycott of goods of Royal Dutch Shell By the time of Oil Reserves Scandal, the image of Shell was greatly diminished because of fuel save diesel did not run properly The company had a lot of effort by the campaign at home and abroad, committed to social responsibility of enterprises more After the crisis, Shell has learned his lesson and become a more responsible business by practicing more CSR applications

With the application of CSR, many economic experts believe that companies can save significant costs Usually the cleaner and modern technology will lower the selling price Ceramics manufacturing company in Jiangxi, China, has installated new technology-friendly environment They has saved nearly $ 10 million per year, with the results of reducing water use by 6%, 65% of waste water and 74% of the waste gas

A personnel management system also helps to effectively reduce costs and increase labor productivity significantly Reasonable compensation, working environment clean and safe, the training opportunities and health insurance and education are also contributed to increased profits for the company

Increase sales

Hindustan Lever is a subsidiary of Unilever in India The first time the new Indian market, milk processing plants Hindutan could not operate at full capacity because

company decided to build a program to help people in many dairy farmers from the different stages of training to livestock farmers, improving basic infrastructure to set

up a Providers Association cow‟s milk The results were encouraging, less than two years later, the supply of dairy cows has increased over 40 times and the plant was operating at full capacity Revenue and profit of Hindustan has increased so

significantly

To raise brand value and reputation of the company

CSR is a useful tool for people who do PR for brand development and image of a product or an organization while ensuring the professional ethics of the PR industry has met the wishes of the owner business Especially in industries where the quality and price of products is almost equal, consumers will become more disturbed in making decisions, your choices In such cases, users often choose products according

to sensory and liking their CSR can therefore be seen as an effective method to increase business reputation, or otherwise increase "feelings" of consumers to brand the product or business, thereby increasing revenue for the company Many

businesses today are implementing CSR is not just for the sole driving force is

"working well" but the actual purpose of building brands accounted for 56% of the business dynamics to implement CSR activities, according International Business Report of Grant Thornton in 2008

Another example is the case of a furniture manufacturing company in Bulsan, South Korea After obtaining the Certificate of friendly forest resources of the government, supply has rapidly accelerated sales The furniture of company penetrated the U.S

market and Europe easily, while selling price prior to 20% higher than the number of orders has grown steadily

10 years ago, before pressing traffic jams and environmental pollution in Tokyo, Youshi Nakamura, an entrepreneur has embarked on projects producing electric bicycles, electric boats, wheelchairs for disabled people with low cost, without

causing environmental pollution and very handy Immediately branded products SELTA was accepted by the market, surpassing the size of the domestic market, the product was preferred in many countries such as Australia, Switzerland, Canada, Germany, Sweden although it was merely introduced to the market from May 2000

Attracting talent

The labour force is deciding factor of productivity and product quality Attracting talented people are always interested companies Attracting good employees was difficult, the attachment feet this staff is more difficult This is a challenge for

companies These companies pay adequate and fair salary, creating opportunities for staff training, health insurance and a clean environment is the ability to attract and retain good employees

The staff also expressed their opinions and their views on CSR in their own way, every three out of four people questioned said they would be more loyal with the boss who is always helpful and responsible with local communities This is

strengthened by more recent studies on 2,100 MBA students showed that more than

These business owners did not worry much about the cost on CSR (health care

workers and their family, for employees to borrow money to buy a car, buying a home, child care institutions, schools for children them ) They always believe that

it is wise investments Rohto company director said that: “Company prides itself on its CSR” and “All our staffs are dedicated to bringing benefits to Rohto They are good performance, quality products, loyalty and creativity.”

Finally, CSR is a certain role in addressing the risk, the crisis of the business

Businesses can use CSR as an end in itself to solve the crisis or risk the company Because of the crisis, the public enterprises that are recognized as "social

responsibility" will get more sympathy for other cases In addition, CSR will help the company regain its image as companies know how to skillfully apply these initiatives and application of process control indicators and quality, ensuring the commitment

of the "corrective "or implementing community programs to demonstrate goodwill and building trust with the public

However, beyond the benefits that CSR brings to the enterprise, CSR can also bring negative impact to the enterprise If business fails to practices CSR activities to build reputation, the image will be negative The public will turn away because of the misconduct situation for example unexpected nature problem As Catherine D

Bennett, vice president of Cost Control Concepts Group Inc said: "No organization

is immune to any known risks."

But saying that does not mean that CSR is too dangerous, many studies have

demonstrated the CSR has a special connection with public relations - business by