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

- 1 - 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 - 2 - 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. - 3 - THE IMPORTANTCE AND EFFECT OF CSR REPORTING ON THE PERFORMANCE OF VIETNAM COMPANIES By KIEU TRUNG KIEN October 2011 Supervisor: Dr. Pham Duc Hieu ABSTRACT Corporate Social Responsibility (CSR) has been known since many years ago and became a familiar concept in the international business environment, but it is fairly new 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. - 4 - 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 - 5 - 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 - 6 - 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 - 7 - 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 - 8 - 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 method of social responsibility and community. However, there are companies still - 9 - 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 congenital heart defects and to support victims of the Can Tho bridge collapse of - 10 - 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 to the public. Aware of the Vietnam people have a positive change on environmental issues. Consumers were more interested in Vietnam to the implementation of CSR in companies operating in the province Vietnam. This change is partly due to the mass media like TV, radio; internet is very much addressed environmental issues, in part from the disaster that the company caused to the environment such as food poisoning, 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 adjusted two times in 2002 (with contents labor agreements, overtime, social security, [...]... Chapter V: Conclusion and Recommendation - 14 - 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... 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... 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... 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... environmental performance of organizations Similarly, the multinational 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,... 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. .. 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... all want the company announced the company's CSR report CSR reports help companies avoid trouble from the law In addition, they also increase the reputation and prestige of the company The company made good CSR report will be the support of investors and attract more customers CSR reporting is one way that organizations use to communicate information about social issues and the environment of different... 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. .. 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 H0: Managers’ attitude toward CSR and CSR reporting is negative - 24 - 2.4.2 Consumers` attitude toward CSR reporting Consumer confidence for businesses that are hurt seriously . toward CSR reporting ……………… …………………27 2.5 Effect of CSR on the performance of Vietnam companies ………………………27 2.6 Methods of effective implementation of CSR …………………………………. relationship between the importance and effect of CSR reporting on the performance of Vietnam companies – It includes: Sub-problem 1: Why is CSR very