Case study masan and ethical issues

MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY - - BUSINESS ETHICS GROUP ASSIGNMENT Lecturer: Nguyen Bich Ngoc CASE STUDY: Masan and Ethical Issues Participants: Nguyen Trang Thu Vu Ha Anh Nguyen Tra My Tran Minh Anh Duong Trung Kien - 11226049 - 11220674 - 11224388 - 11220619 - 11223146 Class: International Business Administration 64B School of Advanced Education Programs (AEP) MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY - - BUSINESS ETHICS GROUP ASSIGNMENT Lecturer: Nguyen Bich Ngoc CASE STUDY: Masan and Ethical Issues Participants: Nguyen Trang Thu Vu Ha Anh Nguyen Tra My Tran Minh Anh Duong Trung Kien - 11226049 - 11220674 - 11224388 - 11220619 - 11223146 Class: International Business Administration 64B School of Advanced Education Programs (AEP) This is a preview Do you want full access? 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Log in Abstract Masan is a dynamic and highly diversified company that operates across various industries, including consumer goods, retail, and financial services With its headquarters in Vietnam, Masan has established itself as a leading player in the market, known for its innovative approaches and ethical business practices Founded with a vision to create sustainable value for all stakeholders, Masan has continuously evolved and expanded its operations since its inception Masan's success can be attributed to its unwavering focus on delivering highquality products and services that meet the evolving needs and preferences of consumers The company's portfolio comprises well-known brands that have become household names, such as Chinsu, Omachi, Wincommerce, and Techcombank commanding a significant market presence In addition to its pursuit of commercial success, Masan places a strong emphasis on corporate social responsibility The company recognizes the importance of sustainable practices and actively engages in initiatives that contribute to the well-being of communities and the environment Through philanthropic endeavors and partnerships, Masan strives to make a positive impact on society beyond its business operations However, along the way, Masan has committed several ethical misconducts about marketing and food safety These occurrences have led to skepticism and disapproval from the public, eroding customers’ trust in Masan To tackle the scandals, Masan has been actively seeking solutions to minimize the negative effects on its business and has achieved encouraging and favorable outcomes In this report, we delve into Masan's business ethics practices, explore the challenges faced by Masan due to its involvement in controversial misconduct, and examine the strategies implemented by the company to recover from the resulting damage to its reputation and scandals to regain trust and restore its standing in the eyes of consumers and the public Table of Contents Abstract .1 A Introduction Masan Group Masan’s business B Analysis company’s business ethical issues Ethics in Human Resource Management .7 1.1 Ethics in recruitment, appointment, employment 1.2 Ethics in Employee Assessment 1.3 Ethics in protecting workers Ethics in Finance & Accounting Toxic competition 3.1 The "instant noodle war" between Masan and Acecook Vietnam (2011) .8 3.2 Masan and the fish sauce scandal (2016) Food Safety 4.1 The story unfolded .10 4.2 Conclusion 10 Marketing 11 5.1 Nam Ngu fish sauce “For consumer health” ,purely extracted from 100% fresh tuna Is Chinsu fish sauce really premium-grade salmon fish sauce? 11 5.2 Tien Vua noodles: The packaging states “ No Transfat”, but further testing reveals otherwise 12 5.3 Other scandals 13 5.3.1 Tam Thai Tu soy sauce does NOT contain 3-MCPD 13 5.3.2 Chinsu seasoning powder “without MSG” 14 5.3.3 Omachi potato noodles: Contains only 5% potatoes 14 C Conclusion 16 References 17 A Introduction Masan Group Masan Group is a leading conglomerate based in Vietnam that operates in diverse industries such as food and beverage, infrastructure development, and mining, among others The company was founded in 1996 and has grown to become one of Vietnam's biggest and most successful business groups Masan Group has a strong focus on sustainable development and innovative solutions, making a positive impact on the communities they serve The company has a presence in Vietnam and is constantly expanding its operations both locally and internationally In Vietnam, Masan Group is often known through famous products and brands such as the fish sauce brand "Nuoc Mam Chin Su", the instant noodle brand "Omachi", and the Winmart retail chain, Masan Group has achieved several outstanding achievements over the years, including: Becoming one of the top 50 public companies in Vietnam by revenue and market capitalization Establishing itself as a leading player in Vietnam's consumer goods industry through its subsidiary, Masan Consumer Holdings, which includes popular brands such as WinMart, WinMart+, and Masan MeatLife Developing a unique business model focused on sustainable development, using advanced technology and innovations to reduce the environmental impact of its operations Launching Masan MEATLife, a subsidiary leading the way in transforming Vietnam's meat industry through technology and sustainability Building the largest tungsten mine in the world through Masan Resources, which has helped establish Vietnam as a significant player in the global tungsten market This is a preview Do you want full access? Go Premium and unlock all 20 pages Masan’s business Masan is known as a consumer-focused group with a few key business Access to all business documents pillars that can synergistically provide Vietnamese consumers with a more convenient and rewarding experience as they their daily basic needs and beyond According Getaddress Unlimited Downloads to Kantar World Panel, 98% of Vietnamese households use at least one Masan Consumer product in 2020 Improve your grades Upload Share your documents to unlock Free Trial MCH's revenue in 2020 compared to other consumer companies (unit: billion VND) Get 30 days of free Premium Already Premium? Log in MCH is in the top 10 most valuable brands in Vietnam in Forbes 2020 (unit: million USD) WinCommerce operates the largest nation-wide grocery modern trade retail platform in Vietnam WIN serves big and essential daily use of Vietnamese people, ranging from grocery (WinMart+), financial services (Techcombank), healthcare (Dr Win), and F&B (Phuc Long) to telecommunication services (WinTel) WinCommerce also owns WinEco – the largest vegetable & fruit brand in Vietnam that is available exclusively at WinMart, WinMart+ and WIN locations BRANDED FOOD & BEVERAGE Masan Consumer Holdings is one of Vietnam’s largest local diversified FMCG companies The company manufactures and distributes a range of food and beverage products Masan Consumer Holdings has grown its product portfolio and domestic distribution channels to establish a leading position in Vietnam’s branded consumer food and beverage market Its key brands include Chin-su, Nam Ngu, Tam Thai Tu, Omachi, Kokomi, Lovemi, Komi, Cao Boi, Ponnie, Vinacafé, Wake-Up, Compact, Vinh Hao, Quang Hanh, Vivant, Faith and Su Tu Trang According to Euromonitor, Masan Consumer has the largest market share in the fish sauce industry with 29.8%, the second largest in the instant noodles industry with 20.0% - just behind Acecook Vietnam (unlisted) and the third largest in the market energy drink market In addition, the company also leads in the segment of instant coffee (about 40% market share) with two main brands, Vinacafe and Wake up BRANDED CHILLED MEAT BUSINESS Masan MEATLife is also Vietnam’s one of largest fully integrated branded meat platforms with chilled meat products using European processing technology and standards FINANCIAL SERVICES Regarding financial services, Techcombank, which is under the control of Masan Group, is currently one of the largest joint stock commercial banks in Vietnam in terms of total operating income, assets, loans, deposits, customers, and distribution network It has built industry-leading franchises in retail deposits, SME, and retail lending through its consumer-centric ecosystem approach Techcombank has developed a diversified range of financial products and services to cater to the financial needs of Vietnam’s emerging consumer class and budding private enterprises Techcombank has a customer base of about 10.8 million by the end of 2022, equivalent to about 10% of the population using the service HIGH-TECH MATERIALS Masan High-Tech Materials is one of the largest private sector mineral resource and chemical processing companies in Vietnam, currently operating the world-class Nui Phao polymetallic project in Northern Vietnam Nui Phao is the largest tungsten mine in the world and the industry’s first new tungsten project to be commissioned in over a decade.4 Masan High-Tech Materials is also a globally significant producer of fluorspar and bismuth Masan High-Tech Materials’ objective is to show the world that a Vietnamese company can lead the transformation of the global tungsten market and is strategically exploring opportunities and discussions to become a further integrated downstream tungsten business on a global scale This will enable MHT to deliver a consistent and strong financial profile across commodity cycles This is a preview Do you want full access? Go Premium and unlock all 20 pages B Analysis company’s business ethical issues Ethics in Human Resource Access Management to all documents 1.1 Ethics in recruitment, appointment, employment Get Unlimited Downloads Seeing human resources as a competitive force, Masan has placed an emphasis on human quality, starting with Attraction - Recruitment - Training and Employee Improve your grades Development Increasing awareness of the core values, principles of behaviour and work skills of employees since their first day at Masan In addition, Masan also trains staff according to job needs and specific career development plans for employees holding key managerial Share your documents to unlock positions and “acute” areas Upload There is a policy of commitment to transparency in all business activities – production, displaying quality integrity – transparency for all employees, in a friendly, efficient and transparent working environment Free Trial Get 30 days of free Premium 1.2 Ethics in Employee Assessment Masan decoding talent through 4C: - Creative solution Already Premium? - Clear thinking - Conclusive actions - Change for results Log in Masan issues share according to the employee selection program in order to retain key, heartfelt, competent and experienced employees 1.3 Ethics in protecting workers Masan always cared about the lives of workers through the means of production and treatment The company limits overtime work, guaranteeing sufficient monthly rest days according to regulations Employees are paid full social insurance, and health care in addition to monthly surcharges, daily support, food allowance, rent Ethics in Finance & Accounting The reports on Masan’s accounting and financial activities are reasonably explicit Masan currently owns major shares in Vietnam Technological and Commercial Joint Stock Bank, commonly referred to as Techcombank, Vinacafe, Vinh Hao Mineral Water, Cam Con Co Masan’s annual profits are continuously increasing However, Masan did not pay dividends to shareholders for four consecutive years Retaining this profit is intended to support acquisition strategies and merging other companies to gain scale and market share Since then, shares have risen 50 per cent since early 2011, reaching the secondmost high price on the market today This non-distribution was approved by shareholders who did not receive dividends but benefited from stock exchange stock price increases and the company's strong growth through investments and mergers Generally speaking, Masan's accounting and finance are relatively good Toxic competition 3.1 The "instant noodle war" between Masan and Acecook Vietnam (2011) In 2011, Masan released their Tien Vua instant noodles and advised customers through their advertising that noodles with a dark yellow color were harmful due to the use of reused oil In a marketing campaign, Masan continued to promote their Tien Vua beef and cabbage noodles by presenting an experiment that proved any noodles turning dark yellow after being boiled contained harmful coloring agents Thus, customers who watched Masan’s advertising will receive the message that any dark-colored noodles are toxic, and only light-colored noodles are good for consumption As a result, Acecook Vietnam, the company producing noodles with a dark yellow fiber, officially filed a complaint with the Competition Management Agency about Masan's advertising clip for their Tien Vua beef and cabbage noodles, which misinformed customers about the quality of the product Acecook demanded that Masan cease their advertising campaign Although Masan spent a considerable amount on advertising, it was evident that the truth had been exposed, and they were unable to surpass their competitors in the market 3.2 Masan and the fish sauce scandal (2016) On October 17, 2016, the Vietnam Standards and Consumer Protection Association (Vinastas) announced the results of a survey that showed 101 out of 150 samples (accounting for 67.33%) did not meet the regulations of the Vietnamese standards for allowed levels of Arsenic in fish sauce products This information, after being published in the newspaper, received a strong reaction from scientists, experts, and traditional fish sauce manufacturers Most of them affirmed that fish sauce, made from fish, naturally contains organic Arsenic which is not so toxic as inorganic Arsenic Providing information without specifying that it is organic Arsenic is a hasty and irresponsible act This disclosure damaged the public's view and degraded their trust in Vinastas On the other hand, Masan immediately presented an advertisement about two completely safe brands which not contain Arsenic In some printed newspapers published on October 20, the ads of two brands, Chin-Su salmon flavor fish sauce and Nam Ngu fish sauce, stated: “We always believe that fish sauce must be delicious, but safety is a top priority” This action is a response to the public's concern about who funded Vinastas to conduct this controversial survey Therefore, instead of receiving support from the community, Masan confronted not only traditional associations with hundreds of enterprises but also the longstanding culinary culture of Vietnam This incident caused a huge loss for the Masan Group as it lost nearly VND 2,800 billion in the stock market in just a few days Food Safety This is a preview Do you want full access? Go Premium and unlock all 20 pages 4.1 The story unfolded On April 2, 2019, the Vietnamese community was upset by the information Accessnetwork to all documents that 18,000 bottles of Chinsu Chilli Sauce from Masan Consumers Corporation were recalled in Japan due to the content benzoic acid, which is a preservative that is not GetofUnlimited Downloads approved for use in chilli sauce in Japan Improve your grades The Tokyo City Department of Health and Welfare has carried out inspections of Chinsu Chilli Sauce products imported from Vietnam for the Jarvis Group suspected of violating the Food Hygiene Law and the Food Label Act The agency found levels of benzoic acid and sorbic acid exceeded permitted levels In addition, because labels not contain information about benzoic acid and sorbic acid found in products, it is considered Share your documents to unlock to violate the Food Labelling Act Upload Masan Consumers Corporation has stated that it did not export the bottles to Javis Co., Ltd Most likely these products are dedicated to the Vietnamese market only because on the packaging it is stated "Exclusively for sale in Vietnam Exports are not authorised.”, or unknown origin.Get 30 days of free Premium Free Trial 4.2 Conclusion According to the results of the investigation of the Ministry of Health, in terms of Already Premium? Log in law, Masan Consumer does not violate ethics in business because according to the circulation of guidelines on the management of food additives, benzoic acid is a preservative that acts against microorganisms, especially mould However, depending on each country, the regulations for the use of food additives will also be different Therefore, it is not excluded that a substance is accepted in one country but not in another country However, in terms of consumer health and community safety, it is once again questionable whether food standards in Vietnam are lower than in Japan and whether the safety of Vietnamese is underestimated by profits Because benzoic acid preservatives combined with vitamin C in tomatoes, crushed fruits, and chilli peppers create carcinogenic benzene and according to the Ministry of Health, chilli peppers still use up 10 to 4-5 preservative additives, not to mention the content of exactly gr/kg as prescribed or not to be evaluated But in business, one criterion that goes beyond the law that leading brands always value is ethics That is when the manufacturer is well aware of a chemical composition although it is legally permitted to use but if it is not good for the health of the user, they will not use it but replace it with a better substance, though better profit According to the analysis of experts, the manufacturer wrote the inscription "For the Vietnamese market, not exported" on the product is to avoid liability if a certain unit exports this product abroad The country of residence cannot hold producers liable if the product does not meet the food standards of their country The manufacturer writes this line is not wrong, but this shows a defect in the business ethics of the enterprise Marketing 5.1 Nam Ngu fish sauce “For consumer health” ,purely extracted from 100% fresh tuna Is Chinsu fish sauce really premium-grade salmon fish sauce? The testing revealed that Nam Ngu only contains 100% 'fish flavoring,' which can be easily purchased from the Kim Bien chemical market Moreover, Nam Ngu contains a synthetic coloring agent called Brow HT155, also known as Chocolate Brown HT, Food Brown 3, and C.I 20285 This additive is prohibited for use in food in countries such as Belgium, Austria, Denmark, France, Germany, the United States, Norway, Switzerland, and Sweden It can cause allergies in individuals with asthma, affect those allergic to aspirin, and even lead to skin allergies This is precisely why Masan advertises the product as being 'extracted from tuna' to cover up any potential allergic reactions from consumers, especially among sensitive children who may develop allergies to tuna, a fish species known to cause skin reactions in some individuals Not only does Nam Ngu fish sauce fail to meet protein standards and contain numerous additives, but it also raises questions among consumers about its claim to be "clean fish sauce for consumer health" made using "technology to eliminate harmful bacteria." 11 However, according to Associate Professor Phan Thi Suu, Director of the Center for Food Safety and Hygiene Technology, Nam Ngu's advertising claims are incorrect and deceptive She states, "The slogan 'For health' that Nam Ngu emphasizes is mainly about the technology used to eliminate harmful bacteria But if there are no bacteria, preservatives must be used Using preservatives cannot be good for human health 5.2 Tien Vua noodles: The packaging states “ No Transfat”, but further testing reveals otherwise It is worth noting that not only in the advertisement but also on the packaging of Tien Vua noodles, the Transfat content is stated as 0g (Transfat content labelling follows the regulations of the U.S Food and Drug Administration) However, the test results of Tien Vua noodle samples have surprised many consumers as Transfat is found in the ingredient list of the noodles According to the analysis, the proportion of Transfat in one pack of Tien Vua noodles is 0.097%, indicating that it is not completely absent as advertised Not only related to trans fat, Masan's Tien Vua noodles once again caught public attention when they aired a TV commercial for Tien Vua cabbage beef noodles claiming to use noodles without the harmful coloring E 102 (also known as Tartrazine 102) However, upon market research, it was found that some Masan products, including the old version of Tien Vua noodles and Omachi noodles, contain E 102, clearly indicated in the ingredients as Tartrazine 102 The truth that was exposed has caused a lot of reactions from consumers Many people have criticized the company's media tactics, saying that it deceived customers by downplaying or not disclosing information about the harmful substances in its products.They feel disappointed and have lost trust in the product and the company Furthermore, many people have changed their eating habits and switched to using other noodles that have clearer and more reliable origins 12 This is a preview Do you want full access? Go Premium and unlock all 20 pages Consequently, Tien Vua noodles were withdrawn from the market and the scandal not only affected the company's business but also affected the reputation and credibility of the instant noodle industry asAccess a whole to In addition to losing customers, the company all documents had to face legal responsibility requirements and was fined for violating advertising and food safety standards At the same it also issued a warning to other businesses about Gettime, Unlimited Downloads honesty and transparency in promoting their products 5.3 Other scandals Improve your grades Over the past nearly 20 years, Masan's business sectors have achieved significant success, with a large part attributed to marketing campaigns that "target consumer fears" by utilizing a common formula: "Product" + "NO" + "harmful substances" Upload Share your documents to unlock 5.3.1 Tam Thai Tu soy sauce does NOT contain 3-MCPD After the public outcry following the 2007 incident where several soy sauce brands in the Vietnamese market were found to contain the carcinogenic substance 3-MCPD, Masan quickly introduced the Tam Thai Tu product withdays the claim ofPremium "no 3Get 30 of free MCPD" and even offered a substantial reward to anyone who could find 3-MCPD in their product Free Trial Immediately, Tam Thai Tu captured 80% of the market share, pushing other soy Already Premium? Log in sauce brands aside and helping Masan generate revenue of 1.9 trillion VND in 2008 three times the amount earned in 2007 (which was 0.7 trillion VND) 13 That's how Masan's products are gradually being introduced to the market, using the formula: “Product" + "NO" + "harmful substances”, and it is proving to be very effective There are products like Tam Thai Tu soy sauce that genuinely not contain 3-MCPD, but there are many other products that claim to be free of harmful substances, yet testing reveals the presence of such substances This is an unethical marketing tactic employed by Masan 5.3.2 Chinsu seasoning powder “without MSG” With the intention of targeting the consumer's fear of MSG, in 2008 Masan launched an advertisement campaign for "seasoning cubes without MSG" to compete with its rivals However, shortly after the advertisement was released, samples of these MSG-free seasoning cubes from Masan were sent for testing at the Testing and Analysis Services Center under the Department of Science and Technology in Ho Chi Minh City The test results showed that the "MSG-free" Chinsu seasoning powder contained 1.21% monosodium glutamate (also known as super MSG) After the controversy surrounding the use of MSG in seasoning cubes in 2008, Chinsu discontinued this type of seasoning In 2019, they returned to the market with sweet and savory seasoning cubes made from shrimp and meat In 2021, they introduced a new product claiming to be times more flavorful than concentrated broth Although they still assert that their seasoning powder are "delicious from meat, savory from bones," these two products still contain the flavor enhancer 621, also known as super MSG So, in reality, these seasoning powders not consist entirely of crystallized broth from bones and meat as advertised, such as "“100% từ nước hầm xương”, “ngon từ thịt, từ xương”, "tốt cho sức khỏe" as claimed by Masan 5.3.3 Omachi potato noodles: Contains only 5% potatoes 14 Masan Food introduced Omachi, an instant noodle brand with a relatively higher price range (premium-mass), claiming to be made from potato fibers, delicious, and not causing heat in the body This targets the long-standing fear of consumers regarding the heat generated by consuming instant noodles However, in reality, these noodles contain only 5% potatoes, meaning they are primarily made from wheat flour like most other noodles That's a remarkable achievement for Masan to have gained a 15% market share in the instant noodle industry within less than three years, surpassing popular brands like Vifon with their longstanding Mi Hai Tom and Asia Food 15 This is a preview Do you want full access? Go Premium and unlock all 20 pages C Conclusion Access to all documents Masan Consumer Holdings is a prominent player in the consumer goods industry in Vietnam, with a strong presence and a track record of success The company's business Get Unlimited Downloads focuses on manufacturing and distributing a wide range of consumer products, catering to the needs and preferences of the Vietnamese market Improve your grades However, it is important to acknowledge the ethical issues that have arisen alongside Masan's growth and success In response to these ethical challenges, it is crucial for Masan Consumer Holdings to take proactive measures to address these concerns The company should prioritize ethical business practices, including transparent advertising, documents to unlock By doing so, Masan sustainable production methods, Share and fairyour treatment of its employees can build and maintain a positive reputation, strengthen consumer trust, and contribute to the sustainable development of both its business and the wider community Upload Free Trial In conclusion, as Masan Consumer Holdings continues to navigate its path as a market leader, it must not only focus on financial success but also ensure that its business Get 30 days of free Premium practices align with ethical standards By prioritizing ethics, Masan can not only enhance its brand reputation but also contribute to a more sustainable and responsible consumer goods industry in Vietnam Already Premium? Log in 16 References Our business | Masan - Vietnam leading corporation (n.d.-a) https://www.masangroup.com/our-business.html An M (2022, May 3) Nước tương, mỳ gói, tương ớt, Masan Consumer chiếm tổng doanh thu chuỗi WinMart, WinMart+? https://cafebiz.vn/nuoc-tuong-my-goi-tuong-ot-cua-masan-consumer-chiem-bao-nhieutrong-tong-doanh-thu-cua-chuoi-winmart-winmart Tckd (2013, October 2) Nhiều doanh nghiệp chậm trả cổ tức BAO DIEN TU VTV https://vtv.vn/chung-khoan/nhieu-doanh-nghiep-cham-tra-co-tuc-100956.htm Online T T (2019, April 9) Tương ớt Chin-su bị thu hồi Nhật: Tiêu chuẩn Việt Nam thấp hơn? https://tuoitre.vn/tuong-ot-chin-su-bi-thu-hoi-tai-nhat-tieu-chuan-viet-nam-thap-hon20190408223508538.htm Vlr.Vn (2017, November 27) Cạnh tranh truyền thông xấu: Phản tác dụng, văn minh? https://vlr.vn/canh-tranh-bang-truyen-thong-xau-phan-tac-dung-kem-van-minh-4024.html Những cú phốt để đời “ông lớn” Masan (n.d.) Vietnam Daily | Tin Tức Việt Nam Daily, Cập Nhật Mới Nóng 24/7 https://vietnamdaily.trithuccuocsong.vn/tai-chinh-ngan-hang/nhung-cu-phot-de-doi-cuaong-lon-masan-46269.html 17 My H (2016, October 21) Sản phẩm + KHÔNG + chất độc hại: Cơng thức marketing bí truyền đánh vào nỗi sợ hãi Masan suốt 10 năm qua https://cafebiz.vn/san-pham-khong-chat-doc-hai-cong-thuc-marketing-bi-truyen-danhvao-noi-so-hai-cua-masan-suot-10-nam-qua-20161021102433942.chn nuocmamnetviet.com (2017) Nhìn lại vụ việc 3-MCPD, Nguời đứng sau hưởng lợi? http://nuocmamnetviet.com/nhin-lai-vu-viec-3-mcpd-ai-la-nguoi-dung-sau-huong-loibid49.html 18