assignment report the development of csr in vietnam dairy products joint stock company vinamilk

ey HUTECH Đại học Công nghệ Tp.HCM OPEN UNIVERSITY MALAYSIA MINISTRY OF EDUCATION & TRAINING HOCHIMINH CITY UNIVERSITY OF TECHNOLOGY ASSIGNMENT REPORT THE DEVELOPMENT OF CSR IN VIETNA

ey HUTECH

Đại học Công nghệ Tp.HCM OPEN UNIVERSITY MALAYSIA

MINISTRY OF EDUCATION & TRAINING HOCHIMINH CITY UNIVERSITY OF TECHNOLOGY

ASSIGNMENT REPORT

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

Instructor (Lecturer) : MSc Nguyen Ngoc Duy Phuong

Student ID: 2155010008 Course code: BMOM5203 Course title: ORGANISATION AND BUSINESS MANAGEMENT

Ho Chi Minh City, 2021

TABLE OF CONTENTS CHAPTER 1: THE THEORETICAL BASIS OF CSR

CHAPTER 1: THE THEORETICAL BASIS OF CSR

Corporate social responsibility: is known as one of the factors that make a lot of benefits for businesses such as increasing sales, profits, reducing turnover, or expanding market development opportunities Corporate social responsibility 1s not a new concept and on the world level, since the 1980s, CSR has become an important strategy in the development process of enterprises each company Since then, CSR has gradually proved its great role in the overall development of enterprises as well as in harmony with the interests of society Therefore, the concept of CSR is receiving more and more attention and investment from businesses

1.1 Some concepts related to CSR:

“CSR is an enterprise's commitment to contribute to sustainable economic development, through jobs that improve the quality of life of employees and members of their 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 and demands from customers are getting higher and higher, and therefore, society has an increasingly strict view of businesses about their obligations and responsibilities to the community In order to achieve sustainable development in society, businesses that want

to develop sustainably must always adhere to not only standards on ensuring production - business must be profitable, even super-profitable, but also standards on environmental protection nature, working environment, gender equality, occupational safety, labor rights, traming 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 is established 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 can also 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

to encode 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 and therefore legal policies can only be followed during this transformation Therefore, the law cannot fully reflect the requirements of the codes of conduct of society Therefore, the responsibility 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 ethical responsibilities in that, businesses perform this responsibility "completely voluntarily" If businesses 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 standard that every business need: Environmental protection, waste treatment by standards to ensure rights and benefits for employees; producing products that are safe for consumers, and fulfilling obligations to suppliers; ensuring the interests of shareholders Businesses that 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 only think for its benefit but must strive to bring benefits to society Business and society are two 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 businesses towards relevant subjects and objects in the process of business operations, from producers, marketers, consumers, and consumers to local suppliers of raw materials and materials; from officers, employees to shareholders of the enterprise In which, there is both 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, including humanitarian 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 by the old regime, including Thong Nhat dairy factory (formerly Foremost factory); Truong Tho 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 dairy products including liquid milk, powdered milk, condensed milk, yogurt, ice cream, cheese, currently Vinamilk has developed a beverage segment Vinamilk's products are mainly consumed 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 and business 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 and creativity are Vinamilk's companions Vinamilk considers customers as the center and is committed 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 trién | Winamilk Việt NamChiến lược phát triển | Vinamilk Viet Nam - Vinamilk, n.d.-a) (Céng ty Vinamilk | Vinamilk Viét Nam - Vinamilk, n.d.) (Lich sử phát triển | Vinamilk Viét Nam - Vinamilk, n.d.)

2.2, Current status of CSR implementation at Vinamilk

Vinamilk soon put action programs mto CSR implementation through the implementation of Vinamilk's Code of Conduct Although it was not until January 2010 that Vinamilk's Code of Conduct was officially applied in the entire company But, many years 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 towards shareholders, investors, and employees, policies towards suppliers, customers, and consumers; policies towards the environment and the community (/447926623- Sde3abcc3ae07f{c9ec8e0cef/b1ld74basbbh0e7de05 1237 7edfeS83cca2c725c73.Pdf, n.d.)

2.2.1 For partners, shareholders, investors:

Vinamilk's viewpoints and policies:

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

¢ Partners: Vinamilk is committed to respecting the interests of partners and making efforts to protect assets and human resources participating in cooperation, joint ventures, and association

¢ Investors: Vinamilk is committed to creating equal investment opportunities for all investors in exchanging and disclosing information and creating a transparent business environment by publicizing the investor selection process

¢ Shareholders: Vinamilk's principle is to consider the interests of shareholders as its own

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

(VnExpress, n.d.) (Nhà cưng cap ctia Vinamilk | Vinamilk Viét Nam - Vinamilk, n.d.)

Vinamilk action program:

Vinamilk ensures to fulfill its commitments by providing the most transparent and honest financial statements and annual reports to partners, investors, and shareholders Vinamilk has been maintaining an information channel to investors, partners, and shareholders through the annual general meeting of shareholders; post information for them through the website http://vinamilk.com vn/; regularly send news-letters to them and the 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, nd.-b) (Winamilk và Kido Chỉ 400 Tỉ Đồng Lập Liên Doanh - Tuối Trẻ Online, 2021)

The IR department has the role of providing information about Vinamilk most understandably 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 For example, in increasing charter capital in 2010, Vinamilk increased its capital from bonus shares 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 for employees by ensuring three basic principles: respect, fairness, and working environment Specifically:

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

¢ 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 other benefits 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) (Whin Lai 2020 Voi Cau Chuyén Cua Vinamilk: Khi Trách Nhiệm Cộng Đông Trở Thành Một Phan Trong Văn Hóa Doanh Nghiệp, n.d.)

Environment:

Vinamilk will always provide and maintain a secure, safe, healthy, and fnendly working environment An environment that always attracts and retains talented people despite their different starting points [t is an environment where:

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

- All employees have the best working conditions in both physical and mental aspects Employees are provided with a convenient working space, work equipment as well as always feel comfortable to promote their abilities and contribute personal ideas

An environment that ensures the spiritual aspect also means that, in which each employee feels respected, everyone has the opportunity to socialize and have fun regardless of individual differences 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 they are ready to develop their capacity (ONLINE, 2019)

Vinamilk action program:

Vinamilk has gradually used the overall human resource management system to realize the rules in the company's code of conduct The overall human resource management system is coordinated by Vinamilk with Tinh Van Consulting Joint Stock Company (Tinh Van Consulting) - an experienced company and a partner of many large enterprises in the field Human resource management consulting based on information technology (IT)

With the application of the overall human resource management system Histaff (from June 13, 2011) (Zinhvan Group - Tinhvan Consulting sdn sang Golive hé thong HiStaff tai Vinamilk, n.d.) 11 syne with the enterprise management system ERP (Enterprise Resource Planning), Vinamilk was able to manage data efficiently centralized and synchronized The system helps the company to monitor changes in regular personnel changes of member units and branches spread across the country; Applying a flexible

timekeeping system such as: Assigning work shifts, monitoring entermg and leaving hours, leaving late, leaving early, working overtime, overtime, overtime ; Support policies on calculating the income of workers such as Product delivery, Line productivity, daily performance, revenue calculation (KPI), Monthly salary fund allocation, effective salary monthly 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 the needs and bring the most satisfaction to consumers That is clearly shown in the company's code of conduct: Winning the trust of consumers is always the goal that businesses aim for 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 operating and 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 competitive prices The company has complied with and applied regulations/standards related to quality, equipment, workers, raw materials in the production process Vinamilk always strictly adheres to the standard production process including the stages from raw material receipt, 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 to the closed production process meeting international standards

« Honesty in Advertising:

One of the ways to bring the image of VINAMILK to consumers is advertising vinamilk expects advertising not only to be creative, attractive, and useful but also to focus on honesty and accuracy vinamilk is committed to always advertising honestly ie tell the truth about its products vinamilk says it night, does it nght, and sells the nght quality products to consumers as announced

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* Satisfying consumers:

Vinamilk always focuses on consumers to meet and satisfy needs and tastes when creating products Consumers’ needs are always changing, the best way to do that 1s to always respect consumers’ opinions, as well as create a comfortable, friendly, and timely environment to exchange information with consumers use Vinamilk is committed to always receiving information from consumers such as product contributions, concerns, questions, or complaints with the most respectful, polite, and timely attitude as well as commitment will promptly investigate and appropriately resolve issues related to product and service safety

* Preservation of consumer information: Vinamilk always respects and preserves the privacy of consumers’ information (Vi Sao Vinamilk Luén La Thuong Hiéu Rat Thanh Cong Trén Kénh Digital?, n.d.) (SONHKND, 2014)

Vinamilk action program:

- The cow raising process is also guaranteed to meet quality standards: The cows are all 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 to produce 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 for advertisements (Clips, information posted on the mass media, milk tnal campaigns ) of Vinamilk always emphasize the quality of products such as real milk, clean milk, 100% pure fresh milk The company's product packaging also clearly states the origin, nutritional ingredients, or recommendations related to the product In addition to the fact that Vinamilk respects honesty in advertising, Vinamilk also ensures to sell the nght quality products to consumers as announced as a way to prove the truthfulness of the company's advertising

- Quality assurance is always top and hygienic