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MINISTRY OF EDUCATION AND TRAINING THUONG MAI UNIVERSITY - DINH THI HUONG CORPORATE SOCIAL RESPONSIBILITIES TOWARDS EMPLOYEES OF VIETNAM GARMENT COMPANIES Major : Commercial business Code : 62.34.01.21 DOCTORAL DISSERTATION SUMMARY Hanoi, 2019 The PhD dissertation is completed at Thuong Mai University Supervisors: Assoc Prof Dr Nguyen Thi Minh Nhan Assoc Prof Dr Mai Thanh Lan Examiner 1:……………………………… ………………… ………………………………………… ……… Examiner 2:………………… ……………………………… ………………………………… ……………… Examiner 3: ……………………………… ………………… ……………………………… ………………… The Doctoral dissertation will be defended at Thuong Mai Universitylevel Board of Examiners at Thuong Mai University at ……… The Doctoral dissertation can be found at: The National Library of Vietnam Thuong Mai University’s library INTRODUCTION Rationale for the study Regarding scientific aspects, the term “corporate social responsibility” has been officially used for the first time since 1953 when H.R Bowen published the book entitled "Social Responsibilities of the Businessman" Corporate social responsibility (CSR) is a harmonious combination of environmental, social and economic factors in enterprises' decisions More and more businesses have already realized that CSR towards employees plays an important role in business strategy With a view to achieving good results in CSR towards employees, enterprises’ managers must ensure the scientific, systematic and efficient process of CSR implementation Regarding legal aspects, not only are employees indispensable to enterprises but they are also an important force of the society Employees are associated with their basic rights in labor relations which are recognized by the law, namely Article of the Labor Code 2012 of Vietnam Nowadays, not only the rights of employees are stipulated in the labor regulations but they are also recognized in CSR standards through the code of conduct Regarding practical aspects, Garment is the main economic sector of Vietnam After 20 years of development, over 5000 garment companies are using more than 20% of workers in industries Currently, CSR towards employees of Vietnam garment enterprises has been implemented partially in line with labor regulations However, it still has many limitations For a good CSR towards employees, enterprises must pay attention to its implementation process In addition, barriers and challenges of garment enterprises are subjective and objective factors for more complicated CSR for implementation On basis of the mentioned-above analysis, the author realizes that the research on “CSR towards employees in garment companies” is urgent Research objectives and tasks Objectives: To propose major scientific and practical solutions to enhance CSR towards employees of Vietnam garment enterprises Research tasks: (i) Develop a theoretical framework on the content of CSR towards employees, the process of implementing CSR, some subjective factors and objective conditions having impact on CSR towards employees of enterprises; (ii) Study experiences of foreign garment enterprises and find out lessons learned for Vietnam garment enterprises; (iii) Analyze and assess the status of the content and implementation of CSR towards employees of Vietnam garment enterprises; (iv) Analyze how a number of subjective factors can impact the process of implementing CSR towards employees of Vietnamese garment enterprises; (v) Analyze and identify objective conditions affecting CSR towards employees of Vietnamese garment enterprises; (vi) Research orientations and opinions on CSR towards employees to propose solutions and recommendations to enhance CSR towards employees of Vietnamese garment enterprises from now to 2025 with a vision to 2030 Research questions For the foregoing research objectives and tasks, the dissertation has to answer the following questions: (1) What is the content and process of implementing CSR towards employees of Vietnam garment enterprises? (2) How can subjective factors affect the process of implementing CSR towards employees and how can objective conditions have impact on CSR towards employees of Vietnam garment enterprises ? (3) What should we to enhance CSR towards employees of Vietnam garment enterprises as well as to improve the objective conditions affecting CSR towards employees of Vietnam garment enterprises? Object and scope of research Object of research: CSR towards employees of enterprises in general and Vietnam garment enterprises in particular Scope of research: Survey conduction in 308 Vietnam garment enterprises; Research time: Analysis of data on CSR towards employees of Vietnam garment enterprises, namely: secondary data are collected from 2010 to 2017, primary data are collected from surveys conducted; Research content: (i) CSR ensuring rights and interests of employees: Labor contracts, working hours, occupational safety and health, salary and welfare, freedom of association and collective bargaining; (ii) The process of implementing CSR towards employees of enterprises from making plan on implementation, implementation and evaluation of the implementation of CSR towards employees; (iii) Identification of subjective and objective factors affecting the process of implementing CSR towards employees New contributions of the dissertation With regard to academic aspect: The theoretical framework of CSR ensuring rights and benefits of employees related to labor contracts, working hours, occupational safety and health is developed; The theoretical framework of the implementation of CSR towards employees of enterprises from making plan on implementation, implementation and evaluation of implementation of CSR towards employees is scientifically developed; Some key factors affecting the process of implementing CSR towards employees are identified, hypotheses are created, variables and scales are selected in line with the research context Namely, independent variables are business leadership, strategic planning, corporate finance, corporate culture; control variables are business size; objective factors are the situation of development and international economic integration, state management on the implementation of CSR towards employees, code of conduct related to implementation of CSR towards employees, other stakeholders affecting CSR With regard to practical aspects, the dissertation analyzes and evaluates the situation in a systematic and objective manner and comes to a conclusion that compared to SMEs, large-scale garment enterprises stand out in terms of implementing clauses ensuring rights of employees in labor contracts, carrying out advanced health care programs, social insurance, health insurance for employees SMEs still have limitations in ensuring rights of employees, ensuring working hours in line with their commitments, strictly complying with regulations on rewards for extra working hours in weekdays Large enterprises have initially been interested in the process of implementing CSR towards employees from making plan on implementation, implementation and evaluation of implementation of CSR towards employees However, they still have difficulties CSR implementation accounting, CSR communication and communication report making SMEs not know the whole process of implementing CSR towards employees The dissertation also finds out other stakeholders influencing the most CSR towards employees The use of exploratory factor EFA, CFA, SEM and Boostrap tests result: CSR = 0.271*LD + 0.193*HD + 0.180*TC + 0.158*Size and Leadership variable has the strongest impact The dissertation proposes some solutions: to enhance the content of the implementation of CSR towards employees; to promote the implementation of CSR towards employees; to improve subjective objectivefactors to create favorable conditions for CSR towards employees of garment enterprises The dissertation structure The dissertation has the following chapters: Chapter 1: Research overview and methodology Chapter 2: Theoretical and practical framework of CSR towards employees of enterprises Chapter 3: Situation of CSR towards employees of Vietnam garment enterprises Chapter 4: Solutions to strengthening CSR towards employees of Vietnam garment enterprises CHAPTER RESEARCH OVERVIEW AND RESEARCH METHODOLOGY 1.1 Overview of researches Foreign and domestic researches on "corporate social responsibility (CSR), CSR towards employees” published in books, scientific articles with empirical, clear and specific evidence are the following: Researches on CSR focusing on a number of theories that are considered fundamental: Stakeholder and responsibility level theories; Researches on "CSR towards employees" mainly focusing on: (i) Content of CSR towards employees in line with the implementation level, ISO26000, CSR ensuring rights and benefits of employees, (ii) The process of implementing CSR towards employees Researches on some subjective factors affecting the implementation of CSR towards employees" coming to a conclusion that CSR towards employees, the process of implementing CSR towards employees are affected by many factors: business leadership, strategic planning, corporate finance, size and type of business Researches on objective factors affecting CSR towards employees of enterprises such as the situation of economic development and international economic integration; state management on the implementation of CSR towards employees; CoC related to the implementation of CSR towards employees; other stakeholders 1.2 Research gap and scientific values inherited in the dissertation 1.2.1 Research gap Firstly, according to some practical researches deploying the pyramid of CSR towards employees of enterprises, levels of CSR are interlinked Therefore, subsequent researches can focus on CSR ensuring rights and interests of employees to overcome this limitation and ensure the comprehensive and systematic process of the implementation of CSR towards employees Secondly, domestic researches are mainly reports, theoretical and practical review articles on CSR and some researches referring to the process of implementing CSR in seafood processing and exporting enterprises, electronic business enterprises Therefore, the research gap is to establish a theoretical framework on the process of implementing CSR towards employees from making plan on implementation Thirdly, researches identify some subjective factors: business leadership, strategic planning, corporate finance, corporate culture, enterprise size and objective conditions such as the situation of economic development and international economic integration, state management, CoC, other stakeholders affecting the implementation of CSR towards employees Not many researches systematically and comprehensively focus on developing models and testing the aforesaid subjective factors have impact on the process of implementing CSR towards employees 1.2.2 Scientific values inherited in the dissertation Scientific values inherited from foreign and domestic researches in the dissemination are (i) Theory of the content of CSR, CSR towards employees; the content of CSR ensuring employees' rights and interests; the process of implementing CSR towards employees; (ii) Some research results related to factors affecting the implementation of CSR and CSR towards employees; (iii) Experience in CSR towards employees, such as Shenzhou International Group Holdings Ltd (China), CBC Fashions (Asia) Private Limited (India), Abu Taher Company leading to lessons learned for Vietnam garment enterprises; (iv) Analysis of data collected from the Vietnam General Confederation of Labor, Vietnam Textile and Apparel Association, Ministry of Labour Invalids and Social Affairs, International Labour Organization (ILO) and International Finance Corporation (IFC), 1.3 Research methodology 1.3.1 Research approach and process (i) Research approach The dissertation focuses on studying the content of CSR ensuring rights and benefits of employees; the process of implementing CSR towards employees from making plan on implementation to evaluation of the implementation of CSR towards employees (ii) Research process In order to answer the identified research questions, the research uses a process consisting of some steps from making the theoretical framework of CSR towards employees, preliminary qualitative research, preliminary quantitative research, official quantitative research and in-depth analysis after quantitative research 1.3.2 Research scale and hypothesis (i) Research scale These scales are inherited from domestic and foreign researches of Panapanaan et colleguages (2003), Jonker & Marco de Witte (2006), Sumina Elizabeth Thomas (2011); Teresa Correia de Lacerda (2014), Barbara J Fick (2014), Le Thi Huong (2017), ILO & IFC (2017), Labor Code (2012) and a five-point Likert scale specifying that point is strong disagreement and points are strong disagreement (ii) Research hypothesis H1-Business leadership has a positive impact on the process of implementing CSR towards employees of enterprises ; H2-Strategic planning has a positive impact on the process of implementing CSR towards employees of enterprises; H3- Corporate finance has a positive impact on the process of implementing CSR towards employees of enterprises; H4- Corporate culture has a positive impact on the process of implementing CSR towards employees of enterprises; H5- Business size has a positive impact on the process of implementing CSR towards employees of enterprises; H6- Type of enterprise has a positive impact on the process of implementing CSR towards employees of enterprises 1.3.3 Qualitative research method Method of collecting primary data sources: The dissertation collects primary data sources from interviews, experts, case studies and surveys Method of collecting secondary data sources: Secondary data is collected from textbooks, monographs, scientific researches at all levels, domestic and foreign scientific articles Besides, data collected from the General Statistics Office of Vietnam, General Department of Vietnam Customs, Vietnam General Confederation of Labor (VGCL), Vietnam Textile and Apparel Association (VITAS), ILO and IFC… 1.3.4 Quantitative research (i) Preliminary quantitative research Preliminary quantitative research is carried out on basis of data collected from surveys conducted in 50 Vietnam in which 152 notes of employees and 107 notes of managers are collected The preliminary quantitative research results show that scales of all variables have Cronbach’s Alpha coefficient greater than 0.6 and the corrected itemtotal correlation greater than 0.3, which means that they are reliable However, observed variables such as glv6, CSR14 are eliminated as the corrected item- total correlation is lower than 0.3 Type of business, the control variable is also excluded because the level of significance is greater than 10% H6 is removed Only business size, the control variable, is satisfactory with the level of significance lower than 5% (ii) Research model of subjective factors affecting the process of implementing CSR towards employees of enterprises The research model has a total of 32 observed variables including independent variables being leadership, strategic planning, corporate finance, corporate culture and dependent variable being CSR and control variable being business size Leadership Strategic planning H1 H2 H3 Corporate finance Corporate culture H4 The process of implementing CSR towards employees H5 Business size Source: The author Figure 1.3: Model of subjective factors affecting of implementing CSR towards employees (iii) Official quantitative research Official quantitative research is conducted on the basis of data collected from 308 Vietnam garment enterprises Namely, 782 survey notes on the content of CSR ensuring rights and benefits of employees collected from employees are open to EFA and CFA and 525 survey notes on the process of implementing CSR towards employees collected from managers are open to EFA, CFA and SEM with steps CHAPTER THEORETICAL AND PRACTICAL FRAMEWORK ON CORPORATE SOCIAL RESPONSIBILITY TOWARDS EMPLOYEES OF ENTERPRISES 2.1 Some concepts of corporate social responsibility 2.1.1 Concept of employees Employees are people who are at working age, working under labor contracts making them perform certain work and get paid as agreed in accordance with current legal provisions 2.1.2 Concept of corporate social responsibility of enterprises Corporate social responsibility of enterprises is a commitment of businesses to related parties to complying with and exceeding the requirements of the law leading to the improvement of the quality of life of employees, appropriate treatment for partners, community, environment to ensure the sustainable development of businesses as well as society 2.1.3 Concept of corporate social responsibility towards employees Corporate social responsibility towards employees of enterprises is to fulfill their commitments to employees through responsibility for ensuring rights and interests of employees leading to improvement of the quality of life of employees as well as the sustainable development of enterprises and society 2.2 Content of corporate social responsibility ensuring rights and interests of employees of enterprises 2.2.1.Labor contract In a labor relation, employees are always in a disadvantageous position In order to enforce employees' rights as well as identify a formal labor relation, employees and employers sign a legal document called a labor contract Regarding labor contracts with clauses ensuring rights of employees, signing a labor contract appropriate to the nature of work and terminating the labor contract in accordance with the labor regulations are fundamental rights of employees Besides, many businesses have realized that they need to attach importance to and enforce clauses ensuring benefits of employees in labor contracts 2.2.2 Working time Working time is the period of time that employees must perform work according to legal provisions, the agreement of employees and employers in labor contracts and collective labor agreement Regulations on working time include committed working hours; extra hours per day, month, year and leave CSR relating working time should expand the voluntariness of about extra working hours of employees 2.2.3 Occupational safety and health Regarding CSR ensuring employees’ rights to occupational safety and health, training on occupational safety and health, fire protection, labor protection, not having emergency exits entangled or locked, periodic health examinations for employees are prerequisites In addition, commitments to ensuring benefits such as advanced health care programs, organization of cultural and sports activities are also important 2.2.4 Salary and welfare For CSR related to salary and welfare being a lever stimulating financial benefits for employees, employees' salary must not be lower than the prescribed minimum wage; social insurance, health insurance of employees must comply with legal regulations The state always encourages enterprises to pay competitive salaries, pay allowances higher than prescribed and give housing support to employees 2.2.5 Freedom of association and collective bargaining With a view to protecting rights of employees, employees in any enterprise are allowed to have the right to join labor unions, freedom of association and collective bargaining to establish general rules on labor relation For example, enterprises organize annual employee conference as well as allow employees to discuss working conditions or collective labor agreements resulting to clauses and conditions that are better than provisions of labor regulations 2.3. The process of implementing CSR towards employees of enterprises The process of implementing CSR towards employees of enterprises is studied by Panapanaan et al (2003), Nguyen Thi Minh Nhan (2015)… in line with the PDCA method 2.3.1 Making plan on implementation of CSR towards employees of enterprises Determination of objectives of implementation: to comply with provisions of labor regulations regarding protection of rights as well as improvement of benefits of employees, to meet requirements of customers in international business, to implement the sustainable business strategy of enterprises, to improve labor productivity and quality of work, to enhance the reputation of enterprises, to attract qualified and skilled human resources Research and selection of codes of conduct: Codes of conduct must be appropriate to social ethics, codes of conduct to be selected must be provided from reputable organizations, codes of conduct are accepted by many international customers In the process of finding out codes of conduct on labor, it is important to pay attention to reputation of certification organizations and reasonable certification evaluation cost Development of programs on implementation: Starting from drafting the implementation program to issuing and saving store and copy the departments and units in the enterprise to implement the program on implementation of CSR towards employees Some social responsibility programs for employees can be single programs or dual 12 CHAPTER THE SITUATION OF CORPORATE SOCIAL RESPONSIBILITY TOWARDS EMPLOYEES OF VIETNAM GARMENT ENTERPRISES 3.1 Overview of Vietnam garment enterprises 3.1.1 The establishment and development of garment enterprises The establishment and development of Vietnam garment enterprises from 1958 to now with particular stages: From 1958 to 1975, from 1975 to 1990, from 1990 to 2000, from 2000 to 2010, from 2010 to now 3.1.2 Some business results of garment enterprises According to the Export Promotion Organization (2017), "Vietnam's export growth rate in the period of 2010 - 2017, which was 32%, reached the highest level in the world" Vietnam’s textile and garment products have been popular all over the world Optimistic business results are an important basis for implementing CSR towards employees 3.1.3 Characteristics of labor in garment enterprises Labor in garment enterprises has some following characteristics: unequal distribution, high proportion of female employees, high proportion of untrained employees, labor instability, labor transfer, high risk of being eliminated of aged employees 3.2 The situation of the content of CSR ensuring rights and benefits of employees of garment enterprises On the basis of 782 survey notes collected from employees and 308 survey notes collected from enterprises’ managers, the EFA of factors (hdld, glv, at, lp, td) and CFA show that the contents of CSR ensuring rights and benefits of employees are appropriate to market data and meet requirements related to unity, convergent and discriminant validity, which together with secondary data results in the following analysis: 3.2.1 The situation of labor contract Responsibility for ensuring the right to labor contract of employees: Results of the performance of responsibility for ensuring the right to labor contract are average, 3.13/5.0; "signing the contract appropriate to the nature of work - hdld2" has the highest score (3.36/5.0) because signing the contract appropriate to the nature of work is the basis for building a harmonious relationship between employees and employers Large garment enterprises have paid attention to "clauses ensuring rights of employees hdld1", however, SMEs fail, which have been shown by ILO & IFC in recent years 13 When terminating labor contracts, large garment enterprises have complied with provisions of the Labor Code on severance benefits, however, 97,37% SMEs fail to pay right severance benefits for their employees (ILO & IFC, 2015) Responsibility for ensuring benefits of employees related to labor contract: “Clauses ensuring benefits of employees in labor contract-hdld4” for employees related to salary adjustment, salary increase, welfare in large enterprises have been partly interested Meanwhile, some clauses ensuring benefits of employees in labor contract are impossible to SMEs 3.2.2 The situation of working hours Responsibility for ensuring the right to working hours of employees: Results of the performance of responsibility for ensuring the right to working hours are average, 3.01/5.0 Large enterprises are capable of “ensuring the working time in line with the commitment-glv1” However, “ensuring extra hours per month-glv3 and per year-glv4” need concerning as they have the lowest scores According to the Labor Union Institute (2017), the average extra hours of employees is 47-60 hours per month and up to 500 hours per year or even 600 hours per year Is it possible for employees to have good health if they work overtime too much? Responsibility for ensuring benefits of employees related to working hours": Ensuring employees’ voluntariness regarding extra working hours-glv6" has relatively low scores (2.84/5.0) because garment enterprises (both large enterprises and SMEs) make decision on extra working hours on their own rather than allow their employees to this 3.2.3 The situation of occupational safety and health Responsibility for ensuring occupational safety and health of employees: Results of the performance of responsibility for ensuring safety and health get 3.22/5.0 and “training on occupational safety and health and fire protection- at1” has the highest scores However, “not having emergency exits entangled or locked during working timeat2” has the lowest scores because of charactẻristics of the garment industry such as the large scale of operation, the large number of employees, workshops full of materials such as cloth, fibre, fabric, yarn which are flammable and cover the exits Responsibility for ensuring benefits related to occupational safety and health: The organization of "advanced health care programs for employees- at5” in large enterprises is considered average meanwhile in SME there are still many shortcomings In large garment enterprises, "the organization of cultural and sports activities for employees- at6” receives optimistic feedback and employees have many opportunities to interact with their colleagues but "taking care of health for employees” is still a limitation of SMEs especially small ones 3.2.4 The situation of salary and welfare 14 Responsibility for ensuring the right to salary and welfare of employees: Results of the performance of responsibility for ensuring the right to salary and welfare of employees achieve 3.21/5.0 "Properly complying with the minimum salary provision- lp1" has the highest scores Both large enterprises and SMEs strictly follow provisions on minimum salary as well as the Decree No 49/2013/ND-CP and the Decree No 121/2018 "Abiding by regulations on overtime on weekdays- ld2" is what large enterprises but SMEs have the lowest scores Responsibility for ensuring benefits of employees related to salary and welfare: Garment enterprises have increased CSR regarding salary and welfare of employees and get 3.02/5.0 "Competitive salary payment-lp5" is the expectation of both employers and employees However, "paying allowances higher than prescribed- lp6” is still quite limited in large enterprises and strange to SMEs 3.2.5 The situation of freedom of association and collective bargaining Responsibility for ensuring the right to Responsibility for ensuring of employees: The implementation of CSR regarding freedom of association and collective bargaining achieves 3.03/5.0 helping enterprises minimize problems arising in the labor relation In Vietnam garment enterprises, "the organization of annual employee conference- td3" is to create a forum to promote direct democracy at work Large-scale garment enterprises focus on "establishing grassroots labor union- td1" but not many SMEs Responsibility for ensuring benefits of employees related to freedom of association and collective bargaining: The performance of responsibility for ensuring benefits regarding freedom of association and collective bargaining achieves the lowest scores in the whole content of CSR “Collective labor agreement having better clauses compared to labor regulations-td5” is impossible and most SMEs are confused with this issue 3.3 The situation of the process of implementing CSR towards employees of garment enterprises 3.3.1 The situation of making plan on implementation of CSR towards employees Determination of objectives : “The determination of objectives-CR1” has been initially concerned by large enterprises Large garment enterprises exporting their products in international trade have determined their objectives methodically and professionally However, according to survey results, 65.58% of enterprises (202 in 308 enterprises) fail to this work Study and selection of codes of conduct: “Study and selection of codes of conduct regarding CSR towards employees- CSR2” achieve 3.32/5.0 However, 68.18% SMEs (210 in 308 enterprises) fail to this work as their main customers which are domestic ones not require 15 Development of programs on implementation: Enterprises have well “developed programs on implementation of CSR -CSR3” are Viettien General Garment JSC, Nha Be Corporation, Garment 10 Corporation JSC, Phuong Dong Garment JSC According to survey results, 28.89% of large and medium enterprises (89 in 308 enterprises) have developed their programs on implementation of CSR Building budget for the implementation: In large garment companies, the accounting department cooperates with the department responsible for implementing CSR and human resources department in building budget for the implementation of CSR According VCCI, 2016, 79.27% of SMEs not have sufficient budget for the implementation of CSR 3.3.2.The situation of the implementation of CSR towards employees Assignment of a division to implement CSR: Large enterprises have paid attention to "assignment of a division responsible for implementing CSR towards employees- CSR5" but SMEs fail According to survey results, 26.29% of large enterprises (81 in 308 enterprises) lead the way in the assignment of a division to implement CSR towards employees Preparation for written registration for the code of conduct: Large enterprises have “prepared for written registration for the code of conduct on CSR towards employeesCSR6” quite well but SMEs have just done this work averagely Large enterprises apply codes of conduct on CSR in order to get involved in international trade However, according to survey results, only 29.22% of enterprises (90 in 308 enterprises) have prepared for written registration for the code of conduct on CSR towards employees Issuing instructions on how to comply with the CoC: “Issuing instructions on how to comply with the CoC on implementation of CSR towards employees- CRS7” is followed by almost large enterprises, while it is shown in slogan and business philosophy of SMEs Implementation of internal communication activities: "The implementation of internal communication activities on the implementation of CSR towards employeesCSR8" is stuck with difficulties in both large enterprises and SMEs That’s why only 21.10% large enterprises (65 in 308 enterprises) have done this work Their division in charge of implementing CSR towards employees cooperates with the communication department and other departments in information storage and processing Organization of training courses: In large enterprises, training is the key for a professional division who is in charge of implementing CSR This work seems strange to SMEs Deployment of programs on implementation: “Deployment of programs on implementation of CSR towards employees-CSR 10” in large enterprises gets positive results but faces many difficulties in SMEs According to survey results, 70.78% of 16 SMEs have not implemented CSR towards employees due to objective determination failure and insufficient budget 3.3.3 The situation of evaluation of the implementation of CSR towards employees Determination of evaluation criteria: Large enterprises have gradually been interested in “determination of criteria for evaluation of the implementation of CSR towards employees-CSR11” but SMEs fail According to survey results, 26.29 % large enterprises (81 in 308 enterprises) large-scale have determines quite well evaluation criteria Measurement of main results: “Measurement of main results of the implementation of CSR towards employees- CSR12” has been followed by large enterprises but stuck in difficulties in SMEs According to survey results, 73.70% of SMEs have not paid attention to this work yet Performance of corrective and preventive actions: Large enterprises have initially “performed corrective and preventive actions- CSR 13” but SMEs fail According to survey results, 81.49% of SMEs (251 in 308 enterprises) have not done this work yet because of their insufficient budget and failure to assign a division in charge of implementing CSR 3.4 Analysis of subjective factor affecting the process of implementing CSR towards employees of garment enterprises Subjective factors affecting the process of implementing CSR towards employees are analyzed on the basis of results of 525 survey notes collected from managers of 308 garment enterprises The use of EFA and CFA, SEM model result in the regression equation: CSR = 0.271*LD+ 0.193*HD + 0.180*TC + 0.158*Size 3.4.1 Leadership of garment enterprises Business leadership is the most powerful factor (0.271) It is a decisive factor for garment enterprises’ implementation of CSR towards employees as well as development 3.4.2 Strategic planning of garment enterprises The strategic planning has a strong impact (0.193).Some large enterprises have based on their resources and the change of the environment to develop their strategic planning 3.4.3 Gartment enterprises’ finance Garment enterprises, especially large ones have timely and sufficient financial resources (0.180) to implement CSR towards employees SMEs are not capable of raising capital from investment funds or credit policies, 3.4.4 Garment enterprises’ size This factor has a weak impact (0.158) because CSR implementation model has not been selected in line with the size of enterprises 17 3.5 The situation of objective factor affecting the implementation of CSR towards employees of Vietnamese garment enterprises 3.5.1 The situation of economic development and international economic integration of our country The international economic integration has created opportunities making Vietnam's economy more dynamic than ever Vietnam enterprises are aware of the process of entering FTAs, however, they are not able to abide by labor regulations immediately 3.5.2 The state management on implementation of CSR towards employees in Vietnam The process of developing and promulgating legal documents of the State is strict and logical Hundreds of effective documents cover almost all aspects of CSR towards employees The implementation of relevant policies and laws is a complex and multisectoral issue The number of inspectors is quite small and their qualification is limited 3.5.3 Current codes of conduct regarding CSR towards employees The code of conduction that are popularly applied by Vietnam garment enterprises is SA 8000 In order to obtain the WRAP certificate, enterprises only have to abide by regulations on protection of employee's rights, environmental protection and comply with regulations on occupational safety and health 3.5.4 Other stakeholders Customers have tightened regulations Limited supply of raw materials in the domestic market is a big difficulty for garment enterprises The community is the foundation for the development of enterprises Un some localities, public opinion has not been taken seriously 3.6  General  assessment   of   the   situation   of   CSR  towards   employees   of   Vietnam garment enterprises 3.6.1 Achievements and reasons Achievements Responsibility for ensuring rights and benefits for employees: Garment enterprises have signed labor contracts in line with the nature of employees’ work, ensuring the number of extra working hours per day, annual leave in accordance with labor regulations, established grassroots trade unions Large enterprises have developed clauses ensuring rights of employees in labor contracts, ensured the working time… The process of implementing CSR employees: The process of implementing CSR employees in large garment enterprises from making plans on implementation, implementation and evaluation of the implementation of CSR towards employees has got remarkable results 18 Reasons for the mentioned-above achievements: Objective reasons are lot of opportunities created from the economic development and international economic integration, good state management on CSR towards employees and pushes from customers for businesses to make progress in international trade Subjective reasons are business leaders’ timely decisions on implementation of CSR; large enterprises’ awareness about the necessity of strategic planning for the implementation of CSR towards employees 3.6.2 Limitations and reasons Limitations Regarding CSR ensuring rights and benefits of employees, both large enterprises and SMEs have not obeyed clauses ensuring benefits of employees, ensuring the number of extra working hours per month, per year in line with labor regulations, SMEs still find it difficult to abide by clauses ensuring rights of employees in labor contracts, ensure the working time as their commitment, allow employees to join trade unions as they wish In terms of the process of implementing CSR towards employees, SMEs are not aware of the whole process of implementing CSR towards employees so they fail to implement CSR systematically Besides, large enterprises still encounter some difficulties in CSR accounting Reasons for the aforesaid limitations Objective reason are: Enterprises have got involved in international trade very fast leading to their unsustainable development; Tthere are still many shortcomings in the state management on CSR towards employees; Many codes of conduct on labor and their implementation require technical facilities and human resources; Customers have tightened regulations; Enterprises still rely too much on suppliers; The community has not put strong Subjective reasons are: Business leaders still face some obstacles; many garment enterprises have not paid adequate attention to strategic planning for their sustainable development; garment enterprises, especially SMEs are not able to mobilize capital; salary payment forms are not really flexible and appropriate 19 CHAPTER SOLUTIONS TO IMPROVEMENT OF CSR TOWARDS EMPLOYEES VIETNAM GARMENT ENTERPRISES 4.1 Orientation of development and direction of operation of Vietnam garment enterprises from now to 2025 with vision to 2030 4.1.1 Orientation of development of garment enterprises With a view to promoting the development of the textile industry to be a key one, the decision No 3218/QD-BCT, Decision No 432/QD-TTg, the Decision No 145/QDTTg focus on developing the quantity and quality of human resources for sustainable development and labor management in line with international standards of DNmay 4.1.2 Direction of operation of garment enterprises Direction of operation of Vietnam garment enterprises is diversifying export markets, expanding the domestic market, renewing export marketing methods and continuing to carrying out training programs for their human resources 4.2 Perspectives on strengthening of CSR towards employees of Vietnam garment employees In order to strengthen their CSR towards employees, Vietnamese garment enterprises need to hold on to the following perspectives: relying on compliance with labor regulations and policies, meeting international labor standards and customers’ requirements in international trade, carrying out and associating sustainable development strategies with their management process 4.3 Enhancing of the content of CSR ensuring rights and benefits towards employees of Vietnam garment enterprises 4.3.1 Strict performance of responsibility regarding labor contracts Labor contract is the "backbone" of labor regulations Therefore, SMEs have to comply with clauses ensuring rights of employees in labor contracts Both large enterprises and SMEs must increase clauses ensuring benefits of employees in labor contracts, especially for employees aging over 35 and suffering from health and sensitivity decline 4.3.2 Compliance with the content of CSR towards employees regarding working hours Employees are always free to decide for which enterprise they work, how long they work for this enterprise and when to leave it and start working for another one Therefore it is necessary for SMEs to ensure the working time of employees in line with their commitment Both large enterprises and SMEs should comply with their provisions on 20 the number of extra working hours per month and year They must obey labor regulations and attach importance to both legal and human aspects in labor use as well as increase the voluntariness of employees regarding extra working hours 4.3.3 Strengthening of responsibility for occupational safety and health Enterprises shall not have their emergency exits entangled or locked during working hours, enhance advanced health care programs and organize cultural and sports activities for employees to help them connect with each other as well as express gratitude and appreciation to employees 4.3.4 Ensuring the implementation of CSR towards employees regarding salary and welfare Ensuring the payment of overtime pay is a cure for the chronic shortage of employees of enterprises SMEs must ensure social insurance and health insurance for their employees in accordance with provisions of the law, pay competitive salary for employees, pay higher allowances than prescribed and provide housing support to short-term and long-term employees 4.3.5 Performance of responsibility for ensuring freedom of association and collective bargaining of employees Leaders of enterprises must always actively raise their awareness about labor relations in order to create good conditions for the establishment and development of trade unions Leaders of enterprises need to consult their trade union about benefits for employees, sign collective labor agreements having better clauses compared to labor regulations contributing to regulating benefits of both employees and employers 4.4.Promotion of the process of implementing CSR towards employees of Vietnam garment enterprises 4.4.1 Making plan on implementation of CSR towards employees actively Paying attention to defining objectives of implementing: The more specific objectives are, the more feasible they are Enterprises need to define their objectives of implementing CSR towards employees over time, from making the list of foundations for setting objectives to making an objective summary in line with each period of development of enterprises from its establishment, growth, stability and degradation Researching and selection of codes of conduct regarding: In International Trade, labor standards and implementation of CSR towards employees have become compulsory so that actively researching and selecting codes of conduct on CSR, garment enterprises shall create an opportunity on their own to dominate the world market Improvement of the method of development of programs on implementation: Garment enterprises need to actively improve their method of development of programs on implementation of CSR to achieve their defined objectives The top-down approach is 21 appropriate to SMEs, meanwhile large enterprises should use both top-down and bottom-up approaches Paying attention to development communication plan on implementation: When development the communication plan implementation of CSR towards employees, enterprises need to focus on the content of CSR ensuring rights and benefits of employees, their objectives of implementation of CSR, written instructions on how to comply with codes of conduct regarding labor, methods of implementation of CSR and management of implementation of CSR Strengthening CSR-related budget planning and accounting: Planning and controlling budgets allocated for the implementation of CSR making the financial lifeline of enterprises smooth and stable Therefore, enterprises can come to an agreement on objectives of the implementation of CSR and encourage each other to implement CSR towards employees Especially, enterprises need to pay attention to complete the procedure for budget planning and strengthening CSR accounting 4.4.2 Mobilization of resources for the implementation of CSR employees Development of human resources for the implementation: Enterprises should rely on their size and conditions to develop human resources for the implementation of CSR towards employees SMEs should develop human resources from departments related to staff responsible for implementing CSR towards employees Meanwhile, large enterprises should establish particular CSR committee, Advisory and Innovation Completion of the written registration for the code of conduct: When completing the written registration for the code of conduct, enterprises should pay attention to drafting procedures and processes on labor use, working conditions, health safety, and apply them gradually Promotion of the issuing of introduction on how to apply the code of conduct: In order to achieve good results in the implementation of CSR towards employees with limited resources, enterprises should promote the issuance of instructions on CSR towards employees by raising awareness of employees about SA8000, WRAP, OHSAS 18001 ; conduct quarterly and yearly internal assessments to find out limitations Organization of the information systems regarding the implementation: Garment enterprises need equipping with modern information infrastructure such as: SV.HRIS, Lucky Hrm in order to have a complete and updated information database on the implementation of CSR towards employees Enhancing of the internal communication on the implementation: Garment enterprises have a transparent, clear and multi-dimensional internal communication strategy In the implementation of CSR towards employees, enterprises need digital internal communication channels: internal magazine, intranet, electronic newsletter 22 Improve the quality of training courses for human resources implementing: The training framework should be selected on the basis of the content, form and location of training It consists of training objectives, forms, schedules, contents and methods and audience Promotion of resources in the implementation of programs: The implementation of CSR towards employees requires the mobilization of all resources In the process of mobilizing all resources, it is necessary to take into account the ability of enterprise meaning that the SWOT analysis should be used 4.4.3 Focusing on controlling the implementation of CSR towards employees Enhancing the development of criteria for controlling the implementation: With a view to controlling the implementation of CSR towards employees, enterprises should promote the development of criteria for controlling the implementation of CSR and pay attention to both quantitative and qualitative ones Attaching importance to the measurement of main results of the implementation: The measurement of main results of the implementation of CSR should be carried out actively and intentionally on basis of quantitative and qualitative criteria regarding CSR ensuring defined rights and benefits of employees in order to find out achievements Analysis of the difference between criteria and results of the implementation: In the analysis of the difference between criteria and results of the implementation of CSR towards employees, enterprises need to consider the appropriateness of results and criteria, focus on information collection methods and use GAP method Performance of corrective and preventive actions regarding CSR towards employees: Corrective and preventive actions are performed in garment enterprises so as to adjust and rectify limitations in the implementation of CSR Making report on results of the implementation of CSR towards employees: Results of the implementation of CSR towards employees are often specified in the sustainable development report or the CSR report of enterprises which are considered as tools in measuring and recognizing achievements in the implementation of CSR 4.5 Improvement of subjective factor to facilitate the implementation of CSR towards employees of garment enterprises 4.5.1. Changing the views of business leaders on the implementation of CSR towards employees The implementation of CSR towards employees stems from the business leadership Business leaders should broaden their strategic perspectives; changing their opinion on the implementation of CSR; actively implement CSR towards employees; combine the implementation of CSR and human resource management activities in enterprises 4.5.2. Strengthening business strategies oriented to combine with the implementation of CSR towards employees 23 The business strategy planning stems from the determination of main long-term objectives of garment enterprises The CSR towards employees must be integrated into strategies and strategic planning of enterprises and become mandatory conditions 4.5.3 Budget planning for the implementation of CSR towards employees Enterprises need to take the initiative in the budget planning for the implementation of CSR towards employees On basis of the strategic planning and the model of CSR towards employees, they will carry out appropriate policies and measures to improve the efficiency of capital mobilization and supplementation in accordance 4.5.4 Selection of the model of the implementation of CSR towards employees in accordance with the size of garment enterprises In SMEs, the division responsible for the implementation of CSR towards employees must perform their duties flexibly and appropriately However, large enterprises must assign a professional department to implement CSR methodically and systematically 4.6. Proposals and recommendations to improve objective factor to facilitate CSR towards employees of Vietnam garment enterprises 4.6.1 Proposals to other stakeholders to increase their pressure on garment enterprises to implement CSR towards employees Customers and suppliers must take drastic actions to make enterprises implement CSR towards employees regularly and completely In addition, the community should more pressure to force enterprises to implement CSR towards their employees 4.6.2 Petition to the National Assembly, Government, Ministries and Departments The Government should have a roadmap for economic development and international economic integration: The Government should pay more attention to economic development to promote the internal strength and affirm Vietnam's position in international trade It is also necessary to abide by global labor standards conventions Besides, regarding negotiated FTAs, it is important to quickly carry out procedures and legal review to prepare for the official signature The National Assembly and the State should complete legal documents related to CSR towards employees: It is essential to complete the process of developing and promulgating policies, complete the legal framework to create a solid and progressive basis for the Labor Code, Law on Occupational Labor and Safety The State also need to support enterprises and employees in the implementation of the Decree No 85/2015/ ND-CP Responsibilities of the Ministry of Industry and Trade should be clearly defined and a specialized management agency responsible for the implementation of CSR towards employees must be established Ministries and Departments should promote enterprises to study and apply codes of conduct on labor: In order to encourage garment enterprises to apply prestigious international codes of conduct on labor to meet requirements of international customers, 24 the Directorate for Standards, Metrology and Quality and Vietnam Textile and Apparel Association should develop a set of common code of conduct on basis of integrating provisions of codes of conduct on labor such as SA8000, WRAP, OHSAS18001 meeting requirements of foreign partners CONCLUSION The theoretical framework of CSR ensuring rights and benefits of employees related to labor contracts, working hours, occupational safety and health is developed; The theoretical framework of the implementation of CSR towards employees of enterprises from making plan on implementation, implementation and evaluation of implementation of CSR towards employees is scientifically developed; Some key factors affecting the process of implementing CSR towards employees are identified, hypotheses are created, variables and scales are selected in line with the research context Namely, independent variables are business leadership, strategic planning, corporate finance, corporate culture; control variables are business size; objective factors are the situation of development and international economic integration, state management… The dissertation analyzes and evaluates the situation in a systematic and objective manner and comes to a conclusion that compared to SMEs, large-scale garment enterprises stand out in terms of implementing clauses ensuring rights of employees in labor contracts, carrying out advanced health care programs, social insurance, health insurance for employees SMEs still have limitations in ensuring rights of employees, ensuring working hours in line with their commitments, Large enterprises have initially been interested in the process of implementing CSR towards employees from making plan on implementation, implementation and evaluation of implementation of CSR towards employees However, they still have difficulties CSR implementation accounting, CSR communication and communication report making SMEs not know the whole process of implementing CSR towards employees The dissertation also finds out other stakeholders influencing the most CSR towards employees The use of exploratory factor EFA, CFA, SEM and Boostrap tests result: CSR = 0.271*LD + 0.193*HD + 0.180*TC + 0.158*Size and Leadership variable has the strongest impact LIST OF ARTICLES/ WORKS PUBLISHED BY THE RESEARCHER RELATING TO THE THESIS Dinh Thi Huong, (2018), To develop textile businesses’ strategy toward approaching the global value chain, Economy and forecast invest, No 543 Dinh Thi Huong, (2016), Vietnam’s labor market when joining the trans - pacific rartnership agreement (TPP), International confenence, The economy of Vietnam in the integration period: opportunities and challenges Dinh Thi Huong, (2017), Implementing social responsibility for employees enterprises under the guidelines of Asean - Rearch Vietnamese garment enterprises, International confenence, Vietnam’s economic development in the process of international integration Dinh Thi Huong, (2018), Carring out social responsibility for employees of garment enterpires, Industry and trade magazine, No1, 2018 Dinh Thi Huong, (2018), Theory on the implementation of corporate social responsibility for employees, Industry and trade magazine, No2, 2018 Dinh Thi Huong, Nguyen Thi Minh Nhan, (2018), The influence of stakeholders in the implementation of corporate social responsibilityto labors by Vietnam garment enterprises,, Journal of trade science, No 117 Dinh Thi Huong, Nguyen Thi Minh Nhan, (2019), Factors affecting the implementation of social responsibility to employees at Vietnameses textile enterprises, Journal of Trade Science, Volum 7, Number Dinh Thi Huong, (2018), Impact of the 4th industrial revolution on the production and business of Vietnamese garment enterprises, International confenence, Industrial revolution 4.0: opportunities and challenges to Vietnam’s economic development Dinh Thi Huong, (2019), Implementing social responsibility towards employees of Vietnam garment companies in the Context of Integration, National confenence, Managing Human Resources in Businesses in the Context of Integration and Industrial Revolution ... collected from the General Statistics Office of Vietnam, General Department of Vietnam Customs, Vietnam General Confederation of Labor (VGCL), Vietnam Textile and Apparel Association (VITAS), ILO... implementing CSR towards employees In large enterprises, may be CSR committee or Advisory and Innovation or Life quality committee Preparation for written registration for the code of conduct: enterprises... committee, Advisory and Innovation Completion of the written registration for the code of conduct: When completing the written registration for the code of conduct, enterprises should pay attention