Corporate social respondsibility at frieslandcampina and lessons for vietnamese enterprises

Corporate social respondsibility at frieslandcampina and lessons for vietnamese enterprises After the 1986 Reformation, Vietnam economy has transformed from a centrallyplanned model to a market oriented economy. Since then, we have witnessed extraordinary efforts of the whole country in terms of internationalization. Vietnam has become a member of Association of the Southeast Asian Nations since 1995, and now member of AEC (ASEAN Economic Community). Vietnam has officially joint World Trade Organization since 2007. In more than 30 years of internationalization, Vietnam has signed and implemented 12 FTAs. Most recently, 11 member nations of Comprehensive and Progressive Agreement for TransPacific Partnership (CPTPP) including Vietnam have signed their pact in March 8th 2018 in Chile. FTAs play a very important role in Vietnam, helping Vietnamese enterprises to attract more FDI, strengthen the competitive advantages of Vietnamese companies and gain more opportunities in global market. To prepare for entering international markets, beside competency, it’s essential for enterprises to define themselves as organizations of high Corporate Social Responsibility (CSR) to gain business collaboration in the shortterm and to develop sustainably in the longterm. In most of countries that Vietnam has signed FTAs with, the issue of CSR is seen as a development strategy and the mode of business operation. They consider social responsibility as a decisive factor for sustainable development and the constantly increased profitability of the business. In developed market economy, each enterprise in its business activities is viewed as an organic part of the social economy. Therefore, behaviors towards business decisions, as well as their business methods are subjects to the standards and regulations of society both ethically and legally. Applying the principles of CSR could bring tremendous benefits to the company, such as reducing costs and increasing productivity; increasing revenue; enhancing brand value and reputation of the company; attracting skilled labor; commodity products and services can easily access to the world market. With the intention to join the global market, Vietnamese enterprises need to understand the market requirements for CSR, due to the increasing consumer demand for product sustainability in those countries, which leads to the standards for Corporate Social Responsibility for companies which intend to establish partnerships or penetrate those markets. The author choose to research on the CSR model of FrieslandCampina – a multinational company which has entered Vietnamese market for 23 years (19952018), applying successfully the model for many years and having insights of Vietnamese economy and obstacles to the CSR implementation.

FOREIGN TRADE UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION GRADUATION THESIS CORPORATE SOCIAL RESPONSIBILITY AT FRIESLANDCAMPINA AND LESSONS FOR VIETNAMESE ENTERPRISES Student name: Trần Hải Ly Class: English 14_Advanced program Intake: Course 53 Instructor: PhD Cao Đình Kiên Hanoi, May 2018 TABLE OF CONTENT LIST OF TABLES AND FIGURES .4 LIST OF ABBREVIATIONS .5 INTRODUCTION CHAPTER 1: THEORETICAL FRAMEWORK 1.1 Definition of CSR and sustainable development 1.2 Models of CSR 12 1.2.1 Carroll’s CSR Pyramid .13 1.2.2 Intersecting circles model 14 1.2.3 Concentric circles model 15 1.3 Types of responsibility .16 1.4 Integrating corporate social responsibility 17 1.5 Principles of corporate social responsibility based on ISO 26000 18 1.5.1 Organizational governance 19 1.5.2 Human rights 21 1.5.3 Labour practices .22 1.5.4 The environment .23 1.5.5 Fair operating practice 23 1.5.6 Consumer issues .24 1.5.7 Community involvement and development 25 CHAPTER 2: CSR IMPLEMENTATION AT FRIESLANDCAMPINA AND CSR SITUATION IN VIETNAM .27 2.1 About FrieslandCampina 27 2.1.1 Organization profile 27 2.1.2 SWOT analysis 28 2.2 CSR at FrieslandCampina 29 2.2.1 Corporate strategy and CSR integration .29 2.2.2 Guidelines and standards 30 2.2.3 Reporting structure and principles .30 2.2.4 CSR policy and implementation 31 2.2.5 Evaluation of CSR implementation at FrieslandCampina 52 2.3 CSR in Vietnam 56 2.3.1 CSR viewpoints and practices of Vietnamese Enterprises 56 2.3.2 CSR outlook of Vietnamese enterprises .59 CHAPTER 3: RECOMMENDATION AND CONCLUSION 61 3.1 Lessons for Vietnamese enterprises from the case of FrieslandCampina 61 3.1.1 Integrating CSR into corporate strategy .61 3.1.2 Supply chain sustainability 61 3.1.3 Considering multiple domains of CSR .62 3.1.4 Raising internal awareness 62 3.1.5 Stages to develop a CSR strategy .62 3.2 Solutions for the State: .65 CONCLUSION 67 REFERENCES 68 LIST OF TABLES AND FIGURES Tables: Table 2.1: Member dairy farmers paid out 45 Table 2.2: Milk supplied by member dairy farmers 47 Figures: Figure 1.1: Sustainable development goals Figure 1.2: Carroll’s pyramid model Figure 1.3: Intersecting circles model Figure 1.4: Concentric circles model 11 Figure 1.5: Corporate social responsibility core subjects 14 Figure 2.1: Organogram of FrieslandCampina 38 Figure 2.2: Environmental factors 35 Figure 2.3: Water and energy consumption 36 Figure 2.4: Waste reused and green electricity percentage 37 Figure 2.5: Greenhouse gas emission 38 Figure 2.6: Direct economic value generated during 2012 - 2017 .43 Figure 2.7: Economic value retained during 2012-2017 .44 Figure 2.8: Value creation for member dairy farmers 45 Figure 2.9: Milk supplied by member dairy farmers 46 Figure 3.1: Stages to develop a CSR strategy .63 LIST OF ABBREVIATIONS FC: FrieslandCampina CSR: Corporate Social Responsibility AEC: ASEAN Economic Community RTRS: Round Table on Responsible Soy CPTPP: Comprehensive and Progressive Agreement for Trans-Pacific Partnership ISO: International Organization for Standardization ILO: International Labour Organization OECD: PEFC: Programme for Endorsement of Forest Certification DDP: Dairy development program CoC: Code of Conduct UN: United Nations ROI: Return on Investment MNC: Multinational Company INTRODUCTION Research rationale: After the 1986 Reformation, Vietnam economy has transformed from a centrally-planned model to a market oriented economy Since then, we have witnessed extraordinary efforts of the whole country in terms of internationalization Vietnam has become a member of Association of the Southeast Asian Nations since 1995, and now member of AEC (ASEAN Economic Community) Vietnam has officially joint World Trade Organization since 2007 In more than 30 years of internationalization, Vietnam has signed and implemented 12 FTAs Most recently, 11 member nations of Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) including Vietnam have signed their pact in March 8th 2018 in Chile FTAs play a very important role in Vietnam, helping Vietnamese enterprises to attract more FDI, strengthen the competitive advantages of Vietnamese companies and gain more opportunities in global market To prepare for entering international markets, beside competency, it’s essential for enterprises to define themselves as organizations of high Corporate Social Responsibility (CSR) to gain business collaboration in the short-term and to develop sustainably in the long-term In most of countries that Vietnam has signed FTAs with, the issue of CSR is seen as a development strategy and the mode of business operation They consider social responsibility as a decisive factor for sustainable development and the constantly increased profitability of the business In developed market economy, each enterprise in its business activities is viewed as an organic part of the social economy Therefore, behaviors towards business decisions, as well as their business methods are subjects to the standards and regulations of society both ethically and legally Applying the principles of CSR could bring tremendous benefits to the company, such as reducing costs and increasing productivity; increasing revenue; enhancing brand value and reputation of the company; attracting skilled labor; commodity products and services can easily access to the world market With the intention to join the global market, Vietnamese enterprises need to understand the market requirements for CSR, due to the increasing consumer demand for product sustainability in those countries, which leads to the standards for Corporate Social Responsibility for companies which intend to establish partnerships or penetrate those markets The author choose to research on the CSR model of FrieslandCampina – a multinational company which has entered Vietnamese market for 23 years (1995-2018), applying successfully the model for many years and having insights of Vietnamese economy and obstacles to the CSR implementation Research objectives: The aim of this thesis is to draw up the model of CSR applied by FrieslandCampina – a multinational company that have applied their CSR strategy successfully in many countries including Vietnam Simultaneously, the thesis focuses on how CSR has been applied in the Vietnamese market and suggests actions that can be taken by enterprises and the State to improve the CSR situation in Vietnam Research methodology: The author has chosen a qualitative approach regarding this subject, aiming for a complete, detailed description of FrieslandCampina CSR approach, including the context of the specific policy Also, in order to measure the efficiency of CSR policy and other business results, the author has studied and analyzed the data sources to draw up conclusions based on them, hence better suits the main objectives of this thesis When it comes to evaluate CSR implementation in Vietnam, the qualitative approach has been chosen along with collective opinions the author has found on the latest publications Data and information used as materials for this thesis are both primary secondary data which the author has collected from both online and offline publications The reports regarding company’s annual reports, CSR updates, business results, Code of Conduct, compliance to standards and other information of FrieslandCampina is primary data which is available for public on FrieslandCampina Global website Meanwhile, some collected opinions from different publications regarding CSR at FrieslandCampina and CSR situation in Vietnam are also mentioned to assure the unbiased point of view while writing this thesis Research scope: As for the limitation of the report, the practice of CSR at FC includes Royal FrieslandCampina N.V and its consolidated subsidiaries in the period of 2010 2017 Since there is no governmental regulation in terms of corporate sustainable reports so the author has used multiple sources to collect the information In addition, the perception and practice of CSR from Vietnamese corporation is not new but limited to specific area of CSR, restricting the author’s research in some sense The limitation is the CSR policy implementation with regard to the economic, social and environmental aspects, based on the framework of the ISO 26000 standards and GRI standards of sustainable report Also, while analyzing the case of FrieslandCampina - a large corporation, it’s necessary to realize that approximately 80% Vietnamese enterprises are small and medium sized Hence, this thesis will only contribute to the understanding of the topic on a small scale of the comparable aspects between two circumstances Research structure: The thesis has been structured to three main chapters: Chapter 1: Theoretical framework Chapter 2: CSR implementation at FC and practical problems facing Vietnamese enterprises Chapter 3: Recommendations and conclusion CHAPTER 1: THEORETICAL FRAMEWORK 1.1 Definition of CSR and sustainable development Across the road leading to the modern concept of corporate social responsibility (CSR), there has been many writers who attempted to establish the perception of how businesses relating to surrounding environment and how businesses should contribute to the society The very first definition of CSR is mentioned in Howard Bowen’s book in 1953 entitled ‘Social Responsibilities of the Bowen has pointed out that “Businessmen… must follow those lines of action which are desirable in terms of objectives and values of our society.” Bowen (1953) During the developing stages, the concept of CSR has been continuously widened up McGuire (1963) argues that beside economic and legal responsibilities the corporation also has certain responsibilities to society extending beyond these obligations Carols (1979) has written in his early book that four dimensions: economic, legal, ethical and discretionary expectations constitute the social responsibility of business at a given time Sen and Bhattacharya (2001) categorize different CSR actions into six broad domains: (1) diversity (religion, sex, race, disability); (2) employee support (job creation, safety and security); (3) environment (carbon footprint mitigation, effluents and waste management, pollution control); (4) product (responsible labeling, R&D), (5) community support (arts, education, philanthropic activities) and (6) overseas operations (overseas labor practices and human rights) On Financial Times (2018), CSR is defined as a business approach that by delivering economic, social and environmental benefits for all stakeholders, contributes to the sustainable development In other words, it’s a corporation’s way to access the wellbeing of society and take responsibility for any effects that the corporation has on it CSR may also be considered as “corporate citizenship” – which shows the interrelation between the corporation and society and its obligation to promote positive social and environmental change According to ISO 26000 (2010), it is referred as the responsibility of an organization for the impacts of its activities on society and environment, through transparency and ethical behavior that: ● Contributes to sustainable development , including health and welfare of society; ● Takes into account the expectation of stakeholders; ● Is in compliance with applicable law and consistent with international norms of behavior; ● Be integrated throughout the organization and practiced in its relationships (ISO, 2010) Sustainable development and CSR are two closely-related concepts Sustainable development, as the big goal of CSR, means striving to meet the needs of society within limited resources without ruining the ability of future society to meet their needs It includes three main dimensions which are social, economic and environmental sustainable development Sustainable development, in the other words, is the way of briefing society expectations that need to be taken into account by corporates whose business activities taking place in it It aims to benefit society as a whole and not for the profit or instant benefit of any specific organization Corporates, growing inside of the society, receiving natural resources benefiting from livelihoods, need to implement their responsibility in return of those gifts from society, as citizens of it Hence, it can be concluded that the sustainable development goals are the original motivation for CSR strategy and policy of any organization and vice versa, CSR is a decisive factor for a business to achieve sustainable development On September 25th 2015, United Nations (UN) adopted the new sustainable agenda – 2030 Agenda for Sustainable Development, which officially came into enforce on January 1st 2016 Based on the vision that “No one is left behind”, the Sustainable Development Goals (SDGs) aims to consolidate the general perception in countries of all developing stages that promoting prosperity and protecting the planet are two simultaneous targets that should be strived for by all organizations taking part in Moreover, the correlation between economic and legal responsibilities is also appropriate with the explanation by Carroll (1991) about the fundamental precepts of business organizations The correlation between economic and philanthropic responsibilities is a proof for the fact in business life in Vietnam Entrepreneur can only perform charity activities if their economic duties are satisfied The results also reflect general thoughts of entrepreneurs in Vietnam and how they actually practice CSR Their approach is to maximize the use of labor and other resources to achieve profit targets, regardless environmental and social factors, then after achieving economic target, they contribute money to philanthropic-related activities/campaigns *Misunderstanding of CSR role In many enterprises corporate donation is considered to be the main CSR activity According to a study on awareness of managers and consumers in Vietnam, managers in firms consider CSR as charity activities rather than a part of company developing strategy The results of research illustrate how the role of CSR has been perceived in Vietnam The majority of respondents (68%) think that engaging CSR, firm could get a favorable image within the public, only 28% still wonder how CSR could impact on the image of companies, and very few respondents (6%) not believe that CSR will bring them any beneficial outcomes In terms of company strategy, 25% of directors are still in doubt about the role of CSR in the view it is a strategic integration and competitive for companies, and 8% not believe CSR reporting is important tool that can influence investors’ decision-making The influence of CSR on investors’ decisionmaking is still questionable as 31% of respondents remain neutral They not think CSR is really important, so it has limited influence on investment decisions of investors (Pham, 2011) It can be seen that CSR in Vietnam has been understood as, and has focused on, workforce issues, labor relations, charity activities and environmental concerns For big companies targeting global market, CSR is compulsory to establish business relationships with foreign companies, as their potential partners would mindfully consider company profile before jumping in Nonetheless, for small and medium business, CSR is quite an unrealistic concept as their constraints of finance resources force them to prioritize short-term business results to struggle against bankruptcy In addition, the non-compliance behaviors to CSR are rarely discovered and there aren’t worthy remedies for those The limitation is that, entrepreneurs think that CSR is just costly and dependable Hence, misunderstanding of CSR role and position is one of the biggest barriers between Vietnam enterprises and CSR *Some violation cases of CSR As can be seen, because of Vietnamese general perception of CSR to maximize profit firstly, then contribute to charity secondly, there have been cases of breaching labor and environmental laws In Vietnam market, due to the incomplete legal system CSR is not fully support to be implemented in enterprises, Vietnamese companies, in particular, don’t usually comply by labor legislation, often operate without necessary permits and not conduct safety precaution Workers in small companies usually might not receive full safe assurance from their employers Many of them have to work in harsh conditions, or environment that affects health negatively, on holiday, or overtime with small amount of extra money and high risk of workplace accidents Many of them have no chance to raise their voice to the company managers and no freedom of association and collective bargaining Nonetheless, very few people take the protection of legal system seriously so those companies usually get away with that The high corruption index (35 points on a scale from (highly corrupt) to 100 (very clean) on 2017) is one of the reasons why Vietnam is not a good environment for small and medium size enterprises to start a transparent and clean business The growing political focus on improving business transparency has not been translated into concrete results yet In addition, group interest is also one of the motivations for companies not to abide by legal rules but to act in their own interests instead Environmental problems such as air pollution, deforestation or water pollution are happening as consequences of industrial growth Environmental scandals such as Formosa Vũng Áng case in 2016 is just one example of industrial production negative impacts environment Formosa is a Taiwanese Steel Corporation, subsidiary of Formosa Plastics Group that has located their factory in Hà Tĩnh province Its pollution scandals started in June 4th 2016 when fish death epidemic across Vũng Áng coast, and from that spread out across four coastal provinces The company admitted that they had dumped the hazardous wastewater resulted from the operation of their factory into the water environment Although a compensation of US$ 500 million has been made by Formosa, the consequences were told to be much more severe, which included damaged environment recover and compensation to fishermen of four coastal provinces who couldn’t continue their jobs for months Along with this case there were six other cases of water pollution in the same year, five of which were results of manufacturing company’s noncompliance to environmental laws and norms 2.3.2 CSR outlook of Vietnamese enterprises *Challenges for CSR implementation Phu (2017) has pointed out four main challenges facing Vietnamese enterprises when it comes to implementation: + Awareness of CSR: entrepreneurs mainly focus on philanthropic and ethical business without long-term strategy + Legal framework is not enough to deter violation in economic activities, and simultaneously, rewards and punishment are not strong enough to create motivation for firm behaviors + Lack of financial and technical resources to implement CSR standards: as innovation is an important part of CSR, many SMEs are having troubles with poorly resources while implementing CSR doesn’t bring expected short-term outcomes + Influence of Vietnamese consuming culture which is easygoing with the counterfeit, fake and foreign goods enterprises are having a hard time struggling to survive against thousands of competitors who take advantage of Vietnamese consuming culture *Opportunities for CSR implementation - Internationalization: As Vietnam has become member of AEC, WTO and signed for 12 FTAs, and many potential ones, it’s a great opportunity for Vietnamese enterprise, regardless their size, to enter a bigger market: global market The fast globalization in Vietnam has been created many requirements for enterprises to perform their CSR transparently as well as learn from practical models of successful organizations When it comes to investing in a foreign company, international investors usually consider MSCI KLD 400 social index as one of the most crucial factors Launched in May 1990, the MSCI KLD 400 Social Index is one of the first Socially Responsible Investing indexes With the growing mainstream adoption of ESG strategies, many investors seek to hold companies that reflect their values and meet stringent best-in-class criteria for managing their environmental, social and governance (ESG) risks and opportunities Therefore, in order to attract more FDI, Vietnamese enterprises of all size should meet the social responsibility of the foreign investors - Influence of multinational companies (MNCs): CSR concept was introduced widely in Vietnam by the practices of multinational companies The Code of Conduct used by MNCs is very universal and can be applied in different geographical areas MNCs like Unilever, Samsung, Honda all have clear strategy and agenda of CSR policy and measuring tools Those companies are also committed to enhance the quality of life for their employees and local communities ad have actively involved in many social initiatives, including various investment programs in culture, education, public healthcare development and other community contribution activities Those activities have had immensely influence on Vietnamese enterprises perception of CSR implementation - Influence of startups with open mind and changing spirit: Startups might be referred as small and medium enterprises but they accounts for approximately 80 percent of number of business in Vietnam With the ambition to take part in the global market and gain foreign direct investment, those startups are expected to be the pioneers of the era of changing perception about CSR CHAPTER 3: RECOMMENDATION AND CONCLUSION 3.1 Lessons for Vietnamese enterprises from the case of FrieslandCampina After researching the case of CSR application at FrieslandCampina and Vietnamese enterprises (most of which are small and medium sized) viewpoint and outlook, the author has drawn up some applicable lessons for Vietnamese enterprises improvement in terms of CSR as well as long-term business growth 3.1.1 Integrating CSR into corporate strategy As the author has discussed earlier, the CSR objectives must be integrated into corporate strategy and must become a driver of the company’s development In most Vietnamese small and medium companies, CSR is likely to remain informal and intuitive, or undertaken only if the shareholders find their value in it Shareholders need to understand that if a company’s business strategy can align its performance in the aspects of social, environmental and economic with its long-term value, CSR will become a part of the business strategy and help company to generate effective results in the long run CSR policy of FrieslandCampina is a great example of the success of integrating CSR into corporate strategy Philanthropy such as giving to charitable causes can have positive impacts on community However, it should not be used by an enterprise as a substitute for integrating social responsibility into corporate strategy 3.1.2 Supply chain sustainability Learning from FrieslandCampina as well as other big manufacturing firms, companies should have a holistic view of supply chain processes as technologies that address the environmental, economic and social aspects of the components throughout their supply chain For example, from the goal of controlling energy consumption, the company has applied Foqus planet program for its member dairy farmers in which there is indicator of energy consumption at farm and compensation for good performance; applied technology to reduce energy consumption at facility, generated green energy to use in manufacturing and logistics and procured raw material from sustainably managed sources It indicates that FrieslandCampina approaches sustainability targets as the matter of the whole supply chain in which it plays the most crucial role, and every single factor is considered to be improved as much as possible by all components in that supply chain 3.1.3 Considering multiple domains of CSR In an early essay, Carroll (1979) proposed that CSR included four components relating to economic, legal, ethical, and discretionary obligations While this was initially meant to distinguish between mandated and voluntary action, it later formed the basis for empirical inquiry into corporate social performance and drew attention to several interrelated firm objectives When it comes to establishing corporate strategy, Vietnamese companies should not consider CSR as preventing of environmental pollution, charity or improving labor working condition but all objectives mentioned earlier in an interrelated and interdependent relationship, and how to achieve those objectives in the constraint of time and other resources 3.1.4 Raising internal awareness The corporate social responsibility has been understood deficiently among Vietnamese enterprises From the viewpoint of businesses, it is very important to raise the internal awareness of the employees, management of non-management, regardless of their hierarchical positions Building the business around the long-term ultimate goal of sustainable development should be constantly considered by business leaders Local business owners need to realize the nature and benefit of CSR integration and have serious efforts to change the status quos 3.1.5 Stages to develop a CSR strategy Company with high CSR become an excellent working place, community where it operates is pleased to have it operating there, and a vendor of choice However, how can a CSR strategy be achieved? Let’s take a tea manufacturing company as an example of developing a CSR strategy The company is currently selling their products in domestic market In five years from now, the company targets to have at least 100 tons of tea annually to buyers in Middle-East countries - where tea taste of the population is very similar to Vietnamese tea Figure 3.1: Stages to develop a CSR strategy Determ ine Determinehow com pany’s companyafectstoits Prioritzeisues Integrateintostrategy Implementation stakeholders stakeholders Stage 1: Determine company’s stakeholders For a tea manufacturing company, stakeholder list might include tea farmers, buyers, consumers, suppliers of raw materials and equipment, employees, government bodies and local authorities, NGOs, environment, local people living in the area of the factory, etc Stage 2: Have conversation with stakeholders of their concerns and determine how company affects to those For example, tea farmers are interested in improving value and quality for their tea, while receiving stable incomes Local authorities are interested in job creation and working condition for their citizen while NGOs needs the company to minimize carbon-footprint, save water and natural resource, reduce waste and protect biodiversity For each topic, company should determine their appropriate involvement and how can their help to satisfy stakeholders’ needs Stage 3: Prioritize the issues by criteria: relevance to company, relevance to company stakeholders, resource restraints, supportive to company strategy Among various issue, company might want to choose their focuses For example, product quality should be paid the most effort to improve, because it’s the most relevant to tea manufacturer and its stakeholders, also its best fit with the strategy of the company While prioritizing the lists, company should categorize the issues in strategic themes and pillars, to see their interrelations and how they support the big goals and align to the company mandate The point of this stage is to define “what the company stands for”, and to outline the area of focus Stage 4: Integrate final list of issues into corporate strategy The final issues should be included in business strategy by specifying their scope, goals (KPIs), management approaches for the implementation, resources management It’s the time for interest of CSR to turn into actions For each strategy, specific implementation plan should be developed, with attention to company resources, KPIs and measurable indicators Once the key areas of focus have been identified, it is easier to determine a realistic budget to meet the plan Resource management is a key factor when funding To prove that CSR implementation is not only in theory, managers need to show their approach to the problems and particular solutions and the ways to measure their effectiveness and how much they cost to enable cost-benefit analysis In order to save the water, innovation is needed to improve equipment in facility, employees are guided to save water in use and farmers are instructed about watering methods for the best efficiency while saving water Indicators includes water consumption, consumption per ton of products, water used in farming and in production, optimal water usage level, money saving from the projects, other measurable positive outcomes, long-term benefits, etc Stage 5: Establish governance structure to track the implementation, set new benchmarks and continuously improve the CSR strategy for appropriation A CSR audit to measure, monitor and evaluate the program is a must In the case of FrieslandCampina, the company monitors CSR by the two-tier structure with Executive Board and Supervisory Board In a SME structure, if the implementation of that structure is too costly, it’s a more cost-effective way to have a CSR manager to monitor and report finding to the Executive Board Based on status quo, company might need to adjust their targets, approaches to be more appropriate to the conditions Achievement should be rewarded, strengths should be developed and wrong approach should be reviewed to improve After achieving one CSR targets, it would become meaningless if everything just gets back to normal Managers need to standardize those achievements and future performance will be developed from that point, meaning continuous improvement Communication tools such as sustainable report should be used for the ease of access to the CSR policy 3.2 Solutions for the State: - Raising awareness about CSR: wrong implementation is originated from misunderstandings that CSR is only about business ethics or charity By raising entrepreneur awareness of the concepts, benefits and helping them to adopt CSR in business, they’ll find it more applicable CSR topics should be discussed in meetings of startup hubs, chapters of Business Networking International, Vietnam Young Leader Forum or other entrepreneur networks At business school, CSR should become one of the courses, research subjects or idea competitions to gain attention and commitment of students Mass media would also be very helpful to correct the view of CSR Millennium and young entrepreneurs and startups are expected to be the first adapters who are openminded and ready to make changes on the business culture which is standing in the crossroad between tradition and modern attitudes With 39,580 startups entering Vietnamese markets in the four first months of 2017, their impacts to - the business community is tremendous Completing the nation legal framework: close loopholes, inadequacies which might be used by corporates to get rid of CSR in some dimensions and complete the law to facilitate corporates implementation As can be seen, many environmental violations have been recognized due to the intentional waste processing policies of the manufacturers, leading to tremendous consequences for the neighborhood of the violating companies and yet, the remedies are not persuasive enough for manufacturers as a whole to have motivation to handle their waste in responsible ways In terms of supporting the implementation of CSR strategies, coordinating activities of governmental agencies, departments and organization should also be a matter of concern CONCLUSION The author has chosen the topic of Corporate Social Responsibility because of the inspiring Business Ethics course she has taken at Foreign Trade University, which emphasizes on the ethical principles and practices regarding potentially controversial issues such as corporate governance, bribery, discrimination, fiduciary responsibilities and so on Since multinational companies, especially Dutch companies such as FrieslandCampina and Unilever have had great influence on Vietnamese entrepreneur community as pioneers in this field, the author has chosen to analyze the successful integrated model of Royal FrieslandCampina to illustrate a model that CSR is at the root of growth strategy In the theoretical part the author has discussed the various definitions and models of CSR From her point of view, the most effective and most applicable CSR model is the concentric circles model as it tackles CSR from a different and more modern viewpoint in the nowadays market economy era It has been indicated clearly in the empirical part that CSR is not merely about environmental issues or philanthropic activities, but a developing strategy that is integrated with chosen priorities of corporate responsibility towards the society, environment and economy Another misunderstanding is that enterprises usually seem to view social responsibility as the matter of company themselves, while most of the potential gains can be found within their production chain networks The author has also drawn up the stages to formulate a strategic CSR plan that is helpful for enterprises of all size, based on the process of FrieslandCampina and some personal opinions of the author Due to the influence of traditional mindset, corporate as well as consumer awareness of CSR is still biased and unsubstantial However, Vietnamese enterprises, in the era of internationalization, need to be aware of CSR as a crucial part of corporate strategy and sustainability as a cornerstone for growth than ever to take part in the energetic global market Without it, there would be no strategy and no growth whatsoever REFERENCES Bowen, H R (1953) Social responsibility of the businessman New York: Harper & Row pp.6 Carroll, A.B (1999) Corporate Social Responsibility: Evolution of a Definitional Construct Busines and Society Vol 38 No 3, pp 268 – 295 Maignan, Ferrell and Hult 1999 Corporate citizenship: Cultural antecedents and business benefits [Online] Available at: https://link.springer.com/article/10.1177/0092070399274005 (Accessed on 24 April 2018) United Nations 2015 Transforming our world: the 2030 Agenda for Sustainable Development [Online] Available at: http://www.un.org/ga/search/view_doc.asp? symbol=A/RES/70/1&Lang=E (Accessed on 24 April 2018) Swaen 2002 Corporate Social Responsibility: Do Managers and Consumers Have the Same Conception of Doing Good? 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