Management perception of the impact of corporate social responsibility on corporate reputation in vietnam

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY  BÙI THỊ DIỄM NGA MANAGEMENT PERCEPTION OF THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON CORPORATE FINANCIAL PERFORMANCE AND CORPORATE REPUTATION IN VIETNAM MASTER THESIS HO CHI MINH CITY – 2013 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY  BÙI THỊ DIỄM NGA MANAGEMENT PERCEPTION OF THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON CORPORATE FINANCIAL PERFORMANCE AND CORPORATE REPUTATION IN VIETNAM Subject: Master of Business Administrator Code: 06.34.01.02 MASTER THESIS SUPERVISOR: DR NGUYỄN THỊ NGUYỆT QUẾ HO CHI MINH CITY – 2013 I ACKOWLEDGMENT First of all, I would like to indicate my deep gratitude to Dr Nguyen Thi Nguyet Que, my promoter Throughout the entire research, she offered valuable advice, helpful guidance and comments as well as encouragement during difficult times I sincerely appreciate you, both personally and professionally I am also grateful to my classmates who were unfailingly kind, offered ongoing encouragement, and helped me whenever it was necessary In addition, I‟d like to send my special thanks to all of my colleagues- Ms Tien, Ms Loan, Ms Thu and my director- Ms Nguyen Vu Thanh Uyen at Dang Hung Chemical Company for your persistent support, encouragement Without your help, my dissertation couldn‟t be finished in time I will be forever indebted to my beloved family members, especially my parents and my parents-in-law They have supported me in a consistently loving manner I am especially grateful to my husband, Kim Do, for his love, thoughtfulness, and endless support Thanks for looking after our daughter- Lucie so well whenever I were busy and focus on this dissertation Lucie, thank you so much for your precious existence in my life! While it is true that you make my life increasingly busy Without you, my life would have no meaning at all Once again, I extend my profound thanks to all of you, as well as to others whose names are not mentioned here but who also contributed directly or indirectly to this thesis Bui Thi Diem Nga Ho Chi Minh City, 26 September, 2013 II COMMITMENT I certify that the ideas, analyses, and conclusions reported in this thesis “Management Perception Of The Impact Of Corporate Social Responsibility On Corporate Financial Performance And Corporate Reputation In Vietnam” are entirely my own effort The data was collected in reality and it has clear origins I also certify that the work is original and has not been previously submitted for any other award III TABLE OF CONTENT ACKOWLEDGMENT I COMMITMENT II LIST OF FIGURES VI LIST OF TABLES VII ABSTRACT CHAPTER 1: INTRODUCTION 1.1 Research background 1.2 Research Issues, Objectives & Questions 1.3 Research methodology 1.4 Significance of study 1.5 Structure of study CHAPTER 2: LITERATURE REVIEW: 2.1 Introduction 2.2 Concept of Corporate Social Responsibilities 2.2.1 Definition of Corporate Social responsibility 2.2.2 CSR components 11 2.3 Review of previous studies on CSR and organization performance 12 2.3.1 Related CSR and financial performance 13 2.3.2 Related to CSR and corporate reputation 15 2.4 Development of theoretical model and research hypothesis .21 2.4.1 CSR and Financial performance 22 IV 2.4.2 CSR and corporate reputation 2.5 Summary CHAPTER 3: RESEARCH METHOD 3.1 Introduction: 3.2 Research design 3.3 Questionnaire development 3.3.1 Scale of independent variables 3.3.2 Scale of dependent variables 3.3.3 Translation of the Questionnaire 3.4 The pilot study 3.5 Main survey 3.5.1 Target population 3.5.2 Sample method 3.5.3 Sample size 3.5.4 Questionnaire administration 3.6 Methods of data analysis 3.7 Summary CHAPTER 4: DATA ANALYSIS 4.1 Introduction 4.2 Descriptions of sample 4.3 Reliability and validity of the measurement scale 4.3.1 Reliability (Cronbach Alpha) 4.3.2 Exploratory factor analysis (EFA) V 4.4 Testing the research model and the hypotheses 47 4.4.1 Testing correlations of constructs 48 4.4.2 Regression Analysis 51 4.4.3 Test the violations of assumptions in linear regression 58 4.5 Conclusion 58 CHAPTER 5: CONCLUSION AND IMPLICATION .60 5.2 Discussion of findings 60 5.2.1 The impact of CSR activities in term of employee responsibilities on financial performance and corporate reputation 61 5.2.2 The impact of CSR activities in term on community responsibilities on financial performance and corporate reputation 62 5.2.3 The impact of CSR activities in term of customer responsibilities on financial performance and corporate reputation 63 5.2.4 The impact of CSR activities in term of environment responsibilities on financial performance and corporate reputation 64 5.3 Practical implications and contribution of study 64 5.4 Limitation and future research 66 5.5 Conclusion 67 LIST OF REFERENCE 67 APPENDIX A 73 APPENDIX B 78 APPENDIX C 81 APPENDIX D 83 VI LIST OF FIGURES Figure Figure 2.1 Figure 2.2 Figure 4.4 VII LIST OF TABLES Table Table 2.1 De Table 2.2 De Table 2.3 Ab Table 3.1 It Table 4.1 Sa Table 4.2 Re Table 4.3 KM Table 4.4 Ro Table 4.5 Ite Table 4.6 KM Table 4.7 Ro Table 4.8 Co Table 4.9 Co Table 4.10 Va Table 4.11 M Table 4.12 AN Table 4.13 Co Table 4.14 M Table 4.15 AN Table 4.16 Co Table 5.1 Re 73 Taneja, S S., Taneja, P K., & Gupta, R K (2011) Researches in corporate social responsibility: A review of shifting focus, paradigms, and methodologies Journal of Business Ethics, 101(3), 343-364 Tho, N D (2011) Scientific research methodology in business Hanoi: LaborSociety Publisher Uddin, M B., Hassan, M R., & Tarique, K M (2008) Three dimensional aspects of corporate social responsibility Journal of Business and Economics,Volume 3,Issue 1,January 2008 Undén, C (Spring 2007) Multinational Corporation and Spillovers: Adding to Corporate Social Responsibility Master Thesis, Institution of Economies, Supervisor: Yves Bourdet, Lunds University Van Marrewijk, M 2003, 'Concepts and definitions of CSR and corporate sustainability: between agency and communion', Journal of Business Ethics, vol 44, no 2, pp 95-105 Vietnam Chamber of Commercial and Industry (VCCI), 2011, “Corporate social responsibility in Vietnam: perspectives from a visit in February 2011” Associate ACCSR Waagstein, P R (2011) The mandatory corporate social responsibility in indonesia: Problems and implications Journal of Business Ethics, 98(3), 455-466 74 APPENDIX A Kính thưa q Anh/Chị Chúng tơi nhóm nghiên cứu thuộc trường Đại học kinh tế TPHCM Chúng thực nghiên cứu Nhận thức lãnh đạo ảnh hưởng việc thực “trách nhiệm xã hội Doanh Nghiệp (CSR)” đến Doanh nghiệp Rất mong anh chị trả lời giúp câu hỏi Chúng xin cam đoan tất thông tin cá nhân anh/chị bảo mật hoàn toàn Cuộc vấn quan trọng cho nghiên cứu nên chúng tơi kính mong anh/chị dành chút thời gian để hỗ trợ Định Nghĩa Trách nhiệm xã hội Doanh Nghiệp (CSR): Trách nhiệm xã hội Doanh nghiệp" (CSR) cam kết khơng ngừng Doanh nghiệp việc đóng góp cho việc phát triển kinh tế bền vững, thông qua việc tuân thủ chuẩn mực bảo vệ môi trường, bình đẳng giới, an tồn lao động, quyền lợi lao động, trả lương công bằng, đào tạo phát triển nhân viên, phát triển cộng đồng… theo cách có lợi cho công ty phát triển chung xã hội (World Business Council For Sustainable Development) A Xin Anh/Chị cho biết vài thông tin thân cơng ty: Giới tính: Vị trí: phận, chi nhánh, cấp cao) Số lượng nhân viên: Loại hình Doanh nghiệp (DN) :   Lĩnh vực hoạt động Doanh nghiệp: Nhà nước   Nước Giày da Loại khác Thời gian Doanh nghiệp thực CSR:  < năm  > năm  – năm  2-5 năm  Khác B Xin Anh/Chị cho biết mức độ đồng ý hay không đồng ý Anh/Chị nội dung sau liên quan đến "Trách nhiệm xã hội Doanh nghiệp" công ty với quy ước: (1) Hồn tồn khơng đồng ý, (2) Không đồng ý, (3) Trung lập, (4) Đồng ý, (5) Hồn tồn đồng ý khơng đồng ý I CSR cộng đồng nơi doanh nghiệp hoạt động Doanh nghiệp đóng góp tài cho Tổ chức từ thiện cộng đồng 75 Doanh nghiệp giúp đỡ cải thiện chất lượng sống Cộng đồng Doanh nghiệp hỗ trợ tài cho hoạt động cộng đồng (nghệ thuật, văn hóa, thể thao) Doanh nghiệp hỗ trợ tài cho hoạt động giáo dục cộng đồng II CSR môi trường Các kế hoạch Doanh nghiệp bao gồm mục tiêu hoạt động môi trường Doanh nghiệp hoàn toàn tự nguyện thực trách nhiệm mơi trường ngồi quy định pháp luật bảo vệ môi trường Doanh nghiệp hỗ trợ tài cho phát động, chương trình mơi trường Doanh nghiệp tiến hành đánh giá hiệu từ hoạt động môi trường Doanh nghiệp III CSR người lao động doanh nghiệp 10 11 12 13 IV 14 Doanh nghiệp đối xử công tôn trọng người lao động, khô phân biệt giới tính, sắc tộc Doanh nghiệp mang lại cho tất người lao động chế độ tiền lương phù h công tương ứng với sức lao động người Doanh nghiệp hỗ trợ cho người lao động có nhu cầu học thêm, đào chuyên sâu Doanh nghiệp giúp đỡ người lao động cân sống gia đình việc Doanh nghiệp ln gắn kết định kinh doanh với lợi ích quyề lợi người lao động CSR khách hàng Doanh nghiệp Doanh nghiệp cung cấp dịch vụ với chất lượng cao cho khách hàng 15 Doanh nghiệp cung cấp cho khách hàng thông tin cần thiết để đưa định mua hàng 16 Doanh nghiệp đáp ứng tất yêu cầu, khiếu nại khách hàng dị vụ, sản phẩm Doanh nghiệp 17 Doanh nghiệp điều chỉnh sản phẩm dịch vụ để gia tăng mức độ thỏa mãn khách hàng V Liên quan đến kết tài Doanh nghiệp 18 So với đối thủ lớn công ty chúng tôi, năm qua phần lớn 19 So với đối thủ lớn công ty chúng tôi, năm qua quy mô 20 Về hiệu hoạt động tổng quan, năm qua Doanh nghiệp đạt hiệu cao so với đối thủ 21 So với đối thủ cạnh tranh lớn công ty chúng tôi, năm qua chúng tơi có mức lợi tức (ROI) cao đáng kể 22 So với đối thủ cạnh tranh lớn công ty chúng tôi, năm qua chúng tơi có tỉ lệ lợi nhuận rịng tài sản (ROA) cao 23 So với đối thủ cạnh tranh lớn công ty chúng tôi, năm qua chúng tơi có mức tăng trưởng lợi nhuận cao 24 So với đối thủ cạnh tranh lớn công ty chúng tôi, năm qua 76 có mức tăng trưởng bán hàng cao VI Liên quan đến danh tiếng Doanh nghiệp 25 Nhìn chung, doanh nghiệp có danh tiếng tốt 26 Doanh nghiệp người biết đến tổ chức đáng tin cậy 27 Doanh nghiệp người biết đến cung cấp sản phẩm vụ chất lượng cao CHÂN THÀNH CẢM ƠN SỰ HỢP TÁC CỦA QUÝ ANH/CHỊ 77 Dear Sir/ Madam, We are student group of Ho Chi Minh city University of Economics We are conducting a Study on “management perception of the impact of CSR on financial performance and corporate reputation in Vietnam” We need your help by answering the following questions We guarantee that all your personal information will be secured This survey is very critical to our study We hope that you could save your precious time to help us Definition of “Corporate Social Responsibility” (CSR): Corporate Social Responsibility (CSR) is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large (World Business Council For Sustainable Development) A A couple of questions about you and your company: senior ) Gender: Posision: Your company size: Type of business: Business sector: How long your company has been implementing CSR:  < year  – years  2-5 years  > years  Other B Please let us know your level of agreement on the following statement about CSR as discribed below: (1) Strongly disagree, (2) Disagree, (3) Neither agree nor disagree, (4) Agree, (5) Strongly agree Strongly disagree I CSR activities toward community where firm operate Give money to charities in the communities Help improve the quality of life in the communities where we operate Financially support community activities (arts, culture, sports) Financially support education in the communities where we operate Strongly agree 78 II CSR activities toward environment Incorporate environmental performance objectives in organizational plans Voluntarily exceed government environmental regulations Financially support environmental initiatives Measure the organization‟s environmental performance III CSR activities toward employee 11 Treat all employees fairly and respectfully, regardless of gender or ethnic background Provide all employees with salaries that properly and fairly reward them their work Support all employees who want to pursue further education 12 Help all employees coordinate their private and professional lives 13 Incorporate the interests of all employees into business decisions 10 IV CSR activities toward customer 14 Provide all customers with very high quality service 15 Provide all customers with the information needed to make purchasing decision Satisfy the complaints of all customers about the company‟s products or services Adapt products or services to enhance the level of customer satisfaction 16 17 V Financial performance 18 VI Relative to our largest competitor, during the last year our company had a larger market share Relative to our largest competitor, during the last year our company larger in size Regarding our overall performance, during the last year our company performed greatly relative to competitors Relative to our largest competitor, during the last year our company return on investment has been substantially better Relative to our largest competitor, during the last year our company return on assets has been substantially better Relative to our largest competitor, during the last year our company profit growth has been substantially better Relative to our largest competitor, during the last year our company sales growth has been substantially better Corporate reputation 25 In general, our organization has a good reputation 26 We are widely acknowledged as a trustworthy organization 27 This organization is known to sell high quality products and services 19 20 21 22 23 24 THANK YOU VERY MUCH FOR YOUR COOPERATION! 79 APPENDIX B RELIABILITY Reliability test for community responsibilities Reliability Statistics Cronbach's Alpha Scale Mean if Item Deleted Com1 Com2 Com3 Com4 Reliability test for environment responsibilities Reliability Statistics Cronbach's Alpha Scale Mean if Item Deleted Env1 Env2 Env3 Env4 Reliability test for employee responsibilities Reliability Statistics Cronbach's Alpha 905 80 Item-Total Statistics Emp1 Emp2 Emp3 Emp4 Emp5 Reliability test for customer responsibilities Reliability Statistics Cronbach's Alpha 898 Cus1 Cus2 Cus3 Cus4 Reliability test for financial performance Reliability Statistics Cronbach's Alpha 937 81 Item-Total Statistics Fp1 Fp2 Fp3 Fp4 Fp5 Fp6 Fp7 Reliability test for corporate reputation Reliability Statistics Cronbach's Alpha 900 Item-Total Statistics CR1 CR2 CR3 82 APPENDIX C EXPLORATORY FACTOR ANALYSIS (EFA) Independent variables: Appendix B - Total variance explained of independent variables Co mp one nt 10 11 12 13 14 15 16 17 To 1 83 Appendix B - Total variance explained of dependent variables (Financial Performance – FP and Corporate reputation – CR) Total Variance Explained Component 10 Extraction Method: Principal Component Analysis 84 APPENDIX D MULTILINEAR REGRESSION ANALYSIS (MLR) Descriptive Statistics of MLR (1) FP COM ENV CUS EMP Collinearity Diagnosticsa of MLR (1) Model Dimension a Dependent Variable: FP 85 Appendix: Histogram of dependent variable: financial performance Scatterplot of dependent variable financial performance 86 Descriptive Statistics of MLR (2) CR COM ENV CUS EMP Collinearity Diagnosticsa Model Dimension a Dependent Variable: CR 87 Histogram of dependent variable: Corporate reputation Scatterplot of dependent variable Corporate reputation ...MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY  BÙI THỊ DIỄM NGA MANAGEMENT PERCEPTION OF THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON CORPORATE FINANCIAL... this thesis ? ?Management Perception Of The Impact Of Corporate Social Responsibility On Corporate Financial Performance And Corporate Reputation In Vietnam? ?? are entirely my own effort The data was... After the revision finished, the author had the final questionnaire 3.5 Main survey 3.5.1 Target population Since this study examines the perception of management regarding the impact of CSR