Determining key factors influencing the implementation of CSR corporate social responsibility of vietnamese companies in ho chi minh city

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G@OUM

OPEN UNIVERSITY MALAYSIA

RESEARCH PROJECT J@l4(2

(BMBR5103)

DETERMINING KEY FACTORS INFLUENCING THE IMPLEMENTATION OF CSR (CORPORATE SOCIAL RESPONSIBILITY) OF VIETNAMESE COMPANIES

IN HO CHI MINH CITY

STUDENT’S FULL NAME : DO THI KIEU LINH

STUDENT ID : CGSVN00015019

INTAKE : MBAOUM0313

ADVISOR’S NAME & TITLE : A Prof PHAN DINH NGUYEN

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Advisor’s assessment

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Re TS REET OT UES Fe ee EER OO eS A SERRE ACKNOWLEDGEMENTS

Firstly, I would like to express my sincere thanks to my thesis coach —A Prof Phan Dinh Nguyen for dedicated deep guidance, precious advice with his enthusiasm and patience

Secondly, I would like to take this opportunity to thank all the organizations,

individuals andbusinesses which have collaborated to share information, give me a lot of resources, responses and useful material for the subject of my study, especially for the fulfilling of research questionnaires Without these helps, I could not believe that my study would come to an end as today

Lastly, I would like to send my deep gratitude to my family, friends and colleagues who have encouraged and supported me very much during the learning process work and completion of thisthesis

Ho Chi Minh City, Vietnam August 2014

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TABLE OF CONTENTS ACKNOWLEDGEMENTTS - S Snnnn29212121 2 2 th H0 ưng i (1 — il IkY09) 83.000): vì IBLJ09)08v.1:00.11177 vi Ilãš09)10.))).42/4/.090/9)011 005 viii CHAPTER 1: INTRODUCTION - cành 1 N9 a2 1 ý» (0Ú 00 o0 3 1.3 Research ObjeCfÏVS - ác sen kh t0 01001011 (ket 4 1.4 Research ScOpC cà hỈnHHH 222 HH1 1100011114111 5 1.5 Research DFOC€SS cá can” TH 00m H02 02.11117.111121010010P 5 R9: 28v) 6 CHAPTER 2: LITERATURE REVIEW : +:222222222E2EErrrrrrrrrrrre 8 2.1 The concept of Corporate Social Responsibility s«cecseeeerererr 8 2.2 Number of other CSR definitions .- Ăn hư 8

2.3 Theories related to Corporate Social Responsibility .:ceceseeteteeteeseeneees 9

2.3.1 Pyramid Model of Carroll cccccccesesecseceeceeteenerereerecrssesersesesnenseneseanensserees 9 2.3.2 Resource-based persD€CfiV€ các Sen nén 10 2.4 Previous research of other authors about CSR implemenftation 11 2.5 Factors influence on implementation of CSR of company in HCMC 12 2.5.1 Caring for customers and CornmuIfy - -c-c-seeeeetrerrrrrrrrree 12 2.5.2 Forces from stakeholder 5 5 Sn + Sen 12 21111121 ereg 13

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2.5.4 Awareness of the CSR benefits - - - - - - - - - ( - nHHn n9 111v 18

2.6 Research Model ccccccsssessessesssssessenesnesssrsestescssssesnsseaseeaseeeseeseenecneensenseneeneaeey 19

CHAPTER 3: - RESEARCH METHODOLOGY .-. nen 22

3.1 Researclh DTOC€SS - 5c cà tt 01.11221111 22 ki 0600) 0 ).) ,.,.,., 26 3.2.1 The Primary Data co tinh 0110111111146 1111 26 3.2.2 The Secondary ÏÖata .- che 1011011421181n1 1 1 27 3.3 Field Work Organizafion .- : + xsxeethntehhhhr 111111101111 m 27 3.3.1 Sampling Method - -c se cénnhnhHhHieHhHee tre 27 3.3.2 Qualitative Research . - + c2 H011 0011 28 3.3.3 Sample Collectiorn -. ch 28 3.4 Measurement Sc€§ ‹- - 55 Sàn tt 104441 87217 e010 29 3.4.1 Measurement ConstruCf .- ác ++ + nành tin 21014011 1 1v 29 3.4.2 Statistic Mefhods - <2 1 9 gi t9 ng nh 011816 34 3.4.3 Descriptive StatISfÍCS ch r1 1 nne 34 3.4.4 Assessment of Scale Reliability . cà cenhheherhdrrrie 34 3.4.5 Assessment of Scales’ Unidimensionality, Discriminant Validity and Convergent Validity chen H011 18111 35 3.4.6 Multi Regression AnaÌySIS canh 35

3.4.7 One-Way ANOVA -ccerehhHhhHHH 11 36 CHAPTER 4: DATA ANALUYSIS chhhhrrrierrrrriiie 37

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4.2.2 Exploratory Factor Analysis (EFA) rrirrrrrrrrrrrrrrrre 42 4.3 Hypotheses f€sting -.ccereirdrhhireerrrreiiieriiiiiiirrrrirrirerrrer 47 4.3.1 The normal distrIbutiOrn . á- s+*2 22212 9tr g1 01.01 11014 47 4.3.2 MulticollinearÏty -. sec ren H02 1.1m 48 4.3.3 Regression analysis and Hypotheses tesfing -ceerrersererre 49 4.3.4 Hypotheses testing . -ccccecehrrrirrhre r1 51 4.4 One-Way ANOVA .-c se e01211101100111 33 4.4.1 Comparison in CSR implementation and Indusfry - 33 4.4.2 Comparison in CSR implementation and Years of foundation 54 4.4.3 Comparison in CSR implementation and Number of company’s

€ITDÏOY€€S - nen tr 1127010.1011.tn1.01011011n 55 4.4.4 Comparison in CSR implementation and Ownership of company 56 4.4.5 Comparison in CSR implementation and Company furnoV€T 57 4.4.6 Comparison in CSR implementation and Respondent authority 58 4.5 Research findings -: + +12 101 60 CHAPTER 5: CONCLUSION AND RECOMMENDATION .- 64 ân 2 .ố 64 5.2 Summary of findings ccssnneethtrhereHrrrerrrieiiirrierrire 65 5.3 Managerial implications .cccceseseseeeeeeeteeesereseseersesseneeeeeesenenenenenenssensataes 66

5.4 Limitation and further research .cccccesseccessesseneneeeeeeenersessesseseesesseeaeeaeees 68

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LIST OF FIGURES

FIGURE 1.1 RESEARCH PROCESS cccccccscscscesessseeseesseesessesssneeeseesersesenseseeags 6 FIGURE 2.1 PYRAMID MODEL OF CARROLL (1999) .-.-.-. 10 FIGURE 2.2 THE IMPACT OF MARKET ORIENTATION AND CSR 12 (KOHLI AND JAWORSKI, 1990) on n2 101 re 12 FIGURE 2.3 STAKEHOLDERS - Ăn 821112111 1 re 14 FIGURE 2.4 THE PROPOSED RESEARCH MODEL, 55c ++x<<++ 19 FIGURE 3.1 RESEARCH STEPS 7-2184 24 FIGURE 4.1 INDUSTRY OF RESPONDENTTS -ceeeerHire 37 FIGURE 4.2 YEARS OF ESTABLISHMENT -Ặ Ăn He 38 FIGURE 4.3 EMPLOYEES OF COMPANIES àeeHHreeie 38 FIGURE 4.4 COMPANY OWNERSHIP .- - S+S sen re 38 FIGURE 4.5 TURNOVER cành 012121101201 8111111011110 39 FIGURE 4.6 RESPONDENTS?” AUTHORLTY che 39 FIGURE 4.7 REVISED HYPOTHESES MODEL -. - o7 Sen 46 FIGURE 4.8 REVISED MODEL - c7 Ăn s Sen 2 8 re 53

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LIST OF TABLES

TABLE 2.1 LITERATURE REVIEW che 20 TABLE 3.1 THE SOURCES OF SAMPLES che 28 TABLE 3.2 MEASUREMENT SCALES -<<ecehehrrdeiirrrree 30 TABLE 4.1 RELIABILITY TESTING RESULTS .- - +-+eererrse 4] TABLE 4.2 KMO KMO AND BARTLETT'S TEST : -ses+reree 42 TABLE 4.3 TOTAL VARLANCE EXPLAINED eeirrrirrrrr 43 TABLE 4.4 ROTATED COMPONENT MATRIX OF FOUR INDEPENDENT

FACTORS ố 43 TABLE 4.5 KMO AND BARTLETT'S TEST FOR CSR IMPLEMENTATION 44 KMO AND BARTLETT'S TEST cccccceccccsssessensenseneteereerensenansenssceennesassesnesnsenasees 44 TABLE 4.6 TOTAL VARIANCE EXPLAINED OF CSR IMPLEMENTATION 45 TABLE 4.7 ROTATED COMPONENT MATRIX OF CSR IMPLEMENTATION

¬ 45 TABLE 4.8 DESCRIPTIVE STATISTICS 7c nhe 47 TABLE 4.9 CORRELA TIONS - c sen 0011 te 48 TABLE 4.10 RESULTS OF HYPOTHESES TESTING - -. errce 49 TABLE 4.11 HYPOTHESES SUMMARY -Ặsshehetreriierrrie 32 TABLE 4.12 ONE-WAY ANOVA TESTING RESULT ON GENDER 53 TABLE 4.13 ONE-WAY ANOVA TESTING RESULT ON YEARS OF

79)00)19.9)/90)225—— 34 TABLE 4.14 ONE-WAY ANOVA TESTING RESULT ON NUMBER OF

COMPANY'S EMPLOYEES c5 sen 1101 me 55 TABLE 4.15 ONE-WAY ANOVA TESTING RESULT ON OWNERSHIP OF

09) 17.0001 56 TABLE 4.16 ONE-WAY ANOVA TESTING RESULT ON COMPANY

TURNOVER 11 ố ố 37 TABLE 4.17 ONE-WAY ANOVA TESTING RESULT ON RESPONDENT

AUTHORITY 0 58

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coc: CSR: HCMC: MNCs: SMEs: WOM: SERVQUAL: LIST OF ABBREVIATIONS Code of Conduct

Corporate Social Responsibility Ho Chi Minh City

Multinational Companies Service Quality

Small and Medium Enterprises Word of Mouth

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Nowadays, CSR is not strange to society, especially developed countries and CSR has become an issue which is talked widely in the international economic forums

There have been thousands of researches, books, articles, magazines, forums,

websites, businesses and government to discuss about CSR topics

Moreover, consumers tend to avoid what they see (rightly or wrongly) as the products or services of companies that have been accused of not acting the best interests of society CSR activities can bring benefits to companies depending on the nature, scale and scope of activities of the company Although the implementation of CSR can increase costs for companies, it is beneficial for companies in many different aspects For Human Resource, for instance, a CSR program can be an aid to recruit and maintain the loyalty of employees, especially in competitive markets graduates Potential candidates often pay more attention to the companies which have comprehensive policy CSR can also help companies’ staffs improve the perception of their corporate imagines Besides, CSR can play a very important role for companies in remaining customer loyalty upon building a reputation for special brand values and ethics CRS also help the companies receive supports from government and community, avoid in their business throughout taxation and regulations

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reputation for their companies Many famous CSReampaign from multinational companies have been conducted in Vietnam recently such as the programof “Colgate — For a Vietnam without decaying teeth” (Unilever group) with educational healthcareprogram for children in mountainous provinces; “I love Vietnam” of Honda to enhance the awarenessof Vietnamese youth about safe traffic; Dasani (a natural water brand name of Coca Cola) with cleanwater project for community; Dutch Lady with “Fireflies light” is a scholarship foundation for poorchildren in nationwide, etc These activities had positive effect in government and community

Identifying the benefit which received from CSR activities, many Vietnamese companies haveprimitively conducted some CSR campaign such as “Red bear - Connection the love” from Asiafood Company in campaign donated for poverties in Tet Holidays and diseases children; Vinamilk with “Growing Vietnam” with the campaign donating three millions glass of milk for poor children, etc These activities received attentions from local media and also got involvement of government which created wide and positive effect to community

In the era of modern development, consumers pay more attentions to the activities besidesmanufacturing; government and investors are interested in company profiles about what they distribute for their employees, community as well as community relation plays an important part in public relation, the commitment of companies in CSR implementation become more useful and necessary There are many previous studies have been conducted in order to find out the importance of CSR in modern business and the benefits which attract the company for CSR implementation

1.2 Problem Statement

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with companies in developed countries Most of Vietnamese companies operate without CSR implementation and don’t have adequate understanding about CSR implementation A numbers of Vietnamese companies also think CSR is just

charitable contributions or donations

Therefore, two main problems prevent Vietnamese companies from CSR implementation are:

- Firstly, inadequate understanding and awareness about CSR and CSR is often simplyconsidered as philanthropy activities

- Secondly, the CSR implementation of enterprises (especially for small and medium sizecompanies) is too difficult because of lacking of capital and technical resources to implement thestandards of CSR While of the

enterprises in Vietnam are small and medium enterprises

There are many motivations affecting Vietnamese companies to aware and implement CSR as well as the number of different degrees influencing the level of the commitment of CSR implementation

The questions are arisen:

- Which factors are influencing the CSR implementation of Vietnamese companies, especially inHCMC?

- What are the motivations which impact Vietnamese companies in CSR implementation?

- How is the degree of the commitment of CSR implementation of Vietnamese companies?

1.3 Research Objectives

There are three main objectives set for this research:

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- To clarify how influence of each factor in implementation of CSR of Vietnamese company inHCMC

- To make some recommendations to increase implementation of CSR in their operations

1.4 Research Scope

This research mainly focuses on identifying the key factors influencing CSR implementation ofVietnamese companies The target interviewees are the top managers or entrepreneurs in the Vietnamese companies who are decision makers or influencers in their companies

Quantitative research will be applied to the companies or enterprises in Ho Chi

Minh City (HCMC) only HCMC is a central commercial city in Vietnam because of many vibrant economic activities HCMC is also city the biggest industry city in Vietnam, where attracts most of important and developing industries in Vietnam

1.5 Research process

In order to study the research, the research process will be applied and presented in

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Research Objective Ỷ V

Literature review Qualitative research (1)

y Conceptual framework Qualitative research (2) y Quantitative research V Data analysis VÔ

Result and Conclusions

Figure 1.1 Research process 1.6 Research Structure

Chapter 1: Introduction to introduce the research background, the research

problem Raising the problems, the objectives, scope and process of the research

were defined in order to solve

Chapter 2: Literature Review to present the theoretical concepts and conceptual framework being the bases for the research The chapter discussed about the factors influencing CSR implementation of companies Hypotheses according to the conceptual framework selected for this research were discussed and developed for

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Chapter 3: Research Methodology to present in more detail of CSR implementation, researchapproach, research design, development of ‘the measurement scales, the questionnaire and the data analysis approach

Chapter 4: Data Analysis and Research Findings to present the result of research and statistical analysis and discussion It also concludes on the theoretical and managerial implications of the research findings

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CHAPTER 2: LITERATURE REVIEW

This research is carried out to identify key factors influencing Corporate Social Responsibility (CSR) implementation of Vietnamese companies in HCMC

Therefore, understanding the related theoretical literature about Corporate Social

Responsibility will be applied to this research Based on the objectives which were

mentioned in Overview part, the definitions of CSR, the factors related to CSR and

involved model, etc will be also reviewed Finally, research model and hypothesis

will be conducted in this research

2.1 The concept of Corporate Social Responsibility

There have been many different definitions of CSR Keith Davis (1973) gave a rather broad concept: "CSR is the interest of the business and react to problems beyond satisfying the legal requirements, economic and technology” Meanwhile, Matten and Moon (2004) stated "CSR is a concept cluster which includes many other concepts such as business ethics, business citizenship, sustainability and environmental responsibility It is a dynamic concept and always challenges in every context of economic, political and social characteristics”

Carroll (1999) illustrated that CSR has a larger scope, “all economic, legal, ethical

matters and other areas where society expected from enterprises in each point in

definite time”

2.2 Number of other CSR definitions

According to Mallen Baker (2004) “CSR is about how companies manage thebusiness processes to produce an overall positive impact on society”

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collection of discrete practices or occasional gestures, or initiatives motivated by marketing, public relations or other business benefits Rather, it is viewed as a comprehensive set of policies, practices and programs that are integrated throughout business operations, and decision-making processes that are supported and rewarded by top management.”

Finally, the European Union (2001) defines CSR as “the concept that an enterprise is accountable for its impact on all relevant stakeholders It is the continuing commitment by business to behave fairly and responsibly and contribute to economic development while improving the quality of life of the work force and their families as well as of the local community and society at large”

2.3 Theories related to Corporate Social Responsibility 2.3.1 Pyramid Model of Carroll

In fact, these currents are not set and even cross together They share the idea that what is good for company is also good for society Archie B Carroll (1979), one of

the authors the most known for the “Business and Society” current, elaborated a

model which makes reference in the Anglo — Saxon world and which presents a four level pyramid

Each of these levels depends on those which precedes it, the satisfaction of both first one (Economic and legal responsibilities) is requested by the society, that of the third one (ethical responsibility) is expected The fourth wished responsibility is philanthropic These levels crossed with the various groups of stakeholders, can serve as reference to define the various categories of social and environmental

performance to be estimated (Wood D J, 1991)

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Carroll's CSR Pyramid

Figure 2.1 Pyramid Model of Carroll (1999) 2.3.2 Resource-based perspective

From a_ resource-based perspective, CSR activities has been seen as providinginternal or externalbenefits such as helping the firm develop intangible resources and capabilities, particularly thoserelating to employees and managers such as know-how and corporate culture (internal benefits), and a positive effect on reputation (external benefits) The basic principle of resource-based perspective is a

competitive advantage of companies that primarily applied all the valuable

resources of companies (Wernerfelt, 1984; Rumelt, 1984)

Besides, a good reputation can help attract better job applicants, employee royalty and increaseperformance through enhanced employees’ attitudes (Branco and Rodrigues, 2006)

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2.4 Previous research of other authors about CSR implementation

One of the most famous researches of CSR implementation and factors impact on CSR are the research of European Commission (2001) with the target objectives of this survey are business owners This scale consists of 26 observation variables with five components: (1) Workplace Policies; (2) Environmental Policy; (3) Marketplace Policies; (4) Community Policies and (5) Company Values This scale also helps the enterprises to recognize where they are and how to carry on CSR activities on their business and improve their business strategy

These factors based on previous studies of the Ali M Quazi and Dennis O'Brien (2000) by editing and adding some variations to suit the observed practical research There have been 17 observation variables in four elements: (1) Caring for Customers and community, (2) Stakeholder pressures, (3) Community orientation and (4) Awareness of the CSR benefits And three of four factors in the previous research of Ali M Quazi and Dennis O'Brien (2000) have been applied to this

research, there are Caring for Customers and community, Awareness of the CSR benefits, Forces from stakeholders

In the study of Ali M Quazi and Dennis O'Brien (2000), CSR revolved around the single dimensionalentity of profit maximization or a multi-dimensional entity serving greater societal interests Thisresearch also considered CSR actions within a two-dimensional model as positioning actions in termsof whether their strategic motivation was altruistic or corporate In this research, the relationshipbetween the profit, benefit and the range of outcomes of social commitments of businesses wasmentioned and this previous study has made a useful contribution to the debate about the merits of CSRto companies in emerging markets

In order study of Kohli and Jaworski (1990) about the impact of market orientation

and CSR, thecorrelation relationship between three main factors CSR, Market

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Orientation and OrganizationalPerformance The relationship between Market Orientation and CSR has positive effect on thehypothesis of this research and used

in our research

H1 G) Organizational

Market Orientation Performance

H3 (+) Corporate Social Responsibility (CSR)

Figure 2.2 The impact of Market Orientation and CSR (Kohli and Jaworski, 1990)

2.5 Factors influence on implementation of CSR of company in HCMC

2.5.1 Caring for customers and community

According to Martin (2000), the goal of each organization is directed to the existence and long-term development with community Employees, customers and suppliers were considered as critical key factors impacted on the existence of business operations, followed by community stakeholders (Mankenlow, 2006)

All of business activities of organizations aim to attractive the attentions and favorable choices from customers A positive reputation shows that an organization is highly esteemed (Weis et al., 1999) and CSR with positive activities to community and organizations’ stakeholders helps organization improve their reputations Reputation is very important because it reflects how positively organization impacts on community compares to competitors (Rao, 1994)

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In previous research of Brown and Dacin (1997) stated that CSR positively influenced not onlyconsumers’ buying intentions but also their perceptions about companies’ products/services andimages This means CSR implementation is very important to organizations in modern business market and helps organizations to link with employee commitment or customer loyalty positively (Maignan et al 1999) Once the loyalty of customer increases, the existence and development of organizations is primarily guaranteed (Kjzr and Langer, 2005)

2.5.2 Forces from stakeholder

Joseph W Weiss (2006) stated “Stakeholders are individuals, companies, groups and even nations that cause and respond to external issues, opportunities and threats” And stakeholder effected to decisions of organizations to community and marketplace In other theory about Stakeholders, Freeman (1984) indicated that corporations consist of various stakeholders on their own shareholders and corporations should be managed with those groups

Stakeholder theory is considered as a theory of ethics This is considered a good way to harmonize the social perspective and economic perspective in an organization This is done through focusing on the vitality of the company by including the benefits of stakeholders in the company policy This means that all involved stakeholders are needed a special attention on business and it carries

intrinsic value; signify that each group of stakeholders considers the value of the

company without others’ benefits.(Donaldson and Preston, 1995)

According to Aguilera et al (2007), the relationship of an organization is a combination of internal and external stakeholders

- Internal stakeholders are the members of an organization who already committed to serving andcontributing for the development of organization, such as employees, stockholders/shareholdersincludes board of members),

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staff, volunteers, etc They are also affected by wages and the stability of corporation

Otherwise, external stakeholders are people who are impacted by company/organization’ sbusiness such as include suppliers,

customers/consumers, competitors, government, environment and

communities/Society (Based on the Caux Round Table’s Principles for Business) Society Government Creditors Sharcholders Custamers Figure 2.3 Stakeholders (Source: http://stakeholderoptimizationmanagement.com/)

According to the theory which is defined by Donaldson and Preston (1995) stakeholders or group of people in stakeholders are the people who receive legitimate benefits from company’s business This means stakeholders need to pay a special attention to business of company or organization And stakeholders also consider the benefits of company than others

Based on the research of Gary Mankenlow (2005), organization (included small business) werestrategically oriented as seen in ranking of stakeholders and multiple business objectives such as profit maximization, marketing activities and good

reputation with local markets including community stakeholders Investors are interested in businesses that results in good communication and report business

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efficiency (Davis and McAdam, 2000) Therefore, business owners tend to increase the pressure and commitment to business for increasing the reputation of the company for the community Once the reputation of the company is large enough, trust and profit maximization for business will be guaranteed

According to Adam Lindgreen et al (2008) “The critical role of the employee was recognized bybusiness owners in that they considered employees to be the most salient stakeholder of the business” Employee is one of the biggest assets of company, directly brings profit to stakeholder Spirits and attitudes of employees impact effectively the results of company’s business (Schneiberg and Bartley, 2001) Thus, the forces and pressures from employees primarily created for them a safe, stable and fair working environment Once a good and balance working environment is guaranteed, employees contribute more and more for business And employees are also company’s competitive advantage (Jones, 1995) Moreover CSR is important for attractive talented employees and positively linked with employees commitment and customer loyalty (Maignan et al., 1999; Greening and Turban.,

2000)

Customers of companies are also considered as a critical factor to business operation (Makenlow,2006) All the attempts of most companies only focus on the customer needs, to compete to competitors and the sympathy from customers

(Maignan va Ralston, 2002) Based on the previous research of Carroll (1979) and

Maignan et al (1999), providing the quality products that meet customers’ needs should be consistent with CSR activities Therefore, by taking a proactive approach which CSR activities are in line with products/services quality to customers concerns, makes company stand out from its competitors, to create preemptive competitive advantage and to become more favorable choices of customers (Narver and Slater, 1990)

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In the study Jones (1995) about the relationship and forces from stakeholders, company will get the competitive advantages if the relationship between company and stakeholders are built on trust and corporation Company need to comply with the basic social rules which had been embodied in the law and ethical standards by the industry (Milton Friedman, 1973) Consumers tend to choose the products or

services which are friendly to users and environment In addition to, many

companies strived to implement their CSR activities to be environmental friendly organizations that reducing fuel using, air polluted or wasting energy, etc

Therefore, it is very important for companies or organizations to create a strong relationship withexternal stakeholders in order to get useful understanding of what stakeholders’ expectations are in order to satisfy their needs and forces and use this result to propose to the CSR activities oforganizations

2.5.3 Market orientation

According to Kohli and Jaworski (1990), the term of market orientation’ means the implementation of CSR to the concept of marketing Narver and Slater (1990) also defined Marketing Orientation that the organizational culture that most effectively and efficiently creates the necessary behavior for the creation of superior value for

buyers and, thus, continuous superior performance for the business.”” They

illustrated that marketing orientation are included three behavioral components such

as customer orientation, competitor orientation, and inter functional coordination

with two decision criteria: long-term focus and profitability which can be integrated as a broader aggregate definition

In the previous research of Adam Lindgreen et al,.(2008) about CSR

implementation stated thatmarketing orientation involved CSR activities with

internal and external stakeholders to expressorganizations business as a socially awareness and responsible business

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Building on the initial research by, Kohli and Jaworski (1990) and Narver and Slater (1990),significant progress has been made in the conceptualization and measurement of MO and also inevaluating its impact upon organizational performance (Deshpande et al., 1993; Kohli et al., 1993)

CSR activities implementation is a tendency in modern social and effects largely to community.Nowadays, in Vietnam more and more organizations implement their CSR activities in order to attract attentions of community and social, improve their reputations and also create strong relationship with their stakeholders, customers, community, media, etc The perceptions of local community about CSR implementation of organization and reputation are measured by the charities, philanthropy activities or corporate patriotic appeal (Handelman and Arnold, 1999) Otherwise, reputation of organization by CSR implementation is also seen as “employee relations”, “product quality”, “treatment of the environment”, “community relation”, etc (Turban and Greening, 1996)

Therefore, many companies invested their CSR more on Research and Development (R&D) andexpected to be a friendly organization with environment Furthermore, investing in CSR activities, for example some companies spent moncy to establish foundations to help and reward employees for achievement in innovation, or in order to take care of inside organization, which employees also were concerned by CSR as organization stakeholders And some of those investments in CSR researcher could not see in every organization

Company often use the terms be tax incentives for charitable activities, social investment (Campbell, 2004: 131-132) Non-governmental organizations increasingly expand range of influences that affect the business operations and behavior made social responsibility (Doh and Guay, 2006)

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2.5.4 Awareness of the CSR benefits

According to Carroll (1979), one of the conceptualization about CSR is the economic responsibility to help organizations to provide job, maximize profit and create products/services to satisfy consumers want

The relationship between CSR and benefit from CSR implementation is also

mentioned by manyprevious researches Kotler and Lee (2005) stated that CSR can be good and useful for business It is concretized that it helps organizations to have

more positive employees’ attitudes and behavior (Maignan et al., 1999), create a better competitive advantage (Porter and Kramer, 2006), also build a positive corporate image and reputation (Fombrun and Shanley, 1990), etc

When CSR activities are implemented into organizations’ business, there are many positive benefits and interests for organizations The organizations that committed to CSR implementation with power and energy saving programs help organizations to reduce a lot of business expenses (Waddock and Graves, 1997) and the ratio of

return on equity of CSR committed organizations is also higher than others

(Bowman and Haire, 1973) The relationship between the profit, benefit and the range of outcomes of social commitments of businesses was mentioned and this previous study has made a useful contribution to the debate about the merits of CSR to companies in emerging markets (Ali M Quazi and Dennis O'Brien, 2000)

According to Carroll and Shabana (2010) CSR implementation attracts more and more attentions in business world due to the benefits which are received from CSR commitment and implementation They also figured out that organizations can get a long-term and stronger development by the positive CSR activities to environment and community which can help organizations for financial increase and reputation Otherwise, organization’ reputation is defined as the overall impression made on the minds of the public about an organization which explain the image and reputation of

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community” (Martin, 2000) (2004) « 5 Forces from Stakeholder 2006) individuals, issues, Stakeholders are companies,

groups and even nations that

cause and respond to external

opportunities and

threats” (Joseph W Weiss,

Joseph W Weiss (2006); Freeman

(1984); Donaldson and Preston

(1995) Aguielera et al (2007); Gary Mankelow (2005); Davis and McAdam (2000); Adam Lindgreen (2008); Schneiberg and

Bartley (2001); (1995); Maignan et al., (1999); Greening

and Turban., (2000); Schneiberg

and Bartley (2001); Maignan and

Ralston (2002); Caroll (1979); Never and Slater (1990); Milton Friedman (1973); et al Jones 6 Market “The Orientation orientation” term of market mean the implementation of CSR to the concept of marketing”

(Kohli and Jaworski, 1990)

Kohli and Jaworski (1990); Narver

and Slater (1990); Adam Lindgreen et al., (2008); Deshpande et al.,

(1993);

(1996); Campell (2004); Doh and

Guay (2006);

Turban and Greening

66 7 Awareness of the CSR benefits is 1979) responsibility to One of the conceptualization about CSR the economic help

organiztions to provide job, maximize profit and create products/ services to satisfy

comsumers want”- (Caroll, Carroll (1979); Kotler and Lee

(2005); Maignan et al., (1999);

Porter (2006);

Fombrun and Shanley (1990),

Waddock and Graves (1997);

Bowman and Haire (1973); Quazi and O’Brien (2000); Carol and Shabana (2010); Barich and Kotler

(1991); Wildes (2008); Brown and

Dacin (1997); Anderson et al.,

(1997);

(1997); Balabanis et al., (1998); Gregory (1998);

and Kramer

Turban and Greening

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CHAPTER 3: - RESEARCH METHODOLOGY

Previous chapter presented the literature review on CSR Implementation and proposed the conceptual model, hypotheses for the factors influence Corporate Social Responsibility Implementation of Vietnamese companies in HCMC This chapter will discuss about the research methods which are usedto this research There are four parts in this chapter: Research process, Measurement scales, Datacollection and Data analysis methods

3.1 Research process

After identifying the research problems and the research objectives, the literature review of CSRimplementation was conducted to look through all the relevant concept of factors influence CSR, CSR implementation and proposed a conceptual model with the hypotheses for CSR implementation of Vietnamese companies in HCMC

Base on the literature of CSR, CSR implementation, the pilot research of the conceptual model has been developed with four main factors which are supposed to be influenced CSR implementation of Vietnamese companies in HCMC The draft questionnaire was built from the consolidation and citing from previous studies of the same literature topic Both qualitative and quantitative methods are conducted in order to consolidate for the quality of this research There are two phases in research design step of this study: pilot survey and main survey Afterward, the measurement scales and pilot questionnaires on CSR implementation were prepared in qualitative

research

The pilot survey is included two steps:

e The first step: a qualitative research with preliminary questionnaire was conducted with pilot interviews with some key interviewees of author who are top entrepreneurs or top managers in some big Vietnamese companies by in-depth interview This survey is constructed from literature review and to

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find out the mistakes or ambiguities of questionnaires After that, the sample size is determined

e The second step: a quantitative research is carried out randomly with randomly 15 interviewees who are also the entrepreneurs come from different Vietnamese companies by face-to-face interviews for the final measurement scale testing before launching the main survey

In the main survey, the qualitative study was conducted to this research by face-to- face interviews method Questionnaires were sent to 200 interviewees who are the entrepreneurs or top managers, coming from different organizations in HCMC And the main method which is used to interview in this survey is online survey The online survey which is attached the questionnaires was sent by emails following the traditional survey the hard copy survey Data was collected in four weeks later After interviewed, there are 172 questionnaires were sent back but only 153 questionnaires in collected samples could be used for analyzing because of the missing problems in the answers After checking the correction and quality, the data were imported to MS Excel before applying to SPSS software in order to analyze The validation of questionnaires and the reliability of measurement scale of this research were also tested by using Exploratory Factor Analysis (EFA) and Cronbach alpha reliability methods while the Standard Multiple Regression was applied for hypotheses testing The research steps were showing in the following figures

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Questionnaire Design y Testing Questionnaire 4 Data Collection L

Assessing the reliability and

validity of đata

Exploratory Factor Cronbach’s reliability

Analysis (EFA) coefficient

Ce Research Hypot:-eses testing ⁄ Regression analysis ⁄

One-way ANOVA analysis

Figure 3.1 Research steps

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The research steps of this research consist of seven steps: Step 1: Initial research model and the draft questionnaire

Based on the literature review, the conceptual model and preliminary hypotheses on CSRimplementation were developed While the draft questionnaire which was based on the variousmeasurement scales in the previous and extent researches was also designed

Step 2: Questionnaire refinement by qualitative pilot research

In the first round of this step, the qualitative research with preliminary questionnaire was conducted with pilot interviews by in-depth interview method This round was executed with two entrepreneurs and three managers of some Vietnamese companies who are friends of author in order to assess the sufficiency of the measurement scales, the conceptual model and the questionnaire Then, the sample

size was identified

Step 3: Quantitative pilot research for the clarity of questionnaire testing

A quantitative pilot research was carried out in this step by face-to-face interview method in order to test how the interviewees understood not only about the content -~ of questionnaires but also about the measurement scales of this research This round was undertaken with 15 interviewees who also entrepreneurs or top managers in

Vietnamese companies in HCMC The feedbacks from interviewees in this step

were very important to the questionnaire refinement process and ensure the understanding of most pilot interviewees about this survey The questionnaire which was refined was also the final version to be released in the main survey

Step 4: Data collection

The online survey with attached questionnaires was sent to 200 interviewees who are targeted sample size by email method Otherwise, the hard copies questionnaires

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were also sent There are 172 questionnaires sent back and only 153 questionnaires were used for data analysis step

Step 5: The validity of scales testing with Exploratory Factor Analysis (EFA)

method

After collecting data from main survey, the Exploratory Factor Analysis (EFA) method was applied to explore the inter relationship between the variables

e The correlation matrix for evidence of coefficients should be greater than 0.3 e Barlett’s test was smaller 0.05 (p < 0.05)

e¢ The KMO index was greater than 0.6 (the range from 0 to 1) Consequently, the hypotheses model was modified

Step 6: Cronbach Alpha Analysis

Cronbach Alpha Analysis method was applied to assess the reliability of measurement scales by testing the consistent of the internal variables in the same factors The scale was considered as the reliable scale when the Cronbach Alpha coefficient was greater than 0.7

Step 7: Standard Multiple Regressions

The Standard Multiple Regression was used for the hypotheses testing

3.2 Data Collection

3.2.1 The Primary Data

The primary data was collected by face-to-face interviews method on the online survey (which was sent by emails to the interviewees) and traditional survey by hard copies as well The interviewees are from the Vietnamese entrepreneurs or the top managers who are also worked for Vietnamese companies in HCMC

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3.2.2 The Secondary Data

The extant literature, international business journals, articles, books, and

professional newspaper are useful sources of relevant information contributing to the research The internet information from the business or expertise websites are

also the valuable sources for collecting related information to this research

3.3 Field Work Organization 3.3.1 Sampling Method

In order to have valuable and reliable database, the sampling method should be executed carefully

The targeted interviewees of this research are the entrepreneurs or top managers in charge of Vietnamese companies in HCMC — the biggest central commercial city of Vietnam The targeted interviewees are also the decision makers or influencers on how their companies operate and distribute for the community

According to Hair et al (2006), the sample size is considered as suitable for the reliability of theresearch should be

n> 100 andn2 5k (where k is equal to the number of variables) Therefore, in this study the minimum sample size for this research is

n=5 x 24= 120 (k = 24 is the number of variables)

Otherwise, Tabachnick & Fidell (2001) illustrated the minimum sample size which is required for the multiple regressions should be:

n> 50 + 8m (where m is equal to the number of independent factors)

There are four independents factors in this research And the minimum sample size is required for the multiple regressions:

N > 50 + (8*4) = 82

Consequently, the minimum size for this research is 82

Finally, the sample size is used for this research was 153 While the sent back questionnaires are 172, there were 200 questionnaires sent out to the interviewees

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3.3.2 Qualitative Research

Before having the final questionnaire, the preliminary questionnaire as pilot method was sent to some key entrepreneurs or top managers of some Vietnamese companies, who are decision makers or influencers of their companies (they are also the persons who are stakeholders or friends of author) by the in-depth interview method in order to check the content of the measurement and find out the mistakes of questionnaire After that, the quantitative research in pilot research period is also conducted with randomly-selected 15 interviewees who are targeted interviewees as mentioned come from Vietnamese companies located in HCMC by face-to-face interviews for final test before launching the final survey

The information is collected in in-depth interview in order to identify the influence of the independent factors (Caring about customers and community; Forces from Stakeholders, Market Orientation and Awareness on CSR benefits) on CSR Implementation of Vietnamese companies in Ho Chi Minh City All the comments from the interviewees gathered in pilot study is to revise the measurement scales

and questionnaires The misunderstanding mistakes or duplicated issues (between

the variables) were also mentioned by the interviewees to ensure that the questionnaires could be understood more clearly and easily

3.3.3 Sample Collection

After revising, 200 questionnaires were sent to the interviewees who can make decision or influence in their companies in HCMC in term of company’s ownership The 200 research questionnaires were sent to the following sources:

Table 3.1 The sources of samples

No Sources Number of Number of Number of sent samples response used samples

samples

1 Limited company 60 54 48

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2 Joint-stock company 65 56 48 3 Private sector 50 47 45 4 Others 25 15 12 Total 200 172 153

After collecting and checking, 55 samples were rejected due to its quality Finally, 172 samples were used for data analysis in this research

3.4 Measurement Scales

3.4.1 Measurement Construct

All the factors from the model in this research are original from many previous studies with citing.Based on the literature review briefing, the most appropriate measurement scale is a multivariate scaleapplied for this research

They are four independent factors adapted to fit the characteristic and culture of Vietnamese Caring about customers and community; Forces from Stakeholders, Market Orientation and Awareness on CSR benefits In order to execute the quantitative study in this research, the Five-point Likert scale was used in the questionnaire for survey

(1) Strongly disagree; (2) Disagree;

(3) Neutral; (4) Agree;

(5) Strongly agree

Questionnaires were designed with this Five-point Likert scale (Likert, 1932) which was used tomeasure the degree of CSR implementation of Vietnamese companies Ho Chi Minh City Hence, the measurement scales for the research model which is showing in the following table:

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Table 3.2 Measurement scales

brings practical benefits

Factor Varia Questions Sources ble

Caring about CAC

customers and | CAC1 | Our company expects Adapted

community our products/services from

accepted by customers GaryMankel

ow, 2001

CAC2 | Our company develops | Adapted

the products/services to | From Kohli

meet consumers’ needs | et

al., 1993

CAC3 | Our firm’s reputation Adapted with customers and from Jeremy community is highly Galbreath, regarded 2009 CAC4 | Top managers

established long-term strategies for our companies

CACS | For our company, Adapted maintaining and from Gary developing Mankelow, our customer loyalty is a | 2001 very important

objective

CAC6 | We expect our business | Adapted from Jeremy

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for the community Galbreath,

2009 Forces from stakeholders FS

FS1 Our company always complies with the provisions of

government (including

the norms in the

industry)

Newly developed

FS2 Our attempt in business

and communication aims to attract the attentions of investors Adapted from Maigman et

FS3 Social expect companies contribute more for community from the

incentive taxes al.,1999 FS4 The nongovernment organizations support and

campaign for the ethical

corporate

F55 The media pay

attentions in business ethics Newly Newly developed FS6 Consumer tendency in purchasing has great influence on the

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decisions of companies Market MO

orientation MO1 | CSR is a new trend of Newly

modern market developed

MO2 | We expect high job Adapted satisfaction and loyalty | from from our employees Maigman MO3 | A strong relationship et

with stakeholder helps al.,1999 out

company to overcome

risks better Corporate CBE

Social CBE1 | Compared to Jeremy responsibility competitors, our Galbreath, and benefit company expectsa 2009

higher evaluation

CBE2 | CSR implementation Adapted

helps companies to fromGary

increase sales Mankelow,

CBE3 | We cut costs 2001 dramatically from the

limited use

of resources (electricity, water, paper, material etc.)

CBE4 | Company has good

reputation in CSR often

given priority in laws,

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incentives taxes, etc

Corporate social responsibility implementation CIM

CIMI We continually improve the quality of

ourproducts and services

CIM2 Our company seeks to comply with all laws regulating hiring and employees benefit policies

CIM3 We are recognized as a trustworthy company

that provide full and

accurate information to

social and all customers

Adapted from Maigman

et al.,1999

CIM4 Our company is ready to contribute for the

community development programs (incommunity health care and

education, etc.)

Newly developed

CIMS

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3.4.2 Statistic Methods

In order to compare and test the collected data from the questionnaires, a numerous

statistic methods had initially been used in this research like standard deviation,

frequency distribution and variance And the SPSS software (Statistical Package for Social Science) would be used for data analysis

3.4.3 Descriptive Statistics

The descriptive statistics is conducted in order to provide the general information of intervieweeevaluation in regards to Industry, Time of Operation, Company size, Company Owner and Turnover These criteria were positively affected to the researcher for identifying the degree of awareness of the decision makers and influencers of Vietnamese organizations who are willing to implement CSR in their

organization operation via values of minimum, maximum, mean, standard

deviation, frequency and percentage calculated from the collected data The Likert

Scale (Likert, 1932) with the degrees of agreement from strongly disagree to strongly agree was used ranking from 1-5 (from strongly disagree to strongly agree)

3.4.4 Assessment of Scale Reliability

The Assessment of Scale Reliability is a measurement of the internal consistency of the constructed items in this research in order to evaluate the reliability of each variable in measurement scales Otherwise, the observed variables describe the common construct The constructs with high reliability are those in which the items are highly inter-correlated It states that they are all measured with the same construct (Hair et al, 1998)

Reliability analysis is used for Cronbach’s alpha coefficient and item total correlation The reliability coefficient of Cronbach’s alpha also illustrates how relation of the items in a set which are significantly correlated from one to another (JA common value of Cronbach’s alpha for acceptable reliability is 0.7

e Although this value is not an absolute standard but it can decrease to 0.6 in exploratory research (Hair et al 1998)