2012

[Dissertation

Project Proposal]
TOPIC: Influences of corporate social responsibility on improving the corporate performance in Vietnam

Table of content:
I. II. Introduction .............................................................................................................................................. 3 Literature review: ................................................................................................................................. 4 2.1. 2.2. 2.3. 2.4. III. IV. CSR definition: ................................................................................................................................ 4 Awareness of CSR in Vietnam: ................................................................................................. 4 Benefit of CSR: ................................................................................................................................ 5 Framework: ..................................................................................................................................... 6

Research Objectives: .......................................................................................................................... 7 Methodology .......................................................................................................................................... 7 Data categories:.............................................................................................................................. 7 Primary data: .......................................................................................................................... 8 Secondary data: ..................................................................................................................... 8 Questionaire............................................................................................................................ 8 Personal interview ............................................................................................................... 9 Data collection ........................................................................................................................... 9 Sampling....................................................................................................................................... 9 Limitation of research ............................................................................................................ 9 4.1.1. 4.1.2.

4.1.

4.2.

Research method ........................................................................................................................... 8

4.2.1. 4.2.2. 4.3. 4.4. 4.5. V.

Reference list: .......................................................................................................................................10

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I.

Introduction

In the past, CSR was still a quite new concept for almost enterprises. They just only cared about how to maximize profit rapidly and ignored how their factories would affect the surround environment. Nevertheless, this has changed nowadays. Most of enterprises realized that only through balancing between their business performance and their influences on the society can create the sustainable existence. On the other hand, it is also the responsibility of managers to give out the right management strategies in order to satisfy the demands of related parties. Besides the responsibility with environment or society, the CSR concept also contains the interaction between enterprises and employees, especially about the way they behave with their employees. With the focus on CSR, the stability of corporate performance will be solidly maintained Many experts believe that persistence, efficiency and development of activities for community benefit should come from the consciousness of business. In fact, CSR abroad has grown to the extent of specifying the responsibilities of business by the rules of conduct and international quality standards. These regulations have been adopted as the mandatory conditions of trade. Therefore, other corporate that looking for world economic integration needs to follow it. In the countries with rapid development of CSR activities, the majority of businesses do not consider it as charity work but as the duty of the business to the community. Enterprise is also a factor in the society, as citizens with rights and obligations. In contrast, almost Vietnamese enterprises do not have a proper view about CSR concept. However, in recent years, with the rapid development of the world economy and joining WTO, Vietnam enterprises realized the importance of CSR to their existence for the long term in the business community. Without CSR, enterprises will not receive the support from the society and other related parties as well and sooner or later losing reputation. Consequently, it leads to failure in the business performance. Indeed, there is a big gap between what we know and what we actually implement in Vietnam. Because of lack in essential CSR information from enterprises and low specific actions, the barriers in CSR implementation are formed. Nevertheless, if Vietnamese enterprises and individuals had positive attitudes towards CSR, fully understand CSR concepts and its implementation, it would contribute a lot to developing the economy in the future. Accordingly, the aim of this research is to build an overall picture of CSR in Vietnam, investigate the awareness level of both enterprises and citizens about CSR and analyze its influence on the business performance. Moreover, it also points out the advantages and limitations when Vietnamese enterprises work with CSR. Additionally, recommendations for enterprises managers in dealing with CSR issues will be suggested through evaluating the collected research data.

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II.

Literature review:
CSR definition:

2.1.

According to Hopkins (2000), Corporate social responsibility can be defined as the management of an organizations total impact upon both its immediate stakeholders and upon the society in which it operates. Based on this definition, it should be seen that the most important factor that Hopkins concerns about CSR is merely 1-way impacts from corporate toward its own external environment. This is quite opposite to the definition of Hawkins (2006)) when this author claims the CSR as the course of ethical activities that the corporate is encouraged to carry on in expectation of sharing mutual benefits with the society. Accordingly, the definition of Hawkins (2006) takes a closer look onto so-called interactive impacts that existed between the corporate and the external environment. The definition of Hawkins (2006) is supported by Maines and Sprinkle (2010) when these authors state that fulfilling CSR is the necessary mission of any corporate in any society to achieve the common sustainable development so the corporate should consider it as the right rather than enforcement. Indeed, it should be concluded that the CSR itself always maintains a cohesive relationship between the organization and the society, which results in mutual benefits for both side as long as the CSR is fulfilled properly.

2.2.

Awareness of CSR in Vietnam:

CSR is not a new concept in Vietnam since its essence and related activities appeared as soon as the born of Vietnamese commerce. However, it has only been officially systemized and used widely since the international corporate entered Vietnam and carried their code of conduct toward society. Since then, the domestic organizations of Vietnam have experienced more motivation to adopt CSR as the main course of its responsibilities. By 2005, Vietnam chamber of commerce and industry started the so-called Vietnam CSR Award to honor the businesses, which implement well the CSR. Since then, CSR has indeed become a serious issue that there are more and more business manager considers and attempts to perform. According to Vu (2012), the adoption of CSR in Vietnam is still the big problem since there is still a large share of enterprises ignoring their own responsibilities. According to Vu (2012), the source of this fact is lack of effective enforcement claimed by law. Furthermore, Vu (2012) adds that the structure of Vietnam economics also partly contributes to the ignorance of CSR. That is, 95% enterprises in Vietnam are in small and medium sizes that more likely underestimate the influences of CSR. Meanwhile, the big companies often accept and carry the CSR as a requirement from the foreign partners. Furthermore, the understanding of people toward CSR is still very limited in Vietnam. Thu (2011) adds that most of people misunderstand and think about CSR as charity only. Accordingly, there are only a small amount of people can realize that the CSR also come from inside of company. Finally, the standard for evaluating CSR is still so ambiguous that makes the businesses find it hard to keep track and determine whether they have fulfilled the CSR well or not. Thus, the business owners tend to be frustrated from doing CSR and they soon find it as a burden rather 4 | Dissertation Project Proposal

than long-term benefits. Consequently, those challenges lead the Vietnam businesses to be unwilling to take CSR in their course of business.

2.3.

Benefit of CSR:

Enhanced brand value and reputation: Via performing CSR, corporate can maintain good brand images in communities. Such good impression can not only help developing more effective PR campaign but also gain strong support of communities in every activity it takes. Increased worker commitment: According to Nurn and Tan (2010), improving the quality of working environment is among the essential course of CSR. As a result, this helps the employees gain higher working morale so they are motivated to not only perform better but also able to feel more comfortable at workplace. Produce competitive capabilities against international invasion: The international businesses often require and perform CSR well so they can produce very steady competitive advantages from CSR activities. This fact forces the Vietnamese company to commit more into CSR to gain the same or higher competitive capabilities to compete against those international forces. In fact, the domestic companies always hold more advantage in winning social support. Therefore, once local company get the upper hand by strengthen position by social support, it will cause tougher challenge for any international corporate to get entry into the market Long-term sustainability for company and society: As a result of CSR, the society may experience such a huge support from the corporate in reducing negative effects of unemployment or poverty reduction. Reversely, since the society can maintain consistent and sustainable development, the corporate also benefits from the growth of market demand, better local employee quality and stable politics Better risk and crisis management: As long as the CSR is successfully performed by organization, its brand image can generate the factors that can enable the organization to deal well with the threats (Nurn & Tan, 2010). For instance, good brand image and amount of loyal customers, which results from CSR, may produce sufficient motivation for the corporate to overcome crisis in market demand or effects of negative rumors on company brand. Enhanced the ability to attract talent workforce: points out that the organizations, which perform better CSR, can cause certainly better impressions in people mind. Especially, those organizations which heavily invest in improving the working environment can be much more attractive to the talents since these people always look for good conditions of work as the most important criteria Good relations with government: Supporting the welfare of society means corporate has partly reduced the burden and shared responsibility with the government. Therefore, it 5 | Dissertation Project Proposal

enables the organization to create and develop good relation with government for further political benefits.

2.4.

Framework:

The main theory that will play the role as backbone of the research is Triple bottom line, which was defined by John Elkington in 1995. Basically, this theory supposes that the organization must evaluate their success of CSR based on interaction and impacts on the economy, environment and society. Accordingly, the triple bottom line report accounts the business performance through the ecological and social performance along with financial performance. Thus, Blinder (2010) states that the stakeholders are more likely concerned in Triple Bottom Line theory than shareholders so the business must closely look at the interest and benefits of every single stakeholder satisfy and even maintain them. Thus the Triple bottom line can be used as the guide for the company to keep track, evaluate as well as report the achievements of CSR implementation. In order to successfully apply the Triple Bottom Line, it is necessary to identify and examine properly the stakeholders involved with CSR decisions of the company. The theory of stakeholder was first developed by Freeman (1984) addressing that the stakeholders consists of any individual or organization that have interest or being directly or indirectly influenced by the organizations activities. Based on that, Branco and Rodrigues (2007) argue that the organization must examine to see if the influences of CSR activities could satisfy every stakeholder. These 2 authors also state that the review of all stakeholders enables the organization prepare more effective plan for CSR implementation. The roles of main stakeholders involved with CSR should be described as following: Organization: This is the main force in stakeholders that directly bring CSR into actions and obtain any result of those activities. The positive expected results toward organization are competitive positioning, risk prevention, brand differentiation or even talent attraction. However, CSR can also drive the organization to ruin if performed actions could not meet the expectation of society or any target of CSR Competitor: The implementation of CSR directly causes impacts on the competitive advantages of the organization against its competitors. Reversely, when the competitors do better in CSR, it causes more likely threats on the organization itself. Society: The more difficult the society is, the more necessary the CSR is. Therefore, the social status directly reflects the need of CSR from the corporate. Furthermore, the society is also the benchmark evaluating every CSR activities performed by the organization and return feedback as a result. In the other words, the society plays the role of both target and evaluator of the CSR Employees: This is the stakeholder of CSR that most of Vietnamese companies ignore or unable to recognize when considering the CSR portfolio. In fact, Maines and Sprinkle (2010) 6 | Dissertation Project Proposal

argue that internal force such as employee should be the very first target of CSR rather than external one such as society because it directly influences the performance of company. In order to satisfy the employees, the CSR of organization should develop a friendly, comfortable and professional environment along with the sufficient supports and working policies, which ensure the mandatory benefits of employees. Mass media: The mass media plays the role as bridge connecting between the corporate and the external force such as society. According to Pulitzer (2003), the mass media helps organization to identify and measure the level of necessity of support from society. As a result, the corporate can then prepare the CSR with most punctual and accurate intervention into the case. Furthermore, the mass media also helps the corporate to widely spread the CSR results to community. Thus, that is such a twin blade because it can either promote the positive brand images if CSR activities can satisfy its target or directly return negative images in the bad consequence of unsuccessful CSR.

III.

Research Objectives:
Define the concept of Corporate Social Responsibility (CSR); summarize related issues and application of theory. Describe the influences of CSR on the performance of Vietnamese companies. Investigate the awareness of Vietnamese people (both individuals and corporate) about CSR and its applications in the business trend nowadays via some research methods. Identify the advantages and disadvantages when Vietnamese companies work with CSR Recommend some appropriate solutions for Vietnamese companies to improve the performance and effectiveness via carrying on CSR.

IV.

Methodology
Data categories:

4.1.

In order to increase the accuracy of any research, selecting the right research methodology is really important. It not only assists the writer in expressing ideas but also collecting essential types of information. For the purpose of this writing, information would be gathered from two sources: primary data and secondary data.

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4.1.1. Primary data: Primary data is collected from different sources such as questionnaire, interview, observation, etc. In specific, questionnaire is selected the most because of its convenience to understand the perception or trend of different types of people in the society. Normally, there are two kinds of survey: offline survey and online survey. However, due to the limits of traditional offline methods such as difficult to approach respondents, hard to deliver and collect the questionnaire and less accuracy of information, online survey should be used in order to save time and efforts as well as increase the accuracy. Accordingly, the questionnaire will be designed in electronic version and delivered directly to respondents via electronic channel such as email or forum post. Besides, personal interview is also a good choice to gather essential information because researcher has an opportunity to communicate directly with the interviewee and capture valuable information. In fact, the direct communication with the expert to collect information can help discover the critical issues in the highest detailed level. 4.1.2. Secondary data: If the primary data cannot fulfill the information need of the researcher, secondary data should be used. Basically, the secondary data is the one sourcing from the research or works of external parties rather than paying personal effort as primary date. In fact, it is easy to search and collect secondary data on newspapers, journals, magazines, Internet or TV, etc. Like two sides of a coin, it takes a short span of time to gather secondary data and low cost. However, too much information coming from different sources is also a barrier to researcher. For instance, esssential data is not the same as the origins or not availabe on Internet, etc. Therefore, in order to use secondary data effectively, the researcher should compare and contrast between various sources to filter out the most accurate information for the writing.

4.2.

Research method

As analyzing above, the questionnaire and interview method would be used to collect the primary data in this research. For the secondary data, it would be gathered via company profile, books or journals on Internet.

4.2.1. Questionaire The questionnaire is designed with questions concerned with CSR, implementation of CSR in Vietnamese corporates and the connection between CSR and the corporate performance. The questionnaire is divided into two main parts: one for stakeholders or customers and one for managers or BOD of each company. The five-point Likert scale would be applied as the measurement for each question (I = Strongly disagree, II = Disagree, III = 8 | Dissertation Project Proposal

Neither agree nor disagree, IV = Agree, V = Strongly Agree) in order to investigate the awareness of Vietnamese people (both individuals and corporates) about CSR and its applications in the business trend nowadays. Moreover, there will have an additional part for respondents who want to express more own ideas about CSR. 4.2.2. Personal interview The aim of an interview with the manager of one selected corporate is to have a broad overview about the perception of Vietnam corporates about CSR and its implementation in general. On the other hand, it also increases the effectiveness of this research through giving out questions related to the solutions for applying CSR in improving the corporate performance in Vietnam. This could be considered as a basic foundation for researcher to analyze and make accurate judgement on CSR. 4.3. Data collection

For the primary data, questionnaire would be delivered to respondents and re-sent to researcher via Internet. Respondents include students, employees and corporates managers. Besides, interview is implemented simultaneously. The interviewee could be any corporate manager in Vietnam. For the secondary data, information related to CSR in Vietnam would be gathered from books, journals or corporate annual reports. 4.4. Sampling

The questionnaire is designed in two languages (English & Vietnamese) in order to bring the convenience to respondents. There will have above 10 selected people to answer the questionaire as a test before releasing it to public. Nevertheless, respondents cannot avoid confusion during the process of answering the questionaire. Thus, the researcher need to have a review and make timely adjustment on the questionnaire according to the respondents' opinion. 4.5. Limitation of research

Basically, it cannot be denied the advantage of using the questionnaire as a data collection method. However, it will also occur some problems. Firstly, not many people have knowledge about CSR, it leads to the fact that they will answer the questionnaire indiscriminately or without thinking. Secondly, some people are too busy to answers the questionaire. They just skim and give out ideas quickly, as a consequence, the accuracy of result will be decreased significantly. Moreover, the misunderstandings in answering the questionaire of respondents because lack of knowledge is also a problem. Those limitations 9 | Dissertation Project Proposal

cannot be avoided, therefore, the researcher should find an effective way to minimize them to the lowest level as possible.

V.

Reference list:

1. Blinder, M., 2010, Corporate Social Responsibility Management as a Strategic Instrument for creating competitive advantages, IBM pubisher 2. Branco, M.C. & Rodrigues, L.L., 2007, Positioning Stakeholder Theory within the Debate on Corporate Social Responsibility, Electronic Journal of Business Ethics and Organization Studies, Vol. 12, No. 1, 2007, available at:http://ejbo.jyu.fi/pdf/ejbo_vol12_no1_pages_5-15.pdf[Accessed Sep 8th 2012] 3. Hopkins, M., 2007, Corporate social responsibility and the international development: it business the solution, Earthscan publisher 4. Maines, L.A. & Sprinkle, G.B., 2010, The benefits and costs of corporate social responsibility, Havard Business Review. 5. Nurn, C.W. & Tan, G., 2010, Obtaining Intangible And Tangible Benefits From Corporate Social Responsibility,International Review of Business Research Papers, Vol. 6. No. 4., Sep 2010, available at:http://www.bizresearchpapers.com/29.%20Gilbert%20Tan-FINAL.pdf[Accessed Sep 8th 2012] 6. Pulitzer, J., 2003, Role of Media in Corporate Social Responsibility and Sustainable Development, UNDP, available at:http://www.undp.org.lb/partners/privatesector/ebcr/casestudybook/docs/Media.pdf[ Accessed Sep 7th 2012] 7. Thu, T., 2011, Trch nhim x hi khng ch l lm t thin (CSR is not only about charity), KinhtesaigonOnline, available at:http://www.thesaigontimes.vn/Home/doanhnghiep/quantri/60867/Trach-nhiem-xahoi-khong-chi-la-lam-tu-thien.html [Accessed Sep 7th 2012] 8. Vu, L., Doanh nghip th vi trch nhim x hi (Enterprises maintains low interest with CSR), Hanoimoi Online, available at:http://hanoimoi.com.vn/newsdetail/Xa-hoi/544706/doanh-nghiep-tho-o-voi-trachnhiem-xa-hoi.htm [Accessed Sep 7th 2012]

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