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A STUDY ON INCORPORATING CORPORATE SOCIAL RESPONSIBILITY
IN A TEA MANUFACTURING COMPANY: A CASE STUDY ON HUNG
CUONG TRADING LIMITED COMPANY

BY
DO XUAN TRUONG
Graduation Project Submitted to the Department of Business Studies, HELP
University College, in Partial Fulfillment of the Requirements for the Degree of
Bachelor of Business (Accounting) Hons ii
MARCH 2011
Declaration of Originality and Word Count

Secondly, I also would like to express my thanks to Ms. Sumathi, Help University
College, who initiated the project and give me so much instruction and support.
Lastly, I would like to express my gratitude to managers and employees of Hung
Cuong Trading Limited Company.
DO XUAN TRUONG

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Abstract

A STUDY ON INCORPORATING CORPORATE SOCIAL RESPONSIBILITY
IN A TEA MANUFACTURING COMPANY: A CASE STUDY ON HUNG
CUONG TRADING LIMITED COMPANY
BY
DO XUAN TRUONG
March 2011
Supervisor: Le Van Lien
Corporate Social Responsibility (CSR) is a trend in the world today, but it is still
relative new in Vietnam. Companies want to compete, to grow, they need
to implement CSR. CSR is a competitive tool for them. The main aim of this research
is to find the level of awareness and the implementation of CSR of a tea company.
Researcher will use both of primary and secondary data to achieve this aim. In the
primary data, researcher uses questionnaire sample to collect data from managers and
employees of the company. After the analyzing of the results, researcher also gives
some recommendations for the company.

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TABLE OF CONTENT
Declaration of Originality and Word Count ii
DECLARATION ii
Acknowledgement iii

3.2.1 Managers 18
3.2.1.1 Level of Awareness 18
3.2.1.2 Implementation 19
3.2.2 Employees 19
3.2.2.1 Level of Awareness 19
3.2.2.2 Implementation 20
3.3 Research Methodology 20
3.4 Data Source 20
3.4.1 Primary Data 20
3.4.2 Secondary Data 21
3.5 Research Method 21
3.6 Research tool 21
3.7 Sampling 22
3.7.1 Sample Population 22
3.7.2 Sample Frame 22
3.7.3 Sample Size 22
3.8 Limitations 22
3.9 Hypothesis Statement 22

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CHAPTER 4: ANALYSIS 24
4.1 Collection of Questionnaires 25
4.2 Description of Result 25
4.2.1 Age 25
4.2.2 Gender 26
4.2.3 Managers 27
4.2.3.1 Level of Awareness 27
4.2.3.2 CSR Implementation 31
4.2.4 Employees 35
4.2.4.1 Level of Awareness 35

Table 14: Question 3 - Description of Result 37
Table 15: Question 4 - Description of Result 38
Table 16: Question 5 - Description of Result 39
Table 17: Question 6 - Description of Result 40
Table 18: Question 7 - Description of Result 41 ix
LIST OF ABBREVIATIONS

CSR
Corporate Social Responsibility
VND
Viet Nam Dong
TBL
Tripple Bottom Line
RI
Responsible Investment
SNV
Netherlands Development Organization
ADB
Asian Development Bank
CoC
Code of Conduct

1.1.1 CSR in the world
1.1.2 CSR in Viet Nam
1.1.3 CSR in the tea industry
1.2 Problem Statement
1.3 Objective and Sphere of Research
1.3.1 Objective of Research
1.3.2 Sphere of Research
1.4 Research methods

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1.1 Research background
1.1.1 CSR in the world
Nowadays, Corporate Social Responsibilities is one of the hottest topics in the world.
CSR is the relationship between business and stakeholders. It affects directly on
reputation of businesses. Objectives of the business activity are not limited to profits.
Measure of business success is the impact that business creates for society. In
addition, long-term benefits of CSR are largely internal to the enterprise such as
improving relationships at work, reduce accidents, and reduce the rate of employee

should have the responsibility to contribute to reduce problems or make better.
Enterprises are only interested with profits while the environment and society face
with damages caused by them. To reduce this problem, government has some
activities to encourage businesses such as CSR awards, organize seminars on CSR
and sustainable development to increase the level of awareness about CSR of
businesses. Evidence that, from 2005, Chamber of Commerce and Industry of
Vietnam, Ministry of Labour, Invalids and Social Affairs, Ministry of Trade and
Industry along with Association Footwear, Textiles awarded “the Corporate Social
Responsibility towards sustainable development” to honor the small business which
implemented social responsibility in the context of enterprise integration. Currently,
many large enterprises in Vietnam have found that social responsibility of enterprises
has become one of the indispensable requirements for enterprises, because, in the
context of globalization and international integration, if the business does not comply
with social responsibilities, they will not be able to gain access to world markets.

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Many businesses when implementing social responsibility has brought practical
results in the production. Results of a recent survey by the Institute of Labor Studies
that conducted over 24 social enterprises of the two industries (Shoes and Textiles)
showed that: by the implementation of social responsibility programs, turnover of
business has increased 25%, labor productivity has increased from 34.2 million VND
to 35.8 million VND per worker per year and the ratio of exports increased from 94%
to 97%. Besides economic efficiency, these enterprises want to strengthen its
reputation with customers, create the closeness and satisfaction of employees for
enterprises, and attract labor force with highly specialized (Duc. P V, 2010).
1.1.3 CSR in the tea industry
As we know, tea production and processing are closely related to many issues such as
social, workers, ecology In the past, when looking at labor, social, ecology, we see
only violation of international standards in the tea industry. To solve these problems,
a number of initiatives have been introduced. Firstly, Unilever launched an initiative

right of poor children of Vietnam to they have developed a comprehensive physical
and spiritual (Vuoncaovietnam, 2010). This action will also improve the image
and reputation of the company, many Vietnamese people buy Vinamilk’s products
because they know that Vinamilk has interested to their children. From all cases
above, we can see that the important of CSR for both company and stakeholders. CSR
will help to increase the reputation of the company, to bring more profit for
shareholders, to ensure the fresh environment for society and so on. Do be aware of
the importance and benefits of implementing social responsibility in the context of

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globalization and international integration, a number of large enterprises in Vietnam
has made social responsibility in the form of commitment to society in protecting the
environment, local communities and the workers. In the tea industry, although no
action was striking about CSR, but the companies had many attempts to meet the
maximum requirements of customers, employees, communities and society.
1.3 Objective and Sphere of Research
1.3.1 Objective of Research
In order to do this research, there are some main objectives of research:
- The first objective is to provide a framework about CSR, including the definition,
concepts related to CSR.
- The second objective is to find the level of awareness of CSR in a tea manufacturing
company (Hung Cuong).
- The third objective is to present the benefits that CSR can bring to company and
stakeholders.
- The next objective is to show the implementation of CSR of the tea company.
- The last objective is to recommend a CSR framework for the company.
1.3.2 Sphere of Research
In this research, the researcher examines the level of awareness and implementation
of CSR of managers and employees in Hung Cuong Company. Hung Cuong trading
limited company is one of top tea exporting company in Vietnam. Hung Cuong was

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CHAPTER 2: LITERATURE REVIEW
2.1 Definition of CSR
2.2 Pyramid Concept of CSR
2.3 The Concepts Related to CSR
2.3.1 Stakeholder Theory
2.3.2 Tripple Bottom Line
2.3.3 Business Ethic
2.3.4 Sustainable Development
2.3.5 Investment Decision
2.3.6 Responsible Investment
2.3.7 CSR Reporting

such as market, environment, employee, local community. The table 1 below shows
some items that businesses need to do when they do CSR:
Market
Environment
Employee
Local
community
- Product quality
- Product
information
- Consumer
protection
- Excluded
customer
segments
- Suppliers &
purchasing
- Fair dealings with
business partners

- Climate protection
- Consumption of
resources
- Renewable
energies
- Environmental
effects
on the location
- Environmental
awareness of the

also contributes to the sustainable development of society in general.
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2.2 Pyramid Concept of CSR
As we know, in 1979, Caroll showed that "social responsibility of enterprises,
including the expectations of society on economic, legal, ethical and charity
organizations for a certain time". And 1999, he introduced the “Pyramid” that is the
most comprehensive hierarchy of CSR. It includes economic, legal, ethical and
discretionary responsibilities.

Figure 2.2: Pyramid model of CSR (Archie. B Carroll, 1979)

In this model, the first aspect is economic responsibilities. It expressed through
performance and growth. The main task of the businesses is that provide goods and
services to members of the society to make profit. Moreover, the enterprise is the
economic fundamental cell of society. Therefore, business functions must always be
top priority. The second aspect is legal responsibilities. Government has the
responsibility to encode the social rules and ethics in legal documents, businesses
pursue in the economic framework that fairly and meet the standards and values of
that society expected from them. Economic responsibility and legal are two basic
parts which the CSR indispensable. Companies have the responsibility to comply with

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the provisions of the law because the legal documents are available. If they do not
follow, they will cause the violation serious consequences for human, social,
environmental, and for themselves and will be heavily punished by laws. For
example, in the case of Vedan Company in Vietnam, they discharge untreated waste
into the environment, so they will pay compensation of 120 billion VND

human capital. It refers how the businesses treat with their employees and local
people. Companies must ensure that they always deal fairly with workers and people
live around. They should have contribution and donation activities to help people.
Secondly, planet means natural capital. Businesses need to have recycling programs

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to protect environment, or they should have waste disposal system. This work will
reduce the damages for environment. Lastly, the purpose of business is to make profit,
but not so that they maximize profits by any cost. It must be made in harmony with
the other two categories of people and planet.
2.3.3 Business Ethic
According to James Fieser, business ethic usually means one of three things: (1) avoid
breaking the criminal law in one’s work-related activity; (2) avoid action that may
result in civil law suits against the company; and (3) avoid actions that are bad for the
company image. In addition, business ethic is also the balance between the interests of
enterprises or managers with the interest of the community or the interest of
employees, customers…
2.3.4 Sustainable Development
As we know, the implementation of CSR is to serve the objectives of sustainable
development of enterprises, Sustainable development is a new concept emerged from
the environmental crisis, so far does not have an adequate definition and uniform.
Some definitions to discuss sustainable development: environmental global
conference in Rio de Janerio (6/ 1992) gives a theory of sustainable development that
is the rational use and effective resources, environmental protection and economic
growth in scientific way, or sustainable development is a conversion model that
optimizes economic benefit and society in the present but without the potential harm
of the same benefits in the future (G. Lino, 1988). From definitions above, sustainable
development is the goal of economic growth to reduce the exploitation of natural
resources for economic development, environmental degradation in the future and
reduce poverty. Sustainable development, including changes in modern technology,