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CORPORATE SOCIAL RESPONSIBILITY IN VIET NAM
A STUDY OF ITS IMPORTANCE FOR VIETNAMESE INVESTORS

BY
NGUYEN CONG VIET 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

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June 2010
Declaration of Originality and Word Count DECLARATION

I declare that this graduation project is based on my original work except for
quotations and citation which have been duly acknowledged. I also declare that it has

Company’s office (FPTS).
The objective of the research is to access the understanding of Vietnamese individual
investors on the topics of CSR. Besides that, the research also wants to define which
major factors contributing to the CSR importance by asking respondents’
understanding and opinion on CSR awareness, investment decision and CSR
reporting.

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By conducting the research, the research is able to show that the understanding of
CSR concepts and its importance is limited. The investors have little basic
knowledge of CSR; however, the understanding is somehow distorted such as
thinking of CSR as regulation compliance only. Besides that, the investors in Viet
Nam find hard to use CSR as a tool to value firm and it is also difficult for them to
make investment decision when CSR issues are mentioned.
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3.1 Research Objectives 27
3.2 Theoretical Framework and Measurement 27
3.2.1 CSR Importance 28
3.2.2 CSR Awareness 28
3.2.3 Investment Decision 29
3.2.4 CSR Reporting 29
3.3 Measurement and Quality Design 29
3.3.1 Section 1 30
3.3.2 Section 2 30
3.3.2.1 CSR Awareness 30
3.3.2.2 Investment Decision 31
3.3.2.3 CSR Reporting 32
3.4 Research Method 33
3.4.1 Sampling 34
3.5 Hypothesis Statement 34
3.5.1 Correlation of Independent Variable 35
CHAPTER 4: RESULT ANALYSIS 36
4.1 Collection of Questionnaires 37
4.2 Description of Result 37
4.2.1 Age 37
4.2.2 Gender 38
4.2.3 CSR Awareness 38
4.2.4 Investment Decision 44
4.2.5 CSR Reporting 49
4.3 Result Analysis 51
4.3.1 Hypothesis 1 52

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4.3.2 Hypothesis 2 53
4.3.3 Hypothesis 3 54

Table 6: Question 3 - Result and Analysis 42
Table 7: Question 4 - Result and Analysis 43
Table 8: Question 5 - Result and Analysis 45
Table 9: Question 6 - Result and Analysis 46
Table 10: Question 7 - Result and Analysis 47
Table 11: Question 8 - Result and Analysis 49
Table 12: Question 9 - Result and Analysis 50
Table 13: Question 10 - Result and Analysis 51
Table 14: Hypothesis 1 52
Table 15: Hypothesis 2 53
Table 16: Hypothesis 3 54 9
List of Abbreviations

FPTS
FPT Securities Company
CSR
Corporate Social Responsibility
RI
Responsible Investment
IR
Investor Relations
WTO
World Trade Organization
VCCI

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1.1 Research Background
Corporate social responsibility (CSR) is relatively new terminology to not only
individual but also to the business in Viet Nam. Moreover, this term is limitedly
understood as donation and the implementation is dependent on the directors’
willingness.
With the join of Viet Nam to the World Trade Organization (WTO) in 2007, CSR is
getting more concerns from businesses because of the requirements from the foreign
clients and partners (WTO website, 2006). From year 2005, Viet Nam has an award
“CSR – towards the sustainable development” established by Viet Nam Chamber of
Commerce and Industry (VCCI) to reward the companies which actively implement
CSR in the international economics integration circumstances. According to Dr.
Doan Duy Khuong, the vice-chairman of VCCI, “CSR is a requirement for the
companies and they could not reach the international market without CSR
implementation” (Securities Investment Newspaper, 2008). The problem is that
regardless the importance of CSR, the companies in Viet Nam find it difficult to
apply because of their understanding and perception, relatively small business size,
and lack of financial and technical resources.
As illustrated in more detail later, there is one firm which has been caught by
polluting a river in Viet Nam claims that it has to do so to keep it survive after the
recent economic crisis. We can see that the financial crisis has been pushing firms
into a really difficult situation. However, it is the end of implementation of CSR
activities? Somebody may think of that way; however, in a complicated business
climate, the firms which are responsible and sustainable will develop on the long-

found discharging waste water directly into a river. The interesting thing is that the
firm’s deputy director general Mr. Liu Chien Lin has explained in a press interview
that the firm has to do so to keep it able to survive after the financial crisis. By doing
so, the firm has saved around US$4,209-5,261 a month (Thanh Nien News, 2010).
As the results of those issues, the customers have been rejecting buying products
from Vedan, the pollution-making firm mentioned above. We can see that CSR
issues are the problematic matter in developing economy like in Viet Nam. That can
affect the firms, the shareholders and stakeholders in the society as the whole. The
investors are those being strongly affected as their capital invested may be lost.
Therefore, understanding of CSR concepts, theories and especially its importance is
important for the individual investors who care for their own, relatives’ and society’s
benefits. Therefore, the research is a demand of individual investors in Viet Nam. It
makes the contribution to the theory and implementation of CSR in Viet Nam which
helps not only the managers, investors but also the society as the whole.
1.3 Objectives and Sphere of Research
1.3.1 Objectives of Research
- Summarize the CSR concepts and its definitions.
- Inspect the understanding of Vietnamese individual investors of CSR concept, its
importance and implementation.

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- Establish theoretical model and inspect the relationship between CSR importance
for Vietnamese individual investors and other contributions such as CSR awareness,
investment decision and CSR reporting.
- Raise the understanding of individual investors on CSR issues, concepts and its
importance.
- Recommend some solutions for the organizations to raise the awareness and
understanding of investors CSR concepts and its importance, solutions for the firms
to have better investor relation.
1.3.2 Sphere of Research

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CHAPTER 2: LITERATURE REVIEW
2.1 Research’s related concepts
2.2 Researches and Studies
2.3 Comparison and Summary of all Researches

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2.1 Research’s related concepts
2.1.1 CSR definition

This is not the single concept but the bunch of investment manners that include
social, governance and environmental and ethical issues. This is used to put into the
financial analysis process and decision making. In the past, RI is used for equities
market only; however, throughout the time of development, the concept which is also
known ethical investing or sustainable investing can be used in many investment
asset categories. RI is not only the target but also the process. It is the target in the
sense that investors want to achieve that. Furthermore, it is also the manner with
which RI is used to identify the performance, sustainability and responsibility of the
investment.
2.1.4 CSR Reporting
CSR reporting is a new model with which the company has a new business protocol
of ethics (Kevin Wilhelm, 2009). Even though the concept has been newly
developed, CSR reporting is emerging need for the business in the world today. That
is because of the demands by investors, consumers and society for CSR reporting.
There are many reporting schemes and standards which are used in different
organizations and countries. Those CSR reports help the company to better
communicate with the investors and other stakeholders. They also increase the image
and reputation of the organizations which issue the reports.

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2.1.5 Investor Relation
Investor Relations is defined by NIRI (2001) as “a strategic management
responsibility using the disciplines of finance, communication and marketing to
manage the content and flow of company information to financial and other
constituencies to maximize relative valuation”. NIRI as the first recognized
profession investor relations body defines its main reason for existence is to maintain
the firm’s fair relative market value. With that approach, the role of investor relations
has been focus on the firm valuation. However, there is another perspective with
which the researchers believe that IR includes three phases: simple communication,
focus on financial results and active marketing (Marcus and Wallace, 1997).

Viet Nam. Firstly, regulations and laws should be strengthened to eliminate the
wrong-doing things of the business entities. Secondly, awareness of CSR in Viet
Nam should be enhanced through not only the media, business organization and
researchers but also support from governmental offices and departments. Last but not
least, the enterprises should be encouraged in raising their business ethics for both
their and other stakeholders’ benefits.
2.2.2 CSR in business entities in Viet Nam – Reality and Solutions
Tran (2009) concludes that there are two ways to define CSR. The first one is that
there is one and only one responsibility. That is to solve the issues of scarce
resources and operation of the organization to enhance the operation performance.

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The main point is to approach the goals and objectives which the managers desire in
the borders of law and regulations. The social welfare is directly guaranteed through
economic operation in term of usage and distribution of benefits from economic
activities. The later understanding of CSR is that CSR is practiced and implemented
not only through economic operation but also non-economic activities. This
perception considers CSR as a social responsibility outside the requirements of laws
and regulations. To sum up, the two perceptions can be understood that the firms
should be able to not only balance the economic benefits and social interests but also
have to participate in CSR activities such as environmental protection, healthcare,
and so on.
Tran (2009) also discusses responsible investment as a strategy with which both
economic and long-term values are achieved. With the survey, it is concluded that
responsible investment is relative new term to Vietnamese investors although the
usage of this concept has lasted for decades in other developed countries (Tran,
2009). Responsible investment also involves several actors: investors, rators and
connectors. Investors are those who invest their capital into funds, stock and other
equity and non-equity markets. Rators are ranking group which rate business entities
and RI indices. Last but not least, connectors are initiatives and platforms related to

responsibilities of organizations in manage, supervise the business in the manner of
respecting human rights and human happiness. The research of Carroll (1979)

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expands the responsibilities into four types: economic, legal, ethical and arbitrary
responsibilities. The research also analyzes some familiar concepts to CSR such as
corporate social performance, responsiveness, and philanthropy and business ethics.
The research is consistent with the definition of CSR mentioned in the previous part.
There are different ideas of the components of CSR. Stone (2005) defines this
concept to be including compulsory, approval, and arbitrary responsibilities for the
business community. Quazi and O’Birien (2000) state that CSR consists of two
components: corporate responsibility and results of social commitment. A firm which
is responsible should be responsible in many aspects. Therefore, CSR is not merely
participating in charity but the commitments and compliance in many ways.
For any company, CSR is important because it responds to the expectation from
society, is regarded as a type of investment, and is motivators for enhance the
business performance, raise the loyalty of customers, build up the brand-name of
company and so on. Moreover, from the characteristics of foreign-invested company;
CSR is especially important and essential: employment relationship improvement,
brand-name development, crisis management, social sustainable development and
government and local relationship improvement. Because of that, CSR reporting is
important tool for providing information for the investors and society as the whole.
CSR reporting has been asked in the research to inspect the understanding and also
the needs from investors and other stakeholders. Even though CSR reports are
relatively new, there is an existing need for CSR reports (Ho, 2008).

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2.3 Researches Summary
The researches summary part will be used to summarize all the above researches.
Furthermore, the comparison among those researches shows the difference in

Ngoc
Chau
(2009)
- Viet Nam CSR
context
- The join of Viet Nam
to WTO and CSR
requirements
- Responsible
Viet Nam
The join of Viet Nam to
WTO is major factor by
which CSR is widely
understood and required.
The current CSR scandals
raise the understanding and
awareness of investors and

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investment
society as the whole.
Lastly, responsible
investment is not familiar
among individual investors.
Céline
Louche
(2009)
- Responsible
investment
- Investor relation

society as the whole.
Table 1: Researches and Studies Summary