RESEARCH ON AWARENESS AND IMPLEMENTATION
OF CORPORATE SOCIAL RESPONSIBILITY IN
A MULTINATIONAL COMPANY IN VIETNAM
CASE STUDY: NESTLE VIETNAM BY
TRUONG THI THU THANH

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 OCTOBER 2011

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October 2011
Declaration of Originality and Word Count

First and foremost I would like to express my deep gratitude to my supervisor, Dr Le
Van Lien from International School at Vietnam National University, Hanoi who
guide me in my choice of assignment. His guidance throughout and inspiration for
me to create new ideas has helped me to learn and grow personally.
I also would like to express my thank to Ms. Sumathi and Ms. Shenba at Help
University College, who initiated the project and give so much instruction and
support.

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Abstract

RESEARCH ON AWARENESS AND IMPLEMENTATION
OF CORPORATE SOCIAL RESPONSIBILITY IN
A MULTINATIONAL COMPANY IN VIETNAM
CASE STUDY: NESTLE VIETNAM

By
TRUONG THI THU THANH
October 2011

Supervisor: Dr. Le Van Lien

Corporate Social Responsibility (CSR) has become even more important for the
developing countries. It has developed through the long history and nowadays many
business entities over the world want to carry out the CSR in their business
operation. Vietnam is one of the world‟s fastest-growing economies. Therefore, there
are many multinational companies want to invest in Vietnam market. This paper
aims to discover the awareness of multinational organizations in Vietnam on CSR,
and the consumer attitude to social responsibility is positive or not. Besides, another
objective understands the implementation, CSR reporting of CSR in a multinational

1.3.2 Sphere of research 16
1.4 Research Methods 16
1.5 Structure of Research 16

CHAPTER 2: LITERATURE REVIEW 17
2.1 The Concepts Related to CSR 18
2.1.1 Conceptual Framework 18
2.1.2 Carroll‟s 1979-1991 conceptualizations 19
2.1.3 Wood 1991 conceptualization 21
2.1.4 Elkington‟s 1997 Triple Bottom Line 22
2.1.5 Stakeholder theory 24
2.2 Social accounting 26
2.3 Hypothesis 27
2.3.1 Managers‟ perception of CSR 27
2.3.2 Consumer‟s perception of CSR 29
2.3.3 Employee‟s perception of CSR 31

CHAPTER 3: RESEARCH METHODOLOGY 33
3.1 Research Objectives 34
3.2 Research Methodology 34
3.3 Data source 34
3.3.1 Secondary data 34
3.3.2 Primary data 35

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3.4 Research method 35
3.5 Research tool 36
3.5.1 Questionnaire 36
3.5.2 Annual report 36
3.6 Data collection 36

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LIST OF FIRGURES AND TABLES

Figure 2.1: Pyramid of CSR (Carroll, 1979) ……………………………………… 19
Figure 2.2: The Wood's CPS Model (adapted from Wood, 1991)………………….22
Figure 2.3: Elkington‟s 1997 Triple Bottom Line………………………………… 23
Figure 2.4: The relationship between firm and its stakeholders…………………….25
Figure 2.5: The important factors for employees (Ewin.com survey)………………32
Figure 4.1: Respondent ……………….…………………………………… …….40
Figure 4.2: Consumer category………………………………………………… …41
Figure 4.3: Employee of category………………………………………… ………41
Figure 4.4: Distribution responses of manager's perception of CSR……………….42

Figure 4.5: Distribution of response of management's perception toward of CSR 45

Figure 4.6: Distribution of responses from consumer survey…………………… 50
Figure 4.7: Distribution of responses from consumer survey (percentage)… ……52
Figure 4.8: Distribution of responses from employee‟s survey……………………55
Figure 4.9: Distribution of responses from employee‟s survey (chart)……………56

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LIST OF ABBREVIATIONS

CSR Corporate Social Responsibility
VBLI Vietnam Business Links Initiative
VCCI Vietnam Chamber of Commerce and Industry
WTO World Trade Organization
WBCSD World Business Council for Sustainable Development
CSP Corporate Social Performance
VND Viet Nam Dong

community, distributing their products in environment-friendly packing materials.
Besides, Nokia Corporation has CSR report annually, moreover, 100% of the
materials in their phone can be recovered and used to make new products or generate
energy. Also, Best Buy Co., Inc, a retailer of consumer electronics in USA and
Canada, has applied recycled goods program. Deputy Manager of public relations of
Best Buy Company says, “We only feel that we still succeed in the market if we take
responsibilities for society” (Saga Vietnam, 2008). On the hand, there are many
companies has quality assurance of staffs‟ living standard, protect the environment,
and making useful products for customers and environment. On the other hand, some
companies are still not aware of the importance of CSR; they have caused damage to
the environment, clients and themselves (effect on their reputation). Typically, Bp is
one of the biggest oil corporations in the world. However, Bp has encountered a
problem that is serious oil spill in the Gulf of Mexico. It leads to the lives of birds,
fish, turtles and other sea animals became ever more fragile by the oil spill disaster in

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the Gulf of Mexico. The cause of this incident is due to the lack of supervision, poor
safety… Living environment is threatened seriously have caused more sickness,
poverty for the people. In addition, marine organizations can not survive, caused
ecological imbalance.

1.1.2 CSR in Vietnam
Although CSR do not strange in the world, but also it is still a relative new concept
in Vietnam. The reason of it is the lack of awareness of the issue from the public and
business community has been considered as the key factors affecting on the
implementation of CSR. Typically, the pollution in Thi Vai River, Thanh Cong
River, or contaminated China milk, conflict between employees and their bosses
have proved that implementing CSR is very important for sustainable economy.
Nowadays, many companies in Vietnam have found that social responsibility of
companies has become one of the indispensable requirements for companies, because


1.1.3 CSR in multinational companies operating in Vietnam
Vietnam is a member of the World Trade Organization (WTO). The Doi Moi
reforms and open-door policies have achieved high economic growth in Vietnam - in
2006, GDP grew by 8.2%. It is cause why nowadays there are many multinational
companies invest in Vietnam market, such as Honda, Ford, Toyota, Nestle, Vedan,
etc. Though they are multinational corporations but their acceptance and
performance about CSR does not pay attention and concern; and it is the caused of
many damages and disasters for environment and social. In recent time (august 4,
2011), Department Police of Crime Prevention and Environment had inspected and

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caught the wastewater treatment plant of JSC Sonadezi services (Long Thanh
Industrial Zone, Dong Nai) theft of waste discharge into Dong Nai river. According
to initial estimates, the plant was discharged into the environment with the amount of
14 millions m3. In there, at high tide, the company will mix with the wastewater to
dilute the tide, and when the tide go down, water and waste was mixed colors, and
flows into the Dong Nai river. People living around said that the sewage canals have
a black color and a very unpleasant odor. Sadly, this is a company specializing in
environmental services. The incident was discovered as the warning to the awareness
of enterprises on CSR. Another Vietnamese company which is well known for soy
sources has been claimed for 3-MCPD chemical contained in its products. This
chemical is one of the factors which can cause people cancer. As was the case
broken, the agency aggressively seek new management plan for resolving the
consequences of the consumer and society has suffered. Therefore, the multinational
companies operating in Vietnam businesses should adopt CSR. After applying CSR,
some businesses have established environments more stable and higher labor
productivity. Moreover, they received many supports from consumers and society in
the common interests that bring businesses to the community.


Europe. The question is of ethical rather than legal issue and it draws lots attention
from media and the public (Vietnamnet, 2007). Another example is the melamine-
contaminated milk which is known all over the world. Although there is not much
contaminated milk in Vietnam, it still makes people scared to use these products.

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Third, another problem is the working conditions, health, and safety of employees.
There are many researches about the working condition which show that health and
safety at work has become a serious and hot problem that need to be solved. An
example of a multinational company - Marumitsu, the workers protest strike
simultaneously at the door of the company in Quang Minh Industry Zone, Hanoi city.
The reason of strike are the unfavorable working conditions, bad air quality affect to
the health, time of work is too much but the wage is too lower, the employees can not
live with this wage, “The boss was hires the police with hooligans, using batons and
put a gun to scare the workers, to force them into the company and brutally beaten,
losing all spirit of the workers” (baokhongle.wordpress, April, 2011). It is a part of
the working conditions of employees. Vietnam is one of the countries which the
health and safety in the working environment are not good and need to be improved
better.
As the results, CSR issue is the matter in growing economic in Vietnam. It can affect
the enterprise, the shareholders and the stakeholders in the society as the whole. The
investors are those being strongly affected as their capital invested may be lost.
Therefore, awareness and implementation of CSR are very necessary for the
individual investors who care for their own, realtives‟ and society‟s benefits.

1.3 Objectives and Sphere Research
1.3.1 Objective of research
- Provide a framework about the CSR, including the definitions, and concepts related
to CSR.
- Inspect the awareness and implementation of multinational companies operating in


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CHAPTER 2: LITERATURE REVIEW

2.1 The Concepts Related to CSR
2.1.1 Conceptual Framework
2.1.2 Carroll’s 1979-1991 conceptualizations
2.1.3 Wood 1991 conceptualization
2.1.4 Elkington’s 1997 triple bottom line
2.1.5 Stakeholder theory
2.2 Social accounting
2.3 Hypothesis
2.3.1 Managers’ perception of CSR
2.3.2 Consumer’s perception of CSR
2.3.3 Employee’s perception of CSR

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2.1 The Concepts Related to CSR

Figure 2.1: Pyramid of CSR (Carroll, 1979)

The first category Carroll is economic responsibility. The business institution is the
basic economic unit before it was anything else. As such it has a responsibility to
produce goods and services that society needs and sell them to make profit.
Moreover, the enterprise roles are predicated on the assumption of fundamental.

The second part is legal responsibility. It indicates the business is expected to the
societies that comply to fulfill their economic mission with the framework of the
legal system. Just a society has sanctioned the economic system by permitting

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business to assume the productive role, as a partial fulfillment of the “social
contract”, they have laid down the ground rules - the laws and regulations - under
that the enterprise is expected to operating (Carroll, 1979). For example, in the case
of Vedan Vietnam, company has been discharge untreated waste water into the Thi
Vai River. As the result, they must paid compensation of 120 billion VND for people
of the local. The opportunity for the business to be proactive is limits by the reactive
nature of the laws. Therefore, although the laws attempt to circumscribe the limits of
tolerable business behavior, but they neither define neither ethics nor they “legislate
morality” (Solomon, 1994).

The third category Carroll is the ethical responsibility. It expresses a concern that
firm meet the Business‟s expectations of society conduct that are not codified into
law, but rather are reflected in unwritten standards, norms, and values implicitly
derived from society (Carroll, 1999). Ethical responsibility is often represented
through principles and moral values in the mission and strategies of the

it, and (3) it designs policies and plans to respond to changing conditions all of which
were originally proposed by Ackerman (1975). In conceptualization of Wood (1991),
she viewed corporate responsiveness as contributing an action dimension to CSP and
in turn, CSR. The following is the model of Wood:

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Principals of CSR 1
Institutional principal: legitimacy
Organizational principal: Public responsibility
Individual principal: managerial discretion
Processes of CSR 2
Environmental assessment
Stakeholder management
Issues management
Outcomes of corporate behavior
Social impacts
Social programs
Social policies
Figure 2.2: The Wood's CPS Model (adapted from Wood, 1991)
Even though the model of Wood had completed great strides in CSR research, the
important of stakeholder impacts, Waddock (2004) stated that, there had not been
considered fully. According Meehan et al. (2006) said that: “While the model of
Wood (1991) represents a significant piece of scholarship, it nevertheless failed to
address the needs of practicing managers charged with the implementation CSR/CSP
programs and crucially measuring their impacts”.



2.1.5 Stakeholder theory
Stakeholder theory has grown in 1963 by R. Edward Freeman. The theory of
stakeholder was defined as embracing “those groups without whose support the
organization would cease to exist.” Some research about the stakeholder theory take
that managers who wish to maximize their firm‟s potential will take broader
stakeholder interest into account. This gives increased to a number of research on
how managers, stakeholders, and business do in the fact interact.

Stakeholder Theory has been raising mentioned as the common frame of reference in
the CSR debate. According to Freeman and Reed (1983), Stakeholder theory defined
as “any identifiable group or individual who can affect the achievement of an
organization’s objectives, or is affected by the achievement of an organization’s
objectives”. Stakeholder Theory has two branches: ethical and managerial. Below the
stakeholder theory‟s ethical perspective, all of these have the true to be treated fairly
through the organization (Deegan, 2009), which can not managed the interest of
shareholders alone, but a wide range of stakeholders who have a legitimate interest in
the corporation as well. If the stakeholder conflict of interest, the firm has a duty to
achieve optimal balance among them. For instances, the Body Shop‟s CSR activities
famously focus on promoting human rights and environmental sustainability of its
wholesalers, while those of Starbucks more narrowly target employee target
employee welfare. A business can be responsive towards one stakeholder group and