THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY (CSR) ON BUSINESS
PERFORMANCE
BY
LE MINH HOANG
E0700038 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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DECLARATION OF ORIGINALITY AND WORD COUNT

I hereby declare that the graduation project is based on my original work except for quotations
and citations which have been duly acknowledged. I also declare that it has not been
previously or concurrently submitted for any other course/degree at Help University College
or other institutions. The word count is 12,718 words.

ON BUSINESS PERFORMANCE

By
LE MINH HOANG
October 2011
Supervisor: Dr. Le Van Lien
ABSTRACT
CSR has become a burning issue in the world. As Vietnam is one of the world’s fastest-
growing economies, CSR has become even more important for the country to develop
sustainably. This paper aims to discover how the CSR impact on the business performance of
companies in Vietnam. It also give a view CSR and CSR reporting, whether CSR information
have any effect on the Vietnam customer behavior, and the attitude of Vietnamese employees
toward CSR reporting. The results of the study provide evidence that there is strong support
for CSR from managers and a growing awareness among consumers and employees.
However, there is expectation gap between how people perceive and how people act because
there are lack of adequate CSR disclosure from firm, and not-so-enthusiastic support actions
from consumers due to the barriers in living expenses, and low effective CSR communication
tools that companies use. However, with highly positive attitude toward the important of CSR
and the willingness to learn and gain more knowledge about this issue found from the survey
have drawing potential bright future for CSR in Vietnam.
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TABLE OF CONTENTS
DECLARATION OF ORIGINALITY AND WORD COUNT 1
ACKNOWLEDGEMENT 2
ABSTRACT 3
CHAPTER 1: INTRODUCTION 9
1.1 Research background 9
1.2 CSR in Vietnam 10
1.2.1 Government actions and policies 10

3.6.2 Sample frame 25
3.6.3 Sample size 25
3.7 Limitations 26
CHAPTER 4: FINDING AND ANALYSIS 27
4.1. Management 29
4.1.1. Finding from the questionnaire survey 29
4.1.2. Actual CSR disclosure by firms 34
4.1.3 Overall assessment of management’s responses 34
4.2. Employees 36
4.2.1. Finding from employee questionnaire survey 36
4.2.2. Overall evaluation of employee’s responses 40
4.3. Consumers 41
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4.3.1. Finding from consumer questionnaire survey 41
4.3.2: Overall evaluation of consumer’s responses 45
4.4 Overall discussion 46
CHAPTER V: CONCLUSION AND RECOMMENDATION 48
5.1 Conclusion 48
5.2 Recommendation 48
5.3 Limitation of study 49
5. 4 Suggestion for the future research 50
References 51
Appendix 55

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LIST OF FIGURES, DIAGRAM, AND IMAGES
Figure 2.1 The Carroll’s “Pyramid of CSR” 16
Figure 2.1 Triple Bottom Line 18

NGO Non-governmental Organization
PR Public Relation
TBL Triple Bottom Line
VSA Vietnamese Accounting Standard
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CHAPTER 1: INTRODUCTION
1.1 Research background
The concept of Corporate Social Responsibility (CSR) has issued in the early of the 1970s,
CSR has become very popular for the companies especially companies which are running
business in the developed countries. With the major relationship between business and society
reflected by CSR, nowadays, CSR is not only the current affairs of companies which are
running business in the developed countries, it also is the current affairs of companies which
are running business in the developing countries.
With the three major issues of CSR are labor, environment, and finance. Companies are
paying more attention on the CSR in the way performing well CSR activities to improve
competitive advantages and reputation in the market. The companies take care about their
internal stakeholders such as employees’ healthcare, working environment will raise their
loyalty, it will lead to increase productivity and may lead to increase profit for companies.
Nowadays, companies are influenced by many parties which are related to CSR. Especially,
international companies which are not running business in only one country, so they have to
follow law in control of CSR of each country they do business. More than that, they have to
follow the rules of World Trade Organization (WTO) or other organization such as Integrated
Reporting Committees (IRC), and World Council for Sustainable Development (WBCSD)
which are applied for over the world. By following the rules of the organization above, and
doing well CSR activities, companies can build their strong reputation and reliable in the view
of public, so they can make shareholders confident to invest, customers also prefer to buy
their products and services, and governments also have sympathy with them and may offer
more benefits to attract them to invest in that country.
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reducing CSR cost. This is reason lead to many problems Vietnam has to face such as social
problem. Awareness of these problems, Vietnamese Government has created many
regulations such as Environment Protection Law, Labor Law, and Consumer Protection Law.
More than that, in the recent year Vietnam has established environment police department to
manage and punish companies which make pollution. In additional, Vietnam also offers more
benefits for companies with advanced technologies when invest in Vietnam, and avoid
companies with old technologies.

1.2.2 CSR practices, opportunities, and challenges
With the awareness of CSR and the traditional and culture of companies, many companies
when invest in Vietnam had practiced very well CSR activities such as set up charitable funds
and do many social activities of Coca-cola Vietnam, Honda Vietnam, Dutch lady. However,
some foreign companies are still tried to ignore CSR activities to maximize their profit and
they have made some scandal related to CSR such as Vedan Vietnam has made pollution in
Thi Vai river. The companies that ignore CSR may forgot that CSR also brings some
opportunities for them. For example, the European Union, Japan require products imported
must follow the ISO 9000 and14000 series (which focus on the environmental management
standards). So doing well CSR in this case will allow companies to export products to these
countries. Even realized that CSR may bring some opportunities for companies, but some of
them are still in a divided mind to pay more for CSR or not because CSR activities will cost
quite a lot of money and time. More than that, the awareness about CSR of customers in
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Vietnam is still limited, so companies which have strong CSR activities may face a challenges
when compete with companies do not apply CSR because these companies have to pay no or
less cost on CSR so their products and services may cheaper. Another challenge is lacking of
law enforcement in Vietnam. For example, companies do CSR activities sometimes may not
get tax deduction because laws relate to CSR are not perfect, so companies will be loss money
and the profit also reduce.


show that in Vietnam in 2009 there were 6200 working accidents (increased 7, 09 %). The
causes of these accidents are mainly from the human (employers’ mistakes are 75%, the
employees' mistakes are 18, 5%). Total damage to property is more than 42 billion and more
than 450,000 working days. In the whole country, 26,700 workers have had occupational
diseases. Even the labor law has issued in Vietnam, some companies are still ignore the safety
of employees because they want to reduce cost or to meet the progress of the project as in the
case of Keangnam group. More than that, some companies do not take care about the working
condition and have too much overtime working with no higher salary was lead to many strike
such as in Binh Duong, Hai Duong.

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1.4 Research objectives
This research will focus on summarize the CSR concepts and its definitions. Evaluate the
awareness of both inland and foreign companies in Vietnam about CSR concept, practices, its
importance and benefits. This research also gives the recommend some solution for
companies in Vietnam to raise the CSR activities.

1.5 Research methods
Besides using the second data, in this research will distribute the questionnaire and conducts
the study of managers, employees, and customers in Hanoi. Interview also can be use in this
research by interviewing each individual from managers, employees, customers for the
survey.

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CHAPTER II: LITERATURE REVIEW
2.2.2 Triple Bottom Line
Triple Bottom Line was first mention in 1981 by Freer Spreckley, there are three bottom lines
are economic line, social line and environmental line. In the previous, the managers are
mostly followed the profit objective. However, if they forget the environment and society, so
how long can they make profit, remain profit. So they should also take care about the
environment and social line to make profit in the durable way.
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A company has bad relationship with employees or local community may difficult to
develop, even exist. If company and employees are not in good relationship, the employees
will not try hard to work, so the productivity will be less, the high skill employees may not
prefer to work anymore, and more than that, it may lead to the strikes which make company
cannot running. All of the activities about result to the performance of company become less
effective and the profit also decrease. If company has good relationship with employees, they
can motivate them to work more effective and efficient, so it will make the profit increase. To
do that company should improve working condition, set up a good welfare policies, have
policy to award employees when they are working with the effective and efficient, and also
should take care about employees’ family such as offer healthcare insurance for their wife or
children. Besides having good relationship with the employees, companies also should have
good relationship with the local community because people living in the local community
may be is the major customers or the employees are also living there. To have good
relationship with local community, companies should do volunteer and communicate with
local people by support the fees for the local community activities, motivate employees to join
these activities to make close to them. Even these actions are useful for companies, but
companies also should consider about the cost to ensure that it is not affect on the profit of
company.
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with each other. Business ethics is a manifestation of the balance between the interests of
managers in implementing the business objectives with the interests of the employees work
for managers, customer benefits, the partners and the interests of the community in general”.
So when doing more CSR activities, company will raise their business ethics but it also put
them into the situation of choosing between profit and business ethics which one is more
important and necessary at that time.

2.2.5 CSR Report
Nowadays, both internal and external are not only pays attention on the financial report of
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company, they also interest on the CSR report of company. The CSR report is very important
for stakeholders such as for customers who have the trend of supporting for environment will
choose products and services of company which is investing more money for CSR. Because
CSR can build up the reputation of company and attract customers so investors also prefer to
invest in company which is performing well CSR. CSR report also helps government and
other organization to monitor, control, and evaluate CSR activities to make decision such as
allow company which is well CSR performing to expand its activity, and close down
company that are not paying for CSR activity. Even the CSR report has been an annual report
as same as annual financial report in the world, but in Vietnam the CSR report is not get
enough interest of company. There are still many companies did not make CSR report, some
companies makes annual CSR report but these reports are not made for business purposes. 2.3 Hypothesis
2.3.1 CSR and the role of manager
Nowadays, the managers act an important role in company such as making decision,
strategies, or even setting up the vision for company. Therefore, manager’s decision will
affect directly on the company’s performance, so each company will have its own
performance result depend on the manager. So company will do more CSR activities if the

2.3.3 CSR and the role of customers
The role of customers also very important, most of customers evaluate CSR through the
product of company, so if product meets the requirement of customers such as quality and
price will make a good image of company in the mind of customers. The most important that
is customers are the people that will consume the products and services of company, so doing
well CSR will increase company’s reputation, it is useful for company to attract more
customers, so the revenue of company also increase.
: Consumers’ attitude toward CSR reporting is moderate
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CHAPTER 3: RESEARCH METHODOLOGY

3.1 Research objectives
The purpose of this project is to give the definition of CSR and its concepts and studies.
Through this definition of CSR and its concepts and studies, we will have a view of CSR in
the world and in Vietnam. More than that, this project will find out how managers, employees
especially accountants, and customers understand, attend, and react to the CSR. So we can
find out the impact of CSR on the company’s performance. Finally, through research we can
understand more about the fact of CSR in Vietnam, so we can make some advises for
company to make the best decision about CSR.

3.2 Research methodology
in this research we will use both qualitative and quantitative method, we also use
questionnaire survey manager, employees, customers. The interview also be use, but the
second data will mostly be used.

3.3 Data sources