UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Le Thanh Truc

CORPORATE SOCIAL
RESPONSIBILITY AND EMPLOYEE
SATISFACTION: A STUDY OF
VIETNAMESE FIRMS IN HCMC

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2012


UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Le Thanh Truc

CORPORATE SOCIAL
RESPONSIBILITY AND EMPLOYEE
SATISFACTION: A STUDY OF
VIETNAMESE FIRMS IN HCMC
ID: 104214046

MASTER OF BUSINESS (Honours)
SUPERVISOR: Assoc. Prof. LE NGUYEN HAU


Lastly, I would like to send my deep gratitude to my family, friends, colleagues who
have encouraged and supported me very much during the learning process, work and
completion of this thesis.
Ho Chi Minh City, Vietnam
December 30th 2012

Le Thanh Truc

iii


ABSTRACT
Corporate social responsibility (CSR) has received an increasing amount of attention
from practitioners and scholars alike in recent years. The growing awareness of this
issue has raised the questions about how responsible behavior of firms would impact
employees’ well-being. Because employees are primary stakeholders who directly
contribute to the success of the company, understanding employee reactions to CSR
may help answer lingering questions about the potential effects of CSR on firms as well
as illuminate some of the processes responsible for them.
Based on the survey of 391 employees and managers in Ho Chi Minh City (HCMC),
measures of internal and external social responsibility are found to be positively
associated with job satisfaction. There are 7 factors effect positively employees’ job
satisfaction: CSR to environment and generation, CSR to society, CSR to customer,
CSR to employee life, CSR to government, CSR to employee development opportunity
and CSR to competition.
CSR to society and CSR to employee life are found to be two most important factors,
other factors are sequenced as CSR to environment and generation, CSR to employee
development opportunity, CSR to customer, CSR to competition, CSR to government.
The analysis results also show that CSR factors which impact on employee satisfaction
and CSR factors which impact on manager satisfaction (middle and low level


Chapter 3 Research Methodology ......................................................................... 16
3.1 Research Process ............................................................................................... 16
3.2 Data Collection .................................................................................................. 19
3.2.1 The primary data ............................................................................................ 19
3.2.2 The secondary ................................................................................................. 20
3.3 Field Work Organization .................................................................................... 20
3.3.1 Sampling Method ............................................................................................ 20
3.3.2 Qualitative Research ....................................................................................... 21
3.4 Measurement Scales ........................................................................................... 22
3.4.1 Measurement Construct .................................................................................. 22
3.4.2 Statistic Methods ............................................................................................. 27
3.4.3 Descripive Statistic ......................................................................................... 27
3.4.4 Assessment of Scale Reliabiliy ......................................................................... 28
3.4.5 Assessment of Scales’ Unidimensionality, Discriminant Validity and Convergent
alidity ...................................................................................................................... 29
3.4.6 Multi Regression Analysis ............................................................................... 29
Chapter 4 Data Analysis ........................................................................................ 30
4.1 Sample Descriptive Statistic ............................................................................... 30
4.2 Assessment and Refinement of Measurement Scales ......................................... 31

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4.2.1 Refinement of Measurement Scales ................................................................. 31
4.2.2 Exploratory Factor Analysis (EFA) ................................................................. 34
4.2.2.1 The Independent Factors .............................................................................. 34
4.2.2.2 The dependent Factor ................................................................................... 42
4.2.3 Revised Conceptual Model .............................................................................. 44
4.3 Hypotheses Testing ............................................................................................ 46

Table 4.5 Rotated Component matrix ....................................................................... 37
Table 4.6 Cronbach’s Alpha for new factors ............................................................. 40
Table 4.7 KMO and Bartlett's Test for employees’ satisfaction ................................. 42
Table 4.8 Total Variance Explained .......................................................................... 43
Table 4.9 Component Matrix ..................................................................................... 43
Table 4.10 Results of hypotheses testing ................................................................... 47
Table 4.11 Hypotheses summary .............................................................................. 51
Table 4.12 Results of hypotheses testing with employees’ view................................ 52
Table 4.13 Results of hypotheses testing with managers’ view ................................. 54
Table 4.14 Descriptive Statistics ................................................................................ 57

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LIST OF FIGURES
Figure 2.1 The Pyramid of Corporate Social Responsibility (Carroll, 1991) ................ 10
Fifure 2.2 The proposal research model ....................................................................... 15
Figure 3.1 The research process ................................................................................... 17

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1

Chapter 1 INTRODUCTION
This chapter introduces the research background, raising the problems, the objectives,
scope and the process of the research were defined in order to solve.
1.1 Overview
The growing of global economy makes the quality of life rising fast and more
comfortable. However, in that process people destroy environment and human life. The

the production and using recycled materials, solar energy, improving water sources,
building schools, building epidemic diseases research center in developing countries,


2

improving the working environment of employees and helping surrounding
communities. Companies are known as CSR leaders: TNT, Google, Intel, Unilever,
Coca-Cola, GE, Nokia , HSBC, Levi Strauss, Bayer, Dupont, Toyota, Sony, Samsung, etc.
With the ongoing effort to implement CSR, corporations in the world today have
achieved a lot of success from the increasing employee satisfaction, reducing operating
costs to enhance the prestige image in public. Therefore, the implementation of the
CSR is as a key strategy for sustainable development of enterprises.
CSR in Vietnam
The state of CSR in Vietnam is intimately linked to doi moi (renovation) and the effects
of globalization. In December 1986, Vietnam’s Community Party adopted a ‘marketoriented socialist economy under state guidance.’ Since then, the Vietnamese state and
society have undergone dramatic transformations. Vietnam has been transformed from
a state-led economy to a more market-oriented one. There were challenges to stateowned enterprises, including foreign investment and donor pressure. Joining the World
Trade Organization (WTO) continued to drive the shift from state to market
orientation. With this shift, CSR, an initiative of the market, comes to the fore. CSR
plays a major role in the environmental and social sustainability of the country. The
forces of doi moi and globalization brought the pressure of international codes of
compliance to Vietnamese firms. Not only did citizens become more aware of the
importance of social responsibility, but the legal code of the country now had greater
need to adapt to meet and enforce international standards. Although Vietnam did not
adopt an explicit CSR policy, the government began to address some CSR-related
issues within the sustainability strategy called Vietnam Agenda 21. This document,
officially signed by the prime minister in 2004, provides a strategy for sustainable
development in Vietnam. It puts people at the center of development, but says that
environmental protection is inseparable from benefits for people. It aims at a balance

4

Most small and medium enterprises in Vietnam is still relatively inactive in CSR issues
such as soy sauce 3MCPD, melamine-tainted milk, petrol station fraud or causing
serious environmental pollution, etc. So clearly, the perception about CSR is incorrect
and not enough that makes the Vietnamese enterprises losing competitive advantages
on their playground and ruin the business environment from indirectly to directly. What
is the reason? Do not managers of the enterprises have fully aware of the importance of
CSR for sustainable development? Or they do not know where they start and how they
implement CSR? Therefore, CSR perception is very important and sensitive.
1.2 Problem Statement
Corporate Social Responsibility (CSR) in Vietnam is understood by many ways. Not
all CSR activities and campaigns of Vietnamese organizations are successful. So, how
people perceive about CSR is more important than how they operate. Employees are
more and more conscious of the widening obligations of firms towards the society. This
means that they nowadays perceive CSR as one of the important issues to be
considered by the employees.
The study by Claydon and Doyle (1996) emphasizes the importance of employee
power in organizational angagement. Similarly, in the study by Greenwood (2007)
employees as representatives of the internal side of the organization are identified as
the most salient stakeholders among all others and thus can be expected to have the
biggest power in terms of stakeholder engagement. Therefore, managers and
employees’ perception about CSR is very important in companies beacause it decides
the employees’ attitude and employees’ behavior at work.
Until now, some studies investigate the relationship between employees’ perception
about CSR and different aspects of job satisfaction all over the world. However, there


5



Data Analysis

Result and Conclusion

1.5 Research Structure
Chapter 1 Introduction to introduce the research background, the research problem.
Raising the problems, the objectives, scope and the process of the research were
defined in order to solve. Then, Chapter 2 Literature review to present the theorical
concepts and conceptual framework being the base for the research. Hypotheses
according to the conceptual framework selected for this research were discussed and
developed for testing. After that, Chapter 3 Research Methodology to present in more
detail research approach, research design, development of the measurement scales, the
questionnaire and the data analysis approach. And Chapter 4 Data Analysis to present
the resut of research and statistic analysis and discussion. It also concludes on the
theoretical and managerial implications of the research findings. Finally, Chapter 5
Conclusion and Recommendations to propose the conclusions on the research,
limitations and recommendations (if any).


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Chapter 2 LITERATURE REVIEW
This chapter presents the theorical concepts and conceptual framework being the base
for the research. Hypotheses according to the conceptual framework selected for this
research are discussed and developed for testing.
2.1 The concept of Corporate Social Responsibility
The basic concept of CSR is that corporations have responsibilities to go beyond the
traditional business objective of maximizing short-term profits and protect and nurture
society and the environment. However, implementation CSR is controversial because


In this study, CSR concept from Turker (2009) is adopted. Turker (2009) defined CSR as
below
“CSR as corporate behaviors, which aim to affect stakeholders positively
and go beyond its economic interest”.

2.2 Corporate Social Responsibility Theories
2.2.1 Stakeholder theory
Many scholars point to stakeholder theory as an influencing factor in corporate
decisions and motivation to invest in CSR. Stakeholder theory says an organization’s
survival and success correlates strongly with its ability to align its objectives with that
of its various stakeholders. By satisfying stakeholder demands, corporations develop
trust and loyalty among those stakeholders. More and more corporations promote
socially responsible actions and policies to effectively respond to stakeholder demands.


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Stakeholders consist of shareholders and investors, employees, customers, suppliers,
governmental organizations, trade associations, environmental groups, and members of
the community where a company operates.
2.2.2 Caroll’s CSR conceptualization - Carroll’s CSR Pyramid
Carroll (1979) first delineated the now-familiar four categories of CSR in a paper on
corporate social performance, depicting them as ordered layers which he labelled
economic, legal, ethical and discretionary responsibilities. Carroll (1979) explained that
the four classes “are simply to remind us that motives or actions can be categorized as
primarily one or another of these four kinds”. The order and relative weighting was “to
suggest what might be termed their fundamental role in the evolution of importance”.
In its first conception, therefore, the framework took a retrospective developmental
perspective, based on the claim that “the history of business suggests an early emphasis

namely: training and education, human rights, health and safety, work life balance and
workplace diversity on the two dimensions of employees’ job engagement and
organizational engagement. All CSR factors above make positive impact on
employees’ job engagement and organizational engagement.


training and education

11

job
engagement

+

human rights

Internal
CSR

health and safety
+

work life balance

organizationa
l engagement

workplace diversity


Justice


12

2.4 Research Model
H1: There is a positive impact of CSR to employees on Employees’ satisfaction
Employees’ perceptions of CSR are likely have a positive effect on organizational trust
and job satisfaction because CSR activities elavate employees’ self-image and morale
by helping align personal identities with those of the corporation (Lee et al., inpress).
In the theoretical literature, social identity theory suggests that employees and other
stakeholders are more likely to have positive perceptions of an organization when they
feel connected to its objectives (Peterson, 2004). To this end, CSR strategies can
positively enhance the perceptions that employees have their own organization (Brown
and Dacin, 1997), and stakeholders tend to trust company that recognize and resolve
social problems in an ethical manner (Hosmer, 1995). Further, Vlachos et al. (2010)
identified a positive relationship between salespersons’ perceptions of their company’s
CSR and job satisfaction. In the hospitality literature, one recent study found that
multiple dimensions of CSR have significant, positive effects on employees’ job
satisfaction (Lee et al., in press).
H2: There is a positive impact of CSR to customers on Employees’ satisfaction
Carroll (1999) states that economic viability is something business does for society as
well and describe the economic component as a responsibility to produce goods and
servies that customers want and do right thing what customers expect.
The relationship between job satisfaction and customer orientation has been explored in
several studies (e.g., Donavanet al., 2004; Hoffman and Ingram, 1992; Pettijohn et al.,
2007). Results indicated that higher levels of customer orientation encourage
employees to have higher degrees of job satisfaction. This finding is grounded in the
theoretical literature: social exchange theory proposes that individuals engage in



(1953), one of the first scholars to define the concep CSR “to pursue policies, make
decisions, or to follow lines of action which are desirable in terms of the objectives and
values of our society”. Accoring to Carroll (1991), there is a natural fot between the
idea of CSR and an organization’s stakeholders. In a broader understanding, which can
be attributed to the famous definition of Freeman (1984), stakeholders are “those
groups or individuals who can affect or are affected by the achievement of the
organization’s objecives or are those actors with a direct or indirect interest in the
company”. Therefore, CSR to society and other stakeholder is a important factor in the
scale.
Moderated variable: Position
Previous studies show that managers’ and employees’ concern about CSR are not
totally the same. Managers believe that CSR activities will make benefit and reputation
for enterprises and they focus much on external CSR activities (Jeremy Galbreath,
2009).
Findings of Leonidas, Mary, Theofilos, Amalia (2012) indicate that most companies
have an internal management function that executed CSR programs which were mostly
oriented towards society, environment and employees. Moreover, managers believe
that CSR activities offer a number of benefits. Interestingly, managers who believe that
CSR activities should be communicated and evaluated externally by a national agency
tend to hold a strong positive attitude for the institutionalization of CSR.
Employees’ concern should be higher regarding internal CSR, whereas managers
should consider both dimensions as equally important (Brammer et al, 2005).
According to Tamm, Eamets, Motsmees (2010), managers’ and employees’ assessments
of external CSR are closer to each other than their assessments of internal CSR.