Corporation Social Responsibility in Vietnam

1. Introduction

Nowadays, Corporate Social Responsibility (CSR) is becoming more important. It shows that CSR has contributed sustainable development for social, companies and affected into all aspects of economies. Companies in the world and their stakeholders have noticed more about the needs and benefits of CSR. The overall performance of the companies will be evaluated by their various stakeholders through their actions in relation to society and the environment. In future, all company’ activities will depend more on the health of the world’s ecosystems (ISO 2006, 2011). In Vietnam, societal and environmental issues appeared in the last few years have emphasized the importance of CSR. However, it shows the fact that companies in Vietnam do not have a clearly awareness of CSR, their ethical dimension is just covered concern about health safety. In addition, Vietnamese consumers seem to have passive and weak reaction and movement to above issues and do not know how to use consumer power to make a social change. (Bui Thi Lan Huong, 2010).

This essay figures will provide an in-depth view on the effects of CSR on social, companies and their stakeholders as well as to show the current situation of CSR implementation in Vietnam. The structure of this assay is included Introduction, Definition and development history of CSR, Impact of CSR on International Business, Relationship between CSR and Stakeholder and Implementation of CSR in Vietnam.

1. Definition and development history of CSR

In the 50’s and 60’s of last century, standards and regulations relating policy approaches to environmental protection, corporate ethics, relationships with competitors, duties to society and the state are used randomly and not developed at all. CSR became a part of corporate governance in U.S. and Canada in the role of covering issues of corporate philanthropy, social security to staffs and assistance to local governments on a professional basis and sponsorship. Since the late of 70s, Companies in USA and Europe have understood the benefits of conducting CSR and develop CSR as a philosophy of the company with marketing strategy to meet the expectations of society. In the 90s, CSR continued to influence in global as the function of business and become an integral part of evaluation activities and the success of corporations. At beginning of the XXI century, CSR has been developed by researchers and experts. And recently years, most of large companies in the U.S. and Western Europe have formed their own policies CSR and develop, promote the concept of CSR. Moreover, they created the business combination to develop and promote the concept of corporate social responsibility and had training courses for corporate management of leading economic institutions included the study of the concept of CSR (Firuza Madrakhimova, 2013).

There are many definition of CSR such as the relationship between global corporations, government of countries and individual citizens or the relationship between a corporation and local society in which it resides or operates and corporation’s stakeholders (David Crowther, 2008). CSR is also defined as the responsibility of an organization for the impacts of its decision and activities on society and the environment, through transparency and ethical behaviors. These behaviors will contribute to sustainable development including health and welfare of society, take into account the expectation of stakeholders, be in compliance with applicable law and consistent with international norms of behavior and be integrated throughout the organization and practices in its relationship (ISO 26000, 2010).

1. How CSR affect International Business

Corporate social responsibility is now the key factor of many companies. There are many factors which lead to the rising of CSR such as globalization, growth in competition, need of talented employee, increased size and influence of companies (UNIDO, 2002, p.1). Depends on the business nature of a company, CSR can bring up many benefits which will increase the competitive image and performance of a company.

First of all, investing in CSR will be an aid to help increasing the sales of a company’s goods. Companies that are pay attention to social responsibilities are likely to give products and services in principled, environmental friendly, and well – organized style (European Commission, 2001). According to Longo, Mura, and Bonoli (2005) state that customers are tend to choose products or services which are carrying insight socially responsible values. A research from the Global Poverty Project and YouGov declared that customers are willing to pay an extra 5% for their clothes if the workers who made the products are working in safe condition with adequate pay (The rise of the conscious consumer: why businesses need to open up, n.d) At the moment, customers are fully aware and do not accept companies with bad CSR.