finalassignment module corporate social responsibility

In the realm of Corporate Social Responsibility CSR, Honda Vietnam, as a transportation manufacturing entity, directs its attention towards four paramount concerns: Environmental Conserv

1 Executive Summary1

3.1 Official guidelines/regulations on CSR for enterprises in Vietnam 3

1 Executive Summary

In an increasingly technologically advanced world where globalization has become an objective necessity, the relationships between economies are becoming more intimate and interconnected As trade activities among nations are growing stronger, competition among businesses is intensifying In the past, companies diversified their product designs and elevated product quality as effective competitive strategies to gain advantages in the market Nowadays, companies pay attention to consolidating their image, enhancing reputation, and developing their brand through building a corporate culture and ethical business practices This approach is proving to be effective in the competitive landscape Businesses aiming to establish a strong brand presence in the market are now focusing on implementing Corporate Social Responsibility (CSR) effectively.

Corporate Social Responsibility is a prominent global trend, becoming a "soft" requirement for businesses during the integration process However, in Vietnam, this issue is still relatively new and has not received sufficient attention from businesses Therefore, Vietnamese enterprises are gaining a deeper understanding of the benefits that implementing CSR brings in the current context of the country The realization is that fulfilling social responsibility is necessary for businesses in Vietnam Corporate social responsibility contributes to increasing profits for businesses, such as gaining more orders and serving as a form of advertising for the company's reputation.

This report conducts an analysis of Honda Vietnam's CSR strategy, outlines the encountered challenges, and proposes strategic solutions from the perspective of a Board of Directors member Additionally, the report delves into Vietnam's official CSR guidelines and regulations for enterprises, advocating for a comprehensive approach to bolster CSR activities and ensure policy compliance.

2 Intro

Formed in 1996, Honda Vietnam represents a collaborative effort between Honda Motor Company (Japan), Asian Honda Motor Company (Thailand), and the Vietnam Engine and Agricultural Machinery Corporation The company is engaged in the production of motorcycles and automobiles Having been a part of the Vietnamese market for nearly three decades, Honda Vietnam has experienced ongoing development and emerged as a prominent player in motorcycle manufacturing and a respected name in the production of automobiles within the Vietnamese market In the realm of Corporate Social Responsibility (CSR), Honda Vietnam, as a transportation manufacturing entity, directs its attention towards four paramount concerns: Environmental Conservation, Road Safety, Educational Advancement, and Community Assistance

Functioning as a conscientious corporate entity, Honda Vietnam has undertaken a multitude of social initiatives, thereby making substantial contributions to the enhancement of Vietnamese society

At this year's Recognition Ceremony, Honda Vietnam has been recognized as one of the top 50 foreign direct investment (FDI) enterprises exhibiting green growth and sustainable development The company has also been honored with the 18th Golden Dragon Award, a distinction bestowed based on voting by the Editorial Board and readers of the Vietnam Economic Times magazine.

The Golden Dragon Award is a testament to the efforts of Honda Vietnam as well as the extensive network of Honda Exclusive Authori d ze Dealers (HEADs) and Honda automobile distributors nationwide This recognition is a result of their continuous dedication to enhancing product quality, sales support services, and prioritizing the expansion of social welfare activities while actively contributing to the community.

3 Findings

3.1 Official guidelines/regulations on CSR for enterprises in Vietnam

In Vietnam, Corporate Social Responsibility is still in its infancy stage of development Since the concept of CSR is not well defined and understood, there may be differences and confusion toward CSR among the business community in Vietnam Recent years, the encouragement for CSR implementation has increased The country has passed various business-related legislation in order to support economic development and international integration, including provisions that encourage responsible and green business practices in Vietnam These legal instruments cover different CSR-related aspects such as environmental protection, sustainable development, community engagement, employee-employer relationship, consumer rights protection.

Additionally, the Vietnamese Government has developed and announced various policies and strategies that supplement the implementation of CSR These include the 2004 Strategic Orientation for Sustainable Development in Vietnam; the 2011 National Strategy on Climate Change; the 2012 Vietnam Sustainable Development Strategy for the period of 2011- 2020; the 2012 National Green Growth Strategy 2011 - 2020 and Vision to 2050.

The 2020 Vietnamese Law on Enterprises:

Various legal responsibilities have been identified for enterprises to follow that can support CSR activities These include the obligation to protect the environment, obligation to ensure legitimate rights and benefits of the employees, obligation to ensure relevant policies and insurance for the employees, obligation to ensure social and unemployment insurance for the workers, and more

The 2020 Law on Environmental Protection (LEP)

The newest legislation that provides obligations for the corporates that might benefit CSR

For example, article 30 of the 2020 LEP provides the requirement of Environmental Impact Assessment (EIA) for different projects Accordingly, relevant corporates conducting one of these projects are obligated to carry out EIA to ensure the implementation of the projects does not damage the environment

The 2010 Law on Protection of Consumer Rights of Vietnam (came into effect in 2011)

This law has established a significant legal foundation protecting consumers legitimate rights and interests Under this law, a corporate operating in Vietnam must provide the consumers with information about goods and services

3.2 Honda Vietnam’s CSR Strategy and practice

Honda Vietnam focusses on four major problems: Environmental Conservation, Road Safety, Educational Advancement, and Community Assistance

• Environmental Conservation:

Understanding the enduring and pressing societal responsibility of environmental conservation, Honda Vietnam is committed not only to reducing the environmental impact of its production and products but also to actively participating in the preservation of Vietnam's environment for the benefit of future generations In the upcoming period, Honda Vietnam aims to implement various meaningful community activities with the goal of steadily increasing environmental awareness among the people of Vietnam every day • Educational Advancement:

Supporting education can be considered a top priority in the social activities of Honda Vietnam Since its inception, the company has implemented numerous educational support programs, such as sponsoring engines and motorcycles for technical and vocational schools nationwide, establishing the "Vinh Phuc Education Support Fund" to encourage a passion for learning in every student, and launching the Honda Y-E-S Award for Engineers and Young Scientists in top universities specializing in science, technology, and engineering in Vietnam Additionally, Honda Vietnam organizes the "Young Ideas" competition for primary school students nationwide, aiming to ignite a passion for exploration and effort to turn dreams into reality These continuous efforts by Honda Vietnam reflect its commitment to making a small contribution to the development of the country's education system.

• Road Safety:

Honda Vietnam places a significant emphasis on safety, both in its products and workplaces The company conducts safety awareness programs for employees and campaigns to promote road safety among the community: The “I Love Vietnam" Program began as a traffic safety awareness initiative coordinated by Honda Vietnam in collaboration with the National Traffic Safety Committee, the Ministry of Education and Training, and the Traffic Police Department under the Ministry of Public Security Launched in 2004, the program has undergone continuous improvement, evolving in both form and content to align with the preferences of audiences nationwide Its aim is to present authentic stories and images reflecting the current state of traffic in Vietnam, accompanied by valuable traffic safety lessons The program seeks to enhance viewers' knowledge and skills in accident prevention while contributing to the establishment of a civilized and safe traffic society Some other notable events and competitions recently can be mentioned:

o Event “Helmet Donation for First and Second-grade Students and Traffic Safety Education for Students and Parents” for the academic year 2022-2023 in Ho Chi Minh City

o The competition "Traffic Safety for Tomorrow's Smiles" for Secondary and High School levels for the academic year 2022-2023

• Community Assistance:

Over its presence of more than 20 years in Vietnam, Honda has consistently demonstrated its timely and proactive engagement in the lives of the people through various community activities These include donating motorcycles to traffic police, providing support to families in difficult circumstances, and notably, engaging in charitable activities such as continuous relief efforts for flood victims from 2015 to 2017 In 2017, empathizing with the pain and losses endured by people in provinces affected by natural disasters, Honda Vietnam contributed over 2 billion VND, comprising more than 1.5 billion VND in cash and 23 power generators This support was provided in two phases, in August for the flood-affected northern mountainous provinces and in December for the flood-affected central provinces The purpose was to alleviate the difficulties and losses faced by families due to natural disasters and share the burden of those affected in these regions.

4 Discussion

Honda Vietnam’s main challenges when building and applying CSR strategy

- The contradiction between CSR strategy and product strategy

With the philosophy of "Preserving the environment for the future generations," Honda Vietnam consistently prioritizes sustainable development The company is committed to maintaining and further enhancing initiatives while ensuring compliance with environmental regulations The goal is to propel Honda Vietnam to become a leading company in environmental protection in Vietnam.

However, Honda's parent company, Honda Motor (Japan), has been somewhat hesitant in the production and business of Electric Vehicles (EVs) Up to now, their main products remain predominantly conventional gasoline-powered vehicles This limitation affects Honda not only in Vietnam but also globally, as other competitors in the market have already introduced their own EV models The explanation for this delay was defended by Katsuhisa Okuda, the Chairman of Honda Motor Europe He cited the relatively slow pace of the automotive manufacturer, attributing it to real-world limitations of fully electric models and the need for infrastructure development.

- High employee turnover rate at Honda Vietnam

Although there are no official figures for 2023, in the period before 2016, Honda Vietnam terminated contracts with 2,000-3,000 workers in Vinh Phuc annually, equivalent to 40% of the total workforce Many of these workers were skilled technicians To address this issue, Honda Vietnam explained that, on average, for the three years preceding 2016, approximately 2,000 workers per year voluntarily stopped contributing to social insurance, with around 1,600 resigning for personal reasons From 2014 to the end of July 2016, Honda Vietnam only dismissed 17 workers, with 13 cases involving the use of fake high school diplomas and 4 cases violating the company's regulations and current labor laws.

- The inconsistency in product pricing between Honda Vietnam and various Head offices

An existing issue between Honda Vietnam and various HEAD establishments revolves around the inconsistency in product pricing According to feedback from many customers, the prices of vehicles at HEAD offices and private retail stores often deviate by approximately 500,000 - 1,000,000 VND or even 2,000,000 VND compared to the prices listed on the company's website This issue may stem from

various influencing factors, including transportation fees, overhead costs, or simply the discretion of the store owner The absence of stringent management oversight has adversely affected customer rights and fostered unfavorable perceptions about the company.

5 Conclusion

In overview, Honda Vietnam emerges as a standout entity in the realm of Corporate Social Responsibility (CSR), placing a strong emphasis on sustainable development The company actively undertakes a myriad of CSR initiatives that directly address concerns intertwined with its core business functions, spanning the manufacturing and distribution of motorcycles and automobiles Key focal points encompass environmental preservation, traffic safety, education, and social welfare These expansive CSR endeavors are executed on a considerable scale, employing systematic approaches and making substantial contributions to the betterment of Vietnam.

Despite these accomplishments, Honda Vietnam faces several challenges during the implementation of CSR initiatives These challenges encompass the lack of synchronization between business and CSR strategies, disparities in CSR practices among authorized dealers, and a notable employee turnover rate Surmounting these obstacles requires strategic interventions from the leadership team, aligning with the company's vision to establish itself as a socially responsible corporate entity within the broader societal framework.

6 Recommendations

6.1 Solutions for the difficulties in Honda Vietnam’s CSR implementation

As a member of the Board of Directors of Honda Vietnam, here are some solutions I would propose for the challenges above with the main goal is to:

Control, synchronize, and implement CSR strategies nationwide

For example:

- Environmental Conservation

Although all products of Honda Vietnam are controlled, distributed, and licensed by Honda Motor (Japan), I would suggest that Honda Vietnam should still propose to Honda Motor to intensify the development of EVs in the near future This is particularly relevant as CSR in Vietnam is gaining increased attention from the public and businesses alike Concurrently, Honda Vietnam should continue its current environmental protection events, programs, and strategies The company is currently performing well and is a leading enterprise nationwide in this regard.

- Protecting workers and citizens

Although we do not know whether the statements made by Honda Vietnam regarding the turnover rate are accurate, there have been contradictory reports in articles and interviews on this matter If in a leadership position, I would still propose addressing and monitoring this issue to protect and ensure fairness for the employees such as regularly conducting surveys and exit interviews is essential for gathering feedback from departing employees, offer competitive salary, benefits, recognizing employees’ efforts, achievements and with good leadership These practices are crucial in identifying the underlying causes of employee departures and uncovering potential organizational issues

Additionally, to uphold ethical standards, it is crucial to conduct regular monthly monitoring and evaluation of dealership operations Stringent consequences, including the termination of dealership ownership and the retrieval of revenue, should be enforced for dealerships deliberately violating the company's policies This is especially pertinent for those involved in unethical practices, such as selling products at discounted prices, as such actions could potentially damage the company's reputation.