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 world development is accompanied by wrong side of society such as: natural disasters, environmental pollution, resource depletion, discriminatory treatment, labor exploitation and toxic products, etc. Our earth will be quickly destroyed soon by ourselves. So is it reasonable to continue to maximize profits at any cost? Will we accept to have a short life left on earth? Or is it time we all get the same serious look about developing world responsibly and sustainably? The question has made a major concern from 1953 to date in the process of business development and the concept of Corporate Social Responsibility (CSR) also was originated. Currently, CSR has become a real movement and growth in worldwide. For the current Euro-American countries, consumers are interested in not only the quality of end product but also the way that production method which are friendly with environment, community, human healthy or not. For example, there have been many movements to boycott products such as fringe food, carbonated soft drinks, fur products, etc. With social pressure, the enterprise has made CSR initiative as one of the essential and serious activities, even drafting for their own CSR strategy. For example, a series of programs have been implemented such as saving energy, reducing carbon emissions in 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 ‘market- oriented 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 state- owned 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 3 between the interests of present and future generations so that actions taken now do not imperil the well-being of the future. The strategy calls for training, workshops and media outreach to improve understanding of sustainable development and the management capability to achieve it. Agenda 21 allocates budget for these activities and calls for efforts to strengthen international cooperation on sustainable development. In Asia, the trend of interest in CSR is increasing but the development of CSR is still relatively low. In particular, Vietnam is one country that CSR concerns have been risen fast. CSR was first introduced into our country through the activities of multinational companies investing in Vietnam. The contents of CSR performance in these companies are basic and effective: "I love Vietnam" - Honda Vietnam, educational programs for personal hygiene for children in the mountainous provinces of Unilever; computer training program TOPIC64 of Microsoft, Qualcomm and HP; supported programs surgery of congenital heart defects and supporting victims of Can Tho bridge collapse by VinaCapital, Samsung; vision rehabilitation program for poor children by Western Union's, etc. For domestic enterprises, the initial concern for CSR in the export enterprises such as garment and footwear (focusing on the treatment of workers and applying the good work). The Vietnam Business Links Initiative, a multi-stakeholder initiative, developed a local code of conduct for the footwear sector in the late 1990s. The Initiative now provides annual CSR Awards for the footwear, garment and textile industries, and recently initiated an award for CSR in the marine products industry. In addition, large corporations in Vietnam also implement CSR initiative and build a good image with the public such as Mai Linh, Duy Loi, ACB, Sacombank, Kinh Do, etc. However, these activities lack of depth. 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 is not any study which find out the relationship between employees’ CSR perception their job satisfaction in Vietnam. The main objective of this research is to observe the relationship between employees’ CSR perception and employees’ satisfaction of Vietnamese firms in Ho Chi Minh City (HCMC). Thus, this research is to answer two questions:  Is there any relation between between employees’ CSR perception and employees’ satisfaction of Vietnamese firms in HCMC?  How employees’ CSR perception affects on their satisfaction at work? 1.3 Research Scope This research mainly focus on identifying the key CSR factors influencing employees’ satisfation of Vietnamese firms. The target interviewees are employees and managers (middle and low level managers). Quntitative research will be applied to the companies or enterprises in Ho Chi Minh City (HCMC) only. HCMC is a central commercial city in Vietnam, where attracts most of important and developing industries in Vietnam. 1.4 Research Process 6 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). Research Ojective Literature review Conceptual Framework Qualitative research Quantitative research Data Analysis Result and Conclusion 7 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 there is no consistent definition of CSR and no accepted way to measure it. Numerous studies attempt to define “corporate responsibility” from various perspectives, with descriptions ranging from “corporate philanthropy” to “business ethics”. The definition of CSR does not come in the form of a single conclusive definition even though in theory and practice, there were many detailed discussion with regard to the concept of CSR. In genral, CSR refers to making business decision associated with ethical values, compliance with legal requirements, and respect for people, communities and environment. Jones (1980) argues that CSR is the perception that corporations have an obligation to groups in sciety other than stockolders and beyond that prescribed by law and union contract. Another definition is from Kotler and Lee (2005), who defined CSR as “a commitment to improve community well-being through discretionary business practices and contributions of corporate resources”. The World Business Council for Sustainable Development (WBCSD) (2002) defines CSR as “the commitment of the company to contribute to the sustained economic development by working with employees, their families, the local community, and the entire society in order to improve life quality”. Wood (1991) defines CSR as “a business organization’s configuration of principles of social responsibility, processes of 8 social reponsiveness, and policies, programs, and observable outcomes as they relate to the firm’s societal relationship”. Adding on to the definition from the social perspectives, Baker (2003) maintained that CSR concerns the way companies manage their business processes which positively affect society aligned to the business. World Bank (2002) describes CSR as the businesses’ obligations to provide renewable economic development through cooperation with employees, their families, the local community and society in a manner that enhances their livelihood and consequently leads to beneficial business and development. 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. 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”. 9 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 on the economic and then legal aspects and a later concern for the ethical and discretionary aspects”. In 1991, Carroll (1991) first presented his CSR model as a pyramid, as shown in Figure 2.1. He once again uses his original historical explanation for the relative weighting, saying: “To be sure, all these kinds of responsibilities have always existed to some extent, but it has only been in recent years that ethical and philanthropic functions have taken a significant place”. He also introduces dependence as a rationale, “beginning with the basic building block notion that economic performance undergirds all else”. Finally, he suggests that, although the components are not mutually exclusive, it “helps the manager to see that the different types of obligations are in a constant tension with one another”. 10 Figure 2.1 The Pyramid of Corporate Social Responsibility (Carroll, 1991) Carroll (1999) appeared to briefly retract his dubious equating of philanthropy with corporate citizenship and to abandon his pyramid concept by reconceiving his model as “the four faces of corporate citizenship”, but soon returned to his original construct. Most recently, Carroll reproduced his 1991 CSR pyramid once again, but this time attempted to incorporate the notion of stakeholders, in terms of which economic responsibility contains the admonition to “do what is required by global capitalism”, legal responsibility holds that companies “do what is required by global stakeholders”, ethical responsibility means to “do what is expected by global stakeholders”, and philanthropic responsibility means to “do what is desired by global stakeholders” (author’s original emphasis). 2.3 Previous research about Corporate Social Responsibility and Employees’ job satisfaction Albdour & Altarawneh (2012) investigate the impact of internal CSR perception on employees’ engagement. Specially, this study examines the impact of five CSR factors 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. [...]... back but only 391 questionnaires in collected samples coulb be used for analyzing because of the missing problems in the answers After checking the correction and quality, the data were imported to SPSS software in order to analyze The validation of questionnaires and the reliability of measurement scale of this research were also tested by using Exploratory Factor Analysis (EFA) and Cronbach alpha... collecting related information to this research 3.3 Field Work Organization 3.3.1 Sampling method In order to have valuable and reliable database, the sampling method shoud be executed carefully The target interviewees of this research are employees and managers of Vietnamese firms in HCMC According to Hair et al (2006), the sample size is considered as suitable for the reliability of the research should... (which was sent by emails to the interviewees) The interviewees are employees and managers of Vietnamese firms in HCMC 3.2.2 The Secondary data The extant literature, international business journals, articles, books, and professional newspapers are useful sources of relevant information contributing tho the research The internet information from the business or expertise websites are also the valuable... survey Afterward, the measurement scales and pilot questionnaires on CSR and employees’ satisfaction were prepared in qualitative research A qualitative research with preliminary questionnaire was conducted with pilot enterviews with some key interviewees who are employees and managers (middle and low level managers) in Vietnameses firms by in- depth interview After that, the sample size is determined... Organization) 4.2 Assessment and Refinement of measurement scale 4.2.1 Refinement of measurement scale In this part of this research, the measurement scales are assessed and refined by two following methods:  Cronbach’s alpha to test the reliability of measurement scales  Exploratory factor analysis (EFA) to assess the validity of measurement scale Firstly, the Cronbach’s alpha test is carried out in. ..training and education 11 job engagement + human rights Internal CSR health and safety + work life balance organizationa l engagement workplace diversity According to the previous study of Duyu Turker (2009), an original, valid, and reliable measure of CSR reflecting the responsibilities of a business to varoius stakeholders is built A scale for CSR is developed through a systematic scale development... which are supposed to be influenced employees’ satisfaction of Vietnamese firms in HCMC The draft questionnaire was built from the consolidation and citing from previous studies of the same literature topic Both qualitative and quantitative methods are conducted in order to consolidate for the quality of this research There are two phases in research design step in this study: pilot survey and main survey... 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... review of CSR and CSR scales were conducted to look through all the relevant concept of factors influence CSR and employees’ satisfaction; proposed a conceptual model with the hypotheses for CSR and employees’ satisfaction of Vietnamese firms in HCMC Based on the literature review of CSR, employees’ satisfaction, the pilot research of the conceptual model has been developed with four main factors of CSR... measurement of scales The EFA testing has showed the result that KMO values of all the independent factors are greater than 0.7 at the Bartlett’s Test Significance of 000 (which is smaller than 0.05) So, the extracted variance meets the requirement of EFA testing Table 4.3 KMO and Bartlett’s Test KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy .932 Approx Chi-Square Sphericity Test of . 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. valuable and reliable database, the sampling method shoud be executed carefully. The target interviewees of this research are employees and managers of Vietnamese firms in HCMC. According to Hair. SPSS software in order to analyze. The validation of questionnaires and the reliability of measurement scale of this research were also tested by using Exploratory Factor Analysis (EFA) and Cronbach