Corporate Social Responsibility Regarding Education of Foreign Direct Investment Companies in Vietnam

Pham Thu Huong[1]

Pham Huong Quynh[2]

 

Abstract

Foreign Direct Investment (FDI) has been growing rapidly in Vietnam despite globally complicated and unpredictable fluctuations of the economy. Although it is presented in impressive numbers regarding FDI’s overall efficiency in Vietnam, the connection between FDI businesses and Vietnam’s education and training is rather feeble. This paper investigates the FDI companies’ corporate social responsibility (CSR) performance regarding education development in Vietnam. The most popular methods of performing CSR regarding education include granting scholarship, building schools and education centers, providing and improving educational facilities, developing programs for young talents, sponsoring scientific researches… CSR regarding to education of FDI companies in Vietnam has impacted on efforts in integrating CSR in their daily operation of big local businesses with mindsets of going global quickly. However, most FDI companies consider CSR regarding education as a part of PR campaigns and do not have a long-term vision for their CSR activities. Methods, targets and locations of these activities are still narrow and centralized, resulting in a restricted number of people reached. Most CSR activities to improve education conditions are available to students in big urban cities, while the real population in need is left inadequately approached. This paper proposes some recommendations for improving CSR activities regarding education of FDI companies in Vietnam.

Keywords: CSR, Education, FDI, Vietnam

1. Introduction

            According to the information announced by the Foreign Investment Agency (Ministry of Planning and Investment), as of December 20^th, 2017, 2,591 new FDI projects are granted certificates in Vietnam. Generally, in 2017, the total registered capital of foreign investors peaked to 35.88 billion USD, which is equivalent to an increase of 44.4 percent over the same period of 2016. The total registered capital was 21.27 billion USD, having increased by 42.3 percent over the same period in 2016, with a disbursed amount of 17.5 billion USD. At the same time, 1,188 projects were registered to adjust their investment capital with the total registered capital of approximately 8.41 billion USD and 5,002 capital contribution, share purchase of investors with a combined capital of 6.19 billion USD. Thus, the amount of FDI inflows into Vietnam has nearly doubled in the past four years, from 20 billion USD in 2014 to nearly 36 billion USD in 2017. Currently, FDI enterprises are present in 63 provinces and cities over the country, among which Ho Chi Minh City is leading with 44 billion USD, followed by Binh Duong, Dong Nai and Hanoi.

            Yet it remains to be in question whether FDI is missing out on something. More than anything, training and education play crucial roles in the future of a nation. As humans are highly influenced by experiences in childhood, the process of guiding and nurturing young generation determines how strongly the country is to evolve. A decent education does not guarantee one’s success, but it optimizes the opportunities one is able to seize in life. Despite impressive numbers regarding FDI’s overall efficiency in Vietnam, the connection between FDI businesses and Vietnam’s education and training is rather feeble. Being regarded as the first priority of the country, however, education and training landed on the 17^th spot among 18 areas receiving FDI. In accordance with the Foreign Investment Agency (Ministry of Planning and Investment), by the end of February 2013, education and training have attracted 170 FDI projects nationwide with the total registered capital investment of 468 million USD. Average scale calculated per project is relatively low, which is around 2.8 million USD. Furthermore, most projects, which account for 93.3 percent of total registered capital, are aimed to be executed in Hanoi and Ho Chi Minh city, while rural and remoted areas are particularly short of education and training investment.    

            Every business is a component of the society, meaning they have legal rights and responsibilities to contribute to the development of society. It is not restricted to business activities or making profits alone. Corporate Social Responsibility (CSR) is the bridge connecting corporates’ benefits with requirements from the society. Under circumstances mentioned above, it is indicated that companies, especially FDI companies, need to pay more attention to CSR in training and education comparing to other areas.

In this paper, the methods, targets, locations and critical factors related to CSR activities regarding education are investigated. The findings are the background for proposing recommendations to improvement of CSR regarding education as well as FDI companies’ awareness of full responsibilities upon Vietnam’s education development.

2. Literature Review
   • Corporate Social Responsibility (CSR)

           Despite controversial viewpoints upon the origin of CSR all around the world, its emergence in ancient Greek society is well established (Visser & Tolhurst, 2010). When civilization started to build up, people believed that it would be reasonable for the upper class to share portions of their wealth with other less fortunate citizens. This rooted from a mutual understanding that the minority would not be able to achieve prosperity without the work of population majority, which resulted in the state passed particular laws to support the belief. These laws were called the liturgies, which shared quite many similarities with modern community’s taxation systems; however, they rather served as one of wealthy people’s privileges back in the days (Avlonas, n.d). An ongoing debate involving the issue of Corporate Social Responsibility has been active since the second half of the 20^th century (Garriga and Melé, 2004). Nowadays, CSR remains a controversial term without a globally unified definition. The term “Corporate Social Responsibility” first emerged in Rowen’s (1953) book titled “Social Responsibilities of the Businessman”. Asset managers were encouraged not to violate others’ rights and benefits, as well as motivated benevolence to make up for damages done to the society by businesses. Ever since, CSR has been interpreted into different meanings. Others claim that “CSR encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time” (Carroll, 1999). Afterwards, studies have mutually reached a relatively complete definition which better clarifies the nature of CSR as “the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life” (World Business Council for Sustainable Development, 1998). In accordance with this definition, so as to achieve sustainable development, businesses are always expected to follow local and international standards of environment conservation, gender equality, labor safety, labor rights, payment equity, personnel training and development as well as community development. In other words, CSR requires businesses to pursue the determination of balancing between their economic performances and their positive impacts on the society.

• CSR factors models

Three of the most remarkable CSR models are Carroll’s (1991) CSR Pyramid, Visser’s (2011) CSR model version 2.0 and Claydon’s (2011) Consumer – driven CSR model. CSR Pyramid in Carroll (1991) was created with a view to explaining how essential it is for business entities to fulfill every aspect in the social world: economic, legal, ethical and philanthropic. The foundational level demonstrates economic responsibilities, clarifying that profit making and stakeholders’ satisfaction financially are the earliest and most essential steps. Legal responsibilities are next in line. Corporations are expected to have accurate awareness, respect and obedience towards laws and regulations set up by authorities to serve the purpose of managing and making sure businesses operate following their conscience. Ethical responsibilities remind companies that they have the obligation to implement fair and rightful treatment on their stakeholders, with no acceptance of damaging intentions. On the top is philanthropic responsibilities – responsibilities to function as a helpful member of the society and facilitate the community with resources of necessity. The main idea of this model is that, unless economic responsibilities are fulfilled, there is almost no way to accomplish the remaining three (Carroll, 1999).

Visser’s (2011) inspiration comes from the four bases of Deoxyribonucleic acid (DNA): A-G-T-C (Adenine, Guanine, Thymine and Cytosine). Accordingly, CSR 2.0 Model in Visser (2011) consists of four responsibility bases: value creation, good governance, societal contribution and environmental integrity. Beyond mere economic responsibilities or financial profitability, value dreation is meant as building and enriching an economically effective environment where jobs are created, facilities are invested in, skills training and development are promoted. In other words, this base factor indicates how the organization is operating to reasonably share economic benefits between various interest groups, rather than bland financial indicators. Good governance is mostly about the reality of a company’s operation ethics. Through indexes regarding “leadership”, “transparency”, “ethical conduct”, etc., effectiveness of the business’ governance would be measure. The fact that an organization conducts ambiguous actions in operating procedures would never be covered and made up for by any positive contribution or intention towards its surrounding society. Societal contribution is considered a broader awareness of “philanthropic responsibilities” in Carroll (1991) CSR Pyramid. With the first priority being stakeholders’ orientation, it encourages businesses to pay more attention to philanthropy, volunteerism and solving urgent problems of child labor and common labor inequity. Environmental integrity goes beyond minimizing damages done to the planet due to economic purposes. As the goal set to be sustainable ecosystems, it is vital that all business entities thrive to achieve renewable resources discovery and zero-waste production (Visser, 2011).

Economic development comes with certain damages towards the environment and the society. These damages are harming the planet both by environmental problems as climate change and civil problems as corporate greed. People expect companies worldwide to take responsibility for drawbacks from huge leap of economic revolutions and innovations (Frederick, 2006). On that background, Claydon (2011) ideas of the consumer-driven CSR emerged as suggestions for businesses to become profitable and socially responsible at the same time. The model proposes understanding CSR application in the form of a cycle, by first realizing that customers’ demand for social responsibility is a way to increase consumption power and profits itself. The business would not only be making more dimes but also take part in activities proving its responsible attitude towards social and environmental issues caused by its or others’ operation process. Remarkable outcomes are to be expected: reputation accelerated, customer base expanded, etc. More customers mean higher demand for CSR, which encourages the business to implement more CSR applications. In the end, it comes back to the first stage of the cycle. Effective deployment of CDCR model creates a win-win scenario for the company: economic, social and environmental responsibilities are fulfilled while customers are satisfied. This model is among the most recent ones about CSR. Yet it has somewhat proved its efficiency and competitiveness compared to older models. It suggests the essence of renovation, upgrade and comprehension in terms of CSR strategies to meet evolving demands of customers (Claydon, 2011).

• ISO 26000 as guidance for FDI companies

Set up with a view to clarifying confusion, ISO 26000:2010 presents guidance to businesses rather than requirements. Therefore, technically, it is not able to be certified, unlike other types of ISO standards. Its main function is to assist businesses and organizations to identify the most suitable definition of CSR for themselves, which later on is translated into practical and impactful actions. It is designed for every type of organizations in terms of activities, size and location to help globally spread best practices of social responsibility. The implementation is possible to be put as followed: performing social responsibility activities accordingly to its policies, organizational culture, strategies and operations; forming the social responsibility’s competency from within; initiate communication regarding social responsibility both internally and externally; and revising actions frequently. There are seven core subjects defined regarding social responsibility in the standard:  organizational governance; human rights; labor practices; environment; fair operating practices; consumer issues; and community involvement and development. It is a mutual understanding nowadays that there is an inevitable connection between organizations and the communities that they operate in. Community involvement, which would lead to community development, should be one of the foundational factors of this connection.

The core subject of community involvement and development includes seven component issues: community involvement, education and culture, employment creation and skills development, technology development and access, wealth and income creation, heath, and social investment. Sustainable development consists of essential parts which include community involvement and community development. Rather than purely recognizing and engaging stakeholders actively in activities’ impacts of an organization, community involvement should also comprise contribution to and connecting with the surrounding community. An organization should be aware of the fact that it is one of the surrounding community’s stakeholders, meaning community improvements are much likely to be accompanied by organization’s benefits. Community involvement and development’s areas of priority depend on the community’s characteristics and which benefits are to be contributed by each organization. An organization might take some actions clearly so as to make contribution to community development, while implement others for organizational purposes but boosting general development in an indirect way.

It is believed that education and culture play foundational roles in developing the community’s society, economy and also a part of its identity. Preserving and promoting culture alongside with renovating education in a human-rights-dedicated direction enhance social connectivity and development. Related actions and expectations under this issue encourage organizations to: boost and assist the growth of education regardless of levels; help make education quality and access availability better, strengthen local knowledge and eliminate illiteracy; implement focused support to open up education opportunities for vulnerable and discriminated groups; promote children’s participation in proper education and make efforts to eradicate barriers preventing them from education obtaining; develop suitable cultural activities, acknowledge and treasure local cultures and traditions in a way that support human rights; contribute to activities of culture which justify disadvantaged groups in history as a method of battling against discrimination; consider assist the progress of supporting human rights awareness education BS ISO 26000:2010 ISO 26000:2010(E) 65; take part in preserving and securing cultural heritage, particularly where the organization’s activities have an impact on; expand usage of traditional knowledge and indigenous communities’ technologies in an appropriate way.

CSR activities might increase expenses. Nevertheless, if the management board has a broad vision, CSR is bound to assure much more impressive advantages. Innovation to come up with positive methods to improve the society would help the business obtain a more advantageous market as well as better conditions for sustainable development. Businesses might gain from executing corporate social responsibility include: brand value increase and sustainable values creation; revenue growth, expenses cutback; employees’ confidence and loyalty improvement - talents attraction; and international competitive advantage boost and new markets approaching opportunities.

3. Methodology

Quantitative and qualitative methods are both adopted to assure a high level of measurement precision and statistical power as well as a great depth of information about the nature of CSR in the research setting. Qualitative approach is the main approach covering the study. Primary data were collected by conducting online surveys and generating results from both internal and external perspectives of FDI companies’ CSR in education implementation in Vietnam.

• Compiling the Questionnaire

To gather two-way opinions about CSR activities regarding education of FDI companies in Vietnam, two questionnaires were built based on the discussed framework. These questionnaires were available in both Vietnamese and English. The first questionnaire was created with a view to understanding how FDI companies’ personnel perceive CSR activities regarding education internally. There are ten questions in accordance with three main parts: acknowledgement of CSR’s importance to business successes; the organization’s current operations of CSR activities in education; and recommendations for improvement of CSR activities in education. The second questionnaire was expected to explore external perception of FDI companies’ CSR activities regarding education in Vietnam. Thirteen questions are divided into two parts: Personal Information and Evaluation of FDI Companies’ Education Developing Activities in Vietnam. Questions in both questionnaires are mostly multiple-choice, and responses are mostly text and descriptive.

• Sampling Selection

The questionnaire surveying internal perception targeting senior and executive managers of big FDI companies operating in Vietnam as of 2018. Eighteen questionnaires were sent out directly to these companies. Ten responses by senior and executive managers in charge of CSR activities from different companies were received. For the questionnaire surveying external perception, a convenience sample of Foreign Trade University students and some of their family members were recruited. Participants were invited to complete the questionnaire through social media by researchers and were encouraged to ask their family members and friends to participate in the study. Those who agreed to participate simply completed the questionnaire digitally and submitted and 103 responses were recorded for this questionnaire.

4. Findings
   • Internal perception questionnaire

Out of 10 managers, six were from Human Resources Department, three were from Public Relations Department and one was from Sales Department. Seven participants chose education to be the most important sector in CSR performance of their companies, while the remaining three answered it was in top 3. About 80 percent of the participants determined their companies’ focused targets of education developing CSR activities are universities and colleges, 10 percent chose high schools and 10 percent chose elementary schools. All 10 participants responded that big urban cities like Hanoi, Ho Chi Minh city and Da Nang were the centralized locations of their CSR activities regarding education development in Vietnam. Among six given options, only four were checked by the participants, with scholarships granting being the most popular method of education related CSR activities implementation. The others were: building education centers; providing and upgrading education facilities; and developing programs for young talents (Figure 3.1). Half of the participants chose “Budget” as the most important factors affecting CSR activities implementations regarding education. 3 participants chose “The company’s awareness of business ethics” and the other 2 chose “Community orientation about education of the company”.

 

Figure 4.1. Popular method of education related to CSR activities

Source: from the survey

• External perception questionnaire

Regarding methods of implementing education developing CSR activities, granting scholarships is the most popular with a 64.4 percent vote. The remaining methods do not have remarkable result distance (Figure 4.2). The most effective communication channel seems to be social network. The remaining order is as followed: electronic paper – education entities’ websites – television – printed newspaper and magazine – family, friends and acquaintances – company’s website – announcements from governmental departments (Figure 4.3). 69.5 percent of the participants claimed that big cities like Hanoi, Ho Chi Minh city and Da Nang are the centralized location of CSR activities investing in education development. About 15.3 percent chose poor rural areas; 6.8 percent went with mountainous and remote areas; 5.1 percent believed it was industrial zones; and the rest voted for others (Figure 4.4).

Figure 4.2. Most popular methods of performing CSR regarding education

Source: from the survey

           

 

Figure 4.3. Popularity of methods to promote CSR activities regarding education

Source: from the survey

 

 

 

Figure 4.4. Participants’ perception of centralized location for FDI companies’ CSR activities regarding education

                                                      Source: from the survey

5. Discussion

5.1. Achievements

            Vietnam is listed among developing nations, therefore, CSR application in this market follows the Visser’s (2011) rather than the more American – suited original version from Carroll (1999). Developing countries tend to prioritize the economic aspects of the CSR pyramids in order to fill in the economic deficit compared to the more developed parts of the world and the philanthropic aspect of CSR due to some dated habits. Due to the high priority placed on philanthropic responsibilities by the Vietnamese community, CSR in Vietnam is perceived by many to solely serve the charitable purpose characterized by donations, voluntary activities and more. Additionally, many enterprises see CSR as a means to polish their reputation a form of brand protection and believe that this is the sole intention for practicing CSR. With the participation of Vietnam into WTO in 2008, along with being a young market with a cheap and available labor force, Vietnam has been welcoming various multinational corporation outsourcing and setting up their official branches, choosing the Vietnamese to be one of their strategic market. Some notable names include Honda Corp, Unilever Corp, KPMG Corp and many others. These international giants have been playing an enormous role in setting up the example for big Vietnamese corporation as well as SMEs by adopting their code of conduct into the Vietnamese market. Additionally, the work of various international NGOs on raising awareness of businesses on 31 social and environmental issues has improved the perception of Vietnamese companies on the matter of sustainability. This development trend accompanied by many serious environmental issues in 2016 have forced the Vietnamese government and the local community to focus and demand businesses to adhere to social responsibilities and operation transparency more, which will undoubtedly lead to a better and more thorough understanding of CSR in the future.

            Many experts in CSR have affirmed that the CSR developing progress in Vietnam was initiated and is currently largely maintained by International economic players. The concept of CSR at first was introduced into this market via the investments of multinational corporations, who brought and enforced their code of conducts on Vietnamese facilities and branches to ensure global coherence among their organizations. Witnessing the profound impacts these strategies and initiatives have had on the brand and the society as a whole, together with Vietnam’s participation into the WTO, big local businesses with mindsets of going global quickly learned from these international players and started putting efforts in integrating CSR in their daily operation. Along with this realization comes better financial results, in 2008, the Institute of Labor Science and Social Affairs conducted a survey on 24 enterprises in the field of leather footwear and textile, which retracted results showing that thanks to CSR implementation, these businesses have witnessed increase in revenues, labor capacity and even better exporting rate. As from the governmental point of view, the topic of CSR is drawing more and more concerns due to the increasing number of environmental and social violations and the pressure coming from the society regarding the protection of the environment. This leads to many decisions regarding the prevention of environmental violations as well as setting up economic initiatives to facilitate sustainable social development. One of such decisions is Decision No. 192/QD-TTg in 2017 that gave approval to the plan of developing the environmental industry until 2025; or Decree No. 61 155/2016/NĐ-CP that provided a punishment framework for violation of the environment, applied for many units including businesses. At the moment, the most active governmental institution in terms of CSR is the Vietnam Chamber of Commerce and Industry (VCCI for short) with various topic-related initiatives from the 2005 inauguration of the “CSR towards sustainable development” award alongside other governmental bodies such as the Ministry of Labor, Ministry of Industry and Trade to name a few, to the launching of the Global Compact Network Vietnam as the cooperation between VCCI and the United Nations. Another governmental body that is relatively active in CSR reformation in Vietnam is the Vietnam General Confederation of Labor (VCGL for short) whose branches are cooperating with more and more union of Western countries to strengthen rights in Vietnam.

5.2. Shortcomings

            FDI companies in Vietnam are paying greate attention to performing CSR, especially the education sector of their CSR activities. Nevertheless, most companies have not made their best efforts in professionalizing CSR. Proofs are most companies do not have a separate division to be responsible for developing and implementing CSR activities. Decisions are made by top managers then passed down to Department of Sales, Public Relations and/or Human Resources to implement. This limits the part of Researching and Developing. Most of their CSR activities have not been planned for a long-term vision, but only planned when there are demands and conditions occurring. Methods, targets and locations of these activities are still narrow and centralized, resulting in restricted number of people reached.

           Performing methods are monotonic, lacking creativity and serious efforts. Most CSR activities to develop education conditions are available to students in big urban cities, while the real population in need is left inadequately approached. Communications and promotions for these activities are still underestimated. Currently, most businesses have not truly set up an impactful orientation for education developing CSR activities in Vietnam. Organizing location is limited to big cities and urban areas, while poor rural areas or mountainous and remote areas are more in need of support. Furthermore, implementing methods are effortless and not creative. The method of granting scholarship is not meaningful enough and has little effect to long-term development of national education. Companies are abusing the method since it takes least time and effort to complete.

           Business ethics reflect aspiration and expectations from within. CSR reflects aspiration and expectations from the outside. An important aspect of business ethics to companies and company evaluation is CSR. CSR was born after business ethics and currently is a priority concern of organizations. CSR is an expression of business ethics which actualizes standards and regulations into realistic actions, minimizing negative impacts. A company’s awareness regarding business ethics plays a stimulating and commanding role in individuals’ and organizational decision making, especially with highly self-conscious issues as education development for the community.

6. Recommendations and conclusion

6.1. Determining long-term orientation and vision regarding education developing CSR activities

           Innovation in corporate governance is an effective way to enhance social responsibility for the development of community. Refreshing the philosophy of enterprises, realizing the charter of enterprises as a guarantee for more responsible behavior of enterprises; enhancing customer-oriented management methods, with particular emphasis on two-way flow of information and customer feedback; implementing risk management through hands-on training for all employees. Build trust and support not only of customers, the public but also with all employees working in businesses, suppliers and distributors, investors, financial institutions and credit and government agencies. Social responsibility in general and education developing responsibility in particular, whether effective or not, starts from managers. If managers do not believe in the importance of social responsibility, community responsibility, proactive leadership, or support for CSR activities at grassroots level, if they do not show integrity and honesty in business as well as in personal life, CSR of that business would not likely to be successful.

6.2. Renovating and implementing codes of conduct

           Vision, business strategy, and the application of principles and codes of conduct to the management of education CSR activities are clearly useful in business. Developing a code of conduct for the environment as a commitment of corporate management to the law and as a reference for enterprise behavior towards the community, showing compliance and more implies the willingness to take responsibility and fulfill obligations when problems arise. These codes must respect and comply with the laws of Vietnam, including clear principles and standards committed throughout all processes. The entire business, whether they are leaders or employees, working together in compliance with these rules ensures that corporate behavior is ethical and responsible to the society.

6.3. Spreading inspiration to employees

           Awareness raising is not limited to the management level. Creating and maintaining internal information channels to disseminate knowledge to each employee in the enterprise is vital. The education activities, propaganda for employees, help them to understand the role of the impact of CSR on enterprises as well as the development of the community, while encouraging employees to change positively. Encourage employees to speak out in the implementation of CSR activities, contribute ideas that are relevant and useful to businesses. The awards, incentives and incentives of the local enterprises as well as within the enterprise for individuals would become the springboard pushing the real activity. Competitions are usually effective. Enterprises that want to develop sustainably and achieve economic success should have a more corporate social responsibility orientation.

           The above are just suggestions for some measures for businesses to improve the implementation of CSR for community development, especially education. The combination of measures together seriously would create good effects for businesses. Contributing to education development is the responsibility of not only any individual but the whole social community, by the unity of action of the government, from the central level, ministries, departments to localities, enterprises, organizations, social workers and customers. Education developing investment in particular, community involvement and development in general, is a way of sustainable development, building a living environment and a stable, favorable and healthy business environment.

           During nearly 30 years since the Law on Foreign Investment was promulgated, Vietnam has achieved impressive results in attracting FDI. Together with the rapid growth of GDP in both the economy and the FDI sector, the share of FDI in the GDP has been increasing. However, due to the rush of economic growth, so far, the contribution and attention to community involvement and development, particularly education, are stagnated. Following the current development trend, in parallel with the production and service provision of products and services, foreign enterprises operating in Vietnam have the responsibility to facilitate education conditions as well as contribute to sustainable development for the community and the environment of Vietnam. In order to create maximum conditions for FDI enterprises as well as to develop a sustainable future for the country, the Vietnamese Government should strive to continuously innovate approaches in the formulation of foreign investment policies. For the next period, effective measures should be applied to attract large multinational companies with diverse potentials, to improve and enhance the effectiveness and enforcement of law and CSR management with rigorous, deterrent and coercive sanctions.

6.4. Conclusion

Awareness of reputation impulsion by implementing corporate social responsibility regarding education, FDI companies in Vietnam have pay more attention to CSR methods as well as communication to society especially in higher education institution and general education schools. In order to improve efficiency and effectiveness, FDI companies should determine long-term orientation and vision regarding education developing CSR activities, renovate and implement codes of conduct, spread inspiration to employees.

 

 

REFERENCES

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[1] Foreign Trade University, Vietnam, Email: huongpt@ftu.edu.vn

[2] BI Norwegian Business School, Norway

 

Corporate Social Responsibility Regarding Education of Foreign Direct Investment Companies in Vietnam

Pham Thu Huong[1]

Pham Huong Quynh[2]

 

Abstract

Foreign Direct Investment (FDI) has been growing rapidly in Vietnam despite globally complicated and unpredictable fluctuations of the economy. Although it is presented in impressive numbers regarding FDI’s overall efficiency in Vietnam, the connection between FDI businesses and Vietnam’s education and training is rather feeble. This paper investigates the FDI companies’ corporate social responsibility (CSR) performance regarding education development in Vietnam. The most popular methods of performing CSR regarding education include granting scholarship, building schools and education centers, providing and improving educational facilities, developing programs for young talents, sponsoring scientific researches… CSR regarding to education of FDI companies in Vietnam has impacted on efforts in integrating CSR in their daily operation of big local businesses with mindsets of going global quickly. However, most FDI companies consider CSR regarding education as a part of PR campaigns and do not have a long-term vision for their CSR activities. Methods, targets and locations of these activities are still narrow and centralized, resulting in a restricted number of people reached. Most CSR activities to improve education conditions are available to students in big urban cities, while the real population in need is left inadequately approached. This paper proposes some recommendations for improving CSR activities regarding education of FDI companies in Vietnam.

Keywords: CSR, Education, FDI, Vietnam

1. Introduction

            According to the information announced by the Foreign Investment Agency (Ministry of Planning and Investment), as of December 20^th, 2017, 2,591 new FDI projects are granted certificates in Vietnam. Generally, in 2017, the total registered capital of foreign investors peaked to 35.88 billion USD, which is equivalent to an increase of 44.4 percent over the same period of 2016. The total registered capital was 21.27 billion USD, having increased by 42.3 percent over the same period in 2016, with a disbursed amount of 17.5 billion USD. At the same time, 1,188 projects were registered to adjust their investment capital with the total registered capital of approximately 8.41 billion USD and 5,002 capital contribution, share purchase of investors with a combined capital of 6.19 billion USD. Thus, the amount of FDI inflows into Vietnam has nearly doubled in the past four years, from 20 billion USD in 2014 to nearly 36 billion USD in 2017. Currently, FDI enterprises are present in 63 provinces and cities over the country, among which Ho Chi Minh City is leading with 44 billion USD, followed by Binh Duong, Dong Nai and Hanoi.

            Yet it remains to be in question whether FDI is missing out on something. More than anything, training and education play crucial roles in the future of a nation. As humans are highly influenced by experiences in childhood, the process of guiding and nurturing young generation determines how strongly the country is to evolve. A decent education does not guarantee one’s success, but it optimizes the opportunities one is able to seize in life. Despite impressive numbers regarding FDI’s overall efficiency in Vietnam, the connection between FDI businesses and Vietnam’s education and training is rather feeble. Being regarded as the first priority of the country, however, education and training landed on the 17^th spot among 18 areas receiving FDI. In accordance with the Foreign Investment Agency (Ministry of Planning and Investment), by the end of February 2013, education and training have attracted 170 FDI projects nationwide with the total registered capital investment of 468 million USD. Average scale calculated per project is relatively low, which is around 2.8 million USD. Furthermore, most projects, which account for 93.3 percent of total registered capital, are aimed to be executed in Hanoi and Ho Chi Minh city, while rural and remoted areas are particularly short of education and training investment.    

            Every business is a component of the society, meaning they have legal rights and responsibilities to contribute to the development of society. It is not restricted to business activities or making profits alone. Corporate Social Responsibility (CSR) is the bridge connecting corporates’ benefits with requirements from the society. Under circumstances mentioned above, it is indicated that companies, especially FDI companies, need to pay more attention to CSR in training and education comparing to other areas.

In this paper, the methods, targets, locations and critical factors related to CSR activities regarding education are investigated. The findings are the background for proposing recommendations to improvement of CSR regarding education as well as FDI companies’ awareness of full responsibilities upon Vietnam’s education development.

2. Literature Review
   • Corporate Social Responsibility (CSR)

           Despite controversial viewpoints upon the origin of CSR all around the world, its emergence in ancient Greek society is well established (Visser & Tolhurst, 2010). When civilization started to build up, people believed that it would be reasonable for the upper class to share portions of their wealth with other less fortunate citizens. This rooted from a mutual understanding that the minority would not be able to achieve prosperity without the work of population majority, which resulted in the state passed particular laws to support the belief. These laws were called the liturgies, which shared quite many similarities with modern community’s taxation systems; however, they rather served as one of wealthy people’s privileges back in the days (Avlonas, n.d). An ongoing debate involving the issue of Corporate Social Responsibility has been active since the second half of the 20^th century (Garriga and Melé, 2004). Nowadays, CSR remains a controversial term without a globally unified definition. The term “Corporate Social Responsibility” first emerged in Rowen’s (1953) book titled “Social Responsibilities of the Businessman”. Asset managers were encouraged not to violate others’ rights and benefits, as well as motivated benevolence to make up for damages done to the society by businesses. Ever since, CSR has been interpreted into different meanings. Others claim that “CSR encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time” (Carroll, 1999). Afterwards, studies have mutually reached a relatively complete definition which better clarifies the nature of CSR as “the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life” (World Business Council for Sustainable Development, 1998). In accordance with this definition, so as to achieve sustainable development, businesses are always expected to follow local and international standards of environment conservation, gender equality, labor safety, labor rights, payment equity, personnel training and development as well as community development. In other words, CSR requires businesses to pursue the determination of balancing between their economic performances and their positive impacts on the society.

• CSR factors models

Three of the most remarkable CSR models are Carroll’s (1991) CSR Pyramid, Visser’s (2011) CSR model version 2.0 and Claydon’s (2011) Consumer – driven CSR model. CSR Pyramid in Carroll (1991) was created with a view to explaining how essential it is for business entities to fulfill every aspect in the social world: economic, legal, ethical and philanthropic. The foundational level demonstrates economic responsibilities, clarifying that profit making and stakeholders’ satisfaction financially are the earliest and most essential steps. Legal responsibilities are next in line. Corporations are expected to have accurate awareness, respect and obedience towards laws and regulations set up by authorities to serve the purpose of managing and making sure businesses operate following their conscience. Ethical responsibilities remind companies that they have the obligation to implement fair and rightful treatment on their stakeholders, with no acceptance of damaging intentions. On the top is philanthropic responsibilities – responsibilities to function as a helpful member of the society and facilitate the community with resources of necessity. The main idea of this model is that, unless economic responsibilities are fulfilled, there is almost no way to accomplish the remaining three (Carroll, 1999).

Visser’s (2011) inspiration comes from the four bases of Deoxyribonucleic acid (DNA): A-G-T-C (Adenine, Guanine, Thymine and Cytosine). Accordingly, CSR 2.0 Model in Visser (2011) consists of four responsibility bases: value creation, good governance, societal contribution and environmental integrity. Beyond mere economic responsibilities or financial profitability, value dreation is meant as building and enriching an economically effective environment where jobs are created, facilities are invested in, skills training and development are promoted. In other words, this base factor indicates how the organization is operating to reasonably share economic benefits between various interest groups, rather than bland financial indicators. Good governance is mostly about the reality of a company’s operation ethics. Through indexes regarding “leadership”, “transparency”, “ethical conduct”, etc., effectiveness of the business’ governance would be measure. The fact that an organization conducts ambiguous actions in operating procedures would never be covered and made up for by any positive contribution or intention towards its surrounding society. Societal contribution is considered a broader awareness of “philanthropic responsibilities” in Carroll (1991) CSR Pyramid. With the first priority being stakeholders’ orientation, it encourages businesses to pay more attention to philanthropy, volunteerism and solving urgent problems of child labor and common labor inequity. Environmental integrity goes beyond minimizing damages done to the planet due to economic purposes. As the goal set to be sustainable ecosystems, it is vital that all business entities thrive to achieve renewable resources discovery and zero-waste production (Visser, 2011).

Economic development comes with certain damages towards the environment and the society. These damages are harming the planet both by environmental problems as climate change and civil problems as corporate greed. People expect companies worldwide to take responsibility for drawbacks from huge leap of economic revolutions and innovations (Frederick, 2006). On that background, Claydon (2011) ideas of the consumer-driven CSR emerged as suggestions for businesses to become profitable and socially responsible at the same time. The model proposes understanding CSR application in the form of a cycle, by first realizing that customers’ demand for social responsibility is a way to increase consumption power and profits itself. The business would not only be making more dimes but also take part in activities proving its responsible attitude towards social and environmental issues caused by its or others’ operation process. Remarkable outcomes are to be expected: reputation accelerated, customer base expanded, etc. More customers mean higher demand for CSR, which encourages the business to implement more CSR applications. In the end, it comes back to the first stage of the cycle. Effective deployment of CDCR model creates a win-win scenario for the company: economic, social and environmental responsibilities are fulfilled while customers are satisfied. This model is among the most recent ones about CSR. Yet it has somewhat proved its efficiency and competitiveness compared to older models. It suggests the essence of renovation, upgrade and comprehension in terms of CSR strategies to meet evolving demands of customers (Claydon, 2011).

• ISO 26000 as guidance for FDI companies

Set up with a view to clarifying confusion, ISO 26000:2010 presents guidance to businesses rather than requirements. Therefore, technically, it is not able to be certified, unlike other types of ISO standards. Its main function is to assist businesses and organizations to identify the most suitable definition of CSR for themselves, which later on is translated into practical and impactful actions. It is designed for every type of organizations in terms of activities, size and location to help globally spread best practices of social responsibility. The implementation is possible to be put as followed: performing social responsibility activities accordingly to its policies, organizational culture, strategies and operations; forming the social responsibility’s competency from within; initiate communication regarding social responsibility both internally and externally; and revising actions frequently. There are seven core subjects defined regarding social responsibility in the standard:  organizational governance; human rights; labor practices; environment; fair operating practices; consumer issues; and community involvement and development. It is a mutual understanding nowadays that there is an inevitable connection between organizations and the communities that they operate in. Community involvement, which would lead to community development, should be one of the foundational factors of this connection.

The core subject of community involvement and development includes seven component issues: community involvement, education and culture, employment creation and skills development, technology development and access, wealth and income creation, heath, and social investment. Sustainable development consists of essential parts which include community involvement and community development. Rather than purely recognizing and engaging stakeholders actively in activities’ impacts of an organization, community involvement should also comprise contribution to and connecting with the surrounding community. An organization should be aware of the fact that it is one of the surrounding community’s stakeholders, meaning community improvements are much likely to be accompanied by organization’s benefits. Community involvement and development’s areas of priority depend on the community’s characteristics and which benefits are to be contributed by each organization. An organization might take some actions clearly so as to make contribution to community development, while implement others for organizational purposes but boosting general development in an indirect way.

It is believed that education and culture play foundational roles in developing the community’s society, economy and also a part of its identity. Preserving and promoting culture alongside with renovating education in a human-rights-dedicated direction enhance social connectivity and development. Related actions and expectations under this issue encourage organizations to: boost and assist the growth of education regardless of levels; help make education quality and access availability better, strengthen local knowledge and eliminate illiteracy; implement focused support to open up education opportunities for vulnerable and discriminated groups; promote children’s participation in proper education and make efforts to eradicate barriers preventing them from education obtaining; develop suitable cultural activities, acknowledge and treasure local cultures and traditions in a way that support human rights; contribute to activities of culture which justify disadvantaged groups in history as a method of battling against discrimination; consider assist the progress of supporting human rights awareness education BS ISO 26000:2010 ISO 26000:2010(E) 65; take part in preserving and securing cultural heritage, particularly where the organization’s activities have an impact on; expand usage of traditional knowledge and indigenous communities’ technologies in an appropriate way.

CSR activities might increase expenses. Nevertheless, if the management board has a broad vision, CSR is bound to assure much more impressive advantages. Innovation to come up with positive methods to improve the society would help the business obtain a more advantageous market as well as better conditions for sustainable development. Businesses might gain from executing corporate social responsibility include: brand value increase and sustainable values creation; revenue growth, expenses cutback; employees’ confidence and loyalty improvement - talents attraction; and international competitive advantage boost and new markets approaching opportunities.

3. Methodology

Quantitative and qualitative methods are both adopted to assure a high level of measurement precision and statistical power as well as a great depth of information about the nature of CSR in the research setting. Qualitative approach is the main approach covering the study. Primary data were collected by conducting online surveys and generating results from both internal and external perspectives of FDI companies’ CSR in education implementation in Vietnam.

• Compiling the Questionnaire

To gather two-way opinions about CSR activities regarding education of FDI companies in Vietnam, two questionnaires were built based on the discussed framework. These questionnaires were available in both Vietnamese and English. The first questionnaire was created with a view to understanding how FDI companies’ personnel perceive CSR activities regarding education internally. There are ten questions in accordance with three main parts: acknowledgement of CSR’s importance to business successes; the organization’s current operations of CSR activities in education; and recommendations for improvement of CSR activities in education. The second questionnaire was expected to explore external perception of FDI companies’ CSR activities regarding education in Vietnam. Thirteen questions are divided into two parts: Personal Information and Evaluation of FDI Companies’ Education Developing Activities in Vietnam. Questions in both questionnaires are mostly multiple-choice, and responses are mostly text and descriptive.

• Sampling Selection

The questionnaire surveying internal perception targeting senior and executive managers of big FDI companies operating in Vietnam as of 2018. Eighteen questionnaires were sent out directly to these companies. Ten responses by senior and executive managers in charge of CSR activities from different companies were received. For the questionnaire surveying external perception, a convenience sample of Foreign Trade University students and some of their family members were recruited. Participants were invited to complete the questionnaire through social media by researchers and were encouraged to ask their family members and friends to participate in the study. Those who agreed to participate simply completed the questionnaire digitally and submitted and 103 responses were recorded for this questionnaire.

4. Findings
   • Internal perception questionnaire

Out of 10 managers, six were from Human Resources Department, three were from Public Relations Department and one was from Sales Department. Seven participants chose education to be the most important sector in CSR performance of their companies, while the remaining three answered it was in top 3. About 80 percent of the participants determined their companies’ focused targets of education developing CSR activities are universities and colleges, 10 percent chose high schools and 10 percent chose elementary schools. All 10 participants responded that big urban cities like Hanoi, Ho Chi Minh city and Da Nang were the centralized locations of their CSR activities regarding education development in Vietnam. Among six given options, only four were checked by the participants, with scholarships granting being the most popular method of education related CSR activities implementation. The others were: building education centers; providing and upgrading education facilities; and developing programs for young talents (Figure 3.1). Half of the participants chose “Budget” as the most important factors affecting CSR activities implementations regarding education. 3 participants chose “The company’s awareness of business ethics” and the other 2 chose “Community orientation about education of the company”.

 

Figure 4.1. Popular method of education related to CSR activities

Source: from the survey

• External perception questionnaire

Regarding methods of implementing education developing CSR activities, granting scholarships is the most popular with a 64.4 percent vote. The remaining methods do not have remarkable result distance (Figure 4.2). The most effective communication channel seems to be social network. The remaining order is as followed: electronic paper – education entities’ websites – television – printed newspaper and magazine – family, friends and acquaintances – company’s website – announcements from governmental departments (Figure 4.3). 69.5 percent of the participants claimed that big cities like Hanoi, Ho Chi Minh city and Da Nang are the centralized location of CSR activities investing in education development. About 15.3 percent chose poor rural areas; 6.8 percent went with mountainous and remote areas; 5.1 percent believed it was industrial zones; and the rest voted for others (Figure 4.4).

Figure 4.2. Most popular methods of performing CSR regarding education

Source: from the survey

           

 

Figure 4.3. Popularity of methods to promote CSR activities regarding education

Source: from the survey

 

 

 

Figure 4.4. Participants’ perception of centralized location for FDI companies’ CSR activities regarding education

                                                      Source: from the survey

5. Discussion

5.1. Achievements

            Vietnam is listed among developing nations, therefore, CSR application in this market follows the Visser’s (2011) rather than the more American – suited original version from Carroll (1999). Developing countries tend to prioritize the economic aspects of the CSR pyramids in order to fill in the economic deficit compared to the more developed parts of the world and the philanthropic aspect of CSR due to some dated habits. Due to the high priority placed on philanthropic responsibilities by the Vietnamese community, CSR in Vietnam is perceived by many to solely serve the charitable purpose characterized by donations, voluntary activities and more. Additionally, many enterprises see CSR as a means to polish their reputation a form of brand protection and believe that this is the sole intention for practicing CSR. With the participation of Vietnam into WTO in 2008, along with being a young market with a cheap and available labor force, Vietnam has been welcoming various multinational corporation outsourcing and setting up their official branches, choosing the Vietnamese to be one of their strategic market. Some notable names include Honda Corp, Unilever Corp, KPMG Corp and many others. These international giants have been playing an enormous role in setting up the example for big Vietnamese corporation as well as SMEs by adopting their code of conduct into the Vietnamese market. Additionally, the work of various international NGOs on raising awareness of businesses on 31 social and environmental issues has improved the perception of Vietnamese companies on the matter of sustainability. This development trend accompanied by many serious environmental issues in 2016 have forced the Vietnamese government and the local community to focus and demand businesses to adhere to social responsibilities and operation transparency more, which will undoubtedly lead to a better and more thorough understanding of CSR in the future.

            Many experts in CSR have affirmed that the CSR developing progress in Vietnam was initiated and is currently largely maintained by International economic players. The concept of CSR at first was introduced into this market via the investments of multinational corporations, who brought and enforced their code of conducts on Vietnamese facilities and branches to ensure global coherence among their organizations. Witnessing the profound impacts these strategies and initiatives have had on the brand and the society as a whole, together with Vietnam’s participation into the WTO, big local businesses with mindsets of going global quickly learned from these international players and started putting efforts in integrating CSR in their daily operation. Along with this realization comes better financial results, in 2008, the Institute of Labor Science and Social Affairs conducted a survey on 24 enterprises in the field of leather footwear and textile, which retracted results showing that thanks to CSR implementation, these businesses have witnessed increase in revenues, labor capacity and even better exporting rate. As from the governmental point of view, the topic of CSR is drawing more and more concerns due to the increasing number of environmental and social violations and the pressure coming from the society regarding the protection of the environment. This leads to many decisions regarding the prevention of environmental violations as well as setting up economic initiatives to facilitate sustainable social development. One of such decisions is Decision No. 192/QD-TTg in 2017 that gave approval to the plan of developing the environmental industry until 2025; or Decree No. 61 155/2016/NĐ-CP that provided a punishment framework for violation of the environment, applied for many units including businesses. At the moment, the most active governmental institution in terms of CSR is the Vietnam Chamber of Commerce and Industry (VCCI for short) with various topic-related initiatives from the 2005 inauguration of the “CSR towards sustainable development” award alongside other governmental bodies such as the Ministry of Labor, Ministry of Industry and Trade to name a few, to the launching of the Global Compact Network Vietnam as the cooperation between VCCI and the United Nations. Another governmental body that is relatively active in CSR reformation in Vietnam is the Vietnam General Confederation of Labor (VCGL for short) whose branches are cooperating with more and more union of Western countries to strengthen rights in Vietnam.

5.2. Shortcomings

            FDI companies in Vietnam are paying greate attention to performing CSR, especially the education sector of their CSR activities. Nevertheless, most companies have not made their best efforts in professionalizing CSR. Proofs are most companies do not have a separate division to be responsible for developing and implementing CSR activities. Decisions are made by top managers then passed down to Department of Sales, Public Relations and/or Human Resources to implement. This limits the part of Researching and Developing. Most of their CSR activities have not been planned for a long-term vision, but only planned when there are demands and conditions occurring. Methods, targets and locations of these activities are still narrow and centralized, resulting in restricted number of people reached.

           Performing methods are monotonic, lacking creativity and serious efforts. Most CSR activities to develop education conditions are available to students in big urban cities, while the real population in need is left inadequately approached. Communications and promotions for these activities are still underestimated. Currently, most businesses have not truly set up an impactful orientation for education developing CSR activities in Vietnam. Organizing location is limited to big cities and urban areas, while poor rural areas or mountainous and remote areas are more in need of support. Furthermore, implementing methods are effortless and not creative. The method of granting scholarship is not meaningful enough and has little effect to long-term development of national education. Companies are abusing the method since it takes least time and effort to complete.

           Business ethics reflect aspiration and expectations from within. CSR reflects aspiration and expectations from the outside. An important aspect of business ethics to companies and company evaluation is CSR. CSR was born after business ethics and currently is a priority concern of organizations. CSR is an expression of business ethics which actualizes standards and regulations into realistic actions, minimizing negative impacts. A company’s awareness regarding business ethics plays a stimulating and commanding role in individuals’ and organizational decision making, especially with highly self-conscious issues as education development for the community.

6. Recommendations and conclusion

6.1. Determining long-term orientation and vision regarding education developing CSR activities

           Innovation in corporate governance is an effective way to enhance social responsibility for the development of community. Refreshing the philosophy of enterprises, realizing the charter of enterprises as a guarantee for more responsible behavior of enterprises; enhancing customer-oriented management methods, with particular emphasis on two-way flow of information and customer feedback; implementing risk management through hands-on training for all employees. Build trust and support not only of customers, the public but also with all employees working in businesses, suppliers and distributors, investors, financial institutions and credit and government agencies. Social responsibility in general and education developing responsibility in particular, whether effective or not, starts from managers. If managers do not believe in the importance of social responsibility, community responsibility, proactive leadership, or support for CSR activities at grassroots level, if they do not show integrity and honesty in business as well as in personal life, CSR of that business would not likely to be successful.

6.2. Renovating and implementing codes of conduct

           Vision, business strategy, and the application of principles and codes of conduct to the management of education CSR activities are clearly useful in business. Developing a code of conduct for the environment as a commitment of corporate management to the law and as a reference for enterprise behavior towards the community, showing compliance and more implies the willingness to take responsibility and fulfill obligations when problems arise. These codes must respect and comply with the laws of Vietnam, including clear principles and standards committed throughout all processes. The entire business, whether they are leaders or employees, working together in compliance with these rules ensures that corporate behavior is ethical and responsible to the society.

6.3. Spreading inspiration to employees

           Awareness raising is not limited to the management level. Creating and maintaining internal information channels to disseminate knowledge to each employee in the enterprise is vital. The education activities, propaganda for employees, help them to understand the role of the impact of CSR on enterprises as well as the development of the community, while encouraging employees to change positively. Encourage employees to speak out in the implementation of CSR activities, contribute ideas that are relevant and useful to businesses. The awards, incentives and incentives of the local enterprises as well as within the enterprise for individuals would become the springboard pushing the real activity. Competitions are usually effective. Enterprises that want to develop sustainably and achieve economic success should have a more corporate social responsibility orientation.

           The above are just suggestions for some measures for businesses to improve the implementation of CSR for community development, especially education. The combination of measures together seriously would create good effects for businesses. Contributing to education development is the responsibility of not only any individual but the whole social community, by the unity of action of the government, from the central level, ministries, departments to localities, enterprises, organizations, social workers and customers. Education developing investment in particular, community involvement and development in general, is a way of sustainable development, building a living environment and a stable, favorable and healthy business environment.

           During nearly 30 years since the Law on Foreign Investment was promulgated, Vietnam has achieved impressive results in attracting FDI. Together with the rapid growth of GDP in both the economy and the FDI sector, the share of FDI in the GDP has been increasing. However, due to the rush of economic growth, so far, the contribution and attention to community involvement and development, particularly education, are stagnated. Following the current development trend, in parallel with the production and service provision of products and services, foreign enterprises operating in Vietnam have the responsibility to facilitate education conditions as well as contribute to sustainable development for the community and the environment of Vietnam. In order to create maximum conditions for FDI enterprises as well as to develop a sustainable future for the country, the Vietnamese Government should strive to continuously innovate approaches in the formulation of foreign investment policies. For the next period, effective measures should be applied to attract large multinational companies with diverse potentials, to improve and enhance the effectiveness and enforcement of law and CSR management with rigorous, deterrent and coercive sanctions.

6.4. Conclusion

Awareness of reputation impulsion by implementing corporate social responsibility regarding education, FDI companies in Vietnam have pay more attention to CSR methods as well as communication to society especially in higher education institution and general education schools. In order to improve efficiency and effectiveness, FDI companies should determine long-term orientation and vision regarding education developing CSR activities, renovate and implement codes of conduct, spread inspiration to employees.

 

 

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