Gaining competitive advantage from csr policy change – case of vietnam

Nội dung text: Gaining competitive advantage from csr policy change – case of vietnam

1. GAINING COMPETITIVE ADVANTAGE FROM CSR POLICY CHANGE – CASE OF VIETNAM Nguyen Hoang Tien*1 ABSTRACT: This article offers two interrelated strategies to be used facing corporate social responsibility challenges. As integrated strategies, they both recognize non-market and social forces while dealing with traditional business issues and taking into account the reality of the market. Avant-garde advocating for progressive social responsibility policy enables firms, the game-­changers to actively or even proactively shape their own strategy by raising barriers to competitors striving to develop identical status. Systematically conforming to current and changing standards of social resp­ onsi­bi­lity set forth by policy makers and supported by policy activists allows firms, the game­-followers to adapt to the situation at their own pace. This article presents four Vietnamese case studies that highlight how some firms have successfully implemented these strategies while others have not. Keywords: Competitive advantage; business strategy; policy change; government; CSR. 1. INTRODUCTION Corporate social responsibility (CSR) is, more or less, an integrated element in Western firms’ structure­ and policy. On the contrary, CSR is quite a new but fast growing in importance issue for developing countries, such as Vietnam, and firms therein. Hence, CSR is a very popular management concept worldwide and it is now being imported into Vietnam. Vietnamese business is beginning to respect CSR policy and regulations, behavioral standards and norms due to growing pressure from multinational corporations originated from developed countries operating in Vietnamese market. However, in the context of globali­ ­za­tion process, in developing countries, policy and regulations in this area are subjects of constant changes­ and adap­ ­tations, sprea­ ding from previous financial model to today’ societal model of CSR (Nguyen Hoang Tien, 2015, pp. 36-44). Due to that, many firms may profit from adaptations to CSR policy and regulations change, building their own prior sustainable compe­ ­titive advantage, while others are not so successful in this area. Hereafter, both of these typical cases are carefully analyzed to draw out interesting and informative conclusions. Until now, in Vietnam, businesses have been identified as practicing social responsibility in an inadequate extent. According to a CSR survey conducted by Social Responsibility Initiatives Vietnam, 90% of respondents misunderstood the concept and essence of ​CSR. This must be changed sooner or later. In addition, there are not many studies carried out on the issues of CSR in the context of Vietnam. This article’s goal is striving to studying and identifying behaviors of firms under changing state policy and regulations on CSR, thereby contributing significantly to further research. 2. CORPORATE SOCIAL RESPONSIBILITY REVIEW AND RESEARCH METHODOLOGY Social Responsibility is a field of research which investigates the processes and solutions in order to guarantee a strategic balance between economic growth and social development at both macro level (international, regional, national, local) and micro level (level of enterprises). Corporate Social Responsibility * Thu Dau Mot University, Binh Duong, Vietnam, Corresponding author. Tel.: +840707841048. E-mail address: vietnameu@gmail.com
2. INTERNATIONAL CONFERENCE STARTUP AND INNOVATION NATION 557 (CSR) is a field of research aiming at defining what the essence of a socially responsible business is and what business has to do to become socially responsible. It relates with a whole range of practical issues, such as: corporate ethical program, corporate governance, social policy, fair trading practice, socially responsible investment and production, etc. (Nguyen Hoang Tien 2015, p.7). In the literature of business and management there are many definitions of CSR. It can be argued that the sphere of influence of CSR is not confined within the enterprise itself. It has a mutual influence on many different parts of society, especially the role of government in the economy in terms of planning policy and setting regulations (Davis, 1973; Carroll, 1999; Matten and Moon, 2005). Both large corporations and small organizations have obligations also to the society which are above that of creating value for shareholders. Corporation should be managed in the benefit of all those who are interested in those organizations (managers, owners, suppliers, employees, local communities, environment) (Man and Macris, 2015). Consequently, the concept of CSR is constantly changing depending on the spatial and temporal sphere of scientific and practical debate and so do the policy and regulations set by government and local authorities. Today, the definition from the World Business Council for Sustainable Development on CSR is widely used, which is considered complete and clear: “Corporate Social Responsibility is the constant commitment of the business to business ethics and to contribute to economic growth, while improving the quality of life of workers and their families, as well as of the community and society” (WBC, 1998). Generally, CSR is a continuous commitment of the enterprise to contribute to the economic development while enhancing the quality of life of the workforce as well as of the community, the society and the environment. CSR is a growing organizational phenomenon with many broad implications for practitioners, scholars and society at large (Kot, 2014). In contrary to developed countries, in developing countries, whether managers with different attitudes and approaches are opted to operate in a responsive or unresponsive manner toward CSR issues, they are exposed to uncertainty caused by policy and regulatory change (Marcus, 1981; Milliken, 1987; Wernefelt and Karnani, 1987). Developing countries’ specificities change the circumstances in which companies face business and society concerns (Muthuri & Gilbert, 2011). The CSR topics there do not follow any specific theme or country pattern. The enactment of new policy and regulations always creates a large group of winners and losers in the marketplace. To be the winners,­ managers should know how to improve the odds, treating pending policy and regulatory change as an opportunity rather than as a challenge. Policy and regulatory change is a function of the bargaining that takes place among all stakeholders which include not only activist organizations, policy makers and strategic planners, but also concerned the firms themselves. Given the nature of policy making process, each stakeholder is likely to get some elements of their preferred outcome, but not all of them. The two following strate­ ­gies proposed recognize that social forces alter the competitive map among firms (Baron 1995). One strategy that advocates for progressive policy and regulations on CSR is suitable for game- changers, allows managers to shape the future policy around their firms’ existing CSR strengths. Second strategy that conforms to current and changing standards of CSR enables­ firms, game-followers, to satisfy activists who tend to place pressure on policymakers to implement higher CSR standards. The CSR literature review reveals a lack of interest in understanding conceptual foundations, focusing, instead, on a description of CSR practices in developing countries (Ite, 2004; Chapple & Moon, 2005; Eweje, 2006; Arya & Bassi, 2009; Wiig & Kolstad, 2010). This tendency to understand what companies are doing is related to the type of methodology that most research papers used. Case studies and interviews are frequently used to find the answers to “why” and “how” questions as well as to offset the lack of previous findings in the literature (Rubin & Rubin, 2005; Yin, 2009). The vast preference for qualitative research
3. 558 HỘI THẢO KHOA HỌC QUỐC TẾ KHỞI NGHIỆP ĐỔI MỚI SÁNG TẠO QUỐC GIA methods in developing countries may indicate the difficulty of conducting empirical research on a wide scale (Husted & Allen, 2006; Jamali & Mirshak, 2007). Without exception, case study is also a research methodology designated for the purpose this article that is to study and identify behaviors of firms under changing state policy and regulations on CSR. 3. CORPORATE SOCIAL RESPONSIBILITY’S POLICY AND REGULATORY CHANGE How managers perceive their position in relation to policy and regulatory change in the field of CSR? Hereafter, in the figure 1, a four-step cognitive sequence is proposed to deal with this challen­ ­ge (CSR policy and regulatory change) in order to improve management skills facing the rise­ in significance of this red-hot issue. Figure 1. Steps to deal with policy and regulatory changes (Fremeth and Richter, 2011) To fully understand the CSR issue and its impact on firms’ business ac­ti­vi­ty and its vulnerability, managers should follow the above mentioned sequential steps described below: a) Assess own current position – Firms’ business activities relating to public and private interest may fall into one of four zones proposed in the following figure 2. The vertical axis represents the profitability of a particular business activity, the higher an activity is placed the more profitable it is. The horizontal axis represents the social responsiveness of a given business activity, the further to the right, the more a firm is ready to engage their resources to comply and follow CSR standards. Figure 2. Map of public and private interest (Carroll, 1979; Freeman, 1984; Wood, 1991; Griffin and Mahon, 1997; Hillman and Keim, 2001)
4. INTERNATIONAL CONFERENCE STARTUP AND INNOVATION NATION 559 Notes: White zone (2) – to be carried out; Black zone (3) – to be avoided; Grey zones (1 and 4) – zones of dilemmas. b) Diagnose CSR policy and regulatory change – uncertainty of policy change should include expected time left until it happens (now, in a short time, in a long time), direction of change (progressive, status quo, regressive), scale of change (small, medium, large). Depending on the level of uncertainty, managers should decide when to respond, how to respond, and which resources to engage in to carry out the response. Some firms are ready and welcome instant policy and regulatory change and large scale of change, while others rather prefer it to be postponed and/or to be done incrementally. Some firms wish policy change, once taken­ pla­ce, to be fostered, while other hopefully expects policy toward this issue to be slackened.­ c) Understand the impact of CSR policy and regulatory change on firms – on one hand, some activities are socially unrespon­ sive­ but profitable in zone 1, while unprofitable­ in zone 3, on the other hand, some activities are socially respon­ ­sive and profitable in zone 2, while unprofitable in zone 4. Naturally, firms should strive to carry out their activities in zone 2 and avoid activities in zone 3. The dilemmas arise in zone 1 and zone 4. Zone 1 provides an attractive but socially risky position, as activities that are curren­ ­tly­ profitable but socially unresponsive are target for policy and regulatory change. Social activists will closely­ work to burden firms with costs to cut down their profit. The challenge for firms in this zone is to improve their social responsiveness without changing in profit. In zone 4, activities do not face social pressures, but their long-run viability is questioned due to the lack of profitability. Managers are facing pressures from shareholders with profit priority. The primary challenge in this zone is to seek profit upon current level of social respon­ siveness.­ d) Act, that is to select and implement an appropriate strategy in front of CSR policy and regulatory change. Adopted strategy should make use of firms’ existing strong points to leverage market positions while countering activist forces promoting policy and regulatory change in the CSR issues. 4. PROPOSED STRATEGIES FOR CHANGING POLICY AND REGULATIONS ON ISSUES OF CORPORATE SOCIAL RESPONSIBILITY Advocating for change, strategy of game-changers In zone 4 of the illustration 2 (socially responsive and unprofitable), direction of policy change, probability of change and time left to moment of policy and regulations change are critical­ elements of uncertainty to manage and ju­s­ti­­fy the costs of socially responsive actions. The strategy of advocating for change, that is advocating for more­ progressive policy and strict regulations to be put in place, may be ef­fec­ tive at improving the likelihood to make them happen sooner, rather than maintain status quo. Progressive policy and strict regulations may serve firms’ private intere­ ­sts if it is used to raise entrance barriers to the industry, competitor­ ’s costs or to push them into second tier in the area re­la­ted with the SCR issues. This strategy allows managers to maintain more stringent­ so­cial responsiveness while becoming more profitable. This is due to some of current competitors, especially smaller and weaker ones will be out of business and the general competition in the industry will remain less intense. Despite the potential advantage­ of this strategy, contingen­ ­­cies, both internal and external to the firm, may limit­ its effec­ti­ve­ness. Developing expertise in lobbying for higher pressure on policy and regulations in this area is both costly and risky. First, it may raise overall costs for firm and its competitors, if there are too many strong and large enterprises in the sector. Secondly, there is a little chance for the given issue proposed by unknown and less influential company to be on top of the political agenda of legislators.­
5. 560 HỘI THẢO KHOA HỌC QUỐC TẾ KHỞI NGHIỆP ĐỔI MỚI SÁNG TẠO QUỐC GIA Conforming to change, strategy of game-followers In zone 1 of the illustration 2 (socially unresponsive and profitable), time left until policy ena­c­tment and the magnitude of its change­ are criti­ ­cal elements of uncertainty that need to be mana­ ged.­ The profitability of these firms may be threatened with the enactment of new policy and regulations. The systematically embracing and con­forming to change may help to postpone the enactment­ of progressive policy and mitigate their impact and scope of change. This strategy helps managers­ to maintain profitability while beco ­me more socially responsive. This is a play for time for managers to become more socially­ responsive­ in a costly efficient way before stringent­ social responsibility policy and regulations take pla­­ce. Despite the potential benefits of this strategy, both internal and external contin­ ­gen­cies may limit its effectiveness. First, it engages the costs to prove firm’s social awareness and credi­ ­bility­ . Second, in time of a likely economic slowdown, stringent policy might be delayed as far as needed or even endlessly, despite firm’s preemptive social and credibility­ measures.­ 5. ILLUSTRATIVE CASES OF VIETNAM CSR becomes increasingly environmental, social and ethical is­sues in Vietnam business panorama. Hitherto, three main legislations relative to CSR have been issued:­ Labor Law (code of conduct) (1994; 2002); Law on Environmental Protection (1996; 2005); Anti-corruption Law (2005) and three main public bodies are involved in CSR: Vietnam­ Chamber of Commerce and Industry (VCCI); Ministry of Labor, Invalids and Social Affairs (MOLISA); Vietnam General Confederation of Labor (VGCL). The Vietna­ ­ mese government has created a strategy called Vietnam Agenda 21, which deals with diverse aspects of CSR including, in particular, sustainable development. Strong CSR commitment is developed by Western companies operating in Vietnam while low commitment is still popular among Vietnamese domestic com­ pa ­nies. The main barrier of CSR implementation success in Vietnam is there is no feasible Vietnamese CSR model that is, on one hand, suitable to current business context and market condition, on other hand, adequate and conformed to internal norms and standards. The next barriers worth of consideration is the lack of financial and human resources, the lack of awareness and strong, full support from the government. Success of strategy of game-changers – UNILEVER VIET NAM During 15 years of operation in Vietnam, Unilever has created more than 7,500 jobs, contributing significantly to the country’s economic development. Unilever’s philosophy of CSR is to deploy itscore competencies to address­ key con­cerns of community­ . It is about long-term positive impacts and sustainable development­ of society whose Unilever consider itself as a part of. Hitherto­ in Vietnam, Unilever has been pursuing three approaches towards­ social respon­ ­sibility. First, in strategic partnership with government, Unilever has enga­ ­ged in many programs­ to boost health and hygiene standards in community, to care about chil dren­ education and develop­ ­ment, gender equality and women­ empowerment. Secondly, Unilever Vietnam­ Foundation (UVF) has been established­ to retain annual grants for health and hygiene­ projects initiated­ and executed by local­ communities to improve­ general living conditions­ and to spread education among children­ and women in far-off provinces, especially in mountainous and rural areas. During 6-year period (2004-­ 2009) grants totaled 10 million USD and bene­ ­fited nearly half a million people living in Vietnam. Finally, many staff members of Unilever­ are encouraged­ to parti­ ­cipate in diverse charitab­ le­ activities across the country. In terms of social performance and communal activities, through UVF, together with market brands, Unilever has been striving to realize the goals of growth and sustainable development with 3 main highlights: improvement of living conditions and healthcare standards­ of Vietnamese people; elimination of negative im­
6. INTERNATIONAL CONFERENCE STARTUP AND INNOVATION NATION 561 pacts of business on environment, using 100% input production materials originated from sustainable sources. Those contents have­ been deployed through long-term cooperative programs carried out together­ with mini­ ­ stries and lower-level organs of Vietnamese authority (ministry of health, ministry of education and training, association of Vietnamese women), with business partners engaged­ in other charitable programs and activities for community. It can be seen that Unilever­ Vietnam, as a branch of Unilever Global, should have to conform to global ethical and social responsibility standards. In Vietnam, from a very first moment, Unilever had been developing widely many social responsibility activities engaging all affordable resources. Unilever Vietnam often did and still does more for the benefits of society and community than government authorities­ required to do thanks to long-year experiences of Unilever in dealing with social responsibility issues widespread in more developed countries and more demanding markets. All those mean that Unilever Vietnam has started its activities from zone 4 (socially res­ponsive and unprofitable), being socially res­ ­ponsive while business is unpro­ fitable­ and has tried to move successfully to the zone 2 (socially responsive and profitable) in figure 3. Uni­le­ver Vietnam has treated all SCR activities as long-term investments,­ and, for sure, it intends­ to stay much longer or forever in Vietnam’s market. Limitations of strategy of game-changers – KFC VIET NAM The famous fast food chain KFC had opened its first restaurant in Vietnam in 1997. Since that time, KFC Vietnam has been coping with many difficulties, including the Asian economic crisis in 1997, the SARS epidemic in 2003, the bird flu in 2004, and global financial crisis­ in 2008. However, it still holds on and maintains its determination on the market together with CSR commitment. As of now, KFC Vietnam has set up foothold in 18 provinces nationwide with over 3,000 staff members. Being currently the leader of fast food industry in the local market, KFC Vietnam restaurants serve more than 20 million customers­ each year. The company is still expanding its business and has reached 200 res­ ­tau­ ­rants in 2015. On the ceremony marking 100 restaurants in Vietnam, KFC Vietnam dona­ ­ted $100,000 to the Saigon Times Foundation under the Saigon Times Group to award scholarships­ to poor students nationwide. This is the most remarkable charitable activity of KFC in Vietnam, which, in this occasion also expressed commitment to social responsibility­ and pledged for a long- term attachment and development in Vietnam. Social responsibility of KFC Vietnam also has been expressed by implementation of all hygienic and safety standards both required and not yet required by authorities for the food industry in Vietnam. KFC Vietnam has its advantages in this area as it is a member of a global American fast food chain where all standards of hygiene, food safety and service competence are obliga­ torily­ imposed. Normally, as a global corporation, KFC Vietnam started its operation in zone 4 (socially responsive and unprofitable), but unsuccessfully moved to zone 2 (social­ ly­ responsive and profitable) in figure 3. It rather remained in zone 4 due to several objec­ ­tive reasons. Asian cuisine and foodstuffs are quite sophisticated, not excluding Vietnam. Many Vietnamese, especially the older ones, are quite conservative and still prefer tradi­ ­tio­nal, healthier foods and are reluctant in trying new Western fast food styles. Moreover, fast foods, including those offered by KFC, are slightly pricy, despite they are serviced in a convenient place with air conditioned. Fast food business in Vietnam, including KFC, still remains unprofitable. KFC Vietnam and all fast food industry competitors in general are facing such tough market condition. They all should be more patient as changing culture, customs and lifestyle usually require a lengthy­ time. First, KFC still has to keep up and go further with CSR standards which are rising in demand as the country develops. Secondly­ , KFC and all the industry should target the customers of younger generation, as those are the group who are relatively easy to change their life style as well as eating habit switching to Western style of consumption.
7. 562 HỘI THẢO KHOA HỌC QUỐC TẾ KHỞI NGHIỆP ĐỔI MỚI SÁNG TẠO QUỐC GIA Success of strategy of game-followers – VINAMILK in Vietnam Vinamilk, established in 1976, is a leading dairy company and also one of the most renowned brands in Vietnam. Having the most diver­ ­si­fied list of high quality milk products offered to the market and together with its largest distribution system Vinamilk is now striving to reach out to the world market, i.e. Australia, Cambodia, Iraq, Philippines, Poland and USA. Vinamilk is always aware that, beside right business strategies and plans, respecting­ business ethics and spreading social responsible activities that bring about sustainable value for society and community play an important part in contribution to the popularity of Vinamilk brands and products. CSR, for Vinamilk, is not an external pressure; it is embed­ ­ded in business rules, in mission and in all business activities towards a balance of interests of stakeholders and the whole society. Vinamilk relates its development with the develop­ ­ment, stability and prosperity of Vietnamese society. Vinamilk is committed to keep continu­ ­ing as much as possible social and charitable programs and activities deployed so far concerning­ poverty reduction, especially for the people from mountainous and rural areas or regions impacted by natural disasters, boosting children’s education, and other well-known charitable, envi­ ­ron­­men­ ­tal and humanitarian actions. Examples among of them are “6 million glasses of milk for the poor children” and “grow­ ing­ together 1 million trees for the sake of environ­ ­ment”. Vinamilk first introduced complex­ quality management and control systems, such as HACCP, BRC, ISO 14001 and ISO 17025 throughout the production process, espe­ ­ cially the input materials,­ and products­ life cycle. As seen above, all CSR activities of Vinamilk are within legal framework imposed by the government for the food industry, especially the dairy sector. As a leading company in the sector Vinamilk is ready to do more than domestic competitors did in this field. But it is not enough, partly due to the lack of resource or willingness, to call social activities of Vinamilk­ responsive, rather active or proactive, comparing it to many foreign dairy companies operating in the sector, such as Dutch Lady which has smaller market share but stronger growth in Vietnam. However, Vinamilk is a profitable dairy company as it has been present in the Vietnam market for over 40 years. Vinamilk is an example of firms which successfully move from zone 1 (socially unre­s­pon­sive and profitable) to zone 2 (socially responsive and profitable) in figure 3. Being socially responsive Vinamilk desires to increase market share in the home market, compete with foreign company, such as the giant Duch Lady mentioned.­ Vietnam dairy market is growing very fast, with the pace of 7-8% annually. Many Vietnamese rarely drink fresh milk due to the price is still a little bit high comparing to other beverages. But as country’ GDP grows, the average income per ca­pita rises as well as the awareness of the healthy living style, fier­ce market competition will make the price affordable, consumption certainly will spike up. Limitations of strategy of game-followers – VEDAN in Vietnam With the business concept of Vedan Vietnam (Taiwanese investor) “taking roots in Vietnam, developing long-term business”, since its establishment, the company has constantly increased total invest­ ment­ capital for production, enlarged material areas all over the country, created employment­ and improved income for ten thousands of farmers, and promoted the develop­ ­ment of agricultural industry in many provinces. Besides, since its establishment, annually, the company­ has been implemented CSR, awards scholarships, sponsors charity and supports people in flood-hit and disaster areas with the amount of ten million USD. As responding to calls from individuals, organizations to support the fund “For the poor”, Vedan compa­ ­ny has implemented and built shelters and houses for people facing the difficulties in accommo­ ­da­tion of their life. As operating in the fast expanding manufacturing industry being considered as a key driver for Vietnam’s eco­no­mic growth, Vedan as well as other same industry companies has missed out on caring about the state of the environment which is rapidly­ de­te­riorating. Vedan’s emissions of untreated­ wastewater
8. INTERNATIONAL CONFERENCE STARTUP AND INNOVATION NATION 563 into the Thi Vai River in Ba Ria-Vung Tau province, about 100 km southeast­ of Ho Chi Minh City, have remained unsettled due to all sorts of reasons. As a result, the livelihood of thousands affected­ farmers is seriously endangered. Immediate consequen­ ­ces are undeniable; the polluted water is making its way to the Saigon River, a main sour­ce of tap water for Ho Chi Minh City. In this case, Vedan has shown a short-lived vision and a lost sense of social responsibility­ , in contrary to its prior declaration concerning the sustainable and respon­sible economic development for the whole society: “one should think of giving back to the environment what one take from it”. Vedan, as many its social activities show, has been a responsible company. Due to opera­ ­tions in manufacturing sector which, in more or less extent, badly impact and cause damages to the natural environment, Verdan is not the only company used to pollute the environment both in the air and the water. Operations of all companies in this sector are burdened with high risk. This unfortunate event has certainly caused damage to Verdan’s reputation and even forces it to close down. Verdan’s activities are in zone 1 (socially unresponsive and profitable) and in case of special mischance, that is when the government intervenes and the society boycotts its products, it has to move to zone 3 (socially unrespon­ ­sive and unprofitable) which possible means a bankruptcy and/or close-down (if unprofitable in a long term) in figure 3. UNILEVER – successful move from zone 4 (socially res¬ponsive and unprofitable) to zone 2 (socially res¬ponsive and profitable) KFC – unsuccessful move from zone 4 (socially res¬ponsive and unprofitable) to zone 2 (socially res¬ponsive and profitable) VINAMILK – successful move from zone 1 (socially unre¬s¬pon¬sive and profitable) to zone 2 (socially responsive and profitable) VEDAN – move from zone 1 (socially unre¬s¬pon¬sive and profitable) to zone 3 (socially unresponsive and unprofitable) Figure 3. Strategic moves of analyzed Vietnamese enterprises
9. 564 HỘI THẢO KHOA HỌC QUỐC TẾ KHỞI NGHIỆP ĐỔI MỚI SÁNG TẠO QUỐC GIA Notes: White zone (2) – to be carried out; Black zone (3) – to be avoided; Grey zones (1 and 4) – zones of dilemmas. GC – Game Changer GF – Game Follower 6. DISCUSSION This article seeks solutions for business managers to become winners in terms of gaining com­ peti ­ti­ve advantages facing CSR policy and regulations change. In reality, not all companies, both game changers and game followers, are successful in gaining desired advantages. Game changers are usually socially responsive in business despite their profitability. For these game changers, social responsibility and responsiveness come first; profitability is on a second range of importance. This is a business orientation of most of Western corporations operating in the home market with very strict standards and regulations on CSR. In our cases study we have dealt with Unilever, a British-Dutch FMCG corporation and KFC, an American fast food corporation. They are socially responsive because they believe that the CSR standards in developing countries, such as Vietnam, are rising as CSR policy is changing quickly, so it is better to be ahead of the game that is to take a position as game - changers. The profitability of those corporations is different. But sooner (case of Unilever) or later (case of KFC) their business will gain a momentum and start to bring about profit as social responsibility instruments become effective. Game followers are usually socially unresponsive and operating at profit at the very first moment. But in developing countries, in a longer run, it is unsustainable due to social pressure and governmental intervention and policy change to implement higher and higher CSR standards to conform to the global market. This is a business orientation of most of the Asian corporations coming from developing market operating in home country and foreign market with different requirements and standard pertaining to CSR. In our cases study we have dealt with Vedan, a Vietnamese manufacturing alliance with Taiwanese investors and Vinamilk, a Vietnamese domestic dairy company. Game followers have two choices. They have to exert all their effort to become more socially responsive preserving at the same time their profitability as CSR standards and requirements are rising in developing countries, otherwise sooner or later they will be out of business. This is what Vinamilk strived to do over time to reach a higher level of CSR compared to its foreign competitors in a domestic market open for global competition. The second choice is less popular, that is to preserve status quo, to get the unchanged profitability with socially unresponsive manner over long time. This is very dangerous and unsustainable business approach as social pressure and governmental intervention and policy adjustment are in place to force on enterprises CSR standards characteristic for developed countries and global market. 7. CONCLUSION The limitation of this research is not to conduct empirical study on a wide scale, referring to industries’ specifics and country of origin of corporations operating in Vietnamese market and other criteria segmenting the enterprises due to the fact that the vast preference for qualitative research methods, especially the case study in developing countries may indicate the difficulty of gathering precise and detailed input data for quantitative researches and limited fund for researches. Further researches should combine both in-depth case study analyses with statistical analysis of a larger sample of enterprises. The research results of this article may serve as preliminary and precondition for such further researches.
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