The case of Vedan
Transcript of The case of Vedan
Measuring the impact of corporate social responsibility
on consumer behaviorTHE CASE OF VEDAN
VIETNAM Instructor : Mr. Hung Quoc Nguyen, MEd. Group : Fantastic 5 Member :Binh Thai Nguyen
Ngan Kim Le NguyenNghi Nhat Vuong Le
Que Nguyet HoangQuynh Thuy Thi NguyenY Nhu Le Huynh
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Chapter 1:Introduction
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INTRODUCTION: Rationale
In the world: Many firms have been “breaking the rules” of CSR because of: The significantly increased
level of globalization’s competition.
The need to gain more profits.
In Vietnam: Not an exception.Presented by: Fantastic 5
INTRODUCTION: Objectives
A research has been conducted to find out: how Vietnamese consumers are affected by CSR in the case of Vedan Vietnam.
It helps to: Find out solutions for companies in
reputation’s regaining, maintaining and developing.
Provide helpful reference information for students and researchers.
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INTRODUCTION: Scope of the study
Monosodium Glutamate (MSG)Presented by: Fantastic 5
INTRODUCTION: Scope of the study
Scandal in 2008
Located in Dong Nai province,
near Thi Vai RiverPresented by: Fantastic 5
Sphere of research:
INTRODUCTION: Scope of the study
Place: - Co.opmart
Ly Thuong Kiet at District 10
- Co.opmart Phu Lam at District 6
Subject: - Vietnames
e individual shoppers
Time: from March 3rd, 2014 to April 29th, 2014
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Consisting of 5 main chapters: Chapter 1: Introduction Chapter 2: Literature review Chapter 3: Research
methodology Chapter 4: Data analysis Chapter 5: Suggestions and
conclusions
INTRODUCTION: Structure of Research
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Chapter 2:Literature
ReviewPresented by: Fantastic 5
Literature Review: A brief grasp of CSR
Carroll’s CSR
Pyramid(1991)
The most comprehensive content and scope
of CSR
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An overview of CSR in Vietnam context: “CSR has become necessary requirement for each company, if the company does not embrace CSR, they cannot approach the global market.” (Saga Vietnam, 2008)
Any challenges?▪ The global competitive pressures▪ The awareness of consumers▪ The lack of capital, techniques
Literature Review:An Overview of CSR in Vietnam context
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Glimpse on Consumer Behavior: “The mental, emotional, and physical
activities that people engage in when selecting, purchasing, using, and disposing of products and services so as to satisfy needs and desires” (Hoyer & Macinnis, 2009)
Influenced by: ▪ Cultural ▪ Social▪ Personal ▪ Psychological
Literature Review: Glimpse on Consumer Behavior
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In Vietnam: “The Vietnamese consumer perception on corporate
social responsibility”, Bui Thi Lan Huong (2010) “Corporate social responsibility: A study on awareness
of managers and consumers in Vietnam”, Pham Duc Hieu (2011)
Around the world: “The importance of corporate social responsibility on
consumer behavior in Malaysia”, Rahim, Jalaludin and Tajuddin (2011)
“The role of Corporate Social Responsibility in consumer behavior: The Case of Peruvian Consumers”, Marquina (2007)
Literature Review: Previous Studies
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Chapter 3: Methods & Materials
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Methods & Materials: Methods
Quantitative research 120 respondents
chosen to fill out a questionnaire
A pilot test is taken in advanced
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Methods & Materials: Materials
With 20 limited answer options
Handed out to 120 people shopping at 2 Coopmarts
Recorded & figured by Microsoft
ExcelPresented by: Fantastic 5
Methods & Materials: Overview
Vedan Vietnam The scandal
Dumped untreated sewage to Thi Vai River The consequences
Made the river heavily polluted (the color, the smell, the living animals…)
Affected people living in the neighborhood The punishment
Pay 100% compensatory damages to local people
Administrative fine and accrued environmental fee for the Government
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Chapter 4:Data
AnalysisPresented by: Fantastic 5
Data Analysis: Collection of questionnaires
110/120 questionnaires were returned. (92%)
10 more sheets were excluded for not having answered 16 questions completely.
100 questionnaires were examined.
Questionnaire returned
92%
Questionnaires examined 83.3%
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Data Analysis:Description of the results
Category
Options
Frequency
Rate (%)
Sex Female 87 87 %Male 13 13%
Age
16-25 26 26 %26-40 30 30 %
Over 40 44 44 %
Education
High school 7 7 %University/
College88 88 %
Post graduate 5 5 %
Total
100 100 %Table 1.1 Respondents’ profilePresented by: Fantastic 5
The real state of affairs of Vedan scandal
Data Analysis:Description of the results
76%
24%
People using Vedan's MSGUse Unuse
83%
17%
Scandal of Vedan 's PopularityKnow Unknown
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Data Analysis:Description of the results
Attitute Percen-tage (%)
1. “Normal. It’s the company’s business, and because it doesn’t affect the quality of its products, I keep using Vedan.”
7
1. “I don’t really care.” 51. “After acknowledging this
issue, my family and I have stopped using Vedan’s products and switched to another MSG manufacturer no matter how good they are.”
88
100
62%
38%
Decision of cus-tomers
when choosing a product
Refuse using
Consider buying
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Chapter 5:Suggestions &
Conclusion
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Suggestion
CSR activities influence the prestige and benefits of the company.
The company should: Have high awareness
on CSR Consider the long-
standing benefits, not short-term ones
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SuggestionsSolutions Percentag
eOfficially admit their mistakes through the media. 82.5
Come up with specific solutions to solve the pollution of the river, such as: enforcing the wterwaste treatment systems. 100
Offer an acceptable and long-term compensation plan. 96.8Commit not to dump untreated water into the water again. If this happens again, they will have to pay 10 times more than the original fine.
55.6
Commit in doing business morally. 92.1
Do charity; cooperate with non-government organizations to provide funds for social projects and activities. 93.7
Increase the number of articles written about the company as well as advertisements on the media to gain back the company’s image.
55.6
Offer various promotions to draw customers’ attention. 47.6
Suggestion: The should-have attitude & strategies of the heads
Vedan should: Hold the press to courageously
apologize to the public Propose detail plans for
deservedly compensation Install water-waste treating
system Participate in social activities and
charities Support the local development Widely implement and report CSR
through campaigns and advertisements on various channels
Attract talents with high sense of CSR awareness
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Results?- Relieve the
groundswell of the public
- Regain the customers’ good impression and trust
- Maintain long-standing rapport
Suggestion:The must-have self-awareness of the heads
Realizing the importance of: A sustainable society: offers a high quality of life Environment: one of the indispensable parts
Realizing the link between good CSR policy & increasing profit Not just about profits. Involves a relationship of
customers, suppliers and the local community Having high CSR can:
Polish reputation Build customers’ loyalty Increase stable profit in long-run
Balance financial and environment performance.
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Conclusion
- Play an undeniably important role in the reputation and image of any company.
- Affect long-term growth
Let’s do CSR!
Corporate Social Responsibility
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References
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References
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Books:Barnes, A. (2011). Corporate Social Responsibility and its effects on Brand Trust, AUT Business School.Bui, Thi Lan Huong. (2010). The Vietnamese consumer perception on corporate social responsibility, The DreamCatchers Group, LLC.Carroll, Archie. B. (1991). The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders. Business Horizons, 34, 39-48.Hansen U, Schrader U. (1997). A modern model of consumption for a sustainable society. Department of Marketing and Consumer Research, University of Hanover.
References
Online material:European Commission. (2006). Communication on CSR. Retrieved July, 2011. From:
http://ec.europa.eu/enterprise/policies/sustainablebusiness/cor porate-social-responsibility/index_en.htmCSR Vietnam Forum. (2009). Social responsibility of enterprises in Vietnam: from theory to practice. Retrieved March, 2010. From:
http://www.vietnamforumcsr.net/default.aspx?portalid=1&tabi d=17&itemid=4703
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