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Corporate Social Responsibility Starbucks Marketing Essay

Topic: Write an essay about the best practices of some selected corporations and business firms. Evaluate the extent of their corporate social responsibility and the impact of their performance to their shareholders.

In the world, the giant corporations paid a lot of money to become an ideal business model and to be more responsible to society. For example: Best Buy electric company applied recycling product program, Starbucks - the coffee company is present in every corner of the planet, has embarked on a series of community activities. Google – the world’s largest “search engine” treats employees like pearls on Googleplex headquarters, General Electric spent 2 billion dollars researching new technologies to protect the environment.

In Vietnam, not until now, the corporate social responsibility of business has just been respected, but on the contrary, in the subsidy period, people respected the corporate social responsibility of enterprises for the state and the workers, as well as for the general public. But in recent years, corporate social responsibility is more widely understood, not only from an ethical, but also from a legal point of view. Thus, the implementation of corporate social responsibility is a task that cannot be skipped on the way of integration of Vietnam’s enterprises, because it creates benefits not only for businesses, but also for the society, especially improving the competitiveness of enterprises in the country and supporting the implementation of labor laws better. For the enterprises in Vietnam, it has just beginning to develop, but it will be a long-term problem.

Vinamilk Corp. led to apply corporate social responsibility by the program “Milk Fund". The program which was founded by Vietnam Fund for Children and Vinamilk, aims to support poor, disadvantaged and malnourished children. [1] This assignment will discuss about corporate social responsibility with the example of “Milk Fund” of Vinamilk and Vietnam Fund for Children, through that it shows the impact of this program to society.

TABLE OF CONTENTS

I. INTRODUCTION

Along with the globalization of the world today, the success in accelerating economic growth caused many problems of environment and society for the countries. These problems require the economic entity, including businesses and organizations to have the responsibility to contribute to that. Because business starts from the human needs. For example, you cannot sell the computers on Mars, because there is no demand on it. The wealth of the enterprise is ultimately generated by consumers; these customers are gathered together in society. Thus, issues of corporate social responsibility of business set out on the basis of such relationships. If the economic growth is unsustainable, they will compensate for environmental and social issues.

Vinamilk Corp. is the company which led to apply corporate social responsibility programs in Vietnam. “Milk Fund" – program was founded Vinamilk and the Vietnam Fund for Children really helped Vinamilk to build good image to consumers and the partners. Through this “Milk Fund” program, I will give my view points on role and impact of corporate social responsibility in the present life.

II. ABOUT COMPANY

The Vietnam Milk Joint Stock Company (Vinamilk) is the company which has the largest producers of dairy products and milk in Vietnam today. Vinamilk was founded under the name of Southern Coffee - Dairy Company, which is a subsidiary of the General Food Directorate. In December 2003, the official equalization decision was issued and it was renamed to the Vietnam Dairy Products Joint Stock Company. From 2006, Vinamilk listed on Ho Chi Minh City stock market. [2] 

In order to provide increasing demands of consumers, Vinamilk constantly renew technology, improve management and product quality. In 1999, Vinamilk has successfully applied the quality management system according to international standards ISO 9002 and is now applying the international quality management system ISO 9001:2000. The majority of products are manufactured in nine factories with total capacity of about 570.406 tons of milk per year. This increased the confidence and prestige of the company in competitive market. Vinamilk has are over 200 various kinds of products and dairy products, such as fresh milk, yoghurt, drinking yoghurt, fermented yoghurt, ice-cream, cheese, soy-bean milk, fruit juice, smoothie, coffee, atiso tea... With the variety of products, Vinamilk really responded to millions of consumers, not inferior to foreign enterprises. In addition to strong domestic distribution with the network of 193 distributors and nearly 94,000 sales points in 64 provinces in Vietnam, Vinamilk also exports to markets in other countries: U.S., Canada, France, Poland, Germany, Australia, South East Asia and the Middle East countries...

With the hope to become the number one brand on health and nutrition products in Vietnam, Vinamilk Corp. develop the optimal product to meet the specific needs of each kind of consumer through the strategic application of scientific research on specific nutritional needs of Vietnamese. In addition to develop a comprehensive list of milk and dairy products towards a large numbers of consumers and expand into value-added products in order to improve overall profits margins of the company, they strengthened the distribution position and the quality products to gain more market share in Vietnam, especially in rural areas and small towns. Besides, they also organized corporate social responsibility programs to help the poor children. Through that, Vinamilk has been creating a beautiful image for Vietnamese consumers. [3] 

III. ABOUT PROGRAM

In order to assert Vinamilk’s role as the number one brand on health and nutrition products in Vietnam, Vinamilk Corp. gave many corporate social responsibility programs such as “Milk Fund” program to support free milk for poor, disadvantaged and malnourished children.

The “Milk Fund” which was founded by Vietnam Fund for Children and Vinamilk in 2008, until now, “Milk Fund” organized many meaningful programs such as the fund “a million glasses of milk”, “3 million glasses of milk” and kicked off the fund “6 million glasses of milk” program in March 2009 that brought free milk to nearly 50,000 Vietnamese children in the country. Vinamilk spent 3 billion VND buying a million glasses of milk for school children. The fund then was expanded to 9.6 billion VND for three million glasses of milk with donations from many organizations and enterprises not only in Vietnam, but also in the world. Until now, in collaboration with the Vietnam fund for children, Vinamilk has brought over 10 million free glasses of milk to nearly 200.000 children who live each day in difficult and often impoverished living conditions. This corporate social responsibility program of Vinamilk contributed to reduced rates of child malnutrition in Vietnam.

Other countries in the world applied similar programs to improve children’s height, weight and other nutrition indexes. Minister Nguyen Thi Kim Ngan - leaders of the Vietnam Children Sponsor Fund, the Department of Child Protection and Care, the General Department for Job, said at the closing ceremony for the Fund “6 million free glasses of milk” for Vietnamese children in Ho Chi Minh City, “The Government should join hands to bring nutrition to children”. [4] This project in Vietnam will combine responsibilities of families, schools, governments and enterprises.

Following the success of the program “a million glasses of milk”, “3 million glasses of milk”, “6 million glasses of milk” and “Vietnam never stops growing” milk fund for poor children in Vietnam, the “Milk Fund” of Vinamilk will organized more programs to take care of Vietnamese children, especially disadvantaged children in rural areas. Along with the support of social organizations, institutions and individuals, the nationwide charity, this program will support free milk to all children every day, to contribute to reduce malnutrition of Vietnamese children and to develop of new generations of Vietnamese people.

IV. THE BENEFITS OF CORPORATE SOCIAL RESPONSIBILITY

Awareness of community, government and companies to corporate social responsibility in recent times improved positively and quickly, the reason is from the environmental pollution, food contamination and fraud trading. Thus, CSR has become a powerful tool to help the businesses to improve their image with the community, and contribute to promoting development.

The first benefit of CSR to businesses in society is that it helps them to improve their brand value in the market. When the companies do corporate social responsibility, they are building brand value for themselves through the institutionalization of brand, trademarks, standardized construction, create a legal framework for market economy… Through these, the State organization can determine the value of the enterprise, rate independent companies, rank brand value and trademarks of firms according to international standards that help the enterprises to be fully and deeply aware of the importance of CSR.

CSR helps the companies to improve their reputation in community. No need PR programs, epic advertising, impressive or flashy social programs, the reputation of the business is still built and strengthened every day, and become the core values ​​of corporate culture through doing CSR. Profit is the purpose of business, but the implementation of CSR is the foundation for the sustainable development not only of individual businesses but also the whole country. The companies with CSR often create breakthroughs in business and achieve profitability targets without destroying the environment, consuming excessive resources.

CSR increases the ability to attract quality human resources for the companies. The employees are the factor that decides productivity and product quality. The companies are always interested in attracting talented people. It is difficult to find good employees; it is more difficult to keep them in the company. This is really a challenge for companies. Therefore, the companies which pay adequate and fair compensation create opportunities for staff training, health insurance and provide them a clean environment will attract and retain good employees and improve their productivity. Many business owners today do not worry about the costs of CSR because they believe that it is wise investment.

The application of CSR helps the businesses to improve financial capacity through cost-saving activities of the business and increase share value. With the application of CSR, many economic experts believe that companies can save significant costs. For example, Jiangxi ceramics manufacturing company in China, with the installation of new technology-friendly environment has saved nearly 10 million dollars per year. A personnel management system also helps to reduce costs effectively and to increase labor productivity significantly. A clean and safe working environment, a reasonable system of salary, opportunities for the training, as well as health insurance and good education have contributed to increased profits for the company. For example, Vinamilk spent 11 billion VND building 60 tanks and milk processing factories that with raw milk storage equipment. The technicians regularly go to the farms, households to provide them technical guidance for improving dairy productivity and quality. Besides, Vinamilk supports poor families with money and dairy cows. With CSR activities, Vinamilk created thousands of jobs for rural people, contributed to changing the appearance and enhance rural life, and raised the total number of dairy cows from 31.000 up to 105.000. [5] 

In the trend of globalization today, the successful implementation of CSR of enterprises will help businesses to overcome technical barriers, enter international markets, improve competitiveness and ensure sustainable development of the country. For a developing country like Vietnam, the issue of ensuring sustainable development was highly appreciated, which is considered as the foundation for opening up prospects for becoming a developed economy. In addition to maintaining a high economic growth rate, the businesses must respect to promoting long-run macroeconomic stability, growth quality, associated with building and improving the competitiveness of the country's businesses and products.

V. CONCLUSION

In the era of globalization, businesses represent not only themselves but also their countries. Therefore, corporate social responsibility is not the upside, not as a "plus" aspect, that is the basic of the business. And corporate social responsibility is the basic of the business so that business must demonstrate its corporate social responsibility in a comprehensive way, not only in some extent. The businesses which desire sustainable development must always abide by the standards of environmental protection, labor safety, labor rights protection, gender equality, training and employee development and community development. Because good ethics is good business, the more corporate social responsibility businesses have, the more profitable they get. Corporate social responsibility is an important condition for business to affirm its reputation, its brand, to build up the goodwill, good image to consumers and the partners, is the motivation for business development in the integration and global competitiveness.

With the success in corporate social responsibility of Vinamilk, in the future, there will have more corporate social responsibility programs of the enterprises to contribute to sustainable development

VI. REFERENCES

1. Vinamilk, available at http://www.vinamilk.com.vn/?vnm=about&id=37

2. Corporate social responsibility (CSR), available at http://www.iisd.org/business/issues/sr.aspx

3. Trách nhiệm xã hội của doanh nghiệp trong nền kinh tế hội nhập, available at http://www.vietnamforumcsr.net/default.aspx?portalid=1&tabid=336&itemid=2574 , accessed on August 12th 2008.

4. Chung tay góp sức để mọi trẻ em đều được uống sữa vì một Việt Nam luôn vươn cao, available at http://www.vuoncaovietnam.com/lichsuhinhthanh.aspx

5. Trách nhiệm xã hội doanh nghiệp tại Việt Nam thực tiễn cơ hội và thách thức, available at http://www.vietnamforumcsr.net/default.aspx?portalid=1&tabid=336&itemid=246 , accessed on January 18th 2007.


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