SMEs in their Own Right: The Views of Managers and Workers in Vietnamese Textiles, Garment, and Footwear Companies

No single definition of SMEs exists because governments, international organizations, and business associations represent different economic and political interests and goals that require language and structural differences in terminology. In this article, ‘SMEs’ are defined as ‘registered entities having at least five employees and no more than 299 employees,’ based on the official definition of SMEs in the textile, garment and footwear sectors in Vietnam.

Please note that the missing articles and grammatical errors found in the translations are because they are taken verbatim from short-hand responses of both managers and workers in the questionnaire, which were then translated verbatim to English.

Instead, he points out that ‘there may be drivers based on a sense of rootedness within a particular community … or other social and cultural norms and experiences’ (Fox 2005, p. 6).

Among the fallacies, Fassin (2008) lists (a) CSR is worthless without formalization, (b) SMEs do not report on CSR and hence do not have CSR, and (c) that the CSR approach of large companies can be used by SMEs (pp. 367–368).

The literature on SMEs and CSR has also highlighted the context-specific nature of SMEs’ engagement in CSR, including the community embeddedness of many CSR activities (Fox 2005; Fuller and Tian 2006; Russo and Tencati 2009).

Referring to this phenomenon, Whalley says that ‘many cultures exist within SMEs’ (2000, p. 120).

This issue entails additional dimensions that we will not discuss in this article. In particular, that existing contributions on SMEs and CSR tend to present SMEs as a monolithic type of firm and/or as one homogeneous unit or entity. The contributions often refer to SMEs as if this very large group of firms had similar characteristics. However, SMEs differ in size, type of activity undertaken, management style, markets (Whalley 2000; Murillo and Lozano 2006) and choice of CSR practices (Scott 2000; Vives 2006). Further assessment of the differences between SMEs constitutes an important future research area.

Other perspectives such as those of Peng and others (Peng 2002, 2003; Amine and Staub 2009) focus on market-oriented institutional transitions—formal and informal—and how they affect firm strategies and decision-making. However, these perspectives are not relevant to our case because we did not focus on the interplay between institutions and firm strategies, nor did we seek to engage the formal institutions by interviewing the representatives of such institutions.

A stakeholder perspective would similarly include a range of views of importance to the SME (see e.g. Freeman 1984). However, the focus revolves around the firm (MNC) actions—the key stakeholder—not the suppliers or the workers.

With regard to the relevance of Rawls (2001) for Vietnam and the study, please kindly review Appendix 2 for an extended discussion.

Similar to Rawls, Arnold and Hartman draw on Kant as they have the following point on MNC managers and their respect for workers: “One core ethical obligation of MNC managers is to respect their employees. To fully respect a person, one must actively treat his or her humanity as an end, and not merely as a means to an end. This means that it is impermissible to treat persons like disposable tools. The Kantian basis for this claim is well established (Arnold and Hartman 2006, p. 682).

Tran (2011), pp. 128–129; www.​vcci.​com.​vn/​sub/​vbli/​default.​htm. Aaccessed October 2014.

For example, the Ministry of Labor, Invalids and Social Affairs (MOLISA) worked with the ILO to conduct several preliminary studies of the impacts of CSR in Vietnam.

UNIDO: corporate social responsibility: implications for Small and Medium Enterprises in Developing Countries; UNIDO, Vienna, 2002; UNIDO: SME Clusters and Responsible Competitiveness in Developing Countries—AccountAbility with UNIDO, January 2006; (Hamm 2012).

http://​vccinews.​com/​news_​detail.​asp?​news_​id=​27693; http://​www.​csr-vietnam.​eu/​.

UNIDO 2006, pp. 45–49.

Examples of crucial questions asked to managers and workers include: (A) Do you/your firm monitor the usage of water, electricity and input materials? (B) Are the occupational safety and health procedures in your firm due to government regulation, formal certified systems, codes of conduct or your own system or practices? (Similar questions were asked regarding wages and labor standards), and (C) Does your company e.g. provide loans to the employees/workers, allow sick leave and/or absence to participate in funerals, family events etc, organize musical/cultural performances, donate book/magazines to companies and dormitories? See Appendix 1 for further information on all the questions asked and Jeppesen et al. (2012) for further information on the format of the questionnaires and interview guidelines, and Sects. 2 and 4 in Jeppesen et al. (2012) for the reasons for focusing on these issues.

Among the 20 SMEs, seven were small and 13 medium-size; 17 had international markets, while 3 sold domestically; and 10 were based in the metro area, while 10 were based in non-metro areas (Jeppesen et al. 2012).

See Appendix 1 and Jeppesen et al. (2012) Appendix 1 for further details.

We were able to interview workers in 14 SMEs, and not in six factories. The key reasons were not because the owners want to ‘hide’ their practices, but precisely because, as second-tier suppliers, they were directly affected by the work pressure of manufacturing for global supply chains with workers who wanted to work overtime to make ends meet. The three medium factories did grant us management interviews and allowed us to interview their workers subsequently. But when we followed up on their promises, all three pleaded ‘urgent delivery schedules’ (to first-tier suppliers) for not allowing us time to interview their workers. Also, we could not interview workers in three TGF factories mainly due to the heavy work pressure of on-time deliveries and the piece-rate payment system. The interviews with managers and workers were conducted face-to-face in Vietnamese by field assistants whose first language is Vietnamese. All three questionnaires were translated into Vietnamese and verified by Vietnamese native speakers to ensure relevance to Vietnamese cultural contexts. In the data analysis phase, the information from the questionnaires was a) typed into Word documents from in-depth interviews (open-ended sections of the forms) and b) coded and typed into SPSS from the quantitative sections (Likert-scale typed questions and changes over time).

More discussion on local initiatives to help themselves will be discussed in the Cognitive and Normative sections below.

The six factories that did not state any private buyers' regulation include four small and two medium factories.

Skadegaard Thorsen and Jeppesen (2010), deal in depth with the many challenges that this phenomenon, sometimes called ‘code mania’, represent for local suppliers, including SMEs. As the same authors point out, this also leads to the exclusion of SMEs from the value chains.

For more information on the standard, see: http://​live-in-green.​com/​products/​bedding/​eco-tex.​html.

http://​www.​sgs.​vn/​en/​Our-Company/​About-SGS/​SGS-in-Brief/​SGS-in-Vietnam.​aspx, accessed 12 June 2013.

What we call ‘East Asian intermediaries’ in this article.

http://​www.​intertek.​com/​news/​2010/​11-16-audit-services-alibaba/​.

This means: Screening (Sàng Lọc), Organizing (S p X p), Cleanliness/Hygiene (S ch Sẽ), Caring (Săn Sóc), Readiness (S n Sàng).

Correspondence with Dr Huynh thi Ngoc Tuyet and Ms Nguyen Minh Chau, September 2–7, 2013. Also, in http://​www.​ust.​vn/​trade_​detail.​asp?​trade=​10585andcat=​19andp=​95 (Accessed September 8, 2013).

The city people's committees govern DONRE administratively, and the Ministry of Natural Resources and Environment directs and supervises DONRE technically.

IWRETE is Vi n K  thu t Tài Nguyên N c và Môi Tr ng in Vietnamese. It is an environmental consultancy institute that belongs to the Vietnamese Science and Technology Association (VUSTA or Liên Hi p H i Khoa Học and K Thu t in Vietnamese).

Her interview with a VGCL official shows that there were only four or five inspectors in Ho Chi Minh City to monitor nearly 40,000 enterprises that have been established there since 2000 (Kim 2012, p. 288).

Most do not receive support from MNCs or suppliers to engage in formal CSR practices, as explained earlier.

About one in six said ‘neutral,’ and very few were unsatisfied.

The median wage is the same for both female and male TGF workers. We have used the exchange rate of 1 USD = 20,794.00 VND as of 15 March 2012. At the time of writing, the government-stipulated monthly minimum wage is 2 million VND in Ho Chi Minh City and 1.78 million VND in non-metropolitan areas (Tran 2007).

But overall, many managers do not provide masks to workers to save costs.