The Development of a Systematic, Aggregate Measure of Corporate Social Performance

Abstract

Individuals, groups, and government units have developed considerable interested in evaluating the social performance of corporations. Evaluating corporate social performance (CSP) is important for researchers investigating the relationship between different organizational measures and CSP and for stakeholders employing social performance information in their decision making models. To assess CSP, an aggregate measure of CSP which incorporates both an independent assessment of actual performance and the individual value judgements of the stakeholder is needed. In this study, we propose a methodology for the development of a systematic measure of CSP using the Analytic Hierarchy Process. This multi-criteria decision making technique allows for the conversion of a multidimensional scale to a unidimensional scale, enabling analysis/comparison of companies both within the same industry and across industries. The technique is illustrated by developing a measure of CSP using several types of managers. The results indicate that there are large rank changes when individual value judgements are incorporated using relative importance weights.