MEASURING CORPORATE SOCIAL RESPONSIBILITY PERFORMANCE: A COMPREHENSIVE AHP BASED INDEX

Abstract

Although there is no agreed upon universal definition of corporate social responsibility (CSR), organizations are often ranked in terms of their CSR performance. However, two glaring gaps have been identified in the CSR literature. First, evaluation methodologies are questionable and often lack a scientific basis and second, stakeholder representation is not made explicit or is missing altogether. This paper contributes to the CSR literature by constructing a CSR index based on the Analytic Hierarchy Process (AHP), as well as ensuring that stakeholder judgments are an integral part of the constructed index. Furthermore, the developed index is implemented to measure CSR performance in a business setting. An AHP-based CSR index is developed for the services sector in Saudi Arabia to serve as a case study. The developed index is used to measure CSR performance in over forty corporations. The paper adds to the existing literature by providing insight into how the Saudi corporations perceive and practice CSR. It concludes that a systematic usage of the developed AHP-based CSR index would facilitate corporations to adopt a more responsible and measurable behavior, while it offers government institutions the option to rank corporations in terms of their CSR practices in a scientific and transparent manner.