Analyzing Corporate Social Responsibility Performance with the Weighted Product Model Method

Abstract

Corporate Social Responsibility (CSR), frequently abbreviated as CSR, is set to assume a crucial role in corporate reporting. It has become customary for all companies to establish CSR policies and create annual reports outlining their CSR activities. This approach aids in distinguishing between socially responsible behaviors and those lacking in social responsibility, simplifying their identification. Presently, CSR is recognized as a sophisticated and globally accepted concept that has systematically evolved and developed. It has emerged as a universally acknowledged language and perspective that is increasingly gaining significance. In today's context, stakeholders are expected to prioritize more than just profit generation and compliance with legal requirements; companies are also anticipated to demonstrate a commitment to business growth alongside their CSR endeavors. CSR has now become an integral aspect of modern business operations. Regarding its social impact, CSR research serves as a tool to understand how businesses influence society and the contributions they make. This research investigates how businesses champion sustainable practices, address social and environmental issues, and contribute to enhancing local communities. By scrutinizing CSR initiatives and their outcomes, research sheds light on the positive influence corporations can have on society. Stakeholder engagement is a central focus of CSR research, underscoring the importance of involving diverse stakeholders such as employees, customers, suppliers, local communities, and investors. This study examines how businesses engage with and react to these stakeholders, aiming to foster collaboration, transparent communication, and the establishment of trust. By nurturing stronger relationships and exploring effective stakeholder engagement strategies, businesses can enhance their social acceptance and credibility. Sustainability stands as a central pillar of CSR research, significantly contributing to the advancement of sustainable business practices. This research explores how companies integrate resource efficiency, environmental considerations, and measures to address climate change into their day-to-day operations. By identifying successful sustainability initiatives, CSR research helps shape best practices and facilitates the transition toward a more sustainable economy. The Weighted product model (WPM), initially introduced by Deng to tackle challenges in Multiple Criteria Decision Making (MCDM), provides a framework that examines the sequential relationships, data types, and geometric patterns among measurable impacts in a communication evaluation model. In this specific context, the alternatives being considered are Community relations, Diversity aspects, Employee relations, Ecological environment, and Product aspects. The evaluation parameters include Ownership by family, Ownership by founder, Ownership by mutual funds, Ownership by banks and insurance firms, Ownership by employees (ESOP), Family CEO (represented as a dummy variable), Founder CEO (also a dummy variable), Debt/equity ratio, and Return on assets. The evaluation outcomes indicate that the Founder CEO (represented as a dummy variable) achieves the highest ranking, while ownership by banks and insurance firms receives the lowest rank in the assessment.