Measuring Corporate Social Performance: A Review

This paper reviews the literature on corporate social performance (CSP) measurement and sets that literature into a theoretical context. Following a review of CSP theory development and the literature on relationships between CSP and corporate financial performance, Wood’s CSP model (Wood, D.J. (1991). Corporate social performance revisited. Academy of Management Review, 16, pp. 691‐718) is used as an organizing device to present and discuss studies that use particular measures of CSP. Conclusions emphasize the need for CSP scholars to refocus on stakeholders and society, and to incorporate relevant literatures from other scholarly domains. Corporate social performance (CSP) and its sister concepts – corporate social responsibility, corporate social responsiveness, corporate citizenship – have been present in management scholarship for about 45 years. Notwithstanding this longevity, the CSP domain has remained controversial, fluid, ambiguous and difficult to research. To a large extent, CSP has been equated with ‘doing good’, and the search has been on for a statistical relationship between CSP and financial performance (FP) so as to justify or delegitimize the normative calls for managers to pay attention to CSP. These two phenomena may be largely to blame for the lack of progress in CSP theory and measurement. It is possible, and I believe desirable, to take a different stance on CSP. Corporate social performance, as conceived in the Wood (1991) framework, is a set of descriptive categorizations of business activity, focusing on the impacts and outcomes for society, stakeholders and the firm itself. Types of relevant outcomes are determined by the firm’s linkages, both general and specific, as defined by the structural principles of corporate social responsibility (CSR). The production, monitoring, evaluation, compensation and rectification (or not) of these outcomes are defined by the processes of corporate social responsiveness – the boundary-spanning (or bridging) processes by which the firm connects itself to information, stakeholders and issues. All these elements can be measured and evaluated: impacts and outcomes; processes; and the specific guidance offered by structural principles. The aim of this paper is, first, to describe briefly the conceptual history of CSP and then to explain CSP as a set of structural categories that can be identified, described and measured (following Wood 1991 and modifications by Kang 1995; Swanson 1995, 1999; and Mitnick 1993, 1995, 2000). A ‘detour’ into CSP–FP research emphasizes how much attention has been paid to this aspect of the CSP domain and suggests that other research questions might now be more interesting. The paper then reviews the empirical literature in which some aspect of CSP is measured, showing how the measures themselves fit into an expanded structural CSP model. An additional result of this analysis will be to spotlight the aspects of CSP that have gone relatively (or completely) unexamined, or that have not yet been considered generally as indicators of CSP. Finally, the analysis will suggest some overarching conclusions about existing CSP research which suggest fruitful paths for future work.