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ABSTRACT
This paper reviews measures of corporate social responsibility. Drawing on measurement theory as well as theoretical approaches to business ethics, each measure is evaluated on its theoretical logic, objectivity, consideration of decision criteria of multiple stakeholders, suitability for hypothesis testing, and predictive potential as an indicator of impending ethical problems. Fortune 's "most admired corporations ", Kinder, Lydenberg, Domini (KLD) ratings, Reidenbach and Robin 's Multidimensional Ethics Scale (MES), content analysis of annual reports, and the Ethical Climate Index (ECI) are covered. Each of these measures has been used by researchers to reflect inclusion of ethics in business decision making.
INTRODUCTION
Empirical research depends on measures or quantification. Measures used in business ethics studies, however, have not been uniform from one study to the next. Because decision processes are difficult to observe, often empirical research is about the observed consequences of incorporating ethics into business decision making. DeMaCarty (2009) even makes the case that apparent corporate social responsibility measured by data reflects both real corporate social responsibility activities as well as skillful management that makes positive activities public while keeping negative activities hidden.
Measurement is defined by representational theory as "the correlation of numbers with entities that are not numbers" (Nagel, 1931). "Quantity and measurement are mutually defined: quantitative attributes are those possible to measure, at least in principle" (Michell, 1999). In business ethics studies, the difficulty of quantifying that which is essentially qualitative has contributed to a lack of uniformity in data used by empirical studies. When Godfrey, Hatch, & Hansen (2008), referencing a prior study by Carroll, list 25 different ways of measuring corporate social responsibility, they are in essence defining corporate social responsibility as being multifaceted. Further, some of those facets are positive while some are negative, so that an aggregate measure of corporate social responsibility might net these out and mistakenly appear to show no effect.
Measurement is complicated by the inherently multicriteria nature of business decision making. Rarely is a business decision motivated by a single decision criterion. There are various claims of multiple stakeholders, and various ways of identifying relevant ethical issues. Teske & Hallam (2009) emphasize that business decision making must incorporate multiple issues, and even the ethics issues may include consideration of multiple persepcitves...