Measuring Performance of Corporate Social Initiatives: Some Methodological Issues

Corporations, as social institutions, are increasingly realising that their activities impact and are impacted by the society. This realisation has come in the wake of increasing awareness of all facets of society, which are interconnected and influence each other. Corporate Social Responsibility (CSR) is a manifestation of the effect a community can have on a companyʼs existence and recognizes the positive role the company can play in fulfilling the needs and expectations of the community. Like most countries worldwide, majority of the companies in India now have designated teams and departments within the organizational structure to fulfil a companyʼs CSR activities in order to ensure the development of the community, its people, its surroundings and the society as a whole. However, the success of any CSR activity of a company, will only stand to be validated with some form of auditing for the activities conducted by it. The present paper focuses on various methodological issues in measuring CSR activities of a company. Given the multiplicity of organisations and their activities, it should be noted that no standard indices exist for measuring CSR and that these are difficult to define as different companies follow different CSR approaches. However, companies use indicators on the basis of determined indices like Community Satisfaction Index and Relative Performance Index. The present paper discusses the CSR activities of a Company X vis-a-vis other agencies working in the same area of its operation by adopting both, quantitative and qualitative approaches. In this context, the paper raises some methodological issues which arise in measuring performance of corporate social initiatives of a company and also lists some effective measures to overcome them.