**3. Research methodology**

This research was conducted in two phases. First, a comprehensive CSR Index was constructed. Then, it was implemented to rank service corporations in terms of their CSR performance.

To construct a comprehensive CSR index that includes all stakeholders' perspectives would entail measuring every single CSR indicator. This task would not only be impossible, but it risks confusing rather than clarifying the objectives, especially since at least some, if not all, of the selection is based on normative judgments. Therefore, the development of a CSR index will be addressed as a multi-criteria group decision-making problem. The methodology that easily lends itself to a task like this is the rating model of the AHP. It offers an advantage over other techniques as it focuses on the relative importance of one CSR indicator compared to another, and it does not require direct measurement of each indicator for comparison [18]. The AHP methodology aggregates judgments in a way that satisfies the reciprocal relation in comparing two elements [19]. It combines the outcomes of the experts' judgments using the geometric mean of the judgments [20]. For more details on the AHP methodology the reader is referred to [18, 21]. The strength of the AHP lies in its capability to compare qualitative and quantitative criteria simultaneously and in integrating the subjective judgments of the decision maker with the objectivity of the alternatives criteria in a robust mathematical model. It follows that as CSR indicators often comprise competing conflicting criteria with competing attributes, the AHP offers a logical format to quantify their selection attributes, which can be evaluated systematically, unlike traditional CSR index construction methods [22].

The published research reveals few applications of the AHP methodology in relation to the field of CSR studies. Tafti [23] developed a fuzzy AHP model to assess CSR practice in a bank. Costa [24] pointed out the importance of including the stakeholder's perception and developed a fuzzy multi-criteria model to measure the company CSR as perceived by its stakeholders. The proposed research is different in that it builds a comprehensive index representing all stakeholders in the service sector and implements it to evaluate CSR performance in the sector. Also, it can be easily generalized to cover all other industries. This model also implements the original and simple AHP which has proven to be a robust mathematical model.

#### **3.1 Constructing the AHP-based CSR index**

Four stages will be performed to construct an AHP-based CSR index as perceived by experts in the private sector and the local community:


#### *3.1.1 Selection of CSR indicators*

A comprehensive CSR index must reflect economic, legal, environmental, social, and ethical corporate responsibilities. Furthermore, for such an index to be acceptable to a corporation and for it to be 'owned' by its management, stakeholders should have the opportunity to set priorities for each of its constituent elements

## *Measuring Corporate Social Responsibility Performance: A Comprehensive AHP Based Index DOI: http://dx.doi.org/10.5772/intechopen.94463*

from their personal perspectives. However, as previously stated, there is no specific definition for the CSR concept, neither is there agreement on its constituent elements. Therefore, as a first step in developing the index, the most frequent elements from the 22 indices studied (Section 3 and Appendix) were selected and clustered to construct the criteria for the proposed CSR index. It is worth noting that each element was carefully assessed with respect to its suitability within the Saudi corporate context. The selected indicators are defined herein.

