Abstract
It is widely recognized that a firm’s well-established corporate governance (CG) has a considerable impact on its corporate social responsibility (CSR) performance. How to determine the main trigger among CG’s indicators for strengthening CSR performance is thus an urgent and complicated task due to its (i.e., CSR) multi-dimensional and numerous perspectives. In order to solve this critical problem, the study breaks down CSR into four dimensions and further examines the impact of CG’s indicators on each CSR dimension by joint utilization of rough set theory (RST) and decision tree (DT). By doing so, users can realize which one CG indicator is the most essential to CSR performance. Managers can take the results as a reference to allocate valuable and scarce resources to the right place so as to enhance CSR performance in the future. To solidify our research finding, we transform the CSR forecasting model selection into a multiple criteria decision making (MCDM) task and execute a MCDM algorithm. By implementing the MCDM algorithm, users can achieve a much more reliable and consensus decision in today’s highly turbulent economic environment. The proposed mechanism, examined by real cases, is a promising alternative for CSR performance forecasting.
Highlights
A broad spectrum of corporate scandals, such as Enron’s collapse, the looting of Tyco, WorldCom’s accounting fraud, etc., highlights the importance of corporate governance (CG)
In order to clearly understand the impact of CG on corporate social responsibility (CSR), this study divides CSR into four sub-indicators of “Responsibility management”, “Market responsibility”, “Social responsibility”, and “Environmental responsibility” based on the Research Report on Social Responsibility of China in the Blue Book of Corporate Social Responsibility issued by Chinese Academy of Social Sciences [45]
Environmental responsibility has the lowest score of 32.43 among the four CSR dimensions, implying that enterprises’ awareness of environmental protection is still very weak and highlighting the serious environmental problems that need to be resolved in China
Summary
A broad spectrum of corporate scandals, such as Enron’s collapse, the looting of Tyco, WorldCom’s accounting fraud, etc., highlights the importance of corporate governance (CG). Carroll [15] indicated that social responsibility must be sufficient to satisfy the overall scope of corporate responsibilities to society It includes economic, legal, moral, and disposable corporate factors to fully reflect corporate social responsibility performance. One should start from the three principles of institution, organization, and individual; the process should premeditate on an appropriate environmental assessment, stakeholder management, and problem management; the results of corporate behavior should include social impacts, social programs, and social policies. Despite several decades of research [24,25,26], traditional regression analysis is still used to investigate the impacts of CG factors on CSR performance This regression analysis can only be Sustainability 2018, 10, 1582 used correctly under the assumption of normal distribution, which is often not the case in the real world.
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