Research issues: Corporate Social Responsibility (CSR) has been given emphasis by literature, in particular, shows positive affect of organization on their stakeholders. Although CSR has been extensively discussed in the literature, CSR measurement is still problematic issue. A number of limitations are associated with a number of methods provides by literature utilized in measuring adoption level of CSR practices within the organization. This research seeks to provide original construct and scale measurement of adoption CSR practices, while also reflecting the business roles towards different stakeholders with respect to economic performance. Research Results: A qualitative interpretive research methodology was adopted, based on in-depth interviews conducted with the board members and executive’s managers in two companies operating in Saudi Arabia, with the findings developed the new scale for measuring the adoption of CSR practices. The new construct and scale were developed by six-dimensional structure of CSR, measuring the companies’ community, environment, shareholders, employees, customers, and supplier practices. Theoretical Implications: This study builds important contribution to CSR literature by developing a new construct and scale of adoption of CSR practices in developing country. This construct was developed based on the finding of qualitative case studies, in order to provide empirical evaluation of the adoption level of CSR practices in the Saudi listed companies. Therefore, this construct is a multidimensional construct that comprised the six CSR practices that communicated and engaged with six company’s main stakeholders namely: environment, customer and product, employee, shareholders, community and finally supplier. Practical Implications: This study can improve board members and managers’ awareness in how to evaluate CSR contributions within their organizations. A newly developed scale for the adoption of CSR practices can be considered as a broad self-constructed index consisting of six main stakeholders that covered 17 CSR practices. The implication of CSR self-constructed index has two practical contributions at organizational and national levels. At the organizational level, it helps directors and executives in Saudi companies listed in industrial sectors that have high sensitivity to CSR issues within their operational activities, in managing and rating the adoption level of CSR practices within their organization. Additionally, the developed self-constructed index generates significant CSR guidelines for those companies to formulate effective corporate practices on CSR issues.

Keywords: Corporate Social Responsibility, Financial Performance and Construct Development and Scale Creation

Article Review Status: Published

Pages: 24-57 (Download PDF)

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