Developing a fuzzy corporate performance rating system: a petrochemical industry case study

The surge of socio-economic and environmental problems in the recent decades have exacted a clarion call for transitioning to more sustainable and responsible business practices. Developing multiple bottom line performance evaluation systems, in order to track the progress made, is at the fulcrum of such a transition. The purpose of this study is to design a triangular rating system for multiple bottom line performance evaluation using corporate governance, corporate social responsibility, and corporate financial performance ratings. Furthermore, using a case study approach, the framework is tested in a high impact industry i.e. Iranian petrochemical industry. The result of the analyses showed no significant relationship among the three dimensions of the rating system which mainly stemmed from the failure of the examined market in adopting responsible business practices. Moreover, sensitivity analyses were conducted to account for any discrepancies in the outcomes as a result of using fuzzy numbers and weighting vectors. The study makes two major contributions. Theoretically, it proposes a triangular framework for performance evaluation using key performance indicators. Empirically, it applies the framework to a set of cases from the petrochemical industry by employing two prominent multi-attribute decision making models using fuzzy sets. Finally, the study concludes that failing to integrate environmental, social, and governance measures into decision making processes, in brazen defiance of stakeholders' needs, is the main culprit of an unsustainable and irresponsible corporate environment.