Measuring Agreement Among Ranks: Sustainability Application

Measuring Agreement Among Ranks: Sustainability Application

Kathleen Campbell Garwood (Saint Joseph's University, Philadelphia, PA, USA) and Alicia Graziosi Strandberg (Villanova University, Villanova, PA, USA)
Copyright: © 2016 |Pages: 18
DOI: 10.4018/IJBIR.2016010104
OnDemand PDF Download:
$30.00
List Price: $37.50

Abstract

Is it possible to compare rankings from different sources when the individual rankings of the top x elements differ? To investigate this question, 2015 sustainable rankings from 4 sources that have ranked the top globally most sustainable corporations are considered (Corporate Knights, Fortune's World's Most Admired Companies, Newsweek's Green Rankings, and Harris). These rankings are analyzed using common rank comparison methods (Spearman's ?, Kendall's t). Then, they are analyzed to see if the sources ranking the data are doing so at random or if there is a specific pattern of agreement (Kendall's W and a method by Alvo, Cabilio & Feigin (1982)). The insights from these methods as well as possible limitations are considered. A truly sustainable corporation would transcend all definitions and be good for the environment and the people relying on the company. This paper will attempt to identify data points that tend to cluster close together in one or more groups, thereby justifying the feasibility of identifying sets of companies that are truly the “most” sustainable.
Article Preview

Introduction

Numerous official rankings are currently available over the internet and in print publications. Popular examples include college and university rankings, automobiles, and sustainability. On their website, U.S. News and World Report (2015) claims “Get exclusive rankings and data on nearly 1,800 schools. Use our tools to search for your perfect fit.” Meanwhile, Forbes (2014) promises to find the college with the most value for the money invested. Individuals relying on these and other collegiate rankings ask: “Is there a best college or a group of colleges that are the best fit?” Universities relying on these rankings to increase applications ask: “How can we improve our standing for future rankings?” Similarly, choosing which type of car to purchase requires research because of the vast selection of car makes and models. Popular websites, such as, J. D. Power (www.kbb.com) each release rankings to help the buyer choose a car. These sources rate automobiles in the areas of safety, fuel economy, and resale value, to name a few. Which source should a customer rely on? For most individuals the best car word be ranked favorable by most if not all sources. Is there any evidence that these sources agree as to the best car? If so, consumers may then be able to use multiple ranks sources to identify the best car for them.

Sustainability has come to the forefront of decision making within companies as well as governmental regulations. Recent media attention and cultural changes have put pressure on companies to become more environmentally aware and report on their corporate sustainability efforts. Between the world of environmental well-being and that of shareholder value, corporate sustainability, sometimes called corporate responsibility (CR), has a very broad meaning. In their 2011 corporate sustainability progress report, KPMG concludes that from an external standpoint, global banks, investors and financial institutions are putting greater focus on the impact and design of sustainability programs to gain a better snapshot of a company’s ability to assess risk, respond to change and deliver shareholder returns. In a more recent report, KPMG (2013) surveyed 4,100 companies in 41 countries. This report indicates how CR reporting has evolved into a mainstream business practice over the last two decades (when reporting on sustainability started).

Business sustainability is measured using criteria that range from carbon disclosures to fiscal responsibility. Strong arguments can be made that companies are able to benefit financially from creating a sustainable environment for their products and practices. Although the definition of sustainability and the preferred characteristics of sustainable companies widely differ among top researchers, a truly sustainable corporation would transcend all definitions. Therefore, this paper will investigate if there is an association among popular sources, such as Newsweek (2015) and Forbes (2015), as to the top x companies or some subset thereof. Answering this question may identify groups of rankings that agree on which companies are indisputably sustainable.

According to Kendall (1938), ranking occurs when a number of items are arranged in order according to some quality that they all possess to a varying degree; these items are said to be ranked. The arrangement as a whole, in which each member has a rank, is called a ranking. Rankings are created using a range of underlying variables, many of which are quantitative. An overall algorithm is established, then, items considered for ranking (herein referred to as elements) are entered into the algorithm. Using these results, the highest element receives a rank of 1, the next highest is ranked 2, and so forth. The method is repeated to produce an overall ranking. For this paper, the sustainability case is considered and analyzed using the most common methods, which are discussed in the Methods section.

Complete Article List

Search this Journal:
Reset
Open Access Articles: Forthcoming
Volume 8: 2 Issues (2017): 1 Released, 1 Forthcoming
Volume 7: 2 Issues (2016)
Volume 6: 2 Issues (2015)
Volume 5: 4 Issues (2014)
Volume 4: 4 Issues (2013)
Volume 3: 4 Issues (2012)
Volume 2: 4 Issues (2011)
Volume 1: 4 Issues (2010)
View Complete Journal Contents Listing