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X

  • Samuel O. IdowuEmail author
Chapter
Part of the CSR, Sustainability, Ethics & Governance book series (CSEG)

Abstract

X-efficiency [1] is a strand of thought that challenges the maximizing approach to economic behavior. The key maximizing approach to economic behavior is neo-classical micro-economics which assumes corporations as profit maximizers. Mainstream CSR—also known as triple bottom line reporting—embraces the micro-economic profit maximizing paradigm and it assumes the core business of corporations as fully captured in their economic bottom line and fully accounted for through their financial statements. X-efficiency allows for a non specified and non optimized rate of work effort in the core business of corporations and all other organizations. Thus is allows for a variety of outcomes of core business activity. Such outcomes appear to be less deterministic than those produced under the profit maximizing paradigm. X-efficiency measures organizational performance through benchmarking and organizational multiplicity or competition. There is no maximization, only comparison can tell what the level of effort is and what the core business outcomes can be.X-efficiency is relevant to mainstream CSR because it challenges the deterministic approach mainstream CSR takes to the economic bottom line under the profit maximizing paradigm. X-efficiency shows that the economic bottom line is not deterministic; therefore, there is freedom in the organization to obtain a viable bottom line and that freedom leads to responsibility. Such responsibility should be accounted for beyond the financial statements because X-efficiency tells us that financial statements can be obtained in many different ways. Financial statements themselves are non deterministic once profit making becomes only one of the many possibilities and combinations of outcomes from organizational activities.

Copyright information

© Springer International Publishing Switzerland 2015

Authors and Affiliations

  1. 1.LondonUK

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