Decide on up any Harvard Company University circumstance study, the most broadly employed pedagogical tool by business enterprise educational facilities close to the earth, and you will almost surely see the phrase “performance”. Company school learners are taught each the implies to generate organisational efficiency and guarantee that efficiency is perpetuated and grown through alignment of remuneration.
We teach administrators to make choices — on the likes of product or service advancement, employing, mergers and payouts — based mostly on the probable for sustaining or bettering efficiency. We use situations to illustrate governance mechanisms, these kinds of as pay back for efficiency, by which boards align the incentives of administrators to shareholders.
But what if the assumptions and measurements fundamental the definition of efficiency are flawed? If the purpose of the business in modern society is to maximise short-expression income, then 1 need to have glance no more than earnings