The Efficiency Paradox in Organization and Management Theory

We theoretically discuss a phenomenon that we label “efficiencyism”. Efficiencyism describes a fixation on reified tenets of efficiency without questioning its assumptions and consequences. In organization and management theory efficiency is a foundational concept, which is assumed to be vital for economic success based on the optimization of input-output ratios. Based on the logic of the Jevons Paradox, a concept originating from resource and environmental economics, we challenge the assumptions underlying the notion of efficiency and argue that presumably efficient processes or behaviours can in many cases lead to inefficient outcomes. These “rebound effects” can be observed in a broad array of organizational and managerial contexts. Despite their oftentimes unintended and counterintuitive effects, rebound effects and efficiencyism more generally however persist in theory and practice. To explain why this is the case, we develop three enabling conditions of efficiencyism, namely interpretive flexibility, the maximization imperative, and the micro-macro gap. Our framework has theoretical and empirical implications for seeing efficiency in organization and management theory in a new light.