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Upper and lower satisficing levels in efficiency analysis: a corporate social responsibility perspective

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  • Malte L. Peters

    (Federal University of Applied Administrative Sciences, Faculty of Finance)

  • Stephan Zelewski

    (University of Duisburg-Essen, Campus Essen, Faculty of Business Administration and Economics)

Abstract

The analysis of efficiency and especially the analysis of so-called eco-efficiency have been broadly considered within the scope of Sustainable Development (SD) and Corporate Social Responsibility (CSR). Moreover, upper satisficing levels for output factors and lower satisficing levels for input factors have been already discussed within this context. In particular, upper satisficing levels for output factors can be viewed as relevant from a CSR perspective, since they can be used to remove the incentive to produce unnecessary high output quantities in order to receive better efficiency scores. However, lower satisficing levels for output factors and upper satisficing levels for input factors have not been addressed in the discussion so far. In this paper, a data transformation model to simultaneously consider lower and upper satisficing levels for output factors as well as for input factors is presented. The proposed model takes up the idea of linear representation of logical constraints. Subsequently, the benefits and perils of this approach are discussed from a CSR perspective. It is shown that changes in efficiency scores or even in efficiency rank positions due to considering satisficing levels can be indicators of behavior that is desirable from a CSR perspective.

Suggested Citation

  • Malte L. Peters & Stephan Zelewski, 2021. "Upper and lower satisficing levels in efficiency analysis: a corporate social responsibility perspective," Sustainability Nexus Forum, Springer, vol. 29(3), pages 187-195, December.
    • Handle: RePEc:spr:sumafo:v:29:y:2021:i:3:d:10.1007_s00550-021-00511-x
    DOI: 10.1007/s00550-021-00511-x
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