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X-Efficiency Theory

Many firms face the problem of inefficient utilization of various inputs or resources. Innovative entrepreneurs come forward to check inefficiencies in the utilization of various resources through novel way. Cardington Silberstein, the most significant feature f entrepreneurship is gap filling. it is the job of the enterpriser to fill the gap or market up the deficiencies which always exist in the knowledge about the production function, i.e. utilization of various resources.

The gaps or deficiencies in the reproduction function arise because all the inputs in the production function cannot be marketed. Some inputs like motivation and leadership are vague and their output is indeterminate. An entrepreneur has to marshal all the inputs to achieve efficiency and economy. Thus, entrepreneurship is a function of input completing an gap filling.

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