Chapter 4 discusses the issue of observing "X-inefficiency" in corporate management, as introduced by Leibenstein. It shows that observing technical inefficiency does not empirically prove the existence of X-inefficiency, and even if X-inefficiency does exist, it does not necessarily manifest as technical inefficiency. Furthermore, it demonstrates that if X-inefficiency is defined by its causes, as Leibenstein did, it becomes impossible to empirically prove its existence. Therefore, this chapter proposes to redefine X-inefficiency as "inefficiency in the absence of control" or "uncontrolled inefficiency,’" which serves as a second-best approach for conducting empirical analysis.