Satisficing

Definition

Satisficing is a decision-making strategy where an individual or organization settles for a solution that is good enough, rather than attempting to find the absolute best or optimal solution. It involves making a decision that meets a set of minimum criteria, rather than exhaustively searching for the perfect outcome.

5 Must Know Facts For Your Next Test

1. Satisficing is a practical decision-making approach that recognizes the limitations of human cognition and the constraints of time and information.
2. It is often used in situations where the decision-maker faces complex problems with multiple, potentially conflicting criteria, and where the cost of searching for the optimal solution may outweigh the benefits.
3. Satisficing can lead to faster decision-making, but it may result in solutions that are not the absolute best, but are still considered acceptable or good enough.
4. Satisficing is particularly relevant in the context of programmed decisions, where the decision-maker is dealing with routine, well-structured problems that can be addressed using established procedures or rules.
5. Improving the quality of decision-making can involve finding the right balance between satisficing and maximizing, depending on the specific context and the importance of the decision.

Review Questions

• Explain how the concept of satisficing relates to the overview of managerial decision-making.
  • Satisficing is a key concept in the overview of managerial decision-making, as it recognizes the limitations that managers face in terms of time, information, and cognitive resources. Rather than attempting to find the absolute best solution (which may be impractical or impossible), satisficing allows managers to make decisions that meet a set of minimum criteria, which can lead to faster and more efficient decision-making. This is particularly relevant in the context of programmed decisions, where established procedures and rules can guide the decision-making process.
• Analyze how the concept of satisficing differs from the idea of optimization in the context of improving the quality of decision-making.
  • Optimization, which seeks to find the best possible solution, contrasts with the concept of satisficing. While optimization may lead to the highest-quality decision, it can also be time-consuming and resource-intensive, especially in complex situations with multiple, potentially conflicting criteria. Satisficing, on the other hand, aims to find a solution that meets a set of minimum criteria, rather than the absolute best solution. In the context of improving the quality of decision-making, finding the right balance between satisficing and optimizing can be crucial, as it allows decision-makers to make high-quality decisions efficiently, without expending excessive time and resources on the search for the perfect solution.
• Evaluate how the concept of satisficing might influence the decision-making process in both programmed and nonprogrammed decisions.
  • The concept of satisficing can have different implications for programmed and nonprogrammed decisions. In the context of programmed decisions, where the decision-making process is well-structured and guided by established procedures or rules, satisficing can be a useful approach, as it allows decision-makers to make decisions quickly and efficiently, without the need for an exhaustive search for the optimal solution. However, in the context of nonprogrammed decisions, which involve complex, unstructured problems, satisficing may not be as effective, as it may lead to solutions that are not comprehensive enough to address the unique challenges of the situation. In this case, a more thorough, optimizing approach may be necessary to ensure the highest-quality decision-making.

Related terms

Bounded Rationality:

The idea that in decision-making, an individual's rationality is limited by the information they have, the cognitive limitations of their mind, and the finite amount of time they have to make a decision.

Optimization: The process of finding the best possible solution or outcome given a set of constraints or criteria.

Maximizing: A decision-making strategy that seeks to find the absolute best or optimal solution, rather than settling for something that is good enough.