Posted in Marketing and Strategy Terms, Total Reads: 305
According to Herbert Simon, people do not always seek for best possible solution for the problems but operate within what is called as bounded rationality. Herbert Simon coined the term “to satisfice” which means a solution that is good enough.
People usually go for satisfactory results because it is hassle free, secure involves lesser risk and cost.
Decision making is a very crucial aspect of every business and the management at all level must practice effective decision making to keep the company perform. But when the people has a number of options at a point, it is not always possible for them to take the best possible decision as it requires increased time, costs and efforts.
In the business world it is often required to make swift decisions and try to get the best under the given circumstances which is only possible with trade-offs. Indeed it is not possible to get the good quality product at the low cost. People need to move forward while maintaining a satisfactory result that doesn’t mean the management has become complacent. Satisficers don’t ponder over and over about the decisions made in the past and try to improve things further at every stage.