Satisficing is a decision-making choice based on making decisions that reach an acceptability standard. The word is a portmanteau of satisfy and suffice and refers to a form of compromise. It differs from optimal decision-making, which is concerned with finding the best solution available and is more resource-intensive.
When making decisions using satisficing, the first decision that achieves the desired outcome may be picked despite the potential drawbacks. When trying to make an optimal decision, the decision-making process would be continued in order to mitigate the drawbacks. Note, however, that most decision can are not truly optimal (i.e. superior to all others) because all they are made on incomplete information and thus its superiority can’t be accurately judged.
Satisficing theory was developed by American political scientist Herbert A. Simon in 1956, although the idea is a decade or so older. Simon said that human beings do not have the cognitive capacity to optimise, such as understanding probability theory and risk and also that our memories are dysfunctional in recall. Lack of information is also a boundary to optimisation, and in many cases – especially at the organisational level – we have to make decisions based on incomplete data.
Although a belief in the human being's inability to optimise was the driving force behind the theory, some organisations will use satisficing due to other reasons e.g. financial constraint or time sensitivity, even though they believe they are capable of optimal decision-making
Satisficing tends to lead to a greater degree of happiness in post-decision evaluation although not necessarily superior outcomes.