The term satisficing, a portmanteau of satisfy and suffice, was introduced by Herbert A. Simon in 1956, although the concept was first posted in his 1947 book Administrative Behavior. Simon used satisficing to explain the behavior of decision makers under circumstances in which an optimal solution cannot be determined. He maintained that many natural problems are characterized by computational intractability or a lack of information, both of which preclude the use of mathematical optimization procedures. He observed in his Nobel Prize in Economics speech that "decision makers can satisfice either by finding optimum solutions for a simplified world, or by finding satisfactory solutions for a more realistic world. Neither approach, in general, dominates the other, and both have continued to co-exist in the world of management science". Simon formulated the concept within a novel approach to rationality, which posits that rational choice theory is an unrealistic description of human decision processes and calls for psychological realism. He referred to this approach as bounded rationality. Some consequentialist theories in moral philosophy use the concept of satisficing in the same sense, though most call for optimization instead.
The theory of satisficing finds application in a number of fields, including economics, artificial intelligence, and sociology. Satisficing implies that a consumer, when confronted with a plethora of choices for a specific need, will select a product or service that is "good enough," rather than expending effort and resources on finding the best possible or optimal choice. If a consumer were to require a tool to process and resolve a problem, under a satisficing strategy they would look to the simplest, most readily accessible piece of equipment, regardless of more effective options being available at greater cost and time. For instance, satisficing might include the use of a single software title versus procuring an entire software suite that includes supplemental features.
Organizations that adopt satisficing as a strategy might seek to meet the minimal expectations for revenue and profit set by the board of directors and other shareholders. This contrasts with attempting to maximize profits through concerted efforts that put higher demands on the performance of the organization across sales, marketing, and other departments. By aspiring to targets that are more attainable, the effort put forth may be equitable with the final results. Such a strategy might also be applied if a company’s leadership chooses to put only a nominal effort toward one objective in order to prioritize resources to achieve optimal solutions for another goal. For example, reducing staffing at a tertiary worksite to minimal operational levels could allow for personnel to be reassigned to other divisions and projects where more substantial labor is required for maximized results. A limitation of satisficing is that the definition of what constitutes a satisfactory result has not necessarily been determined, nor is it universally clear that such a result differs from the pursuit of an optimal outcome.