[This is an awesome concept that explains a geat deal, but more importantly one of those words with which you can amaze your friends...]
In economics, satisficing is a behaviour which attempts to achieve at least some minimum level of a particular variable, but which does not strive to achieve its maximum possible value. The most common application of the concept in economics is in the behavioural theory of the firm, which, unlike traditional accounts, postulates that producers treat profit not as a goal to be maximized, but as a constraint. Under these theories, a critical level of profit must be achieved by firms; thereafter, priority is attached to the attainment of other goals.
The word satisfice was coined by Herbert Simon in 1957. Simon says that people are only 'rational enough', and in fact relax their rationality when it is no longer required. This is called bounded rationality.
In decision-making, satisficing explains the tendency to select the first option given that can work for the situation rather than the “optimal” solution.
Example: One's task is to sew a patch onto a pair of jeans. The best needle to do the threading is a 4 in long needle with a 3 millimeter eye. This needle is hidden in a haystack along with 1000 other needles varying in size from 1 inch to 6 inches. Satisficing claims that the first needle that can sew on the patch is the one that should be used. Spending time searching for that one specific needle in the haystack is a waste of energy and resources.
Satisficing occurs in consensus building when the group looks towards a solution everyone can agree on even if it may not be the best.
Example: A staff spends hours projecting the next fiscal year's budget. After hours of debating they eventually reach a consensus only to have one person speak up and ask if the projections are correct. When the group becomes upset at the question, it is not because this person is wrong to ask, but rather because they have come up with a solution that works. The projection may not be what will actually come, but the majority agrees on one number and thus the projection is good enough to close the book on the budget.