As a business graduate of some years ago now, we were taught that corporations often adopted a strategy for planning called “Satisficing”. This was simply descirbed as the goal of ‘good enough’ rewards, not maximum.
To some extent this seems an intuitive way forward for SME’s who lack the time and resources to research all profit-chasing options fully. I understand that some might see this as abdication of rational economic behaviour, but it is referred to as ‘Bounded Rationality’.
Whilst the foregone profit might be seen as inefficiency, it may also be seen as a cost for SME’s to trade profitably at all. It seems to me that there are step changes in production processes which may be technologically driven and which lead to less that most efficient behaviour. You cannot buy half a laptop computer. This might lead to sub-optimal profits.
The issue is not so much that maximization has been foregone, but that of profitability itself in the current climate. The High Street traders are trading their ground rent against that of the online retailers in low-rent warehouses and lo-cost mail delivery systems where the profit on goods is otherwise equal (trader discounts notwithstanding). Profitability may be marginal, and as such survival is the strategy, not profit-chasing.
The first goal of the organization is to survive.
Satisficing may be a strategy for coping with that goal. Do that which is legal and that which you feel able, comfortable and motivates you.
