Profit satisficing
Definition. Profit satisficing is the pursuit of a satisfactory rather than a maximum level of profit, where a firm aims to earn enough profit to keep stakeholders content rather than to maximise it. It typically arises from the separation of ownership from control and competing objectives within the firm.
Managers may satisfice because they pursue goals such as sales growth, market share, or job security, and because owners cannot perfectly monitor them. This links to the principal agent problem.
This term belongs to The Objectives of Firms in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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