Profit Satisficing

Profit, revenue and sales maximisation are all admirable business objectives…but in real life, a lot of firms aren’t looking to maximise anything. 

Many firms now look not to profit maximise, but to profit satisfice! 

Profit satisficing is when a company makes enough profit to satisfy its influencers: enough profit for shareholders to be happy with their return; enough profit to pay workers a good wage.

But after satisfying its influencers, the firm might decide to pursue environmental, social or personal objectives.

Like Lego, who’ve invested $150m into renewable energy and making their toys recyclable. 

Or Up Learn: for every student who pays for a course, we give a course for free to a student who can’t afford to.

Or your local corner shop owner, who could aggressively expand and make crazy profits…but would rather watch the cricket and spend time with their family. 

These are all instances of profit satisficing, when a firm makes enough profit to satisfy its shareholders and workers and other influencers, but then pursues other objectives: environmental, social or personal – whatever matters to the firm.

And good news: you don’t need to worry about showing profit-satisficing on a graph! But it’s something you should be aware of as a legitimate business objective 🙂 

Profit satisficing is when a company makes enough profit to satisfy its influencers, but then pursues other objectives (social, environmental, personal).