What is sub-optimization and what organizational characteristics tend to lead to larger sub-optimization problems?

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10-02-2022
Business

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What is sub-optimization and what organizational characteristics tend to lead to larger sub-optimization problems?

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Tundexi Tundexi · Answer 1 · 2022-02-16T11:25:52+01:00

An organizational characteristics that tend to lead to larger sub-optimization problems is continuous focus on optimizing a unit of a business rather than the results of the entire business

What is Sub-optimization?

In a firm. the term "Sub-optimization" occurs when there is reduced level of output as a result of an an inefficient or ineffective process or system.

The problem associated with Sub-optimization is that when there is an optimization of outcome for a subsystem, it may not generally optimize the outcome for the system as a whole.

In conclusion, the organizational characteristics that tend to lead to larger sub-optimization problems is continuous focus on optimizing a unit of a business rather than the results of the entire business