Suboptimization

(systems engineering) The process of fulfilling or optimizing some chosen objective which is an integral part of a broader objective; usually the broad objective and lower-level objective are different.

Optimization of the goals of different departments of the entire organization. Suboptimization occurs when different subunits each attempt to reach a solution that is optimal for that unit, but that may not be optimum for the organization as a whole.

For example, the quality control department of a factory may want to introduce a program that will guarantee that every bulb that is produced is perfect. However, the higher cost and the resulting high price would lead to a disaster for the overall company in the form of lower sales.