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.

What are the causes of sub optimization?

To me, the top cause of sub-optimal process performance is the subordination of the process to local interests. To focus on processes is by definition to take a cross-functional view of things. To optimize the process requires authority over the portions of those local interests that are also part of the process.

What does Suboptimization mean in accounting?

Suboptimization is a reduced level of output that results from an inefficient or ineffective process or system. Suboptimization can also arise from a focus on optimizing a unit of a business rather than the results of the entire business.