Pareto Principle (80/20 rule)

• Home
• Dictionary
• Methods
• Views

• Register
• Log in
• Help

• Change & Organization
• Communication & Skills
• Decision-making & Valuation
• Ethics & Responsibility
• Finance & Investing
• HRM
• Knowledge & Intangibles
• Leadership
• Marketing
• Program & Project
• Strategy
• Supply Chain & Quality

Description of Pareto Principle (80/20 rule). Explanation.

Definition Pareto Principle (80/20 rule). Description.

The Pareto Principle (80/20 rule) states that for many phenomena 80% of consequences stem from 20% of the causes. The idea has rule-of-thumb application in many places.

Some of these applications include:

• 20% of any advertising campaign produces 80% of the response.

• 20% of the employees perform 80% of the work.

• 20% of the clients are responsible for 80% of all revenues / profits.

The principle was suggested by management thinker and quality control pioneer Joseph M. Juran.

Juran described the Pareto principle as the principle of 'the vital few and the trivial many' (Quality Control Handbook, 1951). He named it after the Italian economist Vilfredo Pareto, who observed in 1897 that 80% of property in Italy was owned by 20% of the Italian population.

The principle can be viewed as recursive, Tipton Cole has observed that the Pareto Principle applies to the residue of its first application, yielding a "96-36" rule.

Pareto Principle (80-20 rule) Forum New Topic  |  Help Meta Pareto Principle "The Pareto Principle has consistently proven to be right in 80% of the cases. There are of course exceptions, but for sure they do not amount to more than 20%... The pareto principle in action :-)" 80-20 Rule in Broadcasting "When Brian Tracy's "Eat that frog" introduced me to Pareto principle some years back, I called for our marketing books and to my surprise only about 20% of advertising agencies placed adverts worth mo..." Using the 80/20 Principle for Workforce Effectiveness "Can this principle be widely applied, and include a company workforce? In regard to performance and effectiveness of personnel, e.g. if the company's total workforce is 1000, can we attribute the achi..." Danger of Pareto: Self Fulfilling Prophecy "Although I agree with the Pareto principle, the danger is that we act to fulfill. How can we in our organizations and daily life contradict? What is our attitude towards this? Maybe we often act ..." Keep in touch with this topic Please log in... New Topic

Pareto Principle (80-20 rule) Special Interest Group Visit the Special Interest Group

Compare also: Root Cause Analysis

Return to Management Hub: Change & Organization  |  Decision-making & Valuation  |  Human Resources  |  Marketing

More on Management  |  Return to Management Dictionary  | 

End of description Pareto Principle (80/20 rule). An explanation.