In business management, the principle that roughly 80% of results often come from 20% of causes is called the Pareto principle.
The idea is named after Italian economist Vilfredo Pareto, who observed in 1896 that about 80% of Italy’s land was owned by about 20% of the population. Pareto also studied patterns in wealth distribution, and later researchers extended the idea to many organisational settings.
Businesses use the principle as a prioritisation heuristic. For example, a company may find that a minority of customers produces most revenue, or that a minority of defect types causes most quality problems. The actual ratio need not be exactly 80/20, and it is not a universal law.
The Pareto principle is often confused with a guarantee that every business data set follows the same split. It is better treated as a prompt to look for uneven distributions and identify the most influential causes before allocating time or resources.