Life is all about making decisions. From getting out of bed in the morning until you call it a day, we are constantly making choices and making decisions.

Whether it is your personal or professional life, you are often defined by your decisions.

Some of your decisions are mundane and almost automatic such as brushing your teeth and taking a bath, while some tasks require minor decision-making such as planning your daily schedule.

However, in a professional environment, decision-making skills can make all the difference as they can determine your growth and future career development. Depending on your role in an organization, your decisions can also impact other employees and even the overall image of the business.

When it comes to challenges and taking critical decisions, a lot of people shy away from taking responsibility. However, people with a decisive approach and a knack for taking well-measured and well-timed decisions are automatically regarded as leaders.

By honing your decision-making skills, you can create a strong bond with your colleagues and create a harmonious environment around you.






What is Decision-Making?

If we have to define decision-making in the context of the workplace, it is safe to say that management is nothing but a continuous process of decision-making. It is the responsibility of business managers to make operational decisions and ensure that their teams execute the tasks. In fact, the success of every manager depends largely on her decision-making skills.

The process of business planning depends on the art of decision-making. During the planning stage, managers need to make various decisions such as setting organizational goals. They decide on key products, marketing strategies, role assignments and timelines for every task.

In situations where the plans don’t deliver the desired outcome or are derailed due to external issues or lack of performance, it is the managers who need to bring things back on track by taking contingency decisions.

The charting of business plans is in effect great evidence of the importance of decision making. The care and research put in before taking a decision shape the impact it will make. Managers decide individual targets, team goals and various other rules and regulations related to the team’s functioning and conflict resolution, wherever needed.

Importance of decision-making

Iconic 20th-century management guru Peter F. Drucker said once, “Whatever a manager does, he does through making decisions.” That is exactly what we are talking about here.

It doesn’t matter whether you are working in a small company with less than 10 employees or in a large enterprise that has thousands of employees, things and situations always change. Over time, old practices, rules and personnel make space for new processes, especially in uncertain situations. However, these changed situations need people to make decisions.

The meaning of decision-making is strongly connected with management roles. Whether you create plans or organize discussions, give orders or advice, approve plans or reject them, every action involves decision-making. Thus, it can be considered an essential function of management.

If you work in a highly profitable enterprise, you will need to make a lot of critical decisions such as pricing a product, deciding which products to market, controlling production costs, advertising, capital investments, creating a policy for dividends and taking care of employee issues, among others.

Such decisions also need to be taken even by managers in government or social service enterprises where profit is not the criterion of success.

Decision-making and its importance in problem-solving

The importance of decision making lies in the way it helps you in choosing between various options. Before making a decision, there is a need to gather all available information and to weigh its pros and cons. It is crucial to focus on steps that can help in taking the right decisions.

There is a strong correlation between decision-making and problem-solving.

To further understand the importance of decision-making skills, let us take a look at the various ways in which decision-making can help solve problems:

  1. Step-wise approach:

Decision-making is not a random process. Before taking crucial decisions that can have a long-term impact on individual as well as organizational goals and performance, it is important to avoid various challenges.

Many times, we tend to get influenced by the majority opinion. Even if you feel that the group is not moving towards the right decision, you are scared of voicing your opinion due to the fear of isolation.

A systematic decision process ensures such erroneous situations are avoided.

  1. Impact analysis:

By using the correct approaches and ethical decision-making processes, we can evaluate the impact of different choices. For instance, it is important to know whether a decision is long-term or temporary. We can assess the impact that a decision might have on people in the organization and whether they will feel happy about it or not.

  1. Finding decision alternatives:

The decision-making process brings to fore skills such as probing and creativity. By using probing skills, you can gather more information about the various alternatives and creativity can help you in finding options that were previously not known.

  1. Future forecasting:

The importance of decision making is amply seen in its ability to allow future forecasting. When we make a decision through a systematic process, we can calculate the likely impact of the decision on a business’s future growth.

  1. Evaluating various options:

One of the characteristics of decision-making is that it is a fact-based process. Before making a decision, we gather all information about the various options and evaluate their feasibility and impact on the company’s present and future scenarios. This gives us the ability to make ethical decisions that are generally also the right decisions.

  1. Risk assessment:

Strong decision-making skills are crucial in the risk assessment of decisions. They give us the ability to not only take the various options into account and weigh their pros and cons but also to assess the risk. By thoroughly evaluating all the options, market scenarios and past data, we can anticipate the chances of success and prepare for worst-case scenarios. Such a risk analysis comes handy for contingency planning as well as during any course corrections.

  1. Impact on human resources:

Good decision-making can reap rich benefits for the organization. It can help foster a collaborative work environment and create clarity of communication among various stakeholders. By adopting group decision-making processes, it is possible to make different team members understand each other’s perspectives, strengths and weaknesses.

  1. Leadership and emotional management:

Strong decision-making helps solve problems promptly and creates a leadership position for the decision-makers. Strong decisions should be impartial and devoid of any emotional influences that might make us overlook shortcomings. Such decision-making should also be transparent and logical.

These aspects of decision-making reduce stress and friction and increase cohesiveness as well as mutual understanding among team members and respect for the leaders.


Our daily life decisions give us opportunities to become better at what we do. Most of our decisions are made out of habit. However, by bringing our choices in the conscious domain, we can evaluate them, assess their impact and indulge in self-reflection. Such steps eventually lead to better decisions and outcomes.

Hence, it is very important to learn what is decision-making, and Harappa Education’s Making Decisions specially-curated course helps you learn the techniques of ethical decision-making. It has a section on the good decision process which will help you remove obstacles such as biases, peer pressure and lack of clarity that come in the path of good decision-making. Sign up for the course and start making smart decisions for success.

Explore our Harappa Diaries section to know more about the topic related to the Solve habit  – Ethical Decision Making in order to develop your problem solving and decision making skills.