Decision-making skills are the ability to evaluate several courses of action and choose which to take. This is an important life skill as well as a business leadership skill, since effective problem-solving requires deciding on a solution. However, making smart business decisions isn’t just about being decisive in an abstract sense.
Effective decision-making is a skill that requires a combination of critical thinking and data analysis. In a business context, a familiarity with tools of financial analysis is especially important for decision-making, although the financial bottom line isn’t always the only factor to be considered in a careful cost-benefit analysis. For example, a growing number of companies consider corporate social responsibility principles and a “triple bottom line” approach that also looks at social and environmental costs and benefits.
Beyond cost-benefit analyses, there are approaches informed by psychology that are used to make decisions as well as describe decision-making in the real world. Decision theory uses tools similar to game theory to analyze how decisions are affected by uncertainty, different timing between decisions and impacts, social and competitive situations, and other factors. And behavioral economics helps to understand how cognitive bias can influence decision-making, as in the case of the sunk cost fallacy which results in economically irrational decisions based on previous investments.
Decision-making skills are essential for leadership positions in every field, whether chief executive officers (CEOs) of corporations, executive directors of non-profit advocacy groups, or government roles such as mayors and governors. These leaders are responsible for setting organizational goals and policies and, ultimately, making decisions on how to achieve them.
According to the Bureau of Labor Statistics, top executives earn a median pay of $104,690 per year, including a median pay of $184,460 for CEOs. This high level of compensation is a testament to the importance of savvy decision-making skills, which are in high demand in organizations of all kinds.
Absolutely. Coursera lets you learn about decision-making and related topics like problem-solving, psychology, and leadership from top-ranked schools like the University of California, Irvine, the University of Michigan, and the University of Pennsylvania. And although you’ll be learning remotely, you’ll get the same course materials as on-campus students as well as opportunities to discuss these important topics in leadership with expert faculty as well as your fellow students.
Everyone can benefit from learning about decision making, both in their personal and professional lives, so you may not need any previous experience or skills to study the concept. However, any type of work experience may help prepare you for your studies. Once you've worked in a field, you'll better understand why decision-making skills are important and how you can use them to advance your career or even get a new job in your field.
A person who is a leader and good communicator is best suited to work in roles that involve strong decision-making skills. As a matter of fact, learning how to be a good decision maker can lead to supervisory and management positions in your field. You should also be an active listener and someone who can easily convey to other people what your thoughts and ideas are. People who are strong decision makers tend to be good analyzers, troubleshooters, problem solvers, and critical thinkers. This helps them gather the evidence they need to make a choice. Other skills needed for roles that require good decision-making skills are time management, logic, reasoning, and intuition. You'll also need to have good interpersonal skills, as well as be a good collaborator who doesn't shy away from teamwork.
Decision-making studies or skills look good on any resume, so if you're looking for a new career or starting a career, learning about it may be right for you. It can also be helpful if you're looking to be promoted into a managerial position at work. Decision-making skills are very important for people in roles of leadership. If you currently work in a managerial position or any position in any field and find that you're having trouble making sound decisions at work, learning how to do so can improve your work performance. Learning it can also help you make better decisions in your personal life.
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