How Decision-Making in Leadership Affects the Performance of an Organization


Organisational leadership always requires investing a lot of effort in order to control every process in a project. In addition, this kind of activity has no free time, because it is impossible to stand on one place, there is always a need to be one step ahead in terms of commitment and responsibility. An organization is, without a doubt, a dynamic and highly complex systemic network. Toughness and competent decision-making are essential components of leadership in businesses. This study also aims to understand the significance of breakthroughs in management and leadership, to establish patterns of company growth and the impact of good management on this. As a result, a leader’s ability to receive and analyze information and resolve issues relies heavily on their confidence. In their eyes, a person who doubts themselves is incapable of acting or commanding respect from others. All stakeholders’ interests must be considered by leaders while making choices. If the leader questions the decisions of their subordinates, the team’s followers will become less loyal. Those who follow them need to see that they can admit when they are mistaken and move on to a more practical option. When analyzing the problem statement, it becomes clear that poor policy and inconsistent decision-making are two of the most pressing issues confronting today’s workplace and society (Mardani et al., 2017). Organizational leadership and decision-making are the subjects of a wide range of research. However, research on leadership decision-making is lacking, particularly regarding the method, perspectives, skills, and procedures employed to make decisions. The inability of certain leaders to develop appropriate policy norms and knowledge to support an optimum decision design for their organizations causes the closure of many businesses, either due to litigation or mismanagement.

Critical Review

A Leader’s Role in Organizational Decision Making

It is the leader’s main responsibility to be constantly creative and involved in the production process. Controlling a particular process is also part of the leader’s responsibility, as they monitor the whole process and give instructions on how to improve the final product. There are an incredibly large number of factors that influence this work, as it is extremely dynamic and volatile in nature and directly affects the end result of the entire team (Obioma, 2018). By encouraging rather than dictating, by allowing their subordinates to make decisions based on prior experience rather than denying or restricting efforts, leaders may be more effective in their leadership (Harms et al., 2018). Knowing that a precise set of actions does not characterize functional leadership, but rather generic answers prescribed for and will change depending on the context or problem is critical to understanding effective leadership (Lemoine, 2019). Although there is no such thing as a leader outside of an organization, all organizations require leaders to function and thrive. Leaders must be able to manage and lead at the same time. Otherwise, today’s organizations are at risk of extinction if they do not have strong leaders and managers.

To arrive at sound decisions, a series of actions must be taken. Business and institutional leaders need to follow the same standards, with regulations and procedures that are tough but fair (Paais and Pattiruhu, 2020). They need to treat their employees with respect and dignity, no matter how different they are from one another (Winchenbach et al., 2019). Leaders must be seen as an organization’s strategic goal to make smart judgments and operate efficiently among employees. The opposite is true: leaders must remain calm under pressure while still maintaining a sense of self-assuredness and a keen eye for detail while avoiding acting on the spur of the moment. Businesses may achieve their goals by utilizing these aspects to organize their energy around an enticing aim (Amiri-Zarandi et al., 2020). As a leader, it is one’s job to make decisions that benefit the overall company.

Grasping the Importance of Decision-Making

Leadership in every company requires a thorough grasp of the business and the ability to make effective judgments and policies. Because leadership is a service to collective effectiveness, it is a functional one. Decision-Making is a very important part of a leader’s job, as it is responsible for the entire production process. It is he who gives important instructions to the team and makes decisions that will have the best possible impact on the production of the final product (Yetton and Vroom, 2017). Policies, plans, controls, techniques, training, and remuneration for their employees are all things that managers and supervisors must make daily (Mishra, 2017). In vital, difficult, and stressful situations they frequently do so as any organization’s leaders must make decisions. Organizational leaders must study, analyze, and assess the best possible options to choose from among the numerous possibilities (Kruse, 2020). They will be able to make better judgments and run their firm more effectively because of this method.

The more knowledgeable and confident leaders are, the more likely they will make intelligent judgments. A leader who has a firm grasp of decision-making fundamentals will deal with difficult situations better than a leader who has none of these concepts in mind (Wallis, and Frese, 2020). A leader who has researched the dimensions and characteristics of organizational diversity has a better shot at choosing team building than a leader who has not (Mathieu et al., 2019). When it comes to a company’s management, decision-making is critical since it affects all aspects of the business, from recruiting and selection to planning and training to marketing and remuneration. In another way, it is the process of doing management duties. According to Runco (2019), problem-solving abilities pertain to a leader’s inventiveness in resolving novel and ill-defined issues inside the company. To be considered a leader, one must have the ability to motivate others, help them create goals, and guide them in the direction of accomplishing those targets.

The Factors that Influencing Decision-Making in Leadership

Organizational leadership refers to the organization’s executives’ strategy for its future. They put up a strategy to help a business succeed and achieve its objectives. Organizations should take deliberate action when choosing their company’s strategy (Singh, 2018, pp.68–69). Decision-making is a complex process that requires an awareness of the elements that play a role in it. In other words, the elements that influence the process may impact the output. Consider all the facts before deciding what is best for the organization’s future.

Undoubtedly, the most important factors that influence the choice of leader in different situations are human factors, such as a person’s general view of the situation, age or prejudices. Even the smallest factors can significantly affect the project as a whole, such as changes in company policy, the market value of the product, which cannot stand still, and liability to customers (Trigeorgis, 2017). In some manner, all the following elements can have an impact on an organization.

A leader’s awareness of a group’s culture is a simple method to know them. According to Corbett and Spinello (2020), culture is a living phenomenon in which individuals actively participate in constructing and reimagination the environment in which they reside. One’s business decisions may be affected by the absence of culture and expertise in the firm. For any project to succeed, it must consider the values and beliefs of the people who live in it as past experiences heavily influence future decisions.

Ethics and decision-making models

Ethics codes are a technique of describing appropriate behavior and assisting managers when confronted with ethical dilemmas in their organizations. Ethics is critical in business, and each organization’s leaders play a significant role in ensuring that their employees make moral decisions. To understand ethics, one must know how to conduct oneself in a morally acceptable manner. Every organizational leader or manager is required to play a role in the ethical decision-making process (Lindebaum et al., 2020). The following characteristics are typical: dedication, trust, fairness, functioning in good faith, and openness. It is a necessary configuration for the leadership and management of an organization (Sun, Chen, and Zhang, 2017). When it comes to making ethical judgments in the workplace, having a solid framework is critical because it helps leaders avoid ethical difficulties that can’t be handled by simply applying and enforcing codes of ethics.

In addition, one must use a rule, a theory, and a value to guide their reasoning. A single word or phrase is needed to identify something as appealing to human beings. However, there are times when a decision needs to be made without reference to the company’s ethics and rules, because business is an unpredictable environment. They are rather a guide for creating an atmosphere in the workplace that fosters success (Tokede and Traverso, 2020). A company’s ability to thrive in turbulent times depends on its values, which he described as shared ideas and expectations for workplace conduct.

Communication in decision making

Leaders and managers must have a strong knowledge of effective communication and decision-making to create clear policies in their organizations and enterprises. Good communication is perhaps the most critical part of any organization’s management toolkit for all the emphasis placed on functional leadership and its role in improving collective performance (Schneider et al. 2017). To be a good leader, one must be able to communicate effectively. The interaction of leaders and managers plays a very important role in assigning roles to employees and keeping them on track with the overall production process. Effective communication and a pleasant working atmosphere are two of the most ideal methods.

Any successful firm relies heavily on the ability to communicate effectively. Despite the fact that the human factor plays a significant role in a leader’s choice of enterprise strategy, it has long been the subject of debate around the world, because it is impossible to imagine an alternative branch of company development without the involvement of such interventions. Success in today’s world depends on the quality of decisions made by policymakers and other leaders at the highest levels of the business.

Making something happen that would not usually occur or preventing something from happening is the essence of leadership. Leadership in all enterprises needs clear, honest, and reciprocal communication between leaders and staff members (Bavik, 2019). One strategy to motivate others in a leadership position is to share knowledge in the environment’s decision-making process. The issue of raising moral standards in the company through the efforts of the leader, who has a direct impact on employees, also remains relevant. In order to improve the decisions made, it is necessary to have an understanding of the company’s goals and values, because they are at the top of the hierarchy of the firm’s movement towards success. To make a final decision or take any action, decision-makers must first identify or establish a set of alternative measures, as well as acquire information about them (Koksalmis, 2019). Once they have acquired all the information, they need to choose; they must apply that knowledge to each conceivable course of action and decide on execution.


A sequence of steps must be completed in order to arrive at sound decisions. There are many decisions that a leader must make on a daily basis in their field of leadership. The ability to make sound decisions and a burning desire to rise up the ranks of an organization are two of the most common characteristics people identify with leadership in business and politics.

Previous study, on the other hand, reveals little or no evidence that leaders treat their workers with respect and decency. Employees lose trust in their superiors because of being asked to defend their ideas. Following them requires that they have a capacity for admitting their mistakes and then moving on to a better solution. Poor policy and inconsistent decision-making are two of the most pressing issues facing today’s workplace and society, as can be seen by examining the problem statement.

However, despite the provided critical analysis, it is still evident that the problem of the leader’s role in a company exists. The most important gap in knowledge that this study addresses is measuring the influence of the leader on the overall creative process, his or her credibility and the ability to replace the human factor with machine intelligence.The impact of personal factors on the overall conduct of business can be detrimental to overall product results, and unfortunately, humanity is far from rid of this problem. The use of machine intelligence can also worsen the situation by making employees wary and depriving them of an understanding of the soulless creature. In addition, current technology is too underdeveloped to replace human creativity and the ability to manage large numbers of collaborators. The results of the above studies do not provide a complete understanding of the solution to the problem at present. They do not show how significant a role the human perception factor plays in developing unique promotion and production plans for a product. Therefore, it is suggested that further observation of the leader’s involvement in projects and the study of human behavior in non-standard simulations should be carried out for different implementations in the management system without direct human involvement.


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