Problem Solving vs Decision Making in Management
Understanding the difference between problem solving vs decision making can lead to better leadership, greater productivity and more effective teams. In any business or organization, being able to solve problems and make decisions is absolutely necessary. Even so, many people see them as the same thing. If you are a manager, team leader or business owner, this book will teach you how to tell problem solving apart from decision making, see their roles in management, give many examples and work the 7-step framework to get better at both.
Table of Contents
Difference Between Problem Solving and Decision Making
Problem Solving
Problem solving refers to spotting, analyzing and dealing with issues that stand in the way of a person or institution reaching their objectives. Usually, it means figuring out the main reason for the issue, finding answers and selecting the best one to solve it.
Example: A manufacturing company experiences delays in manufacturing. The manager looks into the problem, finds there is a bottleneck in the supply chain and devises a solution to keep things on track.
Decision Making
Decision making is the process of selecting one option over others. It’s often needed to help solve problems, mostly when you are determining the best way to go among several different choices.
Example: A manager is required to choose which product (Product A or Product B) to launch after analyzing market data. Both are options, though only one can get top priority.
Problem Solving vs Decision Making in Management
In management, understanding when to use problem solving vs decision making is critical:
| Criteria | Problem Solving | Decision Making |
| Objective | Identify and fix the root issue | Select the best alternative |
| Complexity | Usually involves multiple steps | May be a single step |
| Focus | Fixing what’s broken | Choosing the best path |
| Tools Used | Root cause analysis, brainstorming | SWOT, pros & cons, decision matrix |
| Outcome | Solution to a specific problem | A clear and timely choice |
Problem solving in management ensures operational efficiency, while decision making in management drives strategic direction.
7 Steps of Problem Solving and Decision-Making
Using a planned method makes it more likely that you will achieve your goals. Here I share the 7 steps of problem solving and decision-making that work for both approaches:
1. Identify the Problem
Identify exactly what the issue is. Making the problem unclear means the solutions will not be very effective.
2. Analyze the Problem
Look up facts, the main reasons behind the issue and the context around it. Try to understand what caused the event, for example, by asking questions that explore the motive.
3. Generate Alternatives
Think of various ways to solve the problem. Support different ideas and avoid making judgments.
4. Evaluate the Options
Test each solution against the pros, cons, its feasibility and how much impact it could have.
5. Make the Decision
Choose the best way to solve the problem during the decision making stage of problem solving.
6. Implement the Solution
Take the actions needed to carry out the selected strategy. Discuss who is responsible, when the work needs to be done and what you will need.
7. Review and Reflect
Once the change is put in place, look at the results. How was the experiment? Were there things that you’d wish you handled differently?
Problem-Solving and Decision-Making Examples in Management
Example 1: Low Sales Performance
- Problem Solving: Sales are down. Analyze CRM data → Discover lack of follow-up → Create new lead nurturing workflow.
- Decision Making: Choose between hiring new sales reps or investing in automation.
Example 2: Employee Burnout
- Problem Solving: Exit interviews show high stress. Investigate workloads → Restructure assignments.
- Decision Making: Select between 4-day workweek or hybrid model for relief.
Why It Matters in Business & Leadership
Understanding problem solving vs decision making in management allows leaders to:
- Act faster and smarter
- Avoid costly mistakes
- Enhance team confidence and morale
- Support data-driven decision making
- Design more sustainable business strategies
Whether you’re fixing a malfunctioning system or selecting a vendor, knowing which process to apply helps optimize results.
Conclusion
Problem solving and decision making are not the same, but still closely tied together in the workplace. A manager who is good at spotting problems, evaluating information and deciding what to do will advance progress and spark new ideas.
A modern manager must be able to use both skills, as they are not optional anymore.
FAQs on Problem Solving vs Decision Making in Management
What is the difference between Problem Solving vs Decision Making in management?
Problem solving resolves problems and decision making helps pick which action to take. They are both necessary, but have unique functions.
What is the relationship between problem solving and decision making?
Making decisions is often done as a part of the bigger process of solving a problem. When you have found the problem and come up with solutions, you make a plan to act.
Are there structured steps to follow?
Yes — the 7 steps of problem solving and decision-making include: identify, analyze, plan, evaluate, decide, carry out and review.
