What does impact analysis evaluate in decision-making?

Impact analysis primarily evaluates the potential effects on various stakeholders and aspects involved in a decision. This assessment is critical in decision-making because it helps leaders understand how different parties will be affected by a decision, including both intended and unintended consequences. This evaluation encompasses factors such as economic impact, social implications, environmental concerns, and organizational effects.

By focusing on the broader range of impacts, decision-makers can work towards minimizing negative repercussions and maximizing positive outcomes. For instance, if a company is considering a new product launch, conducting an impact analysis helps determine how the launch will influence consumers, employees, suppliers, and the community, enabling a more holistic approach to decision-making.

Other options, while relevant to certain aspects of decision-making, do not encapsulate the comprehensive nature of impact analysis. For example, evaluating historical performance provides context but does not specifically assess current stakeholder effects. Similarly, examining costs is vital but limited to financial implications. Lastly, considering the possibility of adverse outcomes can be part of an impact analysis, yet it does not encompass the analysis's focus on positive and negative repercussions across all affected parties.