Product managers are responsible for the major decisions throughout the lifecycle of the product development process. The ability to make those decisions correctly is judgment. By making the correct decisions, mistakes are reduced and the chance of success is higher. Judgment is important for product managers to have because their decisions have high impact on both internal resources and external success. A bad decision can result in the mismanagement of resources and have a negative impact on users, resulting in poor performance. A good decision, on the other hand, will result in appropriate management of resources to deliver a positive impact on users, resulting in good performance.

The larger the scope and the more complex the product is, the better the product manager's judgment must be. This has more to do with the cost of a mistake than it does the actual size of a company. While every organization has its own amount of leniency for mistakes, it often does not have a high tolerance for very costly errors. For example, managing an extremely technical product that can affect the entire use base will require a very high level of judgment because mistakes are extremely costly. However, managing a relatively simple feature that is targeted to a small subset of users will require less judgment because mistakes are not very costly.