The goal of this question is to evaluate the candidate's reasoning ability, problem-solving skills, judgment, and possibly even willingness to take intelligent risks.

Having no answer is a definite warning sign. Everyone makes tough decisions, regardless of their position. My daughter worked part-time as a server at a local restaurant and made difficult decisions all the time -- like the best way to deal with a regular customer whose behavior constituted borderline harassment.

A good answer proves you can make a difficult analytical or reasoning-based decision -- for example, wading through reams of data to determine the best solution to a problem.

A great answer proves you can make a difficult interpersonal decision, or better yet a difficult data-driven decision that includes interpersonal considerations and ramifications.

Making decisions based on data is important, but almost every decision has an impact on people as well. The best candidates naturally weigh all sides of an issue, not just the business or human side exclusively.