Role ambiguity refers to the lack of clarity in the roles an employee is expected to fulfill. Since a worker needs to understand clearly what his or her role is, not clearly knowing what one’s role is may result in negative situations. In organizations, management should ensure that authority and responsibility should be clearly defined.

Problems of ambiguity, lack of clarity, could be reduced through communication among members. Here, however, still exists the problem of equivocality, because each member wold give a different meaning to the same situation. Again, promoting more communication will bring about an agreement.

I exemplified it using a case of U.S.-Japan joint venture.

A common view is that ambiguity is a threat, or a noise to rationality. But ambiguity exists and may bring advantages such as flexibility and openness. Organizations comprise groups with different interests and values. So ambiguity may be necessary for facilitating cooperation among groups.

"Since a worker needs to understand clearly what his or her role is, not clearly knowing what one’s role is may result in negative situations."

Have you ever had this moment when you had a really clear vision of something but when you brought it out it was just different and all you got out of it was this "vision of Johanna" feeling?

Thanks for the response.  Is there someone who think ambiguity can be managed in a positive way?  I think in some circumstances, the existence of ambiguity may provide flexibility and creativity possibility.  

Dear Mian,

If you mean by managing ambiguity in a positive way to get rid of ambiguity one has to disappoint you – following Jim March.

For March all human actors – due to their bounded rationality – are faced with ambiguity in every situation – God might be the only exception. However, situations may differ to the degree of ambiguity they exhibit, they face, and to the degree agents are able to act in such situations in a competent way. Thus, there are three points of reference for thinking about managing ambiguity.

1. The degree of ambiguity a situation exhibits or faces

2. The degree of competence actors involved in the situations are able to produce, and

3. The interplay of 1. and 2.

Managing ambiguity thus could mean 1. reducing the ambiguity of the situation, e.g. by changing internal or external regulations. 2. It could mean to develop the competences of the actors involved or to acquire actors with competences which are able to handle the ambiguous situation more adequately. Or managing ambiguity could 3. mean to reflexively change regulations by defining conditions through which 1. and 2. are playing together in a different way. However, managing ambiguity does not mean that there will be no ambiguity further on. Managing ambiguity is by definition always some kind of shifting sand. This, however, does not mean that managing ambiguity is senseless. On the contrary, it is strategically highly important.

Hi,

In Finance, we consider than an ambiguity averse agent behaves as if he maximises every period expected utility under a worst case belief that is chosen from a set of conditional probabilities. In fact agents lack of confidence in their information sets. Ambiguous information has  key effects. After information has arrived, agents aswer asymmetrically: Bad news are more believed and affect actions more than good news that are considered as non reliable. This is pertinent during crisis periods. For more information you can read:

L G Epstein, M Schneider, "Ambiguity, information quality and asset pricing", 2008, Journal of Finance, N°63, p197 - 228.

Greetings

Hi,

You may benefit from this paper:

Dynamic portfolio optimization with ambiguity aversion

Journal of Banking and Finance, June 2017, vol 79,  Pages 95-109

Jinqing Zhang, Zeyu Jin, Yunbi An

Best regards.