Jurisdictional Ambiguity

Tactics of Organizational PoliticsStructure and AuthorityA borderline tactic

During a reorganization, the center deliberately leaves some decision rights open for a stated period, so new working patterns can form before old jurisdictions are written back in.

Borderline: whether this move is justified depends on the situation, and only the person in it can judge.

An example

After a mining company merged with a smaller rival, the head of integration was sure that writing the full decision-rights chart in month one would simply lock in the larger company's old fiefdoms. On day one she published owners for safety, environmental sign-offs, and spending above ten million dollars, and announced that equipment purchasing and maintenance planning would stay open for six months, worked by joint teams, with a final chart due in September. The head of mine engineering, who had approved every major equipment purchase for nine years, objected. She gave him a seat on the purchasing team and a written list of what was open and what was not. By September the joint team had cut haul-truck costs eleven percent, and the final chart split purchasing between the operations leads and engineering.

Why it works

Leaving part of the map blank for a period makes new patterns easier: without fixed boundaries, joint teams and operating units can try arrangements an early chart would have ruled out. It makes the old jurisdictions worth less as bargaining positions, because territory without a map is hard to defend, and it makes defending them costlier, since a head who wants the old line back must spell it out and argue for it in front of the people deciding. It works while the openness is plausibly temporary, the center is trusted to resolve it, and the affected heads cannot quickly coordinate against it.

The thinking behind it

Ronald H. Coase Ronald Coase's The Problem of Social Cost (1960) argues that because bargaining is costly, who holds the rights and how expensive it is to negotiate determine what actually happens. During an open period nobody holds certain decision rights, so new arrangements can be worked out without first overturning an incumbent's claim. Coase also explains the risk: unclear rights raise the cost of every later negotiation if the period runs too long.

Thomas C. Schelling Thomas Schelling's The Strategy of Conflict (1960) notes that conspicuous, simple lines are easier to hold than arbitrary ones, because they serve as focal points both sides recognize. An old org chart supplies those lines to incumbents. Leaving some rights open removes the focal point they would defend, and publishing a firm date and a list of what is open gives everyone a new one to hold the center to.

When it fits

Integrations and reorganizations where the old boundaries are part of the problem are the setting, provided the center has the credibility to be trusted with the final call. You need authority over the structure, a date you will keep, and a firm line between what is open and what cannot be. It fails if the openness touches safety or regulatory sign-offs.

How to use it well

Decide what must be settled on day one, such as safety, legal and regulatory sign-offs, and large spending, and publish those owners immediately.

  • Name the decision areas that stay open, who works them in the meantime, and the date they will be settled.
  • Give the affected heads a seat in the interim arrangement.
  • Track what the open period produces, so the final chart rests on evidence.
  • Publish the final structure on the date promised.

If an operational problem appears in an open area, settle that area early. A crisis during the open period hands opponents the argument that ambiguity is dangerous.

What it costs and where it backfires

Open periods breed confusion, and confusion has costs: duplicated work, slow decisions, people leaving because they cannot tell what their job is. Miss the date and you lose credibility for the rest of the integration. What you tell people decides whether it stays clean. Leaving areas open is legitimate. Telling heads an area is open when the decision has already been made, or leaving safety and compliance ownership unclear, conceals material facts and puts people at risk.

When it is used on you

Heads whose decision rights stay unpublished past the stated date, while operational calls skip them, should press early and together with the other affected heads for published decision rights with a date attached. Keep a log of decisions made around you, frame the request around operating risk, and make sure the board knows when the chart is late.

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