Clear or Real? The Transformation of a Japanese Business Group: How Does Ambiguity Produce Knowledge?

This study examines the sources of continuity and change in complex organizations characterized by multiple embeddedness. The case is built on a vertical business group of Japan’s shipping industry. In a grounded study, sampling was performed in collaboration with HR and, simultaneous data collection/analysis conducted by the author. Semi-structured interviews took place with middle and top managers in the Tokyo HQ and the London subsidiary across June and July, 2019. As a result, it is argued that ambiguity is systemically inherent in organizations – notably in business groups. Ambiguity is explicated as a knowledge production unit that possesses a structure/process duality. As structure, it upholds and reinforces the dominant logic by 1) defining the moment of truth: membership criteria, control matrix, allocation of resources, norms and standards, desired behaviors, activities etc. and, by 2) control and coordination: delineates the scope of allowed informal action, allocates time, space, processes to perform these. As a process, ambiguity is manifest in the autonomous informal action of socialized and acculturated actors. The integration of informally understood and formally codified structures and processes is found effective to sustain the status quo and, to provide for adaptive continuity: ambiguity’s utility reaches as far as facilitating and reinforcing implementation. The paradox of ambiguity’s inertial and constructive aspect is dissolved in a duality which is mobilized by the organizing purpose requiring action; inertia for stability and, its active aspect to attain continuity. Practical implications: management knowledge has overly emphasized clarity and has regarded ambiguity as a risk; a problem to be clarified. Ambiguity, however, is social control & coordination that can be integrated in the formal organization; culture and identity are often more effective than explicit controls in buying support from members for organizational goals and implementing these.