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Why Decision Rights Become Blurred in Growing Companies

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Why decision rights become blurred in growing companies: when staff in one department get different answers to one question depending on whom they ask.

The symptom

Consider an organisation where staff in the same department receive materially different guidance on a recurring question, depending on which of two managers they happen to ask. Ask one, get one answer; ask the other, get a different one — and both have been giving their respective answer consistently, for years.

What leaders usually conclude

The instinctive response is that one of the two managers is simply wrong, and the fix is to identify the correct interpretation and correct whichever manager has been misapplying it.

What the evidence suggests

Looking more closely, both interpretations turn out to be defensible readings of the same written policy — the policy itself is ambiguous, not misapplied. Each manager has resolved that ambiguity consistently, in a different direction, and staff have learned over time which manager to ask depending on the answer they want. The organisation is not experiencing a compliance failure. It is running two different rules under the banner of one written policy, and recording only the one.

This is a specific and fairly common instance of how decision rights blur as companies grow. Research on decision rights by Paul Rogers and Marcia Blenko at Bain & Company, based on a survey of executives across more than 350 companies, identifies a number of recurring points where decision authority becomes unclear — including situations where the formal rule governing a decision does not actually specify who resolves an edge case, so the resolution defaults to whoever is closest to the situation when it arises. An ambiguous policy interpreted independently and consistently by two different managers is exactly this pattern: the written rule never actually answered the question it appears to answer, and each manager filled the gap with their own reasonable judgement.

Competing explanations

One reading treats this purely as a policy-drafting problem: the language was never precise enough, and tightening the wording resolves the divergence. A second reading is more structural — that even a precisely worded policy will eventually encounter a situation its authors did not anticipate, and that some divergence of this kind is an unavoidable feature of any written rule applied across enough edge cases and enough time, however carefully drafted. A third reading focuses on process rather than wording: that the real gap is not in the policy but in the absence of any mechanism for the two interpretations to be noticed and reconciled once they diverge, since the divergence itself seems to have persisted for years without anyone comparing notes.

The consequences of unreconciled divergence extend beyond the immediate inconsistency. Staff who have learned which manager to ask depending on the answer they want are, in effect, being taught that the written policy is negotiable through venue-shopping rather than binding — a lesson that tends to generalise to other policies well beyond the one in question. Once employees discover that consistent application of a written rule cannot be assumed, they reasonably begin testing other rules the same way, which is a much larger cost than the original ambiguity by itself.

A further complication, easy to overlook, is that both managers may be entirely unaware that a divergence exists. Each has been internally consistent for years and has had no particular reason to compare notes with the other, since the situations they are each resolving rarely surface in a context where both managers are present. The discovery, when it happens, is often accidental — a staff member mentions the other manager’s answer in passing — rather than the result of any deliberate check, which is itself informative: an organisation relying on accidental discovery to catch this kind of divergence has no reliable way of knowing how many similar cases currently exist unnoticed.

It is also worth separating this from cases where a policy is simply being misapplied by one party through error or inattention. What distinguishes the pattern described here is that both interpretations are genuinely defensible on the written text, and both managers have applied their reading with equal, long-standing consistency. That combination — internal consistency paired with mutual incompatibility — is precisely what allows the divergence to persist for years without either manager suspecting anything is wrong, since neither has any internal signal that their own reading might be one of two competing ones rather than simply correct.

The same pattern appears across many kinds of organisation; see Other Sectors for how it is read elsewhere.

Questions worth considering

  1. Does the underlying policy actually resolve the specific situation in question, or only appear to?
  2. What mechanism, if any, exists for two people applying the same written rule to discover that they have been applying it differently — since without one, divergence can persist indefinitely without being visible to anyone above either manager?

This perspective is part of Governance.

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Sources

Paul Rogers and Marcia W. Blenko, “Who Has the D? How Clear Decision Roles Enhance Organizational Performance,” Harvard Business Review, Vol. 84, No. 1 (January 2006), pp. 52–61.

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Frequently Asked Questions

Not always. It is common for the underlying policy itself to be ambiguous enough to support more than one reasonable interpretation, in which case both managers may be applying it correctly as written.
Bain & Company’s research on decision rights, based on a survey of executives at more than 350 companies, found this kind of ambiguity to be a widespread and recurring feature of growing organisations rather than an isolated exception.
It typically persists because there is no routine mechanism for comparing how different managers apply the same rule, so divergence only becomes visible if someone happens to compare notes or a specific incident forces the comparison.
Tightening the wording can close a specific gap, but new edge cases tend to arise over time, so some divergence is a persistent risk rather than a one-time problem to be permanently solved by drafting.
Each may have applied their reading consistently and confidently for years, with no routine occasion to compare notes with the other, so both can reasonably believe their answer is simply correct rather than one of two competing interpretations.
On the page’s account, staff learn over time which manager to ask depending on the answer they want, which in effect teaches that a written policy is negotiable through venue-shopping rather than binding. That lesson tends to generalise, and employees reasonably begin testing other rules the same way, which is a larger cost than the original ambiguity.
In misapplication, one party errs through inattention. In the pattern described, both interpretations are defensible readings of the written text and both managers have applied theirs with equal, long-standing consistency. Internal consistency combined with mutual incompatibility is what allows the divergence to persist without either suspecting a problem.
One reading on the page suggests it may be. Even a precisely worded policy can meet situations its authors did not anticipate, so some divergence may be a feature of any written rule applied across enough edge cases and enough time, however carefully it was drafted.