The contribution of HRM and L&D in different types of organization 97 Causal ambiguity The term `causal ambiguity' refers to the numerous, subtle and often hidden interconnections between the factors influencing cause and effect. Boselie et al (2005: 75) referred to the causal distance between an HRM input and an output such as financial performance: `Put simply, so many variables and events, both internal and external, affect organizations that this direct link- age strains credibility.' A basic reason for ambiguity is multiple causation, which exists when there is more than one possible cause for an effect. HRM may have caused an improvement in performance but there may be many other economic or business factors that did so, and it could be difficult to unravel them. Another factor is the possibility of reversed causality (a situation where A might have caused B but B might well have caused A). As Purcell et al (2003: 2) expressed it: `Although it is nice to believe that more HR practices lead to higher economic return, it is just as possible that it is successful firms that can afford more extensive (and expensive) HRM practices.' Contingency factors Causation will additionally be affected by the organization's context, the