Abstract:The ambiguous institution is one that can make some significant difference even contradictory interpretations on the basis of the same expression. The institutional arrangement is intent to preserve not clearly defined part of the institution or the “intentional ambiguous”. A number of important local examples of ambiguous institutional arrangements include: Interdependence and constraints in resources and power; organizational conflict of legitimacy and actual operation. “Relationship” and “relationships” as the core operation of Chinese customary law constitute the compensation or implementation mechanisms of ambiguous institutional arrangements.The ambiguous institutional arrangements can also be used as a strategy of institutional entrepreneurship.