Risk, Uncertainty, and Legal Problems. How Do SMEs Use Law?
In this vein, using law - ie. consulting lawyers, drafting legal documents, going to court, using other forms of dispute resolution, or resorting to many other types of legal communication, formal and informal - was conceptualized as an outcome of processes of risk and uncertainty management in organizations observing their multiple environments. This led to an observation that decisions in SMEs to use law presuppose a transformation of the observed uncertainties into internally calculable risks. These are further mediated and re-allocated within organization itself or transferred to other entities. Such processes differ depending on type of organization, its available resources and the source of contingency.
The framework suggests that decisions to use law are different in businesses of different size and structure, family-run businesses and corporations, depend on the branch of economy and relative position of a business in the market. The paper also stresses, that contrary to a belief expressed by some theorists, the law is itself a source of contingency for SMEs. This makes it possible to observe different forms of contingency-to-risk transformation, including transformations using law, as competing decision-making opportunities.