Moral communication and legal uncertainty in small and medium enterprises.

Purpose: The links between moral communication and legal communication have long been studied in sociology of law. Little has yet been said about moral communication invoking when communication in the legal system is impossible, ineffective or uncertain. The paper fills this gap to demonstrate that systems theory-based sociology of law can effectively recognise the role of moral communication in such situations. Design/methodology/approach: The paper presents an empirical study of moral communication in small and medium-sized enterprises (SMEs). It focused on situations when SMEs' interactions with function systems, particularly the legal system, result in irremovable legal uncertainty. The data depict strategies of managing such uncertainty and were obtained in a paths-to-justice survey of 7,292 owners and managers of SMEs and 101 in-depth interviews. The findings are interpreted using the author's concept of "uncertainty translation", rooted in Luhmann's systems theory. It suggests that business organisations such as SMEs deal with the ubiquitous uncertainty in their operations by translating it into a convenient type. Findings: The study distinguishes between formative and absorbing moral communication and finds that both types play a role in steering the uncertainty translation mechanism in SMEs. Six scenarios of invoking moral communication are identified in SMEs dealing with legal uncertainty. In such scenarios, moral communication facilitates the translation of business uncertainty "away from law". Under some circumstances, this, in turn, leads to latent systematic results, reflexively affecting the legal system, the economic system and the SMEs. Research limitations/implications: In its core argument, the study is based on qualitative material. While it identifies empirical scenarios of invoking moral communication, it does not report the prevalence of these scenarios due to methodological limitations. Originality/value: The study results pose questions related to the staple theoretical issue in post-Luhmannian social systems theory: functional differentiation. If moral communication–a type of communication not linked to any social system–can produce far-reaching, systematic results that affect function systems, then the functional differentiation thesis should be less pronounced than Luhmann typically stressed. This said, the paper argues that the contradiction between the findings and Luhmannian theory of morality is only apparent and may be reconciled. [ABSTRACT FROM AUTHOR]