Contingency Approach Weaknesses Associated With Essay

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This may be true at large as well as small enterprises, even though the composition and power of the different actors may vary and in theory create different contingent circumstances.

Q2. SMEs that buy off-the-shelf accounting software...To what extent does contingency theory apply and can we really say that 'it all depends'?

The "disutility for effort" principle can be seen in the selection of many SMEs of off-the-shelf accounting software: the ubiquity of these programs and the lack of effort required in selecting the software results in their use as a default option (Tiessen & Waterhouse 1983). Their commonality is not the result of careful consideration of a variety of external factors, as contingency theory in the abstract might suggest. Most of these programs are advertised for their ease of use and convenience, and are widely promoted in the business press.

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Although it is unlikely that there is 'one best way' for SME accounting and many organizations might benefit from a different approach, the similarity of education of many organizational actors and exposure to similar media counteracts contingency theory. Finally, the inexpensive nature of the software may cause certain immediate incentives to predominate over others for some organizational decision-makers, such as more long-term individualized value-saving approaches. A lower-level manager might focus more on meeting an immediate cost-cutting goal, as opposed to the organizational leader focused upon creating a new approach to accounting that will help the organization five years in the future.

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