Women in management and sustainable development of SMEs: Do relational environmental management instruments matter?

Abstract Scientific literature on the relationship between gender diversity in management and sustainability of large companies has produced mixed results. Whether and how gender diversity stimulates the sustainable development of small and medium sized enterprises (SMEs) has not yet been researched. We hypothesize that having more women in management positions improves the sustainability of SMEs, because this encourages the use of relational environmental management instruments. Small business literature has shown this type of instrument to be more effective in improving the sustainability of SMEs than bureaucratic management instruments. We test the model on a sample of 3,663 European SMEs and find support for this hypothesis. However, the effect is nonlinear and sustainability reaches its maximum when the proportion of women managers is 54%. The management implication is that SMEs can improve their sustainability by a gender balanced management team.