Summary Recent research into gender equality in small- to medium-sized organisations (SMEs) in the UK demonstrates low engagement with a formal model of procedural equality. This paper explores whether a diversity approach might be more helpful in evaluating SME practice in the area of gender equality. Drawing on interview data with 80 owner/managers of SMEs, findings reveal an implicit sympathy with diversity practices and principles, underpinned by business rationales for action that could offer positive developments for women. Nevertheless, the data also show that the same rationale and the same practices serve to perpetuate discrimination, utilise stereotypes and continue the segregation of women into low paid, low skilled work. On the basis of these findings, we conclude that while a diversity management approach propels a perspective of women as a valuable resource within SMEs, relying on it in preference to regulated formal procedural equality would be unwise.
