The effects of soft total quality management on the sustainable development of SMEs

This study investigates the soft total quality management (soft TQM) dimensions that affect the environmental and social sustainability of Finnish small and medium‐sized enterprises (SMEs), considering the company‘s business, size, and possible certificates as control variables. Sustainable business has been found to be key to the success of companies, so investing in it is essential for companies. With the help of extensive literature research, the TQM dimensions covering the entire business activity were determined, from which detailed issues were identified. To ascertain the level of implementation of detailed issues, the survey was constructed and sent to 6889 randomly selected CEOs in autumn 2020. A total of 271 responses were received. Based on prior literature and studies, 10 hypotheses were proposed. The collected data were analyzed using regression analysis. The results reveal that two practices—business management systems and human resources (HR) practices—were related to environmental sustainability, while only business management system was related to social sustainability. None of the control variables affected environmental sustainability; however, the industrial sector influenced social sustainability. The study presents recommendations for company managers and the government to support sustainable development, especially in Finnish SMEs. As a practical contribution, the study demonstrates the importance of designing and implementing business management systems for enhanced sustainability. Management should also appreciate that sustainability will not automatically be set at a high level upon certification; thus, the performance of operations and processes should be monitored.