The article considers the application of an institutional approach to the analysis of management of small and medium-sized enterprises (SMEs). The theoretical foundations of institutional theory are revealed, including the key concepts of J. D. North, P. J. Dimaggio and V. V. Powell, as well as modern interpretations in the context of entrepreneurial activity. The mechanisms of the influence of formal and informal institutions on the strategic behavior, organizational practices and sustainability of small and medium-sized enterprises are analyzed. Based on data from the World Bank (World Bank), Rosstat, the Ministry of Economic Development of the Russian Federation and empirical research, it is shown how the institutional environment — the legal system, administrative barriers, culture of trust, social norms — determines the business environment and the effectiveness of management decisions in the SME sector. The necessity of taking into account the institutional context in the development of state policy to support entrepreneurship and development strategies of enterprises themselves is substantiated. The institutional approach is a powerful analytical tool for understanding the specifics of managing small and medium-sized businesses. It allows us to go beyond the traditional microeconomic analysis and see how formal and informal rules, norms and cultural attitudes shape the behavior of entrepreneurs, determine the sustainability of enterprises and influence the effectiveness of public policy. In the Russian context, characterized by high institutional uncertainty and weak law enforcement practices, this approach is particularly relevant. Further research should focus on the interaction of formal and informal institutions at the regional level, as well as on the development of tools for assessing "institutional quality" for the SME sector.