CHICAGO — Women are finally getting their due when it comes to family-run businesses. Decades of entrepreneurship research have often portrayed women CEOs as less effective compared to their male counterparts, citing slower growth rates and lower profits in female-led businesses. However, a recent study challenges this notion, suggesting that women may actually have advantages in family-owned firms.
Researchers from Strategic Management Society have provided new insights into this complex issue. They focused on how CEOs encourage entrepreneurial behavior — traditionally seen as a masculine trait — in their companies. The study involved analyzing data from 322 Spanish small businesses, including both family and non-family firms, with 20 percent of them led by female CEOs.
The competitiveness of the current business landscape makes having an entrepreneurial orientation crucial for success, especially for small and medium-sized enterprises (SMEs) and family businesses. This orientation includes strategies for new product development, innovation, and firm growth. Researchers assessed businesses based on five entrepreneurial traits: risk-taking, innovation, proactiveness, competitiveness, and autonomy.
Learning orientation, on the other hand, is the process of transforming new business knowledge into effective strategies and behaviors. This includes promoting a learning culture, developing a shared vision, and fostering open-mindedness within the organization. The study measured these aspects to understand their relationship with entrepreneurship.
The study found that learning orientation positively relates to entrepreneurship across all businesses, regardless of the CEO’s gender. Differences, though, emerged when considering whether the CEO was leading a family or non-family business.
“Women leaders at family firms better leverage their business’s commitment to learning and open-mindedness to support entrepreneurship than women and men leaders at non-family firms,” says study co-author Kimberly Eddleston in a media release.
This suggests that the cultural environment in family businesses, which often emphasizes inclusivity and supportive internal stakeholder relationships, may play a crucial role.
Cultural Advantage of Female Leadership in Family Firms
Researchers argue that family firms typically focus on inclusive and supportive values, aligning well with feminized values like relationship-building and values dissemination. This cultural alignment gives women a unique advantage when leading family businesses.
“Women have a cultural advantage when leading family businesses,” says study co-author Franz Kellermanns. “Gender stereotypes and the characterization of entrepreneurship as masculine may hamper female CEOs’ ability to exert their leadership. However, those biases seem to exert a lower influence in family firms, where female CEOs show a greater ability to transform learning into greater entrepreneurial orientation.”
“With leadership often seen as a masculine endeavor, the perceived incongruity between female gender roles and leadership roles can lead to prejudice and bias against female leaders,” adds study co-author María Concepcion Lopez-Fernández.
This study provides a new perspective on the longstanding debate about the effectiveness of female leadership in business. It suggests that the success of women in leadership roles may be significantly influenced by the cultural context of the business, particularly in family firms where traditionally feminine values like inclusivity and collaboration are more prevalent. This research not only challenges previous assumptions about female CEOs but also highlights the importance of considering cultural factors in evaluating leadership success.
The study is published in the Strategic Management Journal.