Theory Paper Draft 1
Deonpalmgrove
TheoryPaperProposal.docxRunning head: IMPACT OF FEMALE REPRESENTATION IN TOP EXECUTIVE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 1
IMPACT OF FEMALE REPRESENTATION IN TOP EXECUTIVE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 8
Impact of Female Representation in Top Executive Management on Organizational Performance
Debo A Ogunseinde
Texas A&M Commerce
Professor Brandon Ralph - Seng
June 14, 2018
Does Female Representation in Top Executive Management Improve Organizational Performance?
Introduction
With continued advocacy for diversity and equality in the workplace, more organizations are hiring candidates from different gender, age, ethnic and religious backgrounds. The workplace today is more diverse than it was five decades ago (Chen, Crossland, & Huang, 2016). The number of women being employed in top management positions has increased. For the past two decades, women have made substantial inroads into careers and fields traditionally dominated by their male counterparts.
The US Labor of Statistics report that women are accounting for slightly above 30 percent of American managers (Chen, Crossland, & Huang, 2016). To embrace this new trend, there is a considerable percentage of women pursuing careers in managerial positions not only in the United States but also in other developing and developed nations (Chen, Crossland, & Huang, 2016). However, Dezsö and Ross (2012) explain that despite these changes in the workplace dynamics, women are still underrepresented at the apex of organizational hierarchy, both in executive management and in the boardroom.
Past the obvious ethical, legal and social implications, the scarcity of females at the top of corporate management suggests that their involvement in executive management may have significant consequences or implications on the competitiveness of a company, not merely reflecting recruitment and promotion based on meritocracy and gender neutrality, but more specifically because of the potential impact of gender diversity on the performance of an organization (Terjesen, Couto, & Francisco, 2016). With this important background, this research proposal paper aims to answer these significant questions: Does representation of females in the apex of organizational hierarchy- top management improve the performance of an organization? If affirmative, what is the positive impact general or limited to confined contexts?
Significance of the Study
For the past few decades, a raging debate on gender diversity in the workplace has been on the rise. Undoubtedly, the campaign to have more women hired in managerial positions has increased, with slightly above 30 percent of women being American managers in different organizations. However, very few women have made it to the apex of organizational hierarchy, with most of them in the middle-level management level. Research is however showing that having more females in top positions of leadership promotes the quality of decisions made in organizational contexts. The diversity of thought often lead to better decision making and problem solving. When leaders collaborate with people of diverse gender backgrounds, ethnicities, sexual orientations and color at the workplace, better organizational performance is achieved.
Having more women assuming top management positions or offices in organizations is a big step towards achieving gender diversity in management and leadership. It has been shown in a series of research papers that women executives are not only more collaborative but also trustworthy. Women are better at negotiations and making business deals than men. Most significantly, most employees in the American labor market perceive female executive leaders to be more honest and ethical than males. This study is therefore significant because it explains why increased female representation in high-level management is likely to improve organizational performance. Corporate boards, major brands and decision makers in business can use this article to make vital changes in the set-up of organizational leadership.
Background and Rationale
The performance and by extension behaviour of an organization are largely influenced by the strategic and business decisions made by the top management. Therefore, any process, activity or solution which aims at improving the task performance of the executive management team should accordingly have a positive impact on the performance of the firm. As mentioned by Dezsö and Ross (2012), there is an overwhelming majority of men in top management positions in most organizations. Therefore, when one woman is recruited to join the team at the apex of the organization, it becomes more diverse both with respect to information and social categorization.
According to Chen, Crossland and Huang (2016), there are several reasons why top management diversity can improve the decision making and information processing ability of the teams. Women joining the apex of the corporate hierarchy are likely to add to the diversity of life experiences among the members of the executive management team. Chen, Crossland and Huang (2016) add that women therefore can add insightful decision-making contributions especially those regarding female employees, female trading partners and female consumers. They understand how women think and process information, and therefore they can offer important contributions that can significantly affect the quality of strategic decisions made at the top.
Generally, with a more heterogonous senior management team, there are several but different points of knowledge and view, a comprehensive solution sets and a greater ability to vigorously discuss proposed solutions, thereby leading to decisions of higher quality (Terjesen, Couto, & Francisco, 2016). Further, gender diversity is salient and readily accessible for categorization from a social perspective. While diversity may come with costs such as communication problems, this drawback is unlikely to be a relevant empirical concern for most top senior management teams, since the number of such teams with more than a smaller percentage minority of females is very small. Some opponents also claim that diversity is a tool for negative social cohesion and therefore may affect employee satisfaction.
Miller and Del Carmen Triana (2016) however postulate that affective discomfort does not imply substandard or lower performance. Research is showing that the affective discomfort which results from diversity is intimately related to better decision making (Terjesen, Couto, & Francisco, 2016). From an intuitive perspective, a considerable level of cognitive, dissent and conflict costs may often lead to extensive elaborations of alternative perspectives that contribute to better decision making in diverse teams.
Miller and Del Carmen Triana (2016) reinforce that because of non-routine nature of the challenges faced by top management teams and corporate boards, the positive impact of gender diversity often outweigh the negatives cited by opponents. Lastly, it is important to mention that a significant body of research work is suggesting that there is gender-based variations in managerial behaviour tendencies. Using surveys from female managers and leaders, Post and Byron (2015) affirm that women are likely to display an interactive style of leadership which encourage inclusion, participation and collaboration in making vital organizational decisions which goes a long way in improving organizational performance.
Research Question (s)
Does the representation of females in the apex of organizational hierarchy- top management improve the performance of an organization? Primarily, this paper aims at answering this important question. Secondly, if affirmative, is the positive impact general or limited to confined contexts? If there is a positive impact of representation of females in executive management, can it be a general application to different organizational set ups or the application is only feasible in selected industries?
For instance, when dealing with technical fields like research and development, technology and innovation, engineering and construction, and medicine can female representation in top management make a difference? Lastly, what ways can organizations optimize on the female representation in top management to get best results for their firms? If female leadership offers an improved organizational performance, which strategies can be used to promote it while keeping balance of gender diversity and its possible costs in the workplace?
Hypothesis
The focus of the paper is on the effects of female representation in organizational management hierarchy. While there could be many females in middle level management positions, it does not form the research question of the paper. Moreover, middle level managers do not have a huge impact on the decision-making process of an organization since they do not sit at the top (Terjesen, Couto, & Francisco, 2016). Therefore, for this proposal, the hypothesis is: female representation in top executive management improves the performance of an organization.
Research Methodology
To gather data of the gender of top management of these firms, and corporate governance features and ownership structures of these organizations, published financial statements and annual reports which are ready available on their websites will be used. The results are then compared over the time span provided, and whether gender has indeed affected the general performance of these firms. In a tabular format, we show how inclusion of women in senior positions of leadership have influenced the performance of the organizations. Conclusions are then based on the observations and data collected from the firms.
Conclusion
The focus of the paper is on the positive impact (if there is any) of female inclusion in the top management on firm performance. While more females are employed today than five decades ago, women are still underrepresented at the apex of organizational hierarchy, both in executive management and in the boardroom. There is evidence to support the hypothesis. For instance, women are likely to display an interactive style of leadership which encourage inclusion, participation and collaboration in making vital organizational decisions which goes a long way in improving organizational performance.
References
Chen, G., Crossland, C., & Huang, S. (2016). Female board representation and corporate acquisition intensity. Strategic Management Journal, 37(2), 303-313.
Dezsö, C. L., & Ross, D. G. (2012). Does female representation in top management improve firm performance? A panel data investigation. Strategic Management Journal, 33(9), 1072-1089.
Miller, T., & Del Carmen Triana, M. (2016). Demographic diversity in the boardroom: Mediators of the board diversity–firm performance relationship. Journal of Management studies, 46(5), 755-786.
Post, C., & Byron, K. (2015). Women on boards and firm financial performance: A meta-analysis. Academy of Management Journal, 58(5), 1546-1571.
Terjesen, S., Couto, E. B., & Francisco, P. M. (2016). Does the presence of independent and female directors impact firm performance? A multi-country study of board diversity. Journal of Management, 20(3), 447-483.
