While researching my last topic on CSR I discovered an interesting study from Catalyst and Harvard Business School (HBS). The study proposes that there exists a strong interdependence between the degree of Corporate Social Responsibility and the portion of women in executive management. Furthermore the study states that business benefit from employing women in upper hierarchy level not only from a higher potential for sustainable growth but also financially. Since 90% of my class including me are women aspiring to become managers one day I thought it would be interesting to take a closer look at women in management.
Anabel Pérez (from the Catalyst) notes,
“Companies are realizing that advancing more women to senior leadership roles has many benefits, including increased financial performance and sustainability.”
Management-issues.com are of a contradictory opinion:
“Considering women to be better leaders than men would over-emphasize feminine relationship-building skills to the exclusion of masculine competitive instincts. The truth falls somewhere in the middle, as with most either-or pendulum swings.”
The article continues with asserting that the essential question we should focus on is not men vs women but different organizational cultures and structures. What we need in a modern company is a heterogeneous mixture of both sexes.
“But there is no doubt that we are in the midst of an unstoppable shift to more feminine cultures.”
Before we can truly evaluate if this assumption is true or false we have to take a look at the status quo in management.
Considering the before mentioned opinions the share of women in management is still surprisingly small. According to the DIW (Deutsches Institut für Wirtschaftsforschung):
Within Germany, women hold only 0.9 % of the leadership positions in the 100 largest German companies and 2.6 % in the 200 largest companies (Holst and Wiemer, 2010)
Another unsettling fact is that the share of females in middle management in medium-large enterprises in Germany even declined 2.3 % since 1995!
This is of particular importance in regard to CSR practices as studies reveal that business with a higher percentage of women invest bigger amounts on CSR causes.
Firstly a study conducted between 1997 and 2007 showed that businesses with women board directors donate significantly more funds than did companies with hardly any women—estimates are up to 2.3 million dollars more for each additional woman board director.
Secondly according to a study in 2007 companies with a higher percentage than 25 of female corporate officers made annual contributions that were 13 times higher than those made by companies with no female corporate officers.
And lastly companies with more women corporate officers contributed noteworthy more funds – estimates state that for one percent increase in women corporate officers, yearly donations increased by 5.7 million dollars.
Traits of women and men as managers
“People consider men to be agentic, possessing traits such as ambition, confidence, self-sufficiency dominance, and assertiveness, whereas they consider women to be communal, possessing traits such as kindness, helpfulness, concern for others, warmth and gentleness.“
According to “women matter – female leadership” by McKinsey there are nine key leaderships behaviors.
According to the study women apply the first five more often than men and consequently improve organizational performance.
Observations show that companies with a higher rate of women on their board outperform their competitors
- 42% higher return in sales
- 66% higher return on invested capital
- 53% higher return on equity.
What to do with this information?
In the before mentioned article management-issues.com very rightly points out the truth lies somewhere in the golden middle. Hence we should focus on building a more diverse and equal workforce. Both sexes male and female have certain advantages to offer and to beat the competition we need a healthy mixture of both to collaborate, attract consumer but also need to stay competitive and be aggressive at times.
McKinsey supports this assumption.
“It is only when there is a critical mass of women who use those behaviors that are complementary to men’s that performance significantly increases. While left hemisphere contributions are important, they need to be made in the service of something that only the right hemisphere can bring in order to be constructive.”
CSR denotes the “integration of values and social engagement” into what is known as the traditional ways of doing business. So our goal should be to increase the rate of women in higher management positions and to achieve symbiosis and Synergie through including both genders and a common business strategy.
Here’s to the future
Top business organizations are already making efforts to promote women in management.
Leadership programs for women in areas that are usually male dominated (e.g. technology and sale) are launched all around us. IBM and Coca Cola are two great examples of that. The objective is to achieve synergies – to combine two or more agents so that the combined outcome is greater than the sum of the individuals.
Deutsche Telekom, hopes to raise the percentage of women in senior and middle management from 12 to 30 percent by the end of 2015.
They strive to become one of the first German companies, which also is a member of the DAX 30 index of blue-chip to introduce gender quotas.
Whereas this seems to be very encouraging, on the authority of the guardian, there is still a significant amount of women who tend to belive that their hopes of becoming a member of senior management is constricted by the glass ceiling effect.
What do you think?
Lastly I want to ask you your opinion. After reading my post, do you think that the women of our generation will finally make it to the top?
Or will they be hindered by the traditional character of business?
Do you think Synergie is the way to achieve true greatness?
In my next post I will take a closer look at what is actually being done to empower women in management and achieve a higher women quota in senior management position and hopefully I will be able to answer some of the questions mentioned above!