Big Surprise! Women Face Bias in Business

This shouldn't come as a surprise to any woman in business.  But it's still pretty discouraging.  Did you know that there's bias against women in the working world?

We won't talk about the Texas doctor that recently said that gender pay inequity in the medical world is fair because women don't work as hard.  But that's Texas, for you.

But back to the study.  Women CEOs in America are paid less, have shorter tenures and their companies are punished in the stock market, even when their firms are just as profitable as those run by men, is the finding of new research from Florida State University. 

In addition, women CEOs are less likely to serve as board chair of their companies, and they have a much tougher time landing the top job because there is significantly less demand for their leadership compared to men. 

“This research should be eye-opening to people, and I hope they take a closer look,” says Michael Holmes, FSU’s Jim Moran Associate Professor of Strategic Management. “We hope this sets the record straight on past research, some of which has produced conflicting results, and now people can build on this aggregation of findings.” 

Hey, let's be honest here.  This is hardly ground-breaking.

"To set the record straight, Holmes and Assistant Professor of Management Gang Wang conducted an exhaustive study focusing on the influence of gender on CEOs’ careers. The business management experts conducted a meta-analysis, examining the entire body of research completed over decades, and they pored over 158 previous studies that investigated gender, companies’ hiring choices and the impact of those decisions," newswise reports. 

One of the key findings in that body of research reveals an extreme underrepresentation of women CEOs. Only 5.4 percent of Fortune 500 companies had female CEOs in 2017, and that figure was the all-time high in the United States. 

“The situation for women leaders is probably worse than you think right now,” Holmes adds. “Many women who become CEOs are absolute rock stars. They have graduated from elite schools and risen through the corporate ranks faster, but they get paid less, are less likely to be a firm’s board chair, have shorter tenures in the job and are more likely to lead distressed firms. We wondered, ‘What’s going on here?’” 

That question prompted Wang and Holmes to embark on a two-and-a-half-year research project — the results were just published in the journal Organizational Behavior and Human Decision Processes. The study identifies a number of factors that hinder female CEOs and CEO candidates among stock market investors, corporate boards, managers, and more generally, across American culture. 

Wang and Holmes grouped those factors into two basic marketplace forces: demand-side and supply-side influences that combined to stifle women’s ability to get CEO jobs. 

Demand-side factors reduce demand for female CEOs by limiting the willingness of companies to hire women for the job. One example of that attitude is known as “in-group favoritism,” a phenomenon that causes people to view others who are similar to them as more competent. In the corporate world, where men dominate leadership jobs and company boards, that attitude means leaders tend to hire people like themselves. 

The FSU research also notes the hiring process for CEOs can be influenced by gender-role stereotypes. In American culture, as well as many countries worldwide, the perceived traits of a good leader, such as aggressiveness and risk-taking, are generally seen as masculine qualities. 

“Because of that bias, men have advantages obtaining and succeeding in leadership positions, while women leaders are more likely to be disliked and viewed as socially inept, due to the perceived role incongruity,” the researchers write in the paper.