Personal Finance

Why companies are better off hiring women bosses


Women allow work groups to make decisions as a team and thus reduce corporate risks while male managers are much more likely to overrule a group’s decision. FOTOSEARCH

In honour of the just passed Day of the Girl, Business Talk hereby provides its annual assessment of gender issues in management and leadership with advances in social sciences research.

As access to equal education, anti-discrimination laws and customs, and gender-based awareness improves throughout East Africa, research sees steady improvement in the equitable situation of women in our society. 

In fact researcher Gary Powell found that in nearly every country across the globe, women continue to make gains by reaching more managerial ranks. 

However, the business community lags behind civil society and government employment. Sadly males still enjoy greater favour for employment and make up over 75 per cent of corporate board positions.

Debate over the benefits or hindrances of female workplace empowerment permeate social science literature over the past 50 years.

Recent research uncovered growing acceptance from employees about the desirability of female bosses. Employees used to not desire female managers. But now in many countries, populations prefer a woman as their leader instead of a man. 

However, Kenyan women often stand as the biggest hindrance to female empowerment in workplaces as shown in recent focus groups that they do not desire to work for a lady manager at a higher rate than men prefer to work for a female supervisor.

Nonetheless, the shift towards more acceptance of women in leadership often stems from opinions that females will treat their employees with greater care and concern. 

Women do statistically make decisions more often based on people, feelings, and special circumstances, which often favour their employees, as opposed to male bosses who are more likely to decide based on logical consistencies instead.

However, female managerial behavioural differences evaporate the higher a woman rises up into executive ranks at a firm. Harvard University research showed that women in executive positions behave precisely similar to their male counterparts.

Researchers hypothesise that since men created the business frameworks to judge success, women who espoused those more masculine managerial traits rose to the top since leaders tend to promote those similar in behaviour to themselves.

Also, research supposes that women with more aggressive tendencies chase client deals and promotions like men and therefore reap disproportionately higher rewards than more careful and more risk averse female employees.

A plethora of research studies including by this author conducted in Zambia, Tanzania, and Uganda and released in 2016 show that female employees hold greater commitment to their organisations and quit their employment less often than men. 

These behaviours both help boost profits in firms and reduce turnover costs.  Additional Harvard University research also shows the benefits of hiring women in countries that usually frown on female employment.

Countries such as South Korea show bias against women, which mounts dramatically in Saudi Arabia. The research found that when small local companies hired women in countries that discriminate deeply against them, then firms’ profits decline due to the social micro-chaos within the organisation brought about by female inclusion. 

However, when larger firms or multinational companies hired women, they saw their profits go up noticeably.

Hiring women even in hostile gender biased environments improved company returns. Researchers hypothesise that the reason includes access to top-level skilled labour from a previously untapped worker pool of women.

Also, women know that the firm’s offer of employment exists as a rare opportunity and they tend to feel more grateful for the chance to utilise their professional skills and work harder and remain more loyal to the firm than the men.

Recent research by Gary Charness and Uri Gneezy across multiple countries shows that women leaders invest fewer resources in new endeavours and take less financial risks for a firm.

Essentially, women maintain a long-term focus for their employers while men tend to focus more on short-term gains.  Inasmuch, researchers advise that women comprise safer choices into their decisions. 

Additional research by Seda Ertac and Mehmet Gurdal delineate how women allow work groups to make decisions as a team and thus reduce corporate risk because groups make more careful decisions whereby male managers are much more likely to overrule a group decision or not even allow a team to make a decision for itself and thus increase risk to the firm.

Also, a recent research team comprised of Simon Ho, Annie Yuansha Li, Kinsun Tam, and Feida Zhang found that when gender diversity exists on boards and management, then the financial integrity of reporting increases dramatically.

In short, employers get out there and employ more women. Then internally treat them equally and fairly like you would the male staff.

Do not do so simply because it is the right and ethical thing to do as a renaissance global citizen, but also because hiring more women will make your company earn higher profits that can go directly into your pocket.

Discuss and debate Kenyan leadership with other Business Daily readers through #KenyanWomenEmpowerment on Twitter.


Prof Scott may be reached on [email protected] or follow on Twitter: @ScottProfessor