Are there differences between the way men and women run businesses?
Up until the last few decades, business was predominantly male led. However that’s changing. A recent report ‘The State of Women Owned Businesses’, notes that as of 2016, it is estimated that there are now just over 11.3 million women-owned businesses in the United States, employing nearly 9 million people and generating over $1.6 trillion in revenues.
This is an amazing 45% increase since 2007. When you consider that the total number of American businesses only increased by 9% during this period, that’s pretty significant. To make it even more impressive, while overall employment figures have decreased by 1% during this time, employment by women owned businesses has increased by 18% and their revenues have increased by 35% as opposed to the 27% increase measured across all U.S. businesses.
Do the genders differ in the way they approach business and does this affect how successful they are?
While the statistics cited earlier are quite mind boggling, it’s interesting to note that women often tend to have subtle, yet profound differences in their attitudes toward running a business. Some statistics indicated that women owned businesses tend grow at a slower pace and earn less than businesses owned by men. However, some feel that we need to look beyond the statistics to explore the definition of ‘success’.
At this point, the explanations for this trend are quite speculative. Underlying reasons for the statistics are not quite as clear as the statistics themselves. It’s a bit like trying to analyze what causes different people to be happy.
Some say that women and men have a different life view and that this impacts the way they run their businesses. Findings indicated that while there were no significant differences in short term achievements between the genders, there were differences in long term achievements.
The reason? Women place greater importance to attending to personal goals while men place a higher priority on business goals.
How does this play out in daily operations? One example cited was that women tend to employ people more quickly than men. Is this because they’re generally more inclined to seek and accept help, whereas men tend to have greater confidence in their own abilities?
Research also suggests that women tend to be more empathetic than men. This possibly results in a more frequent tendency to put ‘people before profits’, thus influencing the lag between the receivables of women owned businesses and men owned businesses.
Women are quicker to sacrifice ‘me’ time as well as social interaction for the sake of the business, while men tend to sacrifice time with their spouse and family. Interestingly, both genders cite time spent away from spouse and family as their biggest regret, or the most difficult sacrifice made for the sake of their business.
The majority of new businesses are classified as ’small’, meaning they would have anything from a single employee to five hundred.
Statistics show that women owned businesses tend to remain smaller than men owned businesses. Often, they’re what we might term ‘micro’ business where it’s a single entrepreneur and perhaps just a few other employees. Why is this? Could be that women focus more on building client, vendor and employee relationships while men focus more on business growth and success as defined by the value of their receivables or the size of their enterprise?
Having said that, apparently, women tend to have a more directive management style while men have a more participative style. Variations attributed to gender were also found in terms of the strategies used in the daily operations, specifically in job policies and procedures, employee benefits, labor relations, pricing policies, product/service issues, credit, financial control and growth aspirations.
Even so, there is nothing in the research suggesting that women are any less ambitious than men, or that they’re not as able to participate in certain areas of industry. Utilities and retail trade are the only areas within the top eight sectors by earnings where women owned businesses don’t appear in significant percentages. Interestingly, they are found in significant percentages in manufacturing, wholesale trade, mining and construction, all of which used to be male dominated.
Women owned businesses do tend to dominate in the healthcare and administrative sectors as far as percentages are concernced, while male owned businesses tend to dominate in the real estate, professional, scientific, and technical sciences arenas.
While more research is needed on this topic in order to provide further insights and practical assistance to business owners of both genders, it’s clear that women are increasingly impacting the economy.
As mentioned earlier, differences in financial results is not necessarily the most important factor in assessing or defining business success. As we become more aware of the necessity to nurture human capital in order to achieve the highest levels of innovation and productivity, it becomes increasingly obvious that the best overall outcomes will result from collaboration between the genders allowing strengths to be utilized to their full advantage.