Women Leaders' Positive Presence in Family-Owned Businesses Globally

By: GWL Team | Sunday, 26 May 2024

New study by four consecutive authors published on Strategic Entrepreneurship Journal reveals that family-owned businesses include more women as compared to other businesses. Due to their empathy and relationship-building, women are performing better in leadership positions.

The business world is constantly in a state of flux. Owing to a plethora of factors, the global business landscape is dynamic in nature. In recent years, this realm has observed the increased percentage of women leaders who are not only managing their businesses but also scaling it with their sound tactics and technical prowess.

In the recent past, businesswomen have shown immense potential in terms of running a business while also handling the domestic snags. It is not only applicable to certain countries but globally; the rise of women in business has been noticed. Even with umpteen challenges, women leaders are seamlessly overseeing their responsibilities and building successful business ventures.

Regardless of geography, gender bias has been a constant reality in all aspects of life and work. However, with changing time, people’s mentality is evolving and women’s capabilities in terms of running businesses is being acknowledged. Other than the average corporate structure, women are also taking the reins of family-run businesses and running them with confidence and skill.

Women Leaders’s Rise in Family Businesses

A new study was published in Strategic Entrepreneurship Journal that states that women leader’s success in family businesses is deeply rooted in how employees understand their leadership style. This also shows a better understanding between all the employees working in a firm, starting from CEO to Executives.

It has been clear that the Global GDP counts over 70 per cent of Family firms where 55 per cent of the firms have at least one woman in their board and 70 per cent of them are considering a female leader to take the seat of a CEO which exemplifies that they are significantly more accepting of female leadership.

One of the authors of the study and Universidad de Extremadura in Spain’s Remedios Hernandez-Linares stated, “Family firms tend to focus on being inclusive and supportive of internal stakeholders, extending the sense of 'family' and community. This culture creates a moderating effect for women leaders -- their leadership is perceived as relationship-building and values dissemination.”

Predictable Leadership in Women

The report explains a leadership style which is aligned with the Western gender norms with the characterization of women as more empathetic and cooperative whereas male leaders are more competitive and aggressive.

The women leaders in family businesses/enterprises are not necessarily more impactful, according to the authors note. It is because these women leaders obey the gender norms. The growth in women leaders is because of the businesses' strategies that puts the emphasis on those areas where women are traditionally seen as competent.

Another author, Spain’s Universidad de Cantabria’s Maria Concepcion Lopez-Fernandez expresses, “CEOs influence employees' behaviors via modeling, and leaders who are more credible and legitimate are more effective role models. Perceived incongruity between female gender roles and leadership roles can lead to prejudice and bias against female leaders.”

In-depth Exploration of the Report

The authors of the report had conducted regression analysis on survey data taking the contribution of 322 Spanish small businesses, 198 classified as family firms along with 133 as non-family in order to specifically dug into how CEOs foster entrepreneurship which has been known to be a highly masculinized business behavior within their business culture. When thoroughly examined, 20 per cent of the CEO positions are represented by women.

There’s no effect on of CEO sex on entrepreneurial orientation, as per the analysis whilst the all social learning aspects were positively related to entrepreneurship. Those aspects include commitment to learning, shared vision, and open-mindedness. Although, based on CEO sex there were marked differences in calculation with whether the organization was a family business.

One more author of the study, Kimberly A Eddleston of Northeastern revealed, “It is not male or female leadership per se that predicts a firm's entrepreneurial orientation, but rather, whether the male or female CEO is leading a family or nonfamily business. Women leaders at family firms better leverage their business's commitment to learning and open-mindedness to support entrepreneurship than women leaders at nonfamily firms.”

Closure to the Study

The study’s author urges women to set forth their leadership styles into empathy and relationship-building that can also aid make them to become more effective. The report also says that women can put more impact on those businesses that carry at least some more traditionally feminine values which indicates towards culture.

The last author of the study, Franz Kellermanns of UNC Charlotte stated, “Our study therefore suggests that while women have an advantage leading family businesses, gender biases hamper female leaders' ability to transform learning into greater entrepreneurial orientation in nonfamily business.”

In conclusion, we can say that women leaders undoubtedly can handle businesses but they require a little bit of upscaling of their relationship-building which will benefit them in thriving.