Monday, 8 September 2008

Why female business owners are less successful but just as satisfied

The proportion of businesses owned by women is on the increase in many countries. These female-run firms tend to be less successful in financial terms than businesses run by men, and yet limited evidence suggests female business owners are just as satisfied with their careers as their male counterparts - a phenomenon dubbed: "the paradox of the contented female business owner".

Gary Powell and Kimberly Eddleston surveyed 201 business owners in America (43 per cent were female) and found fresh evidence for this paradox. Compared with the male owners, the female business owners reported that their firms were less successful than rivals', in terms of traditional measures such as growth and profit. And yet, the female owners reported being just as satisfied with their business success as the men.

One explanation for the paradox is that female business owners have lower expectations for success because they recognise that they're bringing less to the business in terms of working hours and experience. However, no evidence for this explanation was found. For example, the female owners reported being better educated than the men and had been in their current position just as long.

An alternative explanation is that female business owners value business outcomes that aren't related to the traditional objectives of growth and sales. It's possible for example that female entrepreneurs are more concerned by achieving their own work-life balance, or by ensuring customer loyalty and satisfaction. Preliminary support for this explanation was found. The male business owners reported placing a much higher value on achieving business success than did the women, and for men, but not women, satisfaction tended to be higher, the greater their own business success.

Powell and Eddleston said more research was needed to uncover the values held by female business owners, but they argued their findings have immediate implications for the current "one size fits all" approach to business education. "It should not be assumed that all business owners seek to grow their businesses, or that business success necessarily leads to business owner satisfaction," they wrote.

ResearchBlogging.orgG POWELL, K EDDLESTON (2008). The paradox of the contented female business owner Journal of Vocational Behavior, 73 (1), 24-36 DOI: 10.1016/j.jvb.2007.12.005

Post written by Christian Jarrett (@psych_writer) for the BPS Research Digest.


tomstafford said...

Funny how women are the exception that needs explaining, isn't it? Perhaps male business owners have perverse or somehow maladaptive expectations and it is their *lack* of satisfaction the needs explaining

Jen said...

From my own experience as an entrepreneur, I can say that I don't really measure my own success in monetary terms. The main reason for me to start my own business was to achieve an acceptable work-life balance and to spend my working hours doing something I truly enjoy.
When speaking to the male entrepreneurs I know they often mention a lot of numbers when they describe their own success, so I think there is some truth to the theory of different business success values for men and women.

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