Gender diversity in business

advantages and disadvantages of gender diversity in the workplace and benefits of cultural diversity in business
Dr.ThorasRyder Profile Pic
Dr.ThorasRyder,Hong Kong,Researcher
Published Date:07-07-2017
Your Website URL(Optional)
Comment
WHAT IS THE IMPACT OF GENDER DIVERSITY ON TECHNOLOGY BUSINESS PERFORMANCE? RESEARCH SUMMARYWHAT IMPACT DOES GENDER DIVERSITY HAVE ON BOTTOM‑LINE PERFORMANCE? A comprehensive review of current research on gender-diverse teams reveals that despite their challenges, they demonstrate superior productivity and financial performance compared with homogenous teams. In addition to summarizing recent research on financial performance, team dynamics, and organizational effectiveness, this summary also reviews strategies to maximize the potential benefits of gender diversity on technical teams. KEY BENEFITS OF GENDER DIVERSITY Gender diversity benefits businesses in several ways. Gender-balanced companies: » Perform better financially, particularly when women occupy a significant proportion of top management positions. » Demonstrate superior team dynamics and productivity. Studies report that gender-diverse technology organizations and departments: » Produce work teams that stay on schedule and under budget. » Demonstrate improved employee performance. To realize these benefits organizations Authors: Lecia Barker, Cynthia must create supportive infrastructures and cultures that foster diversity. Mancha, and Catherine Ashcraft What is the Impact of Gender Diversity on Technology Business Performance: Research Summary 2 Copyright © NCWIT, 2014. All Rights Reserved. www.ncwit.orgWOMEN IN MANAGEMENT AND TEAMS IMPROVED FINANCIAL PERFORMANCE Gender diversity at top management levels improves companies’ financial performance. » An analysis of 2,360 global companies in a variety of industries found that companies with women on their executive boards outperformed companies with all-male executive boards. Gender-diverse management teams showed superior return on equity, debt/equity ratios, price/equity ratios, and average growth. Many of these benefits appeared after the 2008 global economic crash, leading Gender diversity in teams also researchers to conclude that gender diversity might be especially valuable in times of recession. benefits the bottom line. The study also concluded that gender-diverse executive boards decrease volatility and increase 1 » An investigation of 500 U.S. businesses found that balance throughout the economic cycle. companies with more race and gender diverse » A study of 101 public, private, and nonprofit teams had higher sales revenue, more customers, organizations found that those with three or more greater market share, and greater profits than did 4 women on their executive boards outperformed less diverse companies. other companies on all of the study’s measures of » A field experiment asked 12-person teams of performance: leadership, direction, accountability, student entrepreneurs to start up, sell stock for, coordination and control, external orientation, 2 and actually run 43 real companies with the goal capability, work environment, and values. of maximizing profit and shareholders’ value. » An investigation of 89 European companies Statistical analysis showed that gender-balanced with the greatest gender diversity at the top teams outperformed both male-dominated and 5 management level found that, on average, these female-dominated teams. companies’ financial performance was higher than average for their business sectors. In particular, these companies demonstrated superior return on equity, earnings before interest and taxes, and 1 Rohner, U. and B. Dougan (2012). Gender diversity and 2 stock price growth. corporate performance. Technical report, Credit Suisse Research Institute, Zurich. » A study found a positive relationship between 2 McKinsey & Company. (2007). Women matter: Gender diversity, organizational performance and the presence of a corporate business driver, 12–14. women on those organizations’ top management 3 Krishnan, H. A., & Park, D. (2005). A few good women — on teams. Researchers analyzed the gender top management teams. Journal of Business Research, 58(12), composition of the top management teams of 679 1712–1720. Fortune 1000 organizations and found a positive 4 Herring, Cedric. (2009). Does diversity pay? American association between higher proportions of women Sociological Review, 74(2), 213. 3 and the companies’ return on assets. 5 Hoogendoorn, S., Oosterbeek, H., & Praag, M. van. (2013). The impact of gender diversity on the performance of business teams: Evidence from a field experiment. Management Science, 59(7). What is the Impact of Gender Diversity on Technology Business Performance: Research Summary Copyright © NCWIT, 2014. All Rights Reserved. www.ncwit.org 3GENDER‑BALANCED TEAMS IMPROVED INNOVATION AND PRODUCTIVITY Gender-diverse work teams demonstrate superior team dynamics and productivity. » A report found that a greater proportion of women was associated with higher collective intelligence, defined as “the general ability of a group to perform a wide variety of tasks.” Researchers studied 669 people working in teams of 2 to 5 people. They found that teams’ collective intelligence rose with the number of women in the group, possibly because of the women’s higher performance on 6 tasks that required social sensitivity. » A study surveyed 1,400 team members from 100 teams at 21 companies in 17 countries. The study found that gender-balanced teams were the most likely to experiment, be creative, share knowledge, and fulfill tasks. The study also found that the most confident teams had a slight majority 7 of women (60%). » A study of 272 projects at four companies found that gender diversity on technical work teams was associated with superior adherence to project schedules, lower project costs, higher employee performance ratings, and higher employee 8 pay bonuses. Gender diversity has specific benefits in technology settings. » When European competitors have gained 6 global market leadership, they have encouraged Woolley, A. W., Chabris, C. F., Pentland, A., Hashmi, N., & Malone, T. W. (2010). Evidence for a Collective Intelligence innovation by drawing on a diverse knowledge Factor in the Performance of Human Groups. Science, base. Researchers argue that innovative change 330(6004), 686–688. is less likely to emerge from a group with a more 7 9 Lehman Brothers Center for Women in Business. (2008). homogeneous knowledge base. Innovative potential: Men and women in teams, 6. 8 Turner, L. (2009). Gender diversity and innovative performance, Int. J. Innovation and Sustainable Development, 4(2/3), 124. 9 Doz, Y., Santos, J., & Williamson, P. (2004). Diversity: The key to innovation advantage. European Business Forum, 17, 26. What is the Impact of Gender Diversity on Technology Business Performance: Research Summary 4 Copyright © NCWIT, 2014. All Rights Reserved. www.ncwit.orgBoth opportunity costs and attrition Still, gender-diverse lead to big losses for IT Firms. teams may face specific performance-related challenges. The IT labor force demand is growing, yet women’s participation is decreasing. In 1996, women made up Early research identified mixed results when assessing 37% of the U.S. IT workforce; by 2010, they made up the performance of gender-diverse teams. In particular, 25%. The situation is similar in Canada: the Canadian Imperial Bank of Commerce (CIBC) reported in 2012 » In one small study, gender-diverse teams evaluated that 30% of Canadian businesses were facing skilled their own performance more negatively than labor shortages — double the percentage seen in external evaluators, who judged them to 10 early 2010. Retention is a big part of this decrease: be successful. research has found that 56% of women who enter the » Diversity may also reduce the quantity of new ideas private-sector IT workforce leave private industry at a a team generates, though it appears to have no midlevel position, and half of these departing women 11 effect on the quality of new ideas generated. go on to use their tech skills outside of private industry. The cost to companies of replacing a single employee in a technical position is 150,000–200,000. However, this cost does not take into account the opportunity cost of losing gender diversity. American businesses have responded to the skilled labor shortage by hiring noncitizens. However, obtaining visas for foreign hires has become increasingly difficult and controversial. Recruiting and retaining U.S. women in the IT workforce is a more expedient solution to the skilled labor shortage. 10 Baugh, S. & Graen, S. (1997). Effects of team gender and racial composition on perceptions of team performance in cross-functional teams. Groups and Organization Management, 22(366), 366–379. 11 Cady, S. & Valentine, J. (1999). Team innovation and perceptions of consideration — what difference does diversity make? Small Group Research, 30(730), 731–745. www.ncwit.org What is the Impact of Gender Diversity on Technology Business Performance: Research Summary 5TO PROFIT FROM DIVERSITY BUILD A SUPPORTIVE INFRASTRUCTURE Organizations benefit most from gender diversity initiatives when they create a supportive infrastructure. » A study compared the diversity strategies of two Dutch companies: an insurance and banking company and a telecommunications company. The insurance/banking company used an “add diversity and stir” approach, limiting their diversity initiatives to recruitment and selection. The » A study compared two Fortune 500 companies telecom company used an approach to actively with different approaches to diversity. The first, foster diversity, circulating brochures, intranet which researchers described as a multicultural sites, and posters to cultivate diversity awareness. organization, incorporated a value for diversity It also included diversity in its mission statement into its organizational culture. The second, which and held annual diversity training seminars. they called a plural organization, actively recruited Making diversity part of everyday vocabulary women and members of racial minorities, but made it possible for telecom employees to address then required them to assimilate to the dominant differences in communication style, conflict culture and did not incorporate a value for diversity 12 management, and other misunderstandings. into the structure of the organization. The study found that the multicultural organization had more » A study of 20 Fortune 500 companies found that successfully integrated its diverse workforce into a performance-related benefits of diversity were cohesive unit, as indicated by measures of informal only realized when diversity was “managed” 15 mentoring, advice networks, and friendships. or facilitated by, for example, training leaders on communication and problem solving within Businesses that effectively support gender diversity diverse teams. Otherwise, diversity was sometimes perform better financially, enjoy exceptional team associated with communication conflicts and dynamics, and attain greater productivity. weak group cohesion, which sometimes led to higher employee turnover rates. By contrast, the most successful organizations instituted diversity- 12 Benschop, Y. (2011). Pride, prejudice, and performance: focused human relations practices. At these Relations between human resource management, diversity, and performance. International Journal of Human Resource organizations, gender diversity was associated 13 Management, (12)7, 1161–1178. with more constructive group processes. 13 Kochan, T., Bezrukova, K., Ely, R., Jackson, S., Joshi, A., Jehn, » A study of 535 bank executives and 177 senior K., ...Thomas, D. (2003). The effects of diversity on business performance: Report of the diversity research network. Human human resource managers found a positive Resource Management, 42(1), 3-21.. relationship between gender diversity and 14 Dwyer, S., Richard, O., & Chadwick, K. (2003). Gender diversity organizational cultures that highly value in management and firm performance: The influence of growth teamwork, participation, and cohesiveness. In orientation and organizational culture. Journal of Business contrast, gender diversity was not associated with Research, 56, 1013–1017. organizational cultures that valued competition 15 Gilbert, J. and Ones, D. (1998). Role of informal integration in 14 with the external environment. career advancement: Investigations in plural and multicultural organizations and implications for diversity valuation, Sex Roles, 39(9/10), 685–687. What is the Impact of Gender Diversity on Technology Business Performance: Research Summary 6 Copyright © NCWIT, 2014. All Rights Reserved. www.ncwit.orgREFERENCES Ashcraft, C. & Blithe, S. (2010). NCWIT Supervising in a box series: Ely, R. J. (2004). A field study of group diversity, participation Supervisors as Change Agents, 6–7. Retrieved from in diversity education programs, and performance. Journal of www.ncwit.org/supervising. Organizational Behavior, 25(6), 755–780. Ashcraft, C. & Breitzman, T. (2012). NCWIT Who invents IT? Gilbert, J. and Ones, D. (1998). Role of informal integration in Women’s participation in technology patenting, 2012 update, career advancement: Investigations in plural and multicultural 9–10. Retrieved from www.ncwit.org/patentreport. organizations and implications for diversity valuation, Sex Roles, 39(9/10), 685–704. Baugh, S. & Graen, S. (1997). Effects of team gender and racial composition on perceptions of team performance in cross Herring, Cedric. (2009). Does diversity pay? American Sociological functional teams. Groups and Organization Management, 22(366), Review, 74(2), 208-224. 366–379. Hoogendoorn, S., Oosterbeek, H., & Praag, M. van. (2013). The Benschop, Y. (2011). Pride, prejudice, and performance: impact of gender diversity on the performance of business teams: Relations between human resource management, diversity, Evidence from a field experiment. Management Science, 59(7), and performance. International Journal of Human Resource 1514-1528. Management, (12)7, 1161–1178. Kochan, T., Bezrukova, K., Ely, R., Jackson, S., Joshi, A., Jehn, Bureau of Labor Statistics (2014). Occupational employment K., … Thomas, D. (2003). The effects of diversity on business projects 2012-2022. Retrieved from performance: Report of the diversity research network. Human http://www.bls.gov/emp/ep_data_occupational_data.htm Resource Management, 42(1), 3–21. doi:10.1002/hrm.10061 Brown, D.A.H, & Brown, D.L. (2001). Canadian directorship practice Krishnan, H. A., & Park, D. (2005). A few good women — on in Conference Board of Canada. top management teams. Journal of Business Research, 58(12), 1712–1720. Cady, S. & Valentine, J. (1999). Team innovation and perceptions of consideration — what difference does diversity make? Small Group Lehman Brothers Center for Women in Business. (2008). Innovative Research, 30(730), 731–745. potential: Men and women in teams. Conference Board of Canada. (2002). Women on boards: not just McKinsey & Company. (2007). Women matter: Gender diversity, a the right thing, but the bright thing, i–5. corporate business driver. Rohner, U. and B. Dougan (2012). Gender diversity and corporate Turner, L. (2009). Gender diversity and innovative performance, Int. performance. Technical report, Credit Suisse Research Institute, J. Innovation and Sustainable Development, 4(2/3), 124-138. Zurich. Woolley, A. W., Chabris, C. F., Pentland, A., Hashmi, N., & Malone, Doz, Y., Santos, J., & Williamson, P. (2004). Diversity: The key to T. W. (2010). Evidence for a collective intelligence factor in the innovation advantage. European Business Forum, 17, 25-27. performance of human groups. Science, 330(6004), 686–688. Dwyer, S., Richard, O., & Chadwick, K. (2003). Gender diversity in management and firm performance: The influence of growth orientation and organizational culture. Journal of Business Research, 56, 1009-1019. What is the Impact of Gender Diversity on Technology Business Performance: Research Summary Copyright © NCWIT, 2014. All Rights Reserved. www.ncwit.org 7NATIONAL CENTER FOR WOMEN & INFORMATION TECHNOLOGY (NCWIT) www.ncwit.org 303.735.6671 infoncwit.org Twitter: NCWIT Strategic Partners: Investment Partners: Copyright © NCWIT, 2014. All Rights Reserved.