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Gender-Based Leadership in Small Family Business, Strategies and Optimum Performances

The research objective in this study was to examine the impact of gender in the decision-making process and leadership style in small family businesses for optimum performance. The research method was a literature review of previous studies concerning what attributes of leadership are most preferred in the small family business in relation to the performance of the business. Gender was found to have the least impact on small family businesses for choosing the next generation of leaders. However, factors such as eagerness, passion, commitment, previous experience, communication skills, equity, and understanding how to read the market were attributes viewed as needed for small family business leadership. Therefore, the study recommends that small family businesses prepare both the male and female family members for leadership roles in the family businesses and should focus on the skills and abilities of those placed in leadership positions rather than the gender of the individual.

Introduction

Historically the female gender has been vastly under-represented in small family business leaderships positions (Smith et al. 2021). Families were less likely to groom their female members for leadership roles (Smith et al., 2021). However, in small family-owned businesses in the contemporary world, that has begun to change (Family Business Institute, 2019). It should be the skills and attitude that should define the leader of any family business and not gender. 

Research Objective

The objective of the research in this study is to examine gender in the decisions about leadership in small family businesses concerning achieving optimum performance.

Research Questions

The research questions the study emphasis is on answering includes:

(1) Do small family businesses choose the best possible leader for succession regardless of gender?

(2) What are the considerations for leadership succession concerning optimum performance for small family businesses?

Methodology

The methodology used in this research is the literature review method, and as noted by Snyder (2019). For any literature review, it is necessary to seriously consider the processes a detail to ensure it is worthy for publication in peer-reviewed articles or other such publications. The articles that were chosen for inclusion in the study were identified by using Google search. The following terms were used along with the Boolean operator ‘AND’: 

  • Small family businesses AND gender AND leadership
  • Small family businesses AND gender AND optimum performance

Literature Review

As per a study conducted by Delecourt and Ng (2019), it was found that small family businesses with female leaders and their business performances are at par compared to male-led family businesses. Danes et al. (2007) conducted a study to examine business performance in small female-run businesses and stated findings that females do identify ways to ensure business performance is high by working using different strategies than men. Among those strategies are working longer hours each week and working harder. However, females have also identified strategies for working smarter, including asking family members to volunteer in the family business when needed (Danes et al., 2007). 

Olufemi (2021) conducted a study that involved the performance of four case studies with small family businesses in determining the role that gender played in the small family business succession planning toward ensuring business performance. The first case study revealed that gender bias was existent in the family when it came to succession planning. However, the other three case studies of small family businesses revealed that there was no gender bias when it came to leadership succession planning (Olufemi, 2021). Instead, the leaders of the small family businesses were more focused on such as ensuring that the individual chosen had been prepared for the position and had the ability to communicate with clients, relate to the employees of the business, and respect all staff of the business to ensure optimum business performance in the future (Olufemi, 2021).

Table 1 shows the four case studies concerning whether gender bias was present, and the considerations for succession leadership for the small family businesses in Olufemi (2021)
 

Table 1

Gender-based case study 

Case Study

Presence of Gender Bias

Requirements for Leadership Succession

Case Study 1

Yes

Based on gender

Case Study 2

No

Focused on making the business more robust and growing the business, communicating with clients, relating to employees and other stakeholders effectively

Case Study 3

No

Passion, interest in the business

Case Study 4

No

Leadership skills, negotiating ability, ability to read the market in a correct manner

Note: Created by Writer (2021) based on Olefumi (2021)

Olefumi (2021) concluded that “gender is not too important for the choice or prospective CEO” in small family businesses because passion, leadership skills, and interest are more important than gender, as is business performance and sustainability (p. 33). 

The Family Business Institute (2019) conducted a case study of a small family business and the factors that impacted leadership succession planning. In the case of JZ Jones Construction, owned and managed by Mary and John Jones, their oldest son Steve was not viewed as being the best prepared to lead the business, and the couple faced a considerable challenge in determining which of their children would be the best leader for the business once they retired (Family Business Institute, 2019). 

However, the couple’s daughter had considerable experience, so Mary and John decided to talk to each of their children to understand what they wanted when it came to taking over the business, a discussion which also included the company’s Chief Financial Officer (CFO). The differences between the three children of Mary and John are shown in Table 2 (below).

Following the discussions that took place between the family members and the CFO, it was determined that their daughter was the correct choice to fill the role of leadership for the company due to her experience in business before having joined the company, along with her other skills (Family Business Institute, 2019). The daughter was more adept at communicating with clients and other stakeholders than was the oldest son. However, the oldest son was also to be involved in the business in his area of expertise, but he would not serve in a leadership position, and it was determined that the younger son, a musician was not interested in the business operations (Family Business Institute, 2019).

Table 2

Case study of Mary and John’s three children 

Child

Gender

Present Status

Capabilities

Steve

M

Works in the company

Joined the company after completing two years in college. He was only a marginal student but greatly desired to work in the family business. Capable and energetic manager and has been successful with most of his assignments.

Jody

F

Works in the company

She was a straight-A student and worked six years with General Electric. She was on the fast track to success as a manager prior to joining the company, receiving several promotions, and her employee reviews were outstanding.

Robert

M

Musician in Rock-n-Roll band

He had no desire to work in the family business and is happy with what he is doing.

Note: Created by Writer (2021) based on Family Business Institute (2019)

Nevertheless, the exclusion of the youngest son from the business operations did not exclude considerations for his well-being. Mary and John acquired a commitment from the other two children who would be involved in the business leadership and management that the youngest son would be treated in an equitable manner concerning the business earnings (Family Business Institute, 2019). Furthermore, the case study presented by the Family Business Institute (2019) indicated that gender is not an overarching consideration in small family businesses when it comes to leadership because other qualities are more critical.

Summary

Although there are claims in some studies that the female gender is not the best choice to step into small family business leadership roles, recent research has shown that gender is not the primary consideration for those businesses. Instead, there are more critical issues when it comes to the leadership for small family businesses than gender. The factors found to be important included those of the capacity to communicate with clients, employees, and other stakeholders in the business, ensuring business success and high performance, passion, eagerness, commitment, as well ensuring that the other siblings not involved in leading the small family businesses are treated equitably.

Discussion and Recommendations

Historically, small family business leadership positions were filled by the male members of the family once the business owner and leadership retired. However, in contemporary times, there is little focus on the gender of the individual who will fill the leadership role in small family businesses because the considerations are more focused on ability and skills and ensuring a high level of business performance. The recommendations arising from the research in the present study include those stated as follows:

  1. Small family businesses should focus on the skills and abilities of those placed in leadership positions rather than the gender of the individual.
  2. Small family businesses should prepare both female and male family members to take over the reins of leadership.

Conclusion

The objective of the research in this study was to examine gender in the decisions about leadership in small family businesses concerning achieving optimum performance. The research questions that served to guide the research in the study were those asking: (1) do small family businesses choose the best possible leader for succession regardless of gender? and (2) what are the considerations for leadership succession for small family businesses?

The literature review conducted in the study revealed that gender is not a primary consideration for leadership in small family businesses because skills such as communication, a commitment to make the business stronger and bigger, the ability to relate to employees and other stakeholders effectively, eagerness, passion and interest in the business, leadership skills, communication, and the ability to negotiate and to read the market correctly are more valued than any consideration of gender.

Author: Bobby Boruah

References

Danes, S.M., Stafford, K., & Loy, J.T. (2007). Family business performance: The effects of gender and management. Journal of Business Research, 60, 1058-1069.

Delecourt, X. & Ng, O. (2019). Does gender matter for small business performance? Experimental evidence from India. [Berkely, CA: Berkeley University], 1-50. https://cega.berkeley.edu/wp-content/uploads/2020/03/Ng_PacDev2020.pdf

Family Business Institute (2019). Family business in transition: Data and Analysis, 1-24. https://www.familybusinessinstitute.com/wp-content/uploads/2019/01/Family-Business-Succession-Planning-White-Paper.pdf

Olufemi, A. (2021). Succession planning: A key to sustainable family business. Journal of Business and Social Science Review, 2(7), 26-38. https://jbssrnet.com/wp-content/uploads/2021/08/3.pdf

Smith, J.E., von Rueden, C.R., van Vugt, M., Fichtel, C., &Kappeler, P.M. (2021). An evolutionary explanation for the female leadership paradox. Frontiers in Ecology and Evolution, 1-20. https://www.frontiersin.org/articles/10.3389/fevo.2021.676805/full

 

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