Female business owners in industries traditionally dominated by males

Sex Roles, Vol. 26, Nos. 11/12, 1992

Female Business Owners in Industries Traditionally Dominated by Males 1

Patricia L. Smith

Berry College

Stanley J. Smits

Georgia State University

Frank Hoy

University of Texas

This study examined selected demographics, personality traits, and job-related characteristics of females and males operating small businesses in traditionally male-dominated industries. Of the 56 participating businesses owners, all but 2 were Caucasian. Organizational characteristics were also observed. Significant gender differences were found in marital status, industry experience, age of firms, number of females hired, and effectiveness of communication scores.

Female-owned enterprises continue to be the fastest growing segment of the small business population, increasing annually at more than twice the rate of male-owned firms, and there is every indication this trend is continuing. Their firms are concentrated in stereotypically feminine and more labor-intensive industries such as retail trade and services, and a s such, may frequently be considered an extension of the home (Gregg, 1985). Although still not a major force, however, females have recently

1This study was funded by a grant from the Society for Human Resource Management Foundation. A similar version of this paper was presented at the Southern Management Association Meeting in Atlanta, Georgia, in November 1991 and was published in the conference proceedings.

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486 Smith, Smits, and Hoy

emerged as owners of firms in traditionally male-dominated industries. The Small Business Administration reports an increase of 116.3% in female ownership of mining, construction, and manufacturing businesses during the period 1980-1985 (State of Small Business, 1988).

During the last 20 years, largely because of this rapid growth, there has been a dramatic increase in the amount of research on women who operate their own firms. The majority of studies, however, have focused on women who operate firms in so-called feminine domains. Little is known about women who have chosen to enter traditionally male-oriented arenas. This study was designed to address this neglected area of research by com- paring personal and business-related characteristics of women and men who own and operate firms in traditionally male-oriented industries, and by examining the organizations themselves to determine if they differ in size, age, and makeup of the work force.

SMALL BUSINESS RESEARCH

Deficiencies in Research on Female Business Owners

While research on female small business owners has increased dra- matically during the past two decades, it has several weaknesses. First, studies are primarily biographical or anecdotal, and are rarely subjected to empirical testing (Cuba, Decenzo, & Anish, 1983). Second, most of the research has focused on women who own firms in the retail and service sectors of the economy. Relatively little is known about women who choose to operate firms in the growing number of construction and manufacturing firms owned by women.

Finally, Chaganti (1986) points out that studies of small businesses rarely include both males and females. With few exceptions (e.g., Kalleberg & Leicht, 1991), researchers draw conclusions about female owners using the male owner as the standard against which females are measured without having an actual base of comparison (Stevenson, 1986).

Gender-Related Differences of Small Business Owners

Although research indicates that female and male business owners are more similar than they are dissimilar, several studies (e.g., Hisrich & Brush, 1983) have reported some gender-related differences in demographic and job-related characteristics (i.e., education, training, work experience, marital status, and age).

Female Business Owners 487

Furthermore, females and males are motivated to form and operate their own businesses for similar reasons: displacement (Shapero, 1980), dis- satisfaction with paid employment (Goffee & Scase, 1985; Neider, 1987), a desire for independence and autonomy (Cannon, Carter, Rosa, Baddon, & McClure, 1988), for the achievement of personal fulfillment (Richie, Eversley, & Gibb, 1982), and due to economic necessity (Demarest, 1977). In addition, for females, the idea of business ownership presents an alter- native to conditions of perceived gender-related economic and social sub- ordination (Goffee & Scase, 1985), and offers them opportunities not found in male-dominated organizations (Bettner & Donahue, 1983).

Bowen and Hisrich (1986), in a comprehensive review of the career development of female entrepreneurs, found little difference between female and male business owners. They further suggest female business owners score quite high on traits normally associated with the masculine sex role stereotype such as autonomy, aggression, independence, and leadership. They also score low on a number of other so-called feminine traits such as valuing family over occupation, wanting support from others, and exhibiting benevolent and conformational behaviors.

While there appears to be no research examining nurturance and need for dominance of small business owners, traditional psychological research strongly suggests men in the general population have consistently scored higher on measures of dominance and achieved lower scores on nurturance than females (Jackson, 1984). According to Jackson, individuals who score high on dominance "attempt to control the environment and to influence or direct other people" (1984, p. 6), and are described as being domineering and persuasive. High scorers on measures of nurturance "give sympathy and comfort . . . and assist others whenever possible" (1984, p. 7), and are described as being protective and supportive.

Several studies have looked at these traits in managers, particularly with regard to gender-related managerial stereotypes. Schein (1973, 1975) contends the managerial stereotype typically reflects the male stereotype of an absence of nurturance and high dominance. A study by Brenner and Greenhaus (1979) exploring relationships among managerial status, sex, and selected personality traits (including nurturance and dominance), however, found little support for the male managerial stereotype. A later study (Brenner, 1982) of employees in large (i.e., greater than 1000 employees) business organizations found that sex differences in measures of nurturance a~d dominance practically disappeared when more educated females and males were compared.

Female leaders are reported to be more self-disclosing (Hyman, 1980), and to provide more support and information to subordinates (Baird & Bradley, 1979; Thorne & Henley, 1975), a natural progression from the


language of connection and intimacy attributed to most females (Tannen, 1990).

Differences in Female- and Male-Owned Firms

Small businesses operated by females are reported to be smaller in terms of revenues and number of employees than those owned by males (State of Small Business, 1988). Female-owned businesses in stereotypically feminine and more labor-intensive enterprises suggest that females tend to hire proportionately more female employees than males (Cannon et al., 1988; Chaganti, 1986). This may occur because they find it difficult to recruit male employees (Gregg, 1985), or perhaps because they believe female employees are "more adaptable and less likely to challenge the authority of female proprietors" (Cannon et al., 1988, p. 7). Gilligan (1982) and Rosener (1990) suggest that female business owners, like females in general, tend to place more emphasis on an interpersonal work environment. It is possible these women may then hire employees whom they believe share similar attitudes.

Female Business Owners in Nontraditional Industries

The vast majority of research on self-employed females has concentrated on those who operate firms in stereotypical feminine industries, and knowledge and understanding of women who choose to compete in traditionally male-dominated fields is limited. Several studies, however, have examined female employees in nontraditional fields. For example, in a study where respondents were matched according to occupational levels in traditional (i.e., nursing) and nontraditional (i.e., business and industry) careers, Moore and Rickel (1980) report women who chose nontraditional careers were more achieving and emphasized production more than their counterparts who chose more traditional careers. Moreover, these women considered the domestic role as less important than their careers and saw themselves as having characteristics similar to those ascribed to male managers.

THE PRESENT STUDY

The present study attempted to eliminate many of the previous criti- cisms of research on self-employed females through the research design, which permitted statistical analyses and testing of specific hypotheses;


through the choice of industries that have traditionally been considered male dominated but have recently experienced an infusion of female business owners; and through the selection of both female and male business owners.

The study focused on the following questions: First, do selected demographics, job-related characteristics, and selected personality traits dif- ferentiate female and male business owners in the construction, manufacturing, and wholesale distribution industries, and second, do organizational characteristics such as age and size of the firm and the makeup of the work force of female business owners differ from those of their male counterparts in these three industries?

METHOD

Selection of the Sample

The data for this study were collected from 56 small businesses in three industries (construction, manufacturing, and wholesale distribution) in a large southeastern metropolitan area. Firms were selected from a segment of the U.S. Small Business Administration's Small Business Data Base (SBDB), which included businesses of not less than 20 nor more than 100 employees. Business owners were defined as those individuals who not only held a majority interest but were also involved in the day-to-day management of the enterprise.

The entire population of 42 businesses in the 3 chosen industries that met the criteria of female ownership and active management of the firm was used. Using a computerized random number procedure, 45 male- owned companies were then selected from the remaining firms, 15 in each of the three industries. Twenty-seven female-owned companies (64% of the original population of 42) and 29 male-owned companies (64% of the 45 randomly selected companies) participated in the study. All but 2 of the participants (both female) were Caucasian.

Instrumentation

Employer Questionnaire. Owners of the 56 small businesses completed questionnaires designed to gather individual demographics and job-related characteristics and to provide information about the size and age of the firms. Variables of interest included age of owner (categorical variables from less than 21 to over 60 years of age), current marital status (single,


separated or divorced, widowed, married), education (categorical variables from less than 12th grade through completion of graduate school), managerial experience (categorical variable ranging from none to more than 10 years), and industry experience (5-point scale from no experience to extensive experience). Business owners were also asked to identify their primary and second reasons for entering business. Five choices previously identified in the literature and an open-ended "other" category were provided for responses.

As part of a larger study examining human resource practices of small businesses, owners were asked if they felt the policies of the firm were clearly communicated and understood by their employees (5-point scale ranging from strongly agree to strongly disagree).

The questionnaire also included 2 sets of 10 true/false items selected from the Personality Research Form (PRF; Jackson, 1984) to measure nurturance and need for dominance. The PRF is an instrument designed to yield a set of scores for personality traits broadly relevant to needs which act as central motivating forces. Jackson (1984) reported convergent validity and internal reliability for nurturance of 0.75 and 0.79 and for dominance of 0.81 and 0.78. Cronbach alphas for these measures for the present study were 0.63 and 0.54 for females and 0.55 and 0.75 for males.

Information obtained from the owner concerning the business itself allowed the researchers to verify information obtained from the SBDB on the size (in number of female and male employees), age (in years), and type of industry (construction, manufacturing, and wholesale distribution). Where discrepancies occurred, current information furnished by the business owner was used.

Employee Questionnaire. Employees (n = 721) of the sample organization were asked to complete a questionnaire and return it anonymously to the researcher in a prepaid, business-reply envelope. This instrument was designed to gather demographic and job-related information about the employees. Employees were also asked if they felt the policies of the firm had been clearly explained to them and if they understood these policies (5-point scales ranging from strongly agree to strongly disagree).

Analyses of the Data

The Business Owners. Significantly more of the male owners were cur- rently married (p < .02) and had more industry experience (p < .05). Con- trary to findings in traditional psychological research, significant differences in nurturance and dominance based on sex were not confirmed in this study. Female business owners scored 8.78 on nurturance and 8.00 on domi-

Female Business Owners

Table 1. Description of Business Owners and Their Organizations

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Variables of interest Female owners Male owners Total

Age of owner 31--40 7 (26%) 6 (21%) 41-50 11 (41%) 8 (28%) 51--60 7 (26%) 10 (35%) Over 60 2 ( 7 % ) 5 (17%)

Marital status Never married 2 ( 7 % ) 2 ( 7 % ) C.rrently married 16 (59%) 25 (86%) Separated or divorced 5 (19%) 1 ( 4 % ) Widowed 4 (15%) 1 ( 4 % )

Education Less than 12th grade - - 2 ( 7 % ) Completed high school 2 ( 7 % ) - - Some technical school - - 1 ( 4 % ) Completed technical school 1 ( 4 % ) - - Some college 13 (48%) 3 (10%) Completed college 6 (22%) 19 (66%) Some graduate school 5 (19%) 3 (10%) Completed graduate school - - 1 ( 4 % )

Type of industry Construction 7 (26%) 8 (28%) Manufacturing 12 (44%) 8 (28%) Wholesale distribution 8 (30%) 13 (45%)

13 (23%) 19 (34%) 17 (30%)

(13%)

4 7%) 41 (73%)

6 (21%) 5 ( 9 % )

2 ( 3 % ) 2 (3%) i ( 2 % ) i ( 2 % )

16 (29%) 25 (45%)

8 (14%) 1 ( 2 % )

15 (28%) 20 (36%) 21 (38%)

Age of firm Less than 6 years 3 (11%) 1 ( 4 % ) 4 ( 7 % ) 6-10 years 8 (30%) 4 (14%) 12 (21%) 11-20 years 10 (37%) 7 (24%) 17 (30%) More than 20 years 6 (22%) 17 (59%) 23 (41%)

Size of firm Fewer than 26 employees 14 (52%) 13 (45%) 27 (48%) 25-50 employees 10 (37%) 8 (28%) 18 (32%) 51-100 employees 3 (11%) 8 (28%) 11 (20%)

nance; male business owners scored 8.82 and 7.55, respectively, on these measures.

The two leading reasons both females and males chose to form and operate their own business were a desire for independence and autonomy (37% of the females and 31% of the males) and a chance for personal fulfillment (30% and 35% respectively).

The Organizations. A simple t-test revealed significant differences in the age of the firms owned by females and males (p < .002). There was


Table II. Means, Standard Deviations, and Differences of Female and Male Business Owners

Female owners Male owners Chi-square

Variables of interest Means SD Means SD or t values

Age a 4.19 0.88 4.48 1.02 - -1 .71 Marital status 0.59 0.51 0.86 0.35 5.18 e Education b 5.30 1.23 5.62 1.52 - -0 .88 Managerial experience c 3.19 2.09 3.45 1.62 - -0 .52 Industry experience a 2.63 1.50 3.38 1.35 - -1 .96 e Nurturance 8.78 1.55 8.82 1.44 - -0 .12 Dominance 8.00 1.49 7.55 1.94 0.97 Age of firm 14.41 8.69 29.07 22.74 - -3 .23 / Number of employees 27.74 13.91 37.55 23.83 0.06 Number of female employees 11.81 10.50 8.59 6.86 1.35 Number of male employees 15.93 10.25 28.97 20.62 --3 .03/

aThe average age of female and male business owners was 41-50 years. bAll but two of the female owners and two of the male owners had completed some form of

educat ion beyond high school with 4 t % of the females and 89% of the males having completed college.

COn average, both female and male business owners had one to three years managerial experience prior to starting their firms.

dprior industry experience was measured on a 5-point scale of no experience to extensive expetience.

~p < .05. < .01.

no significant difference in the number of individuals employed by female and male business owners. Tables I and II summarize the descriptive sta- tistics and results of these analyses.

A more in-depth examination of the data to observe hiring patterns of the respondents revealed female business owners employed 319 females and 430 males while firms operated by males employed 249 females and 840 males. A test for significant differences between these two population proportions revealed that female business owners hired significantly more females proportionately in their organizations than male business owners (z = 9.307, p < .0001).

Responses by employers to the questions concerning communication and understanding of the personnel policies of the firm were correlated with responses by employees to these same questions. Individuals employed by females responded more favorably than those employed by males (p < .02). Further analyses of the data using dyadic comparisons of female and male owners and their respective female and male employees as separate groups were then employed. Of the four analyses, only the responses of female employees and female owners were significantly correlated (r = 0.22, p < .005).


DISCUSSION

Not surprisingly, female-owned firms in this study had been in op- eration significantly less time than those owned by males. The infusion of females into these once traditionally male-oriented areas has occurred within the last several years, and is likely to escalate in the future as women gain more managerial and industry experience and receive greater accep- tance in their endeavors. But the study indicates that, with the exception of marital status and industry experience, there was no clear pattern of differences in personal characteristics between female and male business owners. Female business owners in this sample appear to be even more similar to their male counterparts than previous research has found.

Of particular interest was the similarity in scores for females and males on measures of nurturance and dominance. Three possible explana- tions are offered. First, the Cronbach alphas for these two measures com- bined for both females and males (0.60 and 0.68), although moderately high in the present study, were lower than the internal consistency reli- abilities reported by Jackson (1984; 0.79 and 0.78). These findings suggest individual items on the test may not accurately measure the traits of interest.

Second, 60.7% of the business owners in this sample had completed college, an educational level higher than the general population (Statistical Abstract of the United States, 1989). These results confirm findings of Bren- net's (1982) study that gender differences in nurturance and dominance disappear as education levels increase and by Fagenson (1990) that higher levels of education are associated with the development of masculine attributes. Fagenson's finding that position in the hierarchy of the organization contributes to masculine vs. feminine attributes may also explain the present findings. If, as she reports, "individuals high in the organization hierarchy were significantly higher on measures of masculini ty. . ." (1990, p. 208), then it follows that female business owners might be different from females in general on traits of nurturance and dominance. It is possible that women who operate firms in traditionally male-dominated industries through a process of self-selection or possibly through adaptation have per- sonalities more like their male counterparts than like females in the general population or even females who operate firms in the more stereotypically feminine industries.

One of the more interesting findings of the study that confirmed previous research (Cannon et al., 1988) was that female owners in the sample hired significantly more female employees proportionately than did male owners. In the present study, however, the sample firms operated in indus-


tries in which there are traditionally more males employed than females. The significant differences, therefore, are even more meaningful.

It was not possible to ferret out the underlying reasons behind these hiring patterns from the data collected. One could conjecture that, as Gregg (1985) suggests, it is more difficult for the female business owner to recruit males, or as Cannon et al. (1988) proposed, they believe women employees less likely to challenge their authority. These differences in hiring practices, however, may reflect real differences in the confidence female and male small business owners of traditionally male-dominated enterprises have in female employees. Having entered these male-dominated sectors themselves, it seems reasonable to assume that female owners may have more confidence in the capacity of female employees than male owners have and, therefore, they hire them in greater proportions.

Another possible explanation for the significant difference in the number of women employed in female-owned firms was suggested by Gil- ligan (1982) and Rosener (1990): self-employed females want to enjoy a close, personal relationship with their subordinates, and they select female employees whom they believe share similar attitudes. This relationship may then result in more effective communication between female employers and female employees, communication where a language of connection and intimacy (Tannen, 1990) is used.

The result of this study suggest several areas of needed research. First, what contributes to the similar nurturance and dominance scores of female and male entrepreneurs in these traditionally male industries? Education? Experience? Self-selection? Adaptation to competitive demands? Or do the findings indicate the need for development of new approaches for assessing personality traits of contemporary small business owners? Second, why do female business owners in nontraditional industries hire proportionately more females than male owners in these same industries? Is it a "confidence" factor? Availability? Affiliation? Third, do females business owners have a more intimate relationship with their subordinates, one in which a language of intimacy exists and provides more support and information? And finally, what will be the ultimate outcome of increased numbers of females employed in female-owned, nontraditional industries? Do their experiences constitute an apprenticeship, i.e., do they aspire to own firms in nontraditional industries?

The results of this research should be viewed with caution for two reasons. First, while previous studies have been criticized for drawing conclusions about similarities or dissimilarities of the sexes without including both sexes in the sample (Stevenson, 1986), by rectifying this deficiency the concern for statistical power must be acknowledged. Due to the small population of female-owned businesses operating in the three selected in-


dustries, the size of the entire sample is smaller than would have been the case if this method of convenience sampling were not used and, as a result, limits the generalizability of the findings. Enlargement of the sample, through inclusion of additional industries or through the use of a wider geographical area, would produce a larger sample size and would provide more complex statistical analyses. Nevertheless, the purposeful control of variances due to industries or geographic diversities would be lost. Second, in spite of the rigorous restrictions imposed in the research design and the assurance of confidentiality, self-report data are subject to challenges of their veracity and always involve the risk of response bias.

CONCLUSIONS

The trend of increasing female ownership of small businesses in traditionally male-dominated industries is likely to continue, perhaps even escalate. The results of this study suggest that self-employed females operating firms in these male domains are quite similar to their male counterparts with two exceptions: first, female owners in the nontraditional industries studied here disproportionately employed more females, thus creating an experienced pool of potential female business owners of the fiature; and second, these female business owners appear to be communi- cating more effectively with their female employees.

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Female business owners in industries traditionally dominated by males