The increase in the number of female entrepreneurs in the United ... and number of employees were compared with those of similar male business owners.
FEMALE AND MALE ENTREPRENEURS: PSYCHOLOGICAL CHARACTERISTICS AND THEIR ROLE IN GENDERRELATED DISCRIMINATION DONALD L. SEXTON Ohio State University
NANCY BOWMAN-UPTON Baylor University
There is good news and bad news about actual gender-related managerial dtferences. The good news is that some do exist. The bad news is that they are overused as the basis for sexual stereotyping. The increase in the number of female entrepreneurs in the United States has been paralleled by an increase in academic research related to their activities. Published research studies of the female entrepreneur have ranged from psychological and demographic studies to perceived start-up obstacles. These studies gave rise to the perception that although male and female entrepreneurs possessed similar socioeconomic backgrounds. motivations, and techniques, the female business owners have been subjected to gender-related discrimination. More recently, research studies have addressed the question, “Is the object of discrimination the woman or is it the type of Jirm she tends to initiate?” Studies have shown that both females and males possess the characteristics requiredfor effective performance as managers. Yet negative attitudes towardfemales still exist. Trait analyses studies have found more similarities than differences between the two groups. However, a gap still exists between the actual traits of women business owners and the perception of those traits by others. This gap is even more significant when the impact of the traits on occupational choices is considered. The use of psychological traits as a predisposition io initiate a business as an occupational choice has been well established. In this study, the psychological traits of growth orientedfemale and male entrepreneurs were measured and tested for significant differences. One hundred five female owners of businesses that rate in the top 10% with respect to sales and number of employees were compared with those of similar male business owners. No significant differences were found on five of the nine traits that were measured. The females did score significantly lower on traits related to energy level and risk taking. They also scored signihcantly higher on the traits related to autonomy and change. These scores indicate thatfemale entrepreneurs are less willing
EXECUTIVE SUMMARY
Address correspondence to Dr. Donald L. Sexton, College of Administrative 1775 College Road, Columbus, OH 43210. Journal of Business Venturing 01990
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30
Il. L. SEXTON AND N. BOWMAN-UFTON
than male entrepreneurs to become involved in situations with uncertain outcomes (risk taking) and have less of the endurance or energy level needed to maintain a growth-oriented business. The signijcantly higher scores by thefemale entrepreneurs on the traits associated with autonomy and change directly refute the perceptions of females found to exist in earlier studies. In addition, the lack of a significant d$ference on the traits related to social adroitness and to succorance between the two groups belies the “emotionality” label often attributed to females. This study shows that the psychological propensities offemale and male entrepreneurs are more similar than they are different. While some differences did exist, they would not be expected to affect the person’s ability to manage a growing company. Hence, as stated earlier, gender-related psychological traits related to managerial differences do exist. However, they do not provide a bayis for sexual stereogping. A modification of the Jackson Personality Inventory and the Personality Research FormE test instruments was administered to similar groups of 105 female entrepreneurs and 69 male entrepreneurs. All of the entrepreneurs sampled were founders of those 10% of the firms in the United States that have reached annual sales levels of $100,000 and have five or more employees. The two groups had similar scores on five traits. The females scored significantly lower on two traits related to risk taking and energy level and higher on two traits related to autonomy and change. No evidence was found to support the perceptions that females may be lacking in the attributes necessary to initiate and manage a business.
A businesses
lthough figures vary, it is estimated that women currently own 28% of all the in the United States and are projected to own 50% by the year 2000 (House of Kepresentatives Report No. 100-736, 1988, p. 2). Concomitant with the growth of female entrepreneurship has been the researchers’ interest in her. Initial studies focused on the demographics of the female entrepreneur and her organization (Schwartz 1976; Sexton and Kent 1981), perceived obstacles to start-up and success (Hisrich and O’Brien 1982; Pellegrino and Rees 1982; Humphries and McClung 1981; Hisrich and Brush 1984), and analyses of traits or psychological characteristics (DeCarlo and Lyons 1979; Smith ct al. 1982; Waddell 1984). A perception arose that although male and female entrepreneurs p~~sscss similar socioeconomic backgrounds, motivations, and personality traits, fcmalc business owners are subjected to gender-related discrimination, especially by financial institutions. This prompted a series of comparative analyses of male and female entreprcncurs to determine if significant differences do exist (Welsch and Young 1984; Sexton and Bowman,-IJpton 1986; Cromie 1987; Fagenson and Coleman 1987) and studies of the actions and perceptions of lending officers toward women business owners (Rirley et al. 1986; ttowman-llpton et al. 1987; Olm et al. 1988; Buttner and Rosen 1988). The former studies revealed the differences were few. The latter sparked a debate centered around the question: “Is the object of discrimination the woman or is it the type of lirm she tends to initiate?” According to Brophy (1989), women have difficulty obtaining financing for their firms because they tend to pursue life-style rather than growth-oriented business ventures. Might not there be a bias toward both? Psychologists and social researchers utilizing techniques for discerning the more subtle forms of gender bias have revealed a “lingering but potentially potent bias in people’s beliefs, feelings and actions regarcling women” (Myers 1986). These results arc mirrored in a number of studies concerning male and female attitudes toward women managers (Schein 19’73, 1975; Heilman and Guzzo 1978; JIonnell and Ilall 1980; Dubno i385; Sutton and Moore 1985). Discrimination does exist and research designed to reveal evidence of it is necessary. But what is also needed is a better understanding of the origin of these attitudes and research that will refute them.
GENDER-RELATED
ORIGINS OF GENDER-RELATED
DISCRIMINATION
31
DISCRIMINATION
A number of models have been proposed to explain why we practice gender-related discrimination. Monopsonistic exploitation theory would propose that men collude to discriminate against women so there will be less competition for well-paying jobs (Madden 1975; Bergman 1983). Serious doubts toward this theory have been espoused by Hamermesh and Rees (1984). Statistical discrimination occurs when the characteristics of a group (which are factual and objective) are attributed to an individual, regardless of his or her own persona1 characteristics (Thurow 1975). Statistical discrimination has been found to be neither particularly rational nor efficient (Bielby and Baron 1986). A similar form of discrimination, error discrimination, occurs when a.n individual is assigned characteristics based on false stereotypes and assumptions about the group of which he or she is a member (Heilman 1984). Further, once an individual elaborates a stereotype, he or she is primed to expect differences on a wide variety of characteristics, including some for which no real sex differences exist (Martin 1987). Fisher (1987) calls attention to the fact that individuals may be discriminated against not necessarily because of their own personal characteristics, but because of either the actual or perceived characteristics of the group to which they are assigned. It is a matter of ‘guilt by association’
Sex role orientation theories predict discrimination based on the perceived and actual trait differences between males and females. Kovach (1983) proposes that male employers determine which jobs should be “female” based upon their knowledge of these traits. Bielby and Baron (1986) provide strong evidence that some employers reserve some jobs for men and others for women based on their perceptions of group differences between the sexes. It has been found that we tend to exaggerate the amount and extent of differences between the sexes because we accept as real both actual and perceived differences (Unger 1970; Martin 1987).
PERCEPTIONS
AND ATTITUDES TOWARD WOMEN IN RUSINESS
Despite studies indicating that males and females both have characteristics required for effective performance as managers (Lirtzman and Wahba 1372; Donnell and Ha11 1980; Stephens and DeNisi 1980), negative attitudes toward females still exist (Dubno 1985; Sutton and Moore 1985). Traits attributed to women, such as emotionality (Goleman 1988), gent!encss, sensitivity, passiveness, and lack of logic, compose sterco?ypes that have been shown to be effective obstacles to employment, pnomotion, and salary increases (Heilman and Guzzo 1978; Chacko 1982; Rosenstein and IEitt 1986). In a study of bank loan officers’ perceptions of male and female entrepreneurs, Buttner and Rose (1988) found that women were perceived as less entrepreneurial than men. Female entrepreneurs were evaluated significantly lower on dimensions related to leadership, autonomy, risk-taking propensity, readiness for change, endurance (energy level), and low need for support (succorance). Further, they were rated as more emotional. Contrary to these perceptions, actual trait analyses fnd more similarities between the sexes than differences (Goffee and Scase 1985). Women seem to possess similar motivations as men for need for money, need for independence, and seizing an opportunity (Hertz 1986). Chaganti (1986) notes that no significant differences between the sexes have emerged con.. ccrning need for achievement, autonomy, persistency, aggression, independence, nonconformity, goal orientation, self-confidence, leadership, and locus of control.
32
D. L. SEXTON AND N. BOWMAN-UPTON
There seems to be a gap between actual traits of women in business and perceptions of those traits. This may be significant when one considers the impact of the traits in occupational development.
PERSONALITY
AND OCCUPATION
The use of traits in vocational development theory is best described by Holland (1959), who theorized that individuals would select occupations and work environments that suit their personality types. Subsequent studies have shown that traits and values play an important role in occupation choice (Bordin et al. 1964; Thumin 1965; Singer and Abramson 1973). Further, a number of studies have used the instruments utilized in this study area to predict occupations and effectiveness in that occupation (Siess and Jackson 1971; Winegardner 1978; Bridgewater 1982). A plethora of studies comparing the traits or psychological characteristics of entrepreneurs to others has been published. Vocational development theory would suggest that these traits predisposed the individual to enter a career. While possessing the trait would in no way imply success in vocational pursuits related to initiating, growing, and managing a business, there does seem to be a correlation between possessing these characteristics and entrepreneurial endeavors. It is not a far leap to assume that women are not suited for entrepreneurship because they do not possess the necessary traits or psychological characteristics.
METHODOLOGY
AND ANALYSIS
The sample comprised 105 female members of the Houston Entrepreneurial Resource Service and 69 male entrepreneurs from the Columbus, Ohio, area. The samples were not randomly selected. In each case, they were members of the audience at a meeting in which the authors were speaking. While this situation may lend itself to a response-set bias, such as a socially desirable response style, the instrument used was designed to control it (Jackson 1974, 1976). Unusually high or low responses on the desirability scale alert the researcher to this response set. The definition of an entrepreneur used in the study is that he or she is an owner of a business with five or more employees and annual sales in excess of $100,000. This definition excludes self-employed professionals, those engaged in part-time ventures, and small-business owners. It represents a group of entrepreneurs who have achieved a company size that exceeds 90% of the firms in the United States (State of Small Business 1987). The composition of the firms in the sample by type of industry reveals a fairly even distribution with the exception of manufacturing. In general, females were clustered in the service area and males in manufacturing, but this is somewhat representative of the population in general (Hisrich and Brush 1984). The average ages of the entrepreneurs were relatively close (females, 41 years; males, 39 years). Although the males were on the average slightly younger, they had been in business about four years longer. The instrument utilized was a modification of the Jackson Personality Inventory and the Personality Research Form-E (Jackson 1974, 1976). Both instruments have been reviewed as highly psychometrically sound assessment devices (Neil1 and Jackson 1976; Hogan 1978). The modified instrument has been validated in earlier studies (Sexton and Bowman 1984). It consists of nine substantive scales and two validity scales. The nine substantive scales are bipolar, each containing equal numbers of true-keyed and false-keyed statements. Bi-
GENDER-RELATED
TABLE
1 Trait Description
of the Personality
33
DISCRIMINATION
Scales
Conformir~t A low scorer normally refuses to go along with the crowd, opinions. and is independent in thought and action.
is unaffected
Ener,ey level; A high scorer is active and spirited, possesses reserves of strength, capable of intense work or recreational activity for long periods of time.
and unswayed
by others’
does not tire easily, and is
Inrerpersonal
affect: A lower scorer is emotionally aloof, prefers impersonal to personal relationships, displays little compassion for other people’s problems, has trouble relating to people and is emotionally unresponsive to those around him/her.
Risk faking: A high scorer enjoys gambling
uncertain outcomes,
enjoys adventure
and taking a chance, willingly exposes self to situations having an element of peril, and is unconcerned with danger.
Social ad&mess: A high scorer is skillful at persuading others to achieve a particular occasionally may be seen as manipulative of others, and is socially intelligent. Auronom~:
restrictions;
with
goal, is diplomatic
A high scorer tries to break away and may be rebellious when faced with restraints, enjoys being unattached, free, and not tied to people, places, or obligations.
but
confinement,
or
Change: A high scorer likes new and different experiences, dislikes and avoids routine, may readily change opinions or values in different circumstances, and adapts readily to changes in environment.
Harm avoidance: A low scorer enjoys exciting activities especially and is not concerned with personal safety.
when danger is involved,
Succorance: A low scorer does not need the support nor frequently seeks the sympathy, advice, or reassurance of other people and has difticulty confiding in others.
risks bodily harm,
protection,
love,
polarity allows the scales to be viewed on a continuum. For example, a low score on energy level not only reflects the absence of traits related to.high energy level but also traits associated with a low energy level. The scales measure traits related to conformity, energy level, interpersonal affect, risk taking, social adroitness, autonomy, change, harm avoidance, and succorance. Definitions or description of persons scoring high or low on a particular scale are shown in Table 1. A multivariate analysis of variance was used to test differences between the group means. The resultant F test indicated significant differences on four scales. Two multiple comparison tests, Scheffe’s multiple comparison tests, Scheffe’s multiple comparison procedure for all main effect means and Bonferroni’s t test of differences between means, were used. Both tests were made at the .05 alpha level. As can be seen in Table 2, female
TABLE 2
Comparison
of Group Means Scale
Conformity Energy level interpersonal Risk taking
affect
Social adroitness Autonomy Change Harm avoidance Succorance *Significant at p < .05 level.
Female
Male
6.4095 14.6286* 10.0857 12.3333* 11.8000 10.7048* 10.4190* 8.5048 4.9714
6.9565 16.0000 9.8551 14.1884 1I .5362 8.5362 9.1884 8.1449 5.3913
34
il. L. SEXTON AND N. BOWMAN-UPTON
entrepreneurs scored significantly lower than male entrepreneurs on the scales of energy level and risk taking. Significantly higher scores for the females were found for the scales of autonomy and change. There were no significant differences on the remaining five scales.
DISCUSSION It has been noted that discrimination may occur when we align sex roles on perceived trait differences. Further, we tend to exaggerate these differences. In this study female entrepreneurs were found to score similarly to males on conformity, interpersonal affect, social adroitness, harm avoidance, and succorance. The insignificant differences between the groups on interpersonal affect and succorance belies the “emotionality” label attributed to females (Goleman 1988). Since the scores were relatively low, they indicate the absence of traits associated with a high scorer, one of which is emotionalality. Females scored significantly lower on energy level and risk taking. Yet their scores are still high relative to published norms. Obviously it requires a great deal of energy to maintain a growth-oriented business. Although the risk-taking scale was designed to measure four facets of risk (monetary, physical, social, and ethical), it correlates highest with monetary risk (Jackson et al. 1972). This study would indicate that female entrepreneurs are less willing to get involved in situations with uncertain outcomes where financial gain is involved. As noted by Buttner and Rosen (1988), bank loan officers perceived females as having less endurance and risk-taking propensity than males and successful entrepreneurs. While this may be true, it may also be that the perception is exaggerated. Females scored significantly higher on the scale’s autonomy and change. This refutes directly the perceptions noted by Buttner and Rosen (1988). In this sample, females have a higher need for independence and a stronger desire for new and different experiences. This study has shown that male and female entrepreneurs possess similar traits. Two noticeable differences are in risk taking and energy level. If female entrepreneurs are perceived as lacking the attributes necessary to initiate and manage a venture, they were not revealed here. Our knowledge of actual traits of female entrepreneurs should allow us to perceive them in a more objective manner. REFERENCES Bergman, B. 1983. Women’s plight: Bad and getting worse. Challenge 31 (March-April):22-26. Bielby, W. T., and Baron, J. N. 1986. Sex segregation within occupations. American Economic Review 76( 1):43-47. Birley, S., Moss, C., and Saunders, P. 1986. The differences between small lirms started by male and female entrepreneurs who attended small business courses. In R. Ronstadt, et al., eds., Fr0ntier.r of Entrepreneurship Research. Wellesley, MA: Babson College. Bordin, E. S., Nachman, B., and Segal, S. J. 1963. An articulate framework for vocational development Journal of Counseling Psychology 10 (Summer: 107- 117. Bowman-Upton, N., Carsrud, A., and Olm, K. 1987. New venture funding for the female entrepreneur. In N. Churchill et al., eds., Frontiers of Entrepreneurship Research. Wellesley, MA: Babson College. Bridgewater, C. 1982. Personality characteristics of ski instructors and predicting teacher effectiveness using the PRF. Journal of Personality Assessment 46 (March): 163-166. Brophy, D. J. 1989. Financing the women-owned entrepreneurial firm. In 0. Hagen et al., eds. Women-Owned Businesses. New York: Praeger. Buttner, H., and Rosen, B. 1988. Bank loan officers’ perceptions of the characteristics of men, women and successful entrepreneurs. Journal of Business Venturing 3(3):249-258.
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