Gender Demography and Organization Performance

Abstract

Considerable theoretical work has been published to date concerning the relationship between demographic composition of organizations and the performance of those firms. Indeed, under the topics of organization demography, substantial thought has been given to how demographic composition influences organization performance. Unfortunately, little empirical research has been conducted. The present research reports the results of two organization-level studies that investigated the relationship between gender diversity of organizations and their performance and hypothesized a nonlinear association. Study 1 results demonstrated support for an inverted U-shaped relationship between gender composition and organization performance, as hypothesized, and these results were constructively replicated in Study 2, thus increasing confidence in the validity of the findings. The results of Study 2 suggest that some industries might not be able to take advantage of this gender composition–firm performance relationship. Implications of these results for theory and research are discussed.

Non-linear relationship between gender diversity in the partnership and profit performance in accounting firms

“…This finding supports our hypothesis of a non-linear relationship existing between gender diversity within the partnership team and profit performance. This finding is also consistent with the conclusions in previous studies by Richard et al (2004) and Frink et al(2003). In the OLS regression results, we observed a significant U-shaped relationship between gender diversity and profit performance; however, no statistically significant curvilinear relationships were observed in the large firm or medium firm subsamples.…”

“…The theoretical foundation of the link between diversity in the background of TMT members and the performance of organizations is provided by the theory of value-in-diversity (Cox, 1993;Frink et al, 2003), which stems from resource-based theory. According to this theory, an organization can maintain its competitive advantage only when it possesses one or more valuable, rare, and imperfectly imitable or substitutable resources (Barney, 1991).…”

“…Broad views and perspectives can have a positive effect on problem-solving, idea formulation, and innovation, due to its effect on helping top managers to devise a variety of ideas for decision-making (Nielsen and Huse, 2010;Frink et al, 2003;Cox, 1993). Thus, a TMT with wider background diversity (in the form of gender) could be expected to create organization-specific resources, which could strengthen the competitive advantage and improve the performance of the organizations beyond what could be attained with a homogeneous TMT (Frink et al, 2003;Watson, Kumar, and Michaelsen, 1993;Barney 1991).…”

“…Interactions among members from diverse backgrounds can provide a deeper understanding of the complexities of the business environment. TMTs with gender diversity often provide a wider range of ideas to deal with specific problems; therefore, these teams tend to be more effective with regard to decision making (Nielsen and Huse, 2010;Frink et al, 2003). This, in turn, enhances competitive advantage and the performance of the organization (Boulouta, 2013;Watson et al, 1993).…”

“…Using U.S. National Organization Survey data, Frink et al (2003) Based on the above discussion related to the nature of this relationship, we propose the following hypothesis:…”