Office for Women | Australia Says No

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Location: Home > Publications >The leadership Challenge: Women in Management (Hannah Piterman © March 2008)

4.The Business Response to Women

4.1 The implementation debate

The business community's response to the diversity challenge shows a consensus around barriers facing women in management. Diversity strategies are designed to respond to:

Traditionally, the diversity challenge has been understood in terms of person-centred variables but is increasingly challenged by an environment-centred approach (Tharenou, 1995). At present, most organisational responses to diversity contain elements of both approaches.

4.1.1 A person-centred approach: placing the onus for change on women

Early business endeavours to address the gender imbalance have been underpinned by a person-centred approach. According to this paradigm, problems faced by women are related to female attributes, behaviours and even their historical relationship with working life (Meyerson & Fletcher, 2000). The onus of change is on women. Interventions to support women in professional work environments aim to assist women adapt their behaviours to culturally fit within a male-dominated environment (Simpson, 2005; Burton, 1997). To succeed, women have to assimilate and adopt behaviours in line with the dominant male culture. Leadership training programs encourage behavioural reform through the acquisition of 'essential' business skills aligned with masculine traits such as assertive decision-making and self-promotion.

Women weren't coming up through the ranks so we created this program...[for] understanding what your skills are...what trade-offs are you prepared to make to get where you want to go? We did a lot of skills training about voice training, stress management, things like that to give people some understanding of what they can do to actually change how they are. (Female manager)

4.1.2 Pipeline theory

Pipeline theory is premised on the relatively late participation of women in tertiary education and professional life. It argues that the under-representation of women at senior levels will reverse once a generation of appropriately qualified women move through organisational hierarchies and become better placed for promotion (Rosener, 1995; Buono & Kamm, 1983; Kanter, 1977). Pipeline theory is underpinned by a person-centred understanding of the gender issue. Accordingly, its effectiveness relies on women's capacity to successfully negotiate their way up the organisational hierarchy. This approach gives little recognition to fundamental elements of organisational culture bias against women, and hence places relatively little emphasis on organisational interventions in fostering a climate change process.

4.1.3 Critics of the person-centred approach

Critics of the person-centred approach believe that the pipeline theory argument is effective only in workplaces that are favourable to the female presence.The pipeline theory presupposes the existence of a level playing field where meritocracy and transparency exist and negotiation within an organisational hierarchy will not in itself prove problematic to women.

Since the mid 1990s, researchers have also argued there is little evidence of a pipeline effect in action. A generation of qualified and ambitious women appear to have stalled at middle management levels in both the private and public sectors (Burton, 1997; Reciniello, 1999). The former director of the Federal Government's Equal Opportunity for Women in the Workplace Agency, Fiona Krautil, asserted:

[I] feel very frustrated...about the time it is taking to see significant numbers of women in CEO and leadership positions with a pipeline of female talent coming up behind... The fact is that the majority of Australian organisations do not have a pipeline of high-performing women who have been identified for promotions and advancement. (Krautil, 2003: 2)

Research suggests that women attempting to climb the career ladder have been stymied by informal networks that can exclude them. A comparison of the factors influencing the promotion of men and women to executive positions in the mid 1990s found informal identification of potential candidates for senior positions had a far greater influence on the promotional outcome for women than their background or personal characteristics (Tharenou, 1995). A similar US study found that while becoming a manager required the demonstration of appropriate credentials, becoming an executive relied more on intangible characteristics such as 'belonging to the appropriate networks' (Rosener, 1995: 8).

A reluctance to provide women with line management opportunities, considered an essential prerequisite for promotion, provides a more contemporary example of attitudinal barriers to female advancement. A recent US survey of Fortune 1000 CEOs and women executives found 79 percent of women believed a 'lack of general management or line experience' among senior women was a primary reason for their continued under-representation at leadership level (Wellington, et. al., 2003: 18). The survey identified widely held perceptions among men that women were inappropriate for high-end profit and loss roles.This was identified as a major contributing factor to their continued exclusion from important promotional opportunities.

Women in senior management are increasingly challenging person-centred arguments and associated strategies. They argue that their daily working life presents significant cultural and structural barriers to advancement. Participation at middle management is not translating into senior leadership opportunities. As more women enter the professional workforce the paucity of senior leadership is becoming harder to ignore.

While women, at 44.8 percent, are present in almost equal numbers to men in the workforce as a whole, at senior levels women become increasingly more isolated until, at board director level, there are 10 men to every woman.At CEO level the picture is even more pronounced with 33 male CEOs to every female CEO within the ASX 200. (EOWA 2006a: 17)

4.1.4 The perception gap

While empirical data continues to challenge the merits of person-centred strategies to facilitate diversity, organisations are proving slow to respond. Research reveals senior management still favour person-centred strategies, appearing less inclined to associate gender inequity with organisational culture or work practices. Attitudinal surveys consistently report a tendency for men in business to 'seem less convinced of [the] significance' of organisational barriers to women. Rather they perceive 'women's ineffective leadership style and their lack of skills to reach senior levels' as the source of many female managers' problems (Wellington, et. al. 2003: 19). As American researcher Dawn Carlson argues:

4.1.5 Environment-centred approach

As evidence emerges that person-centred responses to the diversity challenge are limited, strategies that adopt an environment-centred approach gain ground. An environment- centred strategy accepts that the source of gender inequity lies within organisational cultures and work practices rather than with the inherent aspects of women's performance and behaviour (Tharenou, 1995). This approach considers the impact of organisational practices and attitudes on the participation of women. It seeks strategies that fundamentally realign organisational values to accommodate the growing presence of women.

US researchers Debra Meyerson and Joyce Fletcher point to systemic gender inequity, evidenced by poor retention rates among female staff, low female representation at the executive level and the failure of equal opportunities initiatives to reverse these trends in a number of leading business organisations. They encourage organisations to 'hold up a mirror' to themselves and investigate their management systems for embedded practices and attitudes that discriminate against women and thwart strategies to improve diversity.

Once an organisation determines that it has a problem - female employees won't join the company or women are leaving in alarming numbers - it is time to start searching for causes. Such diagnosis involves senior managers probing an organisation's practices and beliefs to uncover its deeply embedded sources of inequity. (Meyerson & Fletcher, 2000: 132)

This approach involves a deeper level of intervention than many organisations are initially comfortable with, but it does not advocate radical or aggressive regulation of the workforce. Rather, management is encouraged to take small steps and achieve 'small wins' in redressing behaviours and attitudes that inhibit the participation of women at senior level.

Small wins are not silver bullets; anyone familiar with real organisational change knows there is no such thing... Small wins combine changes in behaviour with changes in understanding.When a small win works - when it makes even a minor difference in systemic practices - it helps to verify a larger theory. It says that something bigger is going on. (Meyerson & Fletcher, 2000: 135)

4.1.6 Finding the tipping point

The notion that human behaviour is influenced by the behaviour of others can be traced back to nineteenth century social thinking (Veblen, 1899). This concept has re-emerged in contemporary business literature in the form of 'tipping point' theory, (Livingston, 2003; Graetz, 2002; Gladwell, 2000). Proponents of the theory argue that only when internal support for change reaches a point of critical mass will there be a sustainable shift in organisational culture. Pipeline effect relies on the natural evolution of critical mass. Critics of pipeline theory argue that systemic barriers within organisations mitigate against a critical mass of women at senior levels.

A number of studies have demonstrated a tipping point effect in the form of female friendly cultural change that occurs once women represent significant minorities at senior levels of management (Chesterman, et. al., 2005; Dahlerup, 1988; Kanter, 1977). Researchers have tracked the impact of a critical mass of senior women on organisational culture. Findings consistently indicate that constructs of good leadership and suitability for promotion are influenced in favour of female candidates when they represent a significant minority of senior appointments.

An Australian study compared attitudes towards women in law firms that had a minority of female partners (5 percent) with the attitudes in more gender-integrated firms with a minimum of 15 percent female partners.The results revealed a marked tendency among women in the male-dominated environment to comply with traditional, masculine constructs of leadership and to under-perform in comparison with their male colleagues (Palermo, 2004). A recent survey of Australian organisations revealed that as the proportion of women in management increased, so too did the uptake of female friendly work practices such as flexible work hours and work from home programs (EOWA, 2003). US researchers recently reported that at board level, a minimum of three women was required before their presence is fully accepted by their male colleagues (Konrad & Kramer, 2006).

These studies demonstrate that once a critical mass of women has been achieved at senior levels, other strategies to facilitate women become more effective. Findings suggest that the realisation of critical mass is an essential prerequisite for the facilitation of women into senior positions. However, research also suggests that numbers alone will not guarantee gender equity unless work/life balance issues are adressed (Chesterman, et. al., 2005).

There is a different effect when you have a lot of women in the workforce, different things are valued. (Female senior manager)

4.2 The leadership challenge

The workplace will remain largely unchanged until the increased presence of women ushers in more significant cultural change.This requires a will at leadership level to take on the diversity challenge. It requires leadership to confront a traditionally narrow interpretation of diversity. It also requires initiatives to test and bring to the fore hidden and often irrational and unconscious assumptions regarding women's ability to operate in senior business environments (Sinclair, 2004a, 2004b; Meyerson & Fletcher, 2000).

The US non-profit research and advisory organisation, Catalyst, has made an explicit commitment to advance the position of women in business (www.catalystwomen. org). Catalyst regularly awards companies who report notable achievements in the advancement of women. Commenting on the attributes of its 2003 winners, Catalyst President Shiela Wellington stated:

The enlightened CEO builds a strategic vision and business case for gender diversity, sets concrete goals to meet those commitments, holds management accountable for achieving diversity goals, reports on progress, participates visibly in diversity events, and takes every opportunity to communicate these commitments down through the ranks. He - and it is still usually he - uses the bully pulpit to its full advantage. The key to women's advancement rests squarely with him. (Wellington, et. al., 2003: 19)

A robust diversity agenda depends on managing the long-term as well as the short-term. This requires transcending knee jerk pressure for reactive cost-cutting that may undermine the diversity agenda.

You think you have made substantial ground, you think you have embedded long-term substantial cultural change... But as soon as there is a profit downgrade then anything goes to get there. (Female senior manager)

4.3 Implementation practices

4.3.1 Organisational response in Australia

Organisations are introducing initiatives that require changes to work practices.The majority of organisations that have adopted diversity strategies in Australia have chosen to enact them in relatively passive ways (Charlesworth, et. al., 2002). Establishing alternative work patterns like flexi-time or career pathways for women are common examples. These strategies are still driven by the desire to help women conform to a better cultural fit, with the aid of some organisational concessions.

They achieve minor changes to conventional workplace practices but continue to present women as special cases needing accommodation (Sinclair, 2000).

The study confirms research findings that a reluctance to adopt an aggressive interventionist response to organisational settings reflects, in part, the continued influence of person-centred arguments.

I've chosen not to have a formal affirmative action type policy...because I've seen the very negative impact of those sorts of policies. [They] can be misused and misunderstood. So for us it is really the right person for the right role. (Female senior manager)

Resistance to active interventions in the organisational environment reflects not only espoused values of individualism and meritocracy but the suspicion of excessive control and regulation inherent in Australia's 'fair go' culture. A US style of affirmative action is commonly portrayed among Australian business leaders as unacceptably aggressive in the mainstream environment (Sawer, 2003).

Interventions involving gender specific career pathways and work practices are perceived to encourage unfair advantage for women and are unpopular.

The moment you create a separate pathway that...is pretty much gender based, that is a pretty second rate solution. That's not to say there shouldn't be a different pathway that can be chosen. My point is it shouldn't be a gender specific one. (Male senior manager)

I actually sponsored one of my reports on a program...'Women in Management'. This person went to the presentation and it was a great course, absolutely magic course...What I objected to was that we differentiate and we shouldn't differentiate. It should be called 'People in Management'... I just think, well why are women doing this course as opposed to a general course with women in the first intake? (Male manager)

A number of business leaders and senior managers argue that where meritocracy and transparency are emphasised at policy and strategy level, a level playing field environment will support women's career paths to senior positions. They believe a critical mass of women will occur organically without interventions such as quotas and that inculcating values that support diversity is a better way to go.

It starts with the right people in the right role, very much around culture and making sure that you bring on people that have values that are aligned to the values of the organisation. Because you are selecting not just for the skill to do the job but you are selecting for a fit for the culture. (Female senior manager)

Critics of this approach argue that environment, rather than values, drives and influences the effectiveness of diversity strategies. Recruitment does not always ensure that individual values truly align with those of the organisation.

There's a particular part of the business where we've had quite a lot of turnover and probably 60 to 70 percent of senior management have come in from organisations that do not value any of these issues and in that part of the organisation it is being systematically unpicked. (Female senior manager)

4.3.2 Passive enactment weakens strategies

Diversity strategies can be vulnerable to shifts in the landscape. Changes in leadership, radical shifts in the market, or profit dives are common examples of external forces that can undermine the effectiveness of passively enacted strategies.

A senior manager at the forefront of her organisation's cultural change initiatives bemoaned the lack of resilience shown by these programs when the company's financials 'went south' and bottom line concerns took centre stage.

[After] four years of really serious investment in fundamentally changing the cultural fabric of the organisation... something comes in and threatens your financial future. It is a license to undo absolutely everything.Things the [executive] was up supporting three weeks ago, we are now unravelling them faster than you can say the word 'because they are costs'... We thought we had embedded long-term substantial cultural change but a new owner unravelled five years of work in five minutes simply by taking all the tools and processes out. (Female senior manager)

Another senior manager described her concerns that diversity would be sidelined as her organisation struggled with a financial crisis.

I wondered whether the organisation would be able to continue to focus on it given everything was focused on cost cutting. Maybe I thought the organisation wanted to go back to a leaner, [more] compliant organisation. (Female manager)

Researchers increasingly argue that diversity needs to be integrated into business planning if positive benefits are to be realised (Hewlett & Luce, 2005;Wellington, et. al. 2003; Burton, 1997). This embedding process needs to transcend passive enactment and requires active intervention and staunch direction and support from leadership.

If a company is not fiercely committed to advancing and retaining its talented female employees, it is easy for that company to justify phasing out programs or reducing their effectiveness. (Burton, 1997: 27)

4.3.3 Moving towards organisational change

Some organisations are undertaking internal investigations of their culture. The law firm Freehills and the Westpac bank have conducted internal research on various aspects of their diversity implementation.Westpac has contributed to research on the impact of flexibility initiatives on business outcomes (EOWA, 2006c), incorporating the findings into their improvement strategies. Freehills has established cross-industry forums to discuss the delivery of flexible work options. The company argues that 'it may be easier to change the industry collectively rather than attempt to promote change in isolation' (Freehills EOWA EOCFW Application, 2006: 16).

A minority of leaders have also broken with tradition and are pursuing change in an atypically proactive manner. Rather than sitting and waiting for critical mass to evolve, they consciously pursue a cultural tipping point. They explicitly promote positive discrimination practices, such as quotas, as the only response to the under-representation of women in leadership. ANZ Bank CEO, John McFarlane recently argued:

For my own part, I've come to the conclusion that the most important thing to do is simply to appoint more women.We have gone against conventional wisdom and set specific targets.We want to see women in 25 percent of senior executive roles by 2008. (McFarlane, 2006: 6)

These leaders follow the small wins model (Meyerson & Fletcher, 2000), pursuing slow, incremental but deliberate and co-ordinated change.

Under the leadership of CEO Giam Swiegers, Deloitte Touche Tohmatsu has established equal opportunity as a key strategy in business planning. It seeks to ensure the gender issue remains high on the management agenda. Implementation of the organisation's equal opportunity programs is a critical KPI, a 'ticket to play' at senior level. In 2006, 16 of Deloitte's senior partners were held accountable to help drive an inclusive culture as part of their business plan.

We are in an environment that is not an equal environment... specifically we look at women [and] say, 'When I come to you with these hard numbers, you'd better be above this line'... The most powerful change agent for people is to see the talented women. (EOWA 2006b: 8)

Positive discrimination initiatives such as those undertaken by Deloitte and ANZ are relatively unpopular among a majority of Australian organisations. Swiegers recognises that this approach has been 'very controversial as it focuses on the top talent and that is often considered not to be Australian. The study finds that person-centred responses to the diversity challenge tend to be more prevalent than the more aggressive interventions suggested by an environment-centred approach.

4.4 Conclusion

Organisational culture impacts on the experiences of women in management. It can impede female advancement and exercise of authority.

A person-centred (deficit equity model) continues to drive organisational interventions to support women in professional work environments. It is based on the assumption that women's behaviour and competencies lie at the heart of their failure to thrive in corporate environments. Diversity initiatives are aimed at assisting women adapt to the culture.

Critics of the person-centred approach argue that it does not address the source of problems faced by women in management. Strategies that place the onus on women to effect change and encourage a passive response from organisations only 'give women stilts to play on an uneven playing field' (Meyerson & Fletcher, 2000: 130).

An employer-centred approach encourages a fundamental realignment of organisational values to accommodate the growing presence of women. It seeks to change organisational culture by adopting interventions that pursue an 'inclusive organisational culture that is championed by the CEO, driven by senior executives, and holds line managers accountable' (EOWA, 2007).

Leadership at the most senior levels is required to drive the change agenda if women's promotional opportunities are to increase.

 

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