Family businesses make up over 70 percent of the global GDP, and surveys reveal a noteworthy trend toward female leadership in these enterprises. Approximately 55 percent of them have at least one woman on their board, and an even more significant 70 percent are contemplating a woman for their next CEO.
While many experts attribute this gender parity in family businesses to a focus on long-term strategies or family values, a study from the Universidad de Extremadura in Spain proposes a different perspective. According to the research, the success of women leaders in family businesses is fundamentally tied to how employees perceive and interpret their leadership style.
A different focus
“Family firms tend to focus on being inclusive and supportive of internal stakeholders, extending the sense of ‘family’ and community,” the researchers say. “This culture creates a moderating effect for women leaders—their leadership is perceived as relationship-building and values dissemination.”
This leadership style aligns with Western gender norms, portraying women as more empathetic and cooperative, and men as more competitive and aggressive. However, the authors of the study highlight that the success of women leaders in family businesses isn’t solely because they conform to these gender norms. Instead, they flourish because the strategies of their businesses focus on areas where women are traditionally perceived as competent.
“CEOs influence employees’ behaviors via modeling, and leaders who are more credible and legitimate are more effective role models,” the authors continue. “Perceived incongruity between female gender roles and leadership roles can lead to prejudice and bias against female leaders.”
Encouraged behaviors
The authors delved into how CEOs encourage entrepreneurship, a behavior often associated with masculinity, within their business culture. They analyzed survey data from 322 Spanish small businesses, with 198 identified as family firms and 133 as nonfamily firms.
In these businesses, women made up 20 percent of the CEOs. The CEOs ranked their business’s performance on five entrepreneurial traits: risk-taking, innovation, proactiveness, competitiveness, and autonomy. The survey also assessed key aspects of social learning at each business, including commitment to learning, shared vision, and open-mindedness.
The analysis revealed that CEO gender alone did not directly impact entrepreneurial orientation. Instead, all aspects of social learning were positively linked to entrepreneurship. However, notable differences emerged based on the CEO’s gender and whether the organization was a family business.
Family leaders
“It is not male or female leadership per se that predicts a firm’s entrepreneurial orientation, but rather, whether the male or female CEO is leading a family or nonfamily business,” the authors explain. “Women leaders at family firms better leverage their business’s commitment to learning and open-mindedness to support entrepreneurship than women leaders at nonfamily firms.”
“Our study, therefore, suggests that while women have an advantage leading family businesses, gender biases hamper female leaders’ ability to transform learning into greater entrepreneurial orientation in nonfamily business,” they continue.
This study adds context to decades of conflicting research that has shown various business benefits linked to female leadership but also slower growth and lower profits. The crucial factor appears to be the organizational culture—women seem to have a more significant impact in businesses that prioritize at least some more traditionally feminine values. The authors also suggest that coaching women leaders to incorporate empathy and relationship-building into their leadership styles can enhance their effectiveness in business.
