(Mt) – SMSU Management Discussion

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Women tend to have less power in organizations than men. To demonstrate gender differences in power, just look at the gender composition of executive boards for top performing companies. As of 2015, only 18.8 percent of Fortune 1000 company board seats were occupied by women, and only 20.6 percent of board seats were occupied by women at Fortune 500 companies. This disparity does not only highlight discrimination and the glass ceiling that many women face. It may also be bad for business.
In Chapter 9, we learned that diverse groups may be more creative and innovative, and that decision-making is more accurate when a group has a variety of perspectives. This principle appears to be true when it comes to diverse executive boards. A recent review of 140 studies found that having women on an executive board boosted returns, especially in countries with stronger shareholder protections. The same review found that having female board members helped companies’ marketplace performance in countries with higher gender equality. In addition, boards with greater gender diversity are better at monitoring company performance and engage in more strategic involvement. Other research suggests that diverse executive boards are not always beneficial. In most circumstances, having women with greater power on a board led to more strategic change in the organization. However, this is only true when the company is not threatened by low performance.
Many countries are trying to improve their economies by creating “pink quotas” that promote more gender diverse boards. As of 2008, Norway requires women to hold 36% of board seats. Similarly, France passed legislation in 2011 to promote gender diverse boards. As a result of the law, 48 percent of new directorships were held by women in 2013.
Sources: M. Farber, “Justin Trudeau Perfectly Sums Up Why We Need More Women in Power,” Fortune, April 7, 2017, http://fortune.com/2017/04/07/justin-trudeau-women-in-the-world-summit-2017/; S. H. Jeong and D. Harrison, “Glass Breaking, Strategy Making, and Value Creating: Meta-Analytic Outcomes of Females as CEOs and TMT Members,” Academy of Management Journal, in press; C. Post and C. J. Byron, “Women on Boards and Firm Financial Performance: A Meta-Analysis,” Academy of Management Journal 58, no. 5 (2015): 1546–1571; T. M. del Carmen, T. L. Miller, and T. M. Trzebiatowski, “The Double-Edged Nature of Board Gender Diversity: Diversity, Firm Performance, and the Power of Women Directors as Predictors of Strategic Change,” Organization Science 25, no. 2 (2014): 609–632; and M. Liautaud, “Breaking Through: Stories and Best Practices From Companies That Help Women Succeed,” Huffington Post, April 29, 2016, http://www.huffingtonpost.com/martine-liautaud/stories-and-best-practices-from-companies-that-help-women-succeed_b_9722518.html. Stephen P. Robbins (San Diego State University) and Timothy A. Judge (The Ohio State University). Organizational Behavior. (18th Edition). 2019. Pearson Education Inc. ISBN-13: 978-0-13-47293-29.
Discussion Topic:
Do you think using a quota system to promote gender diversity is a good idea? Why or why not?

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