As a society, many of us expect organizations to be socially responsible, green, philanthropic, etc. When dissecting the make-up of an organization and its ability to achieve these things, it’s also important to keep in mind that the first goal of an organization (excluding non-profits) is to make money. Successful organizations find a good balance between bottom-line profit and re-investment in the organization and communities through social responsibility and stewardship. Many even have the mission of achieving a triple-bottom line. Successful organizations also carefully maintain a continual focus on becoming stronger organizations.
One aspect of organizational make-up that can greatly affect the strength of an organization is the on-going inequality of women versus men in the workplace. The following statistics support the fact that there is indeed still inequality between men and women:
o Board Member Make-up:
§ In the US, for Fortune 500 companies, 15% of board members are women
§ In the UK, 12.5% of board members are women
§ In Asia, the number of women on boards is in single digits
o Pay Gaps:
§ 17% difference in the UK
§ 15% in the European Union
§ 23% in the US
Women who have an appropriate education level, experience and leadership skills are still encountering a “glass ceiling” that is difficult to penetrate. Women are aware of this glass ceiling; 75% of women believe there are barriers to them reaching senior management whereas only 38% of men feel the same way. The glass ceiling can create inequity for women who can’t penetrate the barriers for higher salaries and more prestigious positions. Each of us strives for balance; as a result, women may be de-motivated in organizations with glass ceilings.
So inequality exists, but what historically has been done about it? Some countries have tried to “force” organizations to decrease the inequality of women. For example, Norway implemented quota that requires that a board must consist of 40% women for publicly traded companies. If companies do not comply with this law, they are threatened with termination of the organization. Organizations who do not want to comply, in the past, however, have taken their companies private or moved their headquarters to the United Kingdom.
France has also implemented a policy to increase the percentage of women on company boards. The penalty for not complying compared to Norway’s law, however is much less severe. Germany also enforced a “Self Commitment” requirement for organizations about 10 years ago. The requirement consisted of organizations committing to hiring and maintaining higher percentages of women on their boards. Ten years after this was enacted, the German DAX30 is only comprised of 2.2% women board members.
Obviously some of these policies aren’t working, but the research firms Catalyst and McKinsey and Company have found that having women on boards has shown to bring higher profit, better share price growth, higher quality earnings, better decisions and better innovation within organizations. In addition, diversity in general results in higher creativity in decision-making, better understanding and service of customers, more satisfied workforce, higher stock process and lower litigation expenses.
Aforementioned, organizations exist to make money; so as organizations see other organizations with leadership teams comprised of a roughly equal number of men and women do well, could this drive them to also change their leadership teams to include more women? Also, if this starts happening, could the policies that haven’t worked in the past become more powerful similar to policies regarding race have in the past? I think a powerful question regarding this issue is - will these policies help businesses make money? The answer to this question should determine the type of policies (if any) that should be implemented to address the issue.
Who gets the carrot and who gets the stick? Evidence of gender disparities in executive remuneration. Kulich, Clara; Trojanowski, Grzegorz; Ryan, Michelle K.; Alexander Haslam, S.; Renneboog, Luc D. R.. Strategic Management Journal, Mar2011, Vol. 32 Issue 3, p301-321, 21p; Retrived from Business Source Premier (Milner Library); Accession Number 57096249
-Jessica Brown
Same as a female, I especially concern about this issue. I like your analysis of context and causes driving unequal situation in workplace.
ReplyDeleteAnd I just saw this video talking about why there're very few women leaders in workplace. Facebook COO, Sheryl Sandberg gives three messages for women who really want to stay in their works taking advices to break inequality; these are sit at the table, make your partner as a real partner, and don't leave before you leave.
Despite it is difficult to find a balance between work and family for women, I think there's still a great opportunity for us to challenge it.
Pls check that interesting video for reference. Thx~
http://www.ted.com/talks/sheryl_sandberg_why_we_have_too_few_women_leaders.html
Yin-Chin Huang