Abstract
This paper lies at the intersection of three fields: leadership, gender studies, and social enterprises. It addresses two questions: Are female employees of social enterprises more effective under female leadership than under male leadership? And if leaders’ gender matters, does the impact stem from formal authority or from inspirational authority?
On the one hand, existing literature examines the impact of inspirational leaders who motivate their followers by projecting an idealized vision of the organizations they serve (Antonakis et al., 2003). In particular, Joshi et al. (2009) show that inspirational leadership fosters trust in team members, especially when their activity is geographically dispersed. On the other hand, the specificities of female leadership style are still controversial. According to the role congruity theory (Eagly and Karau, 2002) formal authority is associated with stereotypically male characteristics, which are prejudicial to women leaders.
This paper exploits a unique database of more than 100,000 micro-loans granted by a Senegalese network of financial cooperatives. It addresses the impact of leaders’ gender and style by measuring how effectively the supervised credit officers obtain timely repayments from borrowers. In Senegal, women are still subject to customary patriarchal norms (Guérin, 2008). However, in 1983 the government introduced a specific legal status for cooperatives intended to empower female members. The democratic structure of cooperatives makes it possible to identify the effects of both formal and inspirational leadership on the same set of credit officers. This is because cooperatives involve dual leadership: A professional top manager exerts formal leadership, while the elected board provides inspirational leadership only.
We scrutinize how loan-specific loss-given-default (LGD) is influenced by the genders of the three groups of actors: the credit officers, the top managers, and the board members; while controlling for the borrower’s gender and a set of other characteristics. First, we observe that female credit officers obtain significantly lower LGD than their male colleagues, and this superior effectiveness is independent from the borrower’s gender (yet, women reimburse better than men, all else equal). Second, LGD is significantly higher when the top manager is female, and female management moderates the performance of female credit officers. Third, the gendered composition of the board has no direct impact on LGD, but female-dominated boards fully mediate the relationship between credit officer’s gender and effectiveness, suggesting that female officers are more prone to follow female inspirational leaders than male ones, but they tend to comply better with male formal leadership, which is in line with role congruity theory.
Overall, our findings confirm that analyzing the implications of leadership styles requires a gendered approach (Vinckenburg et al., 2011), and that the relationship between leadership style and gender involves both the gender of the leader and the gender of the subordinate (Cuadrado et al. 2012). We theorize that, in social enterprises aiming at empowering women, the special connection between female credit officers and female board members stems from what Greenbard and Mollick (2016) label as “activist choice homophily,” namely a common social identity driving a common perception of structural barriers.
References
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Cuadrado, I., M. Navas, E. Ferrer, and J.F. Morales (2012). “Gender Differences in Leadership Styles as a Function of Subordinates’ Sex and Type of Organization,” Journal of Applied Social Psychology, 42: 3083-3113.
Eagly, A.H. and S.J. Karau (2002). “Role Congruity Theory of Prejudice toward Female Leaders,” Psychological Review, 109: 573-598.
Greenbard, J. and E. Mollick (2016). “Activist Choice Homophily and the Crowdfunding of Female Founders,” Administrative Science Quarterly, forthcoming.
Guérin, I. (2008). “Women and Money: Lessons from Senegal,” Development and Change, 37(3): 549-570.
Joshi, A., M.B. Lazarova, and H. Liao (2009). “Getting Everyone on Board: The Role of Inspirational Leadership in Geographically Dispersed Teams,” Organization Science, 20(1): 240-252.
Vinkenburg, C.J., M.L. van Engen, A.H. Eagly, and M.C. Johannesen-Schmidt (2011). “An exploration of stereotypical beliefs about leadership styles: Is transformational leadership a route to women's promotion?” Leadership Quarterly, 22: 10-21.
10. Gender and diversity issues
