The Challenges of Women Business Leaders in Canadian Fastest Growing Firms: A Network Theory Approach

Research Objectives and Questions: Over the past three decades, in Canada like many other countries with advanced institutions, the number of women-owned companies has increased. Yet, the proportion of High Growth firms (HGFs)... [ view full abstract ]

• Research Objectives and Questions:

Over the past three decades, in Canada like many other countries with advanced institutions, the number of women-owned companies has increased. Yet, the proportion of High Growth firms (HGFs) owned, or lead, by women remains under-represented. Moreover, the performance of women-owned companies has remained lower than those of their male counterparts. The literature suggests many plausible explanations for this discrepancy. Majorly the explanations take atomistic approach and revolve around socio-economic status, entrepreneurial characteristics, risk taking behavior, or in brief Entrepreneurial Differences. Where studies posit, men maintain more instrumental qualities; while women seem to rely more on communal and socio-emotional traits, which put women-lead firms at a significant disadvantage. But if we change our lenses, entrepreneurs are embedded in social settings and the manners they select to manage their professional and utilize social network have a great impact on their firms performance. Within the world of business, networking has proved to play a major role in determining a person’s professional success. In network theory literature, numerous studies have highlighted differences between the influences of men and women network (Forret & Dougherty, 2004; Van Emmerik, 2006).

Theoretically, one may hypothesize that consistent high growth is based on professional efficiencies and success is based on differences attributable to gender characteristics and preferences, which include networking practices. Hence, the main purpose of this ongoing research is to identify factors that impact high growth by using network theory perspective. We aim to investigate:

•           What are the patterns of network configuration and behavior of women executives of leading HGFs?

•           How efficiently do women leading HGFs utilize their social networks to achieve and maintain high growth over time?

•           What is the level of entrepreneurial self-efficacy among women leaders of HGFs?

•           What are differential barriers to the growth of companies headed by women executives in general and those related to network characteristics in particular?

•           How do women executives deploy their network to meet their goals and overcome barriers to growth?

 Proposition Development:

 With respect to women, Ely and Padavic (2007), Manolova et al. (2007) report that clearly defined groups, such as women in a male-dominated firms and industries, are at a distinct disadvantage in terms of equal opportunities to attain employment, obtain buyer-supplier contracts, or synergistic relations to enhance the growth of their business.

Based on the literature review, five propositions, regarding differential growth in HGFs and network-related influences, are formulated, as follows:

Proposition 1: Women leaders of HGFs effectively and dynamically benefit from mentorship in their entrepreneurial life.

Proposition 2: The network configuration of in HGFs associated with women is broad and diverse (in contrast to typical high closure associated with women networking).

Proposition 3: The HGFs associated with women effectively benefit from their social and family capital.

Proposition 4: Women leaders of HGFs have high entrepreneurial self-efficacy that counterbalances the possible network inefficiencies

Proposition 5: Women leaders of HGFs can effectively manage their work-life balance.

Methodology

The primary methodology of this paper, which is a part in an ongoing program of research, is multiple in-depth case studies. Specifically, the initial target group for this research was women CEOs of high growth firms.

The Population and Sample. The list of the highest growing firms in Canada is published annually. A Canadian Business publication identifies the population of the fastest growing firms over the previous five years on annual basis. A subset of this list is called Women 100 List (or W100 for short). A larger list of 500 firms achieving highest growth in the past five years, regardless of their CEO’s gender or ownership, is also published. It is popularly called as the “Profit 500” list. Both annual lists are published in July of each year.  All statistics and performance figures are verified and closely audited by using generally accepted accounting standards (GAAPS). We have used the annual 2017 of these two lists and the corresponding data-bases for extracting basic information on the firms, their entrepreneur and CEO(s) for the past five fiscal years (2012 to 2016, inclusive).

Sampling Procedures. Using a selection criteria, we first identified all HGFs with women entrepreneurs, CEOs and owners. For this research, we then identified representatives, but distinct, firms in two Canadian Provinces of Quebec (with many HGFs in Montreal Metropolis) and Ontario (with many HGFs in Ottawa and Toronto metropolitan Areas), which were well-qualified candidates for studying the dynamics of their business and conducting in-depth interview as a basis for writing case studies within the methodology framework. 

Procedurally, we studied the past five years of archival information for the qualified candidate firms, and much longer when available or necessary. This archival preparation was undertaken to uncover the various milestones accomplished by each firm (and its entrepreneur, owner or CEO) in order to further learn and also assess each candidate's suitability for interviewing and developing an in-depth case study about their respective firms as well.

Based on the extant literature and our research questions, we developed a comprehensive interview guide, with open ended questions, and used as the main instruments for collecting information from the principal women entrepreneur and other informants from others in each of the focal firms. This interview guide has seven parts, each with a few specific questions. The interviews were conducted in the firm’s premises by at least two members of the research team interviewing the main entrepreneur. Questions about chronological events and milestones of the business were followed by specific questions regarding the composition and sources of resources, including network-related-issues, as well as other influential issues enhancing (or detracting) the interviewees from giving birth to the company, managing it effectively and supporting its growth. Similarly, specific questions covering characteristics of networks, social capital and network configuration, behavior and ties were also asked.  The detailed version of interview guide (protocol) will be appended and discussed in the actual paper.

 Prospective Findings:

The main purpose of this study was to explore as to why HGFs associated with women achieved lower performances than those associated with their men counterparts. Based on prior research, this investigate adopted a two track approach: Examining the general barriers to women as entrepreneurs, owner-managers and CEOs; and the significant, but relatively under-explored, if not unexplored, network effects affects in HGFs associated with women.

Our findings confirm the extant prior research with respect to general barriers inhibiting women entrepreneurs and executive accomplishing as much as their men counterparts. However, our preliminary analysis points to significant differences in the network affects as compared to those of men. These findings will be discussed in depth and details in the paper.

• Contributions, Implications and Limitations:

The main purpose of this study was to explore as to why HGFs associated with women achieved lower performances than those associated with their men counterparts. Based on prior research, this investigate adopted a two track approach: Examining the general barriers to women as entrepreneurs, owner-managers and CEOs; and the significant, but relatively under-explored, if not unexplored, network effects affects in HGFs associated with women.

Our findings confirm the extant prior research with respect to general barriers inhibiting women entrepreneurs and executive accomplishing as much as their men counterparts. However, our preliminary analysis points to significant differences in the network affects as compared to those of men. These findings will be discussed in depth and details in the paper.

This paper further contributes to the extant literature by adopting a highly interactive conception of the entrepreneur-the firm and its task-environment. This conception enabled us to both isolate and examine direct forces (or influential factors) influencing the entrepreneur, the firm and the context directly and also explore the impact of those exerting impact indirectly, mainly through interaction with others – e.g., networks.

Our preliminary analysis points to a few implications, including, but not limited to, the need for women as group to exert more direct influence on, and interact more forcefully, with those in a position to impact their conduct, including government, stake-holders, and especially buyers and suppliers.

The limitations of this study are mainly due the limited scope, which is focused on HGFs associated with women within a qualitatively oriented research framework. However, most of this limitations will be removed in the follow-up study, where a much larger sample of HGFs associated with men are compared with a matching sample of HGFs associated with men entrepreneurs, owner-managers and executives.

• Selected References:

Ely, R. and Padavic, I., 2007. A feminist analysis of organizational research on sex differences. Academy of management review, 32(4), pp.1121-1143.

Forret, M.L. and Dougherty, T.W., 2004. Networking behaviors and career outcomes: differences for men and women?. Journal of Organizational Behavior, 25(3), pp.419-437.

Manolova, T.S., Carter, N.M., Manev, I.M. and Gyoshev, B.S., 2007. The differential effect of men and women entrepreneurs' human capital and networking on growth expectancies in Bulgaria. Entrepreneurship Theory and Practice, 31(3), pp.407-426.

Van Emmerik, I.H., 2006. Gender differences in the creation of different types of social capital: A multilevel study. Social networks, 28(1), pp.24-37.