For women aiming for the top job in corporate America, talent and experience may not be enough. How a company is organised could play a crucial role in determining who reaches the executive suite, according to new research from the University of Massachusetts Amherst.

Despite progress in recent decades, women still occupy fewer than 10% of CEO positions at S&P 500 companies. As recently as 2015, more men named John were running major American companies than women, notes Ulya Tsolmon, associate professor of strategy at UMass Amherst’s Isenberg School of Management. The gender gap, she says, remains enormous.

The study, published in the Strategic Management Journal, suggests that company structure may help explain why women struggle to reach the top. Researchers found that female managers working in companies divided into separate business units were significantly more likely to become CEOs than those employed by businesses operating as a single entity.

The difference may come down to something surprisingly simple: accounting. When managers oversee divisions with their own revenues, expenses and profit-and-loss statements, their performance becomes easier to measure. Clear financial results make it harder for achievements to be overlooked or credited to someone else, potentially reducing the influence of subjective judgments and unconscious bias.

“It’s clear who has led the unit,” explains Tsolmon, who conducted the research with Tingyu Du of California Polytechnic State University. Having separate financial records makes it easier to identify who delivered results, giving capable managers a clearer opportunity to demonstrate their leadership abilities.

To investigate, the researchers examined 25 years of personnel records covering 616,754 managers at 49,135 American companies between 1993 and 2017. They found that women working in firms with multiple business units had a 37% higher probability of being promoted internally to CEO than women at stand-alone companies. Men, meanwhile, experienced slightly lower promotion prospects in firms organised into divisions.

However, the findings do not mean that companies can automatically improve gender equality simply by reorganising their operations. The researchers emphasise that the study identifies an association rather than a direct cause-and-effect relationship. It also leaves unanswered questions about whether women receive the same opportunities as men to lead important business divisions in the first place.

Company structure involves trade-offs. Businesses with separate divisions typically delegate greater responsibility and evaluate managers against measurable outcomes. More centralised organisations, however, may depend more heavily on internal relationships, established hierarchies and personal influence. Such environments could disadvantage women who have fewer opportunities to enter influential professional networks.

For Tsolmon, the findings highlight an often-overlooked dimension of workplace inequality. Organisational structure does more than determine how efficiently a business operates; it also shapes how employees’ achievements are recognised and rewarded. Further research is needed to understand where gender disparities emerge along the career ladder and how performance visibility influences advancement. Until those mechanisms are better understood, she cautions, finding effective solutions will remain difficult.

More information: Tingyu Du et al, Firm divisionalization and the gender gap in CEO promotion, Strategic Management Journal. DOI: 10.1002/smj.70128

Journal information: Strategic Management Journal Provided by University of Massachusetts Amherst