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Digital multi-sided platforms revolutionize conventional value chains in business-to-business service sales

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The proliferation of digital platforms is increasingly evident in business-to-business (B2B) interactions. These platforms serve as dynamic hubs, facilitating competitiveness enhancement and transactions in the buying and selling processes. Moreover, they present diverse avenues for nurturing enduring customer relationships within B2B service sales frameworks. Recent research underscores the transformative impact of digital platforms, ushering in a departure from conventional linear value chains towards the establishment of platform-centric, multi-faceted digital value networks.

Minna Heikinheimo, a Doctoral Researcher at the University of Eastern Finland, underscores the pivotal role of platform owners in orchestrating these networks. She highlights the imperative for platform owners to attract a critical mass of strategically aligned service providers and customers to initiate value creation across multiple stakeholders. The efficacy of this orchestration lies in the platform owner’s ability to forge cohesive sales strategies in collaboration with crucial network participants. This strategic realignment from traditional value chains to platform-driven value orchestration underscores the centrality of platform owners in shaping sales dynamics within these networks.

Research conducted jointly by the University of Eastern Finland and Tampere University of Applied Sciences delves into the nuances of this transition, shedding light on how platform owners navigate the evolution from conventional value chains to value networks. Central to this evolution is the strategic alignment of sales processes with platform resources, enabling owners to manage expansive networks with minimal staffing resources efficiently. Furthermore, adopting diverse interaction methods facilitates meaningful engagement with network actors, fostering robust relationships across the value network.

Historically, scholarly inquiry into platform dynamics has predominantly focused on consumer-centric platforms, leaving a significant void in understanding B2B platform dynamics. This knowledge gap underscores the significance of the recent study, which addresses this disparity and provides a comprehensive model elucidating the transformation of the value chain into a value network within B2B service sales contexts. Moreover, the study offers pragmatic insights to inform the strategic planning of platform-based sales initiatives, bridging the divide between academic research and practical application.

Published in Industrial Marketing Management, a prestigious scholarly publication in marketing and management, this study adopts a qualitative longitudinal approach spanning four years. By meticulously examining the experiences of platform owners and their clientele across four service companies, the research synthesizes insights gleaned from 45 in-depth interviews. This rigorous methodology provides a solid foundation for understanding the intricate dynamics underpinning the transition from traditional value chains to platform-driven value networks, thereby enhancing the credibility of the research findings.

The emergence of digital platforms ushers in a paradigm shift in B2B service sales, propelling the transition from linear value chains to dynamic value networks. As platform owners take on a central role in orchestrating these networks, their ability to devise cohesive sales strategies and leverage platform resources becomes a crucial factor for success. By effectively bridging the gap between theoretical insights and practical applications, this research not only advances scholarly understanding but also equips practitioners with actionable recommendations to navigate the evolving landscape of platform-based sales, thereby enhancing the value of this article to its readers.

More information: Minna Heikinheimo et al, B2B service sales on a digital multi-sided platform: Transformation from value chains to value networks, Industrial Marketing Management. DOI: 10.1016/j.indmarman.2023.11.006

Journal information: Industrial Marketing Management Provided by University of Eastern Finland

Events such as pandemics or financial crashes have the potential to impede advancements in gender diversity within boardrooms

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The study unveiled a concerning pattern: significant external upheavals like the 2008 Global Financial Crisis (GFC) instigated a notable decline in the representation of women in boardroom positions. This decrease wasn’t confined to particular board roles or industries; instead, it affected companies across the spectrum of financial performance. Moreover, the research indicates that even strong leadership from female CEOs or pre-existing institutional endeavours aimed at fostering gender diversity, such as quotas, proved ineffective in mitigating this decline during periods of crisis.

Sorin Krammer, Professor of Strategy and International Business and the corresponding author of the study from the University of Surrey, articulated: “Our findings underscore the vulnerability of the progress achieved towards gender diversity on boards when businesses encounter significant crises. Companies often pivot towards short-term survival, sidelining diversity initiatives during such times.

While female leadership plays a pivotal role in advancing gender equality, our results indicate that female CEOs, despite the challenges, continue to strive and make significant contributions to safeguard diversity efforts amidst extreme turbulence. Similarly, established initiatives like gender quotas or corporate governance codes lack the resilience to counteract the adverse impacts of major disruptions on gender diversity within top management teams.

The research urgently advocates for companies to formulate enduring diversity strategies resilient to unforeseen major challenges. Researchers propose that policymakers concentrate on fortifying institutional frameworks to foster and enforce gender diversity on boards. Further investigation is warranted to ascertain whether specific conditions or factors could alleviate the negative repercussions of crises on gender diversity.

Professor Krammer remarked, “These findings underscore the necessity for companies to devise long-term diversity strategies capable of withstanding unforeseen challenges. Additionally, policymakers must ensure that existing institutional frameworks are adaptable to withstand such external shocks and continue to drive progress towards gender diversity on boards even in the aftermath of major disruptions.”

More information: Shibashish Mukherjee et al, When the going gets tough: Board gender diversity in the wake of a major crisis, The Leadership Quarterly. DOI: 10.1016/j.leaqua.2024.101784

Journal information: The Leadership Quarterly Provided by University Of Surrey

Coaching Boosts Employee Innovation

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In the modern business landscape, inclusion transcends mere rhetoric; it is a strategic necessity. Giants like IBM, Volkswagen, and Starbucks are pivoting towards participatory approaches in strategy development, recognising diversity’s pivotal role in nurturing innovative ideas. However, the outcomes often need to be revised. A recent study in the Strategic Management Journal delves into this disparity.

Violetta Splitter, David Seidl, and Richard Whittington examine an inclusive strategy process in a major insurance company and unveil inclusion’s transformative power. Forty mid and lower-level managers engaged in a 20-week strategy development initiative to enhance investor confidence and employee backing. The result? A notable three-percentage-point surge in the company’s share price equates to an $18 billion uptick in market capitalisation.

However, the path was not without its challenges. Despite initial support from senior management, the early weeks were marked by frustration. Employees found it difficult to articulate ideas that would resonate with the CEO and top executives. The root of the problem was their lack of familiarity with corporate strategy-level communication. They often repeated familiar themes or raised local issues that were not aligned with strategic objectives.

However, a transformation occurred over weeks. Employees refined their ability to communicate ideas effectively through direct interactions with the CEO or by observing peers. Notably, the most fruitful exchanges involved CEO-led coaching, where employees received guidance on idea formulation, theme integration, and coherence.

This research underscores the significance of inclusive strategies that place employee development and managerial coaching at the forefront. The authors stress, “The findings underscore the crucial role of senior managers in actively coaching and fostering avenues for employee learning.” By cultivating a culture of inclusive discourse, organisations can tap into a wealth of untapped potential for innovative strategic ideas.

More information: Violetta Splitter et al, Getting heard? How employees learn to gain senior management attention in inclusive strategy processes, Strategic Management Journal. DOI: 10.1002/smj.3602

Journal information: Strategic Management Journal Provided by Strategic Management Society

Initiatives focused on disabilities that are driven by employers can lead to benefits for both individuals and companies

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Successful employer-driven disability initiatives exhibit specific characteristics consistent across various companies and programs despite their differences in other aspects. Recent research published in the Journal of Vocational Rehabilitation indicates that companies with leadership teams dedicated to fostering inclusion for individuals with disabilities and guided by intrinsic values deeply ingrained in their organisational ethos witnessed enhanced performance, favourable employee perceptions, and the development of a unified corporate culture. The effectiveness and visibility of disability-inclusive actions and policies played a pivotal role in shaping their outcomes, underscoring the importance of leadership commitment and effective strategies in disability initiatives.

Although disability is prevalent in society, its representation in the US labour market is notably lower. According to the Centers for Disease Control and Prevention and the US Department of Labor, the participation rate of individuals with disabilities in the workforce in 2023 is approximately half that of those without disabilities.

Lead investigator Brian N. Phillips, PhD, CRC, from the Department of Special Education and Rehabilitation Counseling at Utah State University, stated, “Initiatives led by employers aimed at addressing disabilities can indeed yield positive outcomes for both company performance and organisational climate. Our research identified the driving forces and effective strategies that contributed to successful results: enhanced business and financial performance, improved employee morale, and strengthened unity within the company. These exemplary practices should serve as a guiding light for other organisations to actively embrace disability as a valuable component of workplace diversity.”

The research findings suggest that employers stand to gain significantly by recognising individuals with disabilities as a valuable and vastly underutilised workforce segment. Drawing insights from case studies conducted across seven companies of varying sizes and industries, the study aimed to deepen understanding of employer-driven disability initiatives, their underlying motivations, and their impact on company productivity and overall success. The most notable achievements were observed in companies that demonstrated the most significant commitment to implementing their initiatives decisively.

Timothy N. Tansey, PhD, from the University of Wisconsin-Madison, a co-investigator on the study, remarked, “It is remarkable to recognise the extent to which workplace inclusion can serve as a competitive advantage. However, it’s essential to highlight that companies adopting a disability initiative on a more tentative basis or with a degree of scepticism tended to yield less favourable outcomes. Many employers emphasise diversity but overlook the importance of providing adequate support for individuals with disabilities.”

Paul Wehman, PhD, from Virginia Commonwealth University, also the Editor-in-Chief of the Journal of Vocational Rehabilitation, noted, “Existing literature suggested a correlation between employer disability initiatives and company performance, with leadership commitment playing a significant role. However, we were pleasantly surprised to discover that these initiatives had a positive impact not only on employees with disabilities but also on their non-disabled counterparts. Many employees we spoke with expressed a newfound sense of pride in the company and a greater sense of camaraderie with their colleagues.”

Dr Phillips emphasised that all the companies in the study shared a typical value of prioritising their employees, acknowledging that employees are not merely assets to the company but that the company also exists to support and empower its employees through measures such as flexibility, training, opportunities for advancement, and fair compensation.

More information: Phillips, Brian N. et al, Effect of company-driven disability diversity initiatives: A multi-case study across industries, Journal of Vocational Rehabilitation. DOI: 10.3233/JVR-230061

Journal information: Journal of Vocational Rehabilitation Provided by IOS Press

Narcissistic CEOs often select fellow individuals with narcissistic tendencies to join the management board

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Narcissism exhibits diverse manifestations within leadership contexts, ranging from self-assurance and charm to more detrimental traits like excessive self-absorption and a lack of empathy towards others. While scholars have extensively investigated this personality trait in individual CEOs, little attention has been directed towards understanding its broader implications on the overall composition of senior management teams.

This research endeavor commenced with Professor Graf-Vlachy’s team analysing LinkedIn profiles belonging to top-tier managers. Professor Graf-Vlachy elucidates, “Narcissists are inclined to showcase their superiority to a wider audience. Previous studies have indicated that this inclination transcends into various facets of corporate communication, including press releases and correspondence with shareholders.” Indicators of narcissistic tendencies encompass aspects such as the prominence of an executive’s photograph in annual reports or the frequency of a manager’s name appearing in company press releases.

Researchers utilised a similar methodology to scrutinise individuals’ digital footprints on social media platforms. “We have established the feasibility of gauging managers’ narcissism levels through an analysis of their LinkedIn profiles, focusing on metrics such as the quantity of photographs, the length of ‘About’ sections, and the array of skills, certifications, and career milestones listed,” states Professor Graf-Vlachy.

The study examined 11,705 LinkedIn profiles belonging to senior managers in US-based companies, revealing a remarkable trend: CEOs with pronounced narcissistic tendencies tend to appoint individuals to their management boards who mirror their own narcissistic characteristics. Put differently, they gravitate towards selecting executives who also exhibit a propensity for narcissism. A surge in a CEO’s narcissism level by one standard deviation corresponds to an 18 per cent increase in narcissism levels among newly appointed executives.

This phenomenon profoundly influences team dynamics and stability, as management boards comprising more narcissistic individuals experience elevated turnover rates, consequently incurring substantial costs for the organisation. “Narcissists are inclined towards dominance, which fosters conflicts within the boardroom, thereby precipitating greater volatility within the executive team,” summarises Professor Graf-Vlachy.

The study’s findings underscore the importance of CEOs and supervisory boards gaining a deeper understanding of the dynamics within their executive teams and reassessing their managerial selection processes accordingly. To achieve this objective, the researchers advocate for a more holistic evaluation of managers’ personality traits.

More information: Sebastian Junge et al, Narcissism at the CEO–TMT Interface: Measuring Executive Narcissism and Testing Its Effects on TMT Composition, Journal of Management. DOI: 10.1177/01492063241226904

Journal information: Journal of Management Provided by TU Dortmund University

Despite the inclination to mitigate the risk of replication, recent studies propose that startups should adopt a strategy of gradual and consistent scaling

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A recent study, published in the Strategic Management Journal, has revealed that startups should be cautious about early scaling, as it has a direct correlation with a higher risk of firm failure, especially for platform companies. The study also found that while early scaling may seem attractive to deter competitor imitation, it can hinder learning through experimentation and commit a business to an idea that lacks product-market fit.

Contrary to the success stories of high-growth startups like Facebook and Uber, which achieved their fortunes through early scaling, also known as ‘blitzscaling,’ researchers Saerom (Ronnie) Lee and J. Daniel Kim, both esteemed members of the Wharton School at the University of Pennsylvania, have observed numerous instances of startups failing due to this approach. This prompted them to conduct an extensive data analysis to test these contrasting views empirically.

Building on existing research, the researchers defined scaling as the process where startups focus on acquiring and deploying new resources to execute their core business concepts and expand their customer base. To determine when startups begin scaling, Lee and Kim devised a unique method. Since companies typically do not publicly disclose this information, the researchers had to get creative. They turned to job postings, analysing when startups planned to recruit their first managerial or sales personnel. This innovative approach allowed them to build a robust dataset.

Their approach involved analysing when startups planned to recruit their first managerial or sales personnel, discernible from their job postings. This analysis yielded a dataset comprising 6.3 million job postings from over 38,000 startups founded in the U.S. post-2010, containing details on the date and occupational category of each posting.

Significantly, they discovered that startups scaling early were less inclined to engage in experimentation through A/B testing. Moreover, startups entering nascent markets (i.e., devoid of pre-existing competitors) tended to delay scaling compared to those in more established markets, contrary to the prevailing belief advocating early scaling to mitigate imitation risks. Crucially, early-scaling startups exhibited a greater propensity for failure compared to their later-scaling counterparts.

“What surprised us was the robustness of this trend, particularly evident among platform companies, which are central to the blitzscaling narrative,” remarked the authors.

Consequently, entrepreneurs should embrace a strategy of gradual and consistent scaling. While the argument for rapid scaling highlights a select few success stories, counterexamples such as WeWork, Theranos, and Baroo, known for aggressive expansion without a viable product or scalable business model, underscore the perils of premature scaling.

“Instead of pursuing blitzscaling, startups should allocate ample time to experiment with their business concept and assess its product-market fit,” advise the authors. “Upon confirming product-market fit, they can then commence hiring and expanding their customer base.”

More information: Saerom (Ronnie) Lee et al, When do startups scale? Large-scale evidence from job postings, Strategic Management Journal. DOI: 10.1002/smj.3596

Journal information: Strategic Management Journal Provided by Strategic Management Society

A fresh investigation frames the concept of ownership competence within the realm of private enterprises

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Researchers have now identified two key competencies that owner-managers must possess to facilitate growth within their firms: matching competence and governance competence. In a recent study published in the Strategic Entrepreneurship Journal, the team has not only uncovered a notable challenge faced by owner-managers of family firms in effectively leveraging their governance competence to drive growth but also pinpointed strategies to overcome this obstacle, providing valuable insights for the field of strategic entrepreneurship and family business management.

The study, led by the esteemed Jannis von Nitzsch from the University of Munich, Miriam Bird from the Technical University of Munich, and Ed Saiedi from BI Norwegian Business School, aimed to delve into the components of sound judgment exhibited by owner-managers of private firms. These individuals hold full decision-making authority to allocate the firm’s resources in alignment with their distinctive beliefs to foster value creation, showcasing the depth of expertise and knowledge behind this research.

Von Nitzsch emphasises the significance of growth as the primary indicator of value creation within private firms. This drove the researchers to intertwine the construct of owner competence with Penrosean growth theory, which posits that growth breeds further growth. This integration sought to elucidate how owners adeptly allocate resources to propel growth, an aspect previously nebulous in Penrosean growth theory.

To scrutinise the role of entrepreneurial judgment in resource allocation decisions, the researchers adopted a secondary research design to conduct a comprehensive empirical examination and extension of the owner competence construct. They examined owner-managers competence in matching and governance, as reported on their LinkedIn profiles, and incorporated these metrics into a longitudinal sample alongside data on their firm’s growth and various firm characteristics. Matching competence pertains to conceptualising the potential value of specific resource combinations (“what to own”). In contrast, governance competence involves crafting effective governance structures to align incentives within a firm (“how to own”). Additionally, the researchers gathered survey data from German owner-managers to validate that their approach effectively captured matching and governance competence.

The findings underscored the pivotal role of owner-manager competencies, particularly in the nascent stages of their firms when standardised processes are yet to be established. Surprisingly, the team discovered that owner-manager matching competence was not bolstered in family firms, contrary to their initial hypothesis. For instance, familial ties among owners and managers within a firm may either facilitate or impede the exercise of owners’ judgment regarding strategic actions.

“This sheds light on intriguing family dynamics that may impede the exploration of innovative, risk-taking strategies — despite the family’s inherent trust and support of the owner — and hinder the professionalisation of firms when it entails relinquishing family control,” remarks von Nitzsch.

The study suggests that these dynamics obstructing growth could be alleviated by implementing governance mechanisms to deter nepotism. Furthermore, the insights for firm owners include introspection on their own competences, the unique environment of their firm (such as the influence of family members on decision-making), and the cumulative impact on firm growth. Von Nitzsch advocates for owners to contemplate enhancing their competencies to propel further growth within the firm, providing actionable recommendations for owner-managers in family firms.

More information: Jannis von Nitzsch et al, The strategic role of owners in firm growth: Contextualizing ownership competence in private firms, Strategic Entrepreneurship Journal. DOI: 10.1002/sej.1497

Journal information: Strategic Entrepreneurship Journal Provided by Strategic Management Society

Researchers find that nearly half of B2B startups choose not to market themselves

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Marketing is a pivotal strategy for fostering growth within early-stage business-to-business (B2B) startup firms. However, despite its potential to drive success, many such enterprises opt to forego marketing endeavours, as highlighted by a study authored by a Smeal College of Business professor and featured in the Industrial Marketing Management journal.

Delving into the realm of systematic marketing, wherein firms continuously gather and utilise customer data to enhance their offerings, communications, and distribution strategies, the researchers scrutinised the landscape of startup firms. Their inquiry centred on identifying which startup ventures embrace systematic marketing, the factors motivating their decision, and the dividends reaped from such investments. These insights could serve as a compass for future startups, aiding in discerning the feasibility and timing of adopting systematic marketing practices.

Gary Lilien, the Smeal Distinguished Research Professor of Management Science and co-author of the study, likened their findings to a recipe guiding marketing into the startup formula. Collaborating with University of Technology Sydney Associate Professor Ofer Mintz, the researchers harnessed data from Equidam, an online valuation platform. Their analysis encompassed 693 startup firms launched between July 2016 and April 2018, spanning business-to-business (B2B) and business-to-consumer (B2C) domains. Two hundred firms furnished financial data for 2019 and 2020, offering a comprehensive view of their trajectories.

It’s worth noting that the startup firms engaging with Equidam represented a self-selected cohort, distinct from the broader startup populace. To mitigate potential bias and bolster the robustness of their findings, Lilien and Mintz embarked on a supplementary study. This involved surveying 377 startup entities drawn from a Survey Sampling International panel of entrepreneurs.

The research unearthed a dichotomy: while 55% of the sampled startup firms reported implementing systematic marketing practices, a significant 45% abstained from such endeavours. Notably, early-stage B2B startups emerged as the least likely candidates for embracing systematic marketing despite standing to gain the most from its adoption. Conversely, early-stage B2C startups exhibited a higher propensity for systematic marketing, albeit with lesser associated benefits. Furthermore, late-stage B2B startups derived diminished returns from systematic marketing compared to their developing counterparts.

Intriguingly, the decision to embark on systematic marketing greatly influenced firms’ valuations. Alarmingly, most surveyed startup firms—60% from the Equidam study and 61% from the validation survey—misjudged the necessity of systematic marketing, thereby incurring detrimental repercussions on their valuations.

The study presents a nuanced framework informed by insights from interviews with startup founders, investors, and consultants. This framework zeroes in on the repercussions of systematic marketing adoption by startup firms. Crucially, the efficacy of marketing endeavours and their potential to augment a firm’s valuation hinge upon several factors, including the firm’s customer base (direct consumers or businesses), developmental stage, prior entrepreneurial experience of the management team, and industry environment.

Ofer Mintz reflected on the study’s evolution, initially envisioning it as an exploration of the optimal marketing strategies for startups. However, early interviews revealed many startup managers’ pervasive disregard for marketing, often due to resource constraints. This epiphany underscored the broader significance of their research endeavour.

Notably, early-stage startup firms exhibited a greater propensity for systematic marketing when endowed with management team members boasting successful entrepreneurial track records and backed by investors with vested financial interests. The researchers observed that certain B2B startup ventures, particularly those from existing companies, boasted smaller yet more discerning customer bases, affording them a heightened ability to substantiate their credibility through marketing endeavours.

For these companies, marketing transcends mere promotion; it encompasses sales, technical support, and a profound comprehension of evolving customer needs, often culminating in co-development initiatives with clients. By engaging in systematic marketing, startup firms furnish discernible signals to potential investors, signalling their commitment to quality.

The implications of this study extend beyond the realm of startups, offering valuable insights for venture capitalists seeking to navigate the intricate landscape of investment opportunities. Nonetheless, the researchers underscored the need for further research to elucidate strategies for encouraging early-stage B2B startups to embrace systematic marketing practices.

In essence, this research serves as a beacon for both startup aspirants and investors alike, shedding light on the pivotal role of marketing in shaping the trajectory of emerging ventures. By leveraging these insights, stakeholders can chart a course towards sustainable growth and value creation in an ever-evolving entrepreneurial landscape.

More information: Ofer Mintz et al, Should B2B start-ups invest in marketing? Industrial Marketing Management. DOI: 10.1016/j.indmarman.2024.01.003

Journal information: Industrial Marketing Management Provided by Penn State

Craft-based firms can authentically convey their identity, but should avoid overt methods to do so

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Consumers’ strong preference for authenticity, especially in the realm of craft-based firms, is a well-established phenomenon. However, a recent investigation, featured in the Strategic Entrepreneurship Journal, offers a fresh perspective by delving into the unique elements that contribute to the credibility of authenticity within such enterprises.

Authored by Stanislav D. Dobrev from the University of Wisconsin-Milwaukee and J. Cameron Verhaal from Tulane University, the study scrutinises the challenges managers face in identity-centric markets as their businesses expand. Within craft industries, the authors observe that overt assertions of authenticity by producers yield little effect. Dobrev and Verhaal’s examination of the craft beer sector reveals that managers can harness three strategic assets to convey their firm’s identity convincingly: organisational resources, capabilities, and position.

Dobrev highlights the evolution of authenticity assessment, transitioning from a focus on individuals or objects to the realm of organisations. “So we need a theory that explains whether organisations can legitimately claim to be authentic and be perceived as such,” he asserts.

While the study underscores the significance and advantages of authenticity for producers, it also acknowledges the ambiguity surrounding the projection of an authentic identity that resonates with the audience. Contemporary consumers are characterised by a sense of cynicism towards brands, particularly about authenticity claims, which inherently contradict self-promotion. Consequently, the central inquiry revolves around the strategies employed by organisations to establish themselves as authentic entities.

The microbrewery and brewpub industry is one sector where the intertwined concepts of craft and authenticity are particularly prominent. Here, the driving force is the pursuit of beer production for its intrinsic value rather than mere profit generation.

To gather robust insights, the research team employed a rigorous methodology. They utilised data from a reputable website hosting reviews from craft beer enthusiasts. These reviews were then categorised based on authenticity definitions, generating a score for each beer review and subsequently for each brewery over a span of years. This comprehensive approach facilitated an examination of authenticity perceptions over time and enabled statistical analyses to determine predictors of perceived authenticity among consumers.

The study identifies three primary factors contributing to credible claims of authenticity. Firstly, organisational resources encompass the independence of a company’s ownership structure. Many successful craft producers engage in production alliances with larger entities to augment volume, potentially signalling a shift towards profit maximisation. Secondly, capabilities involve the diversity of beer styles produced. A focus on a single capability may imply profit-driven motives, as diversification often aligns with increased profitability. Lastly, position refers to third-party endorsements, where external entities validate the authenticity of a company. For instance, winning awards from independent bodies is an authenticity endorsement, bolstering the company’s credibility.

Dobrev elucidates the theory’s emphasis on three pillars crucial for organisations to maintain authenticity amid growth and success. Firstly, conveying a message consistent with the audience’s perception of authenticity is imperative. Secondly, the facets contributing to a company’s authenticity must be visibly demonstrated, as mere assertions may backfire. Lastly, authenticity claims must be credible, necessitating substantial investments and commitments to bolster credibility.

The study’s findings hold significant implications for managers in craft-based industries, providing a roadmap for navigating the delicate balance between authenticity and expansion. By understanding the nuanced interplay of organisational resources, capabilities, and positioning, managers can effectively cultivate and preserve authenticity in an evolving market landscape.

More information: Stanislav D. Dobrev et al, Organizational authenticity: How craft-based ventures manage authentic identities and audience appeal, Strategic Entrepreneurship Journal. DOI: 10.1002/sej.1496

Journal information: Strategic Entrepreneurship Journal Provided by Strategic Management Society

Recent research indicates that female entrepreneurs achieve greater success with guidance from female mentors

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Mentorship’s significance in professional and personal development has been widely recognised for some time. However, a pertinent question arises: is it essential for a mentor to physically resemble their mentee? A recent study has delved into this query, uncovering that the gender of a mentor can profoundly influence the success of female entrepreneurs.

Specifically, the research highlighted that female entrepreneurs benefit significantly when mentored by other women. In a detailed randomised controlled experiment, sales for female entrepreneurs increased by an average of 32% when they were under the guidance of female mentors.

The findings of this research have been documented in a paper titled “Breaking the Glass Ceiling: Empowering Female Entrepreneurs Through Female Mentors,” published in the INFORMS peer-reviewed journal Marketing Science. An esteemed group of academics conducted the study: Frank Germann from the University of Notre Dame, Stephen Anderson from Texas A&M University, Pradeep Chintagunta from the University of Chicago, and Naufel Vilcassim from the London School of Economics and Political Science.

The researchers conducted a controlled field experiment involving 930 entrepreneurs in Uganda who were part of a business support program and operated from physical locations. The study spanned from July to August 2015, during which the researchers conducted individual interviews, performed a business audit, and administered a baseline survey. The participating entrepreneurs, 40% female and 54% married, typically were around 31 years old, with two children and at least a high school education.

At the beginning of the study, these businesses had been operational for an average of four years and employed a small workforce. Participants were divided into a control group and a treatment group, with those in the treatment group paired with a mentor with a postgraduate degree and at least five years of work experience. These mentors were based in various global locations.

Further evaluations, including business audits and surveys conducted in May 2017, revealed that female entrepreneurs experienced more positive and supportive interactions when mentored by women. This contrasted with those mentored by men, who did not show significant performance improvement compared to the control group.

The study’s conclusions were clear: Matching female entrepreneurs with female mentors appears to be a very effective strategy for enhancing their success rates. Additionally, the researchers suggested that in situations where female mentors are not available, male mentors could increase their effectiveness by adopting a mentoring style that is characteristically supportive and positive, similar to that typically exhibited by female mentors.

More information: Frank Germann et al, Frontiers: Breaking the Glass Ceiling: Empowering Female Entrepreneurs Through Female Mentors, Marketing Science. DOI: 10.1287/mksc.2023.0108

Journal information: Marketing Science Provided by Institute for Operations Research and the Management Sciences

Startup financing gender gaps are larger in societies with higher levels of women’s empowerment

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Commercial bankers play a crucial role in providing the capital necessary for business operations and growth. However, a pervasive gender bias results in women more frequently facing rejection than their male peers when they assess entrepreneurs seeking loans.

It is estimated that there is a $1.7 trillion global financing gap for small and medium-sized enterprises owned by women. Research indicates that even when women manage to secure business loans, they often do so for smaller amounts, have higher interest rates, and demand more collateral. This significantly curtails the economic potential of women-led businesses. The relationship between an entrepreneur’s gender and their access to bank financing is complex, showing inconsistent results across studies and underscoring the importance of the social context.

A surprising finding from new research conducted by the University of Notre Dame highlights that gender discrimination in startup financing intensifies in societies where women are more empowered. The study, “A Meta-Analysis of the Impact of Entrepreneurs’ Gender on their Access to Bank Finance,” soon to be published in the Journal of Business Ethics by Dean Shepherd of Notre Dame’s Mendoza College of Business, offers insights into narrowing this gender gap. Shepherd, alongside co-authors Malin Malmström from Lulea University of Technology, Barbara Burkhard and Charlotta Sirén from the University of St. Gallen, and Joakim Wincent from the Hanken School of Economics, drew from academic studies worldwide. Their research incorporated over one million unique data points and spanned over three decades, confirming a sustained global bias against women in entrepreneurial bank finance.

The study’s findings highlight the role of social gender norms in perpetuating gender bias in entrepreneurial bank finance. These norms often portray women as less suitable for entrepreneurial roles, associating masculine attributes with entrepreneurial success more than feminine ones. This leads evaluators to prefer male over female entrepreneurs. Shepherd, who specializes in entrepreneurship in adverse conditions, asserts that both women and men have equal potential for success in entrepreneurship. The challenges women face, therefore, stem from entrenched social norms and biases, not their own shortcomings.

The meta-analysis revealed that women’s business loan applications are more frequently rejected and their loan terms less favourable. It also highlighted significant variability in these outcomes, suggesting the influence of various moderating factors.

Two primary factors were identified as impacting women in entrepreneurial financing. In societies with conservative political ideologies, women entrepreneurs tend to receive worse credit terms compared to their male counterparts due to the upholding of structural gender differences. Furthermore, contrary to expectations, the researchers found that women’s empowerment in a society, which theoretically should dismantle gender norms, threatens male dominance in resource distribution, thereby intensifying protective responses to uphold existing gender norms.

The study’s findings underscore the need for continuous monitoring and intervention by policymakers to address gender bias in entrepreneurial bank finance. The researchers propose three strategic recommendations. Firstly, policymakers should monitor conditions continuously and develop intervention programs that cover various financial avenues such as bank finance, venture capital, governmental programs, and incubator access. Secondly, it is crucial for societies to normalize women’s empowerment, ensuring that women’s advancement is not hindered by prevailing patriarchal structures. This might involve redesigning organizational structures and refining recruitment processes to support women in achieving and sustaining leadership positions. Lastly, the implementation of regulations mandating gender audits in bank lending is crucial. These audits should assess gender equality in financial distributions, services, and project financings.

Dean Shepherd concludes by emphasizing the need for a collective admission of the resistance to women’s empowerment within political, cultural, and managerial spheres as a prerequisite to effectively tackling and dismantling gender inequality in entrepreneurial finance.

More information: Malin Malmström et al, A Meta-Analysis of the Impact of Entrepreneurs’ Gender on their Access to Bank Finance, Journal of Business Ethics. DOI: 10.1007/s10551-023-05542-6

Journal information: Journal of Business Ethics Provided by University of Notre Dame