Family enterprises contribute significantly to the global economy, representing over 70% of worldwide GDP. Recent surveys indicate these businesses demonstrate a notable openness to female leadership: approximately 55% include women on their boards, and 70% are contemplating female candidates for their next CEO role. This trend towards gender parity is often attributed to a focus on long-term objectives and familial values. However, a groundbreaking study featured in the Strategic Entrepreneurship Journal offers a fresh perspective, suggesting that the success of women in leadership positions within family-owned businesses is fundamentally linked to employee perceptions of their leadership approach.

Remedios Hernández-Linares from the Universidad de Extremadura in Spain, a contributor to the study, highlights that family firms prioritize inclusivity and support for their internal community, fostering a workplace that extends beyond the traditional sense of a company into a more familial and communal environment. This ethos significantly benefits female leaders, framing their leadership as centred on relationship-building and the propagation of core values.

This approach to leadership is more in line with Western gender stereotypes that describe women as empathetic and cooperative, contrasting with the competitive and assertive traits often associated with men. The researchers clarify that the effectiveness of female leaders in family businesses is not merely a result of adhering to these gender norms but stems from a strategic emphasis on areas traditionally deemed suited to women’s competencies.

María Concepcion Lopez-Fernández, another study author from Universidad de Cantabria in Spain, points out the importance of CEOs as role models. She discusses how perceived discrepancies between female gender roles and leadership positions can engender bias and prejudice against women leaders. The research delves into how CEOs encourage entrepreneurial spirit—a domain often seen as masculine—within their company culture. Through a regression analysis of data from 322 Spanish small businesses, focusing on 198 family firms and 133 non-family firms, the study examines the influence of CEO gender on a business’s entrepreneurial orientation, considering various aspects of social learning.

Kimberly A. Eddleston from Northeastern University, who contributed to the study, notes that leadership’s impact on a firm’s entrepreneurial orientation is not determined by the gender of the CEO alone but also by the nature of the business—whether it is a family or non-family enterprise. Female leaders in family businesses are particularly adept at harnessing their firm’s commitment to learning and openness, thus fostering an entrepreneurial spirit more effectively than their counterparts in non-family businesses.

Another author, Franz Kellermanns from UNC Charlotte, emphasizes that while women are well-positioned to lead family businesses, gender biases still impede their ability to translate learning into a stronger entrepreneurial orientation in non-family firms.

This research provides valuable insights into the complex interplay between gender, leadership, and business culture, challenging decades of conflicting studies on the impact of female leadership on business outcomes. It suggests that women’s leadership can be particularly impactful in environments that value traditionally feminine attributes, recommending that framing leadership styles around empathy and relationship-building can enhance the effectiveness of women business leaders.

More information: Remedios Hernández-Linares et al, Learning to be entrepreneurial: Do family firms gain more from female leadership than nonfamily firms? Strategic Entrepreneurship Journal. DOI: 10.1002/sej.1482

Journal information: Strategic Entrepreneurship Journal Provided by Strategic Management Society