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Gender Inequality in Family Business Essay


Literature Review

One of the problems that every woman faces in a family business is that of succession. There are various approaches to succession in the family business. Ward (2016) believes that it depends on the model of the family and singles out eight models. In the model of Royal Families, the right to lead the business belongs to the oldest son. As a rule, he is the first child to enter the business. Besides, in such families, daughters are often excluded from the business and have to make a career elsewhere. This model contradicts the modern tendency for equal opportunities for women. In the model of Anarchical Families, there are no clear rules of succession. All children have equal rights and voices in the business. Moreover, the children are not obliged to join a family business; this model gives freedom for women to decide their destiny. Laissez-Faire Families are similar to anarchical family, but they usually plan to sell the family company because they believe that their children should start a business of their own. In this model children of both sexes will get equal shares. In Social Democratic Families parents provide equal opportunities for all their children. If children enter the business, they share equal titles and are equal partners.

If they choose not to join the business, they get equivalent assets. Democratic Capitalist Families consider that everyone gets what one deserves. Thus, the benefits from the business are shared according to the contribution. Representative Democracy Families prefer appointing a trustee to run the business instead of the family. The equity among the family members is provided through equal shares. In Pure Capitalist or Entrepreneurial Families, the founder of the company believes that no one can follow him. Thus, the owner does not choose a successor and usually sells the business. The Utopian Families consider a business a great resource for building an empire and a strong family. This system benefits all family members. Every family member can enter the business, but it needs hard work.

The report of the Family Business Center of Excellence (2015) suggests then study of female representation in the biggest world family businesses. The report states that 55% of the 525 examined companies have a minimum of one woman on their board (Family Business Center of Excellence, 2015). Besides, 70% of the family businesses are thinking of a woman as a possible next CEO candidate. Moreover, it is reported that the interest of women in joining family businesses increased during the last three years. The figures prove that the involvement of female family members to the leading roles in companies has some economic sense. The examples here are that “companies with more women in leadership increase focus on corporate governance, corporate responsibility, talent dynamics, and market acuity” (Family Business Center of Excellence, 2015, p. 3) and the fact that a gender-balanced board is usually identified with better corporate social performance. Nevertheless, despite some progress in this issue, female participation in a family business is still a challenge all over the world.

Koffi, Guihur, Morris, and Fillion (2014) investigate the peculiarities of bringing the credibility of successors in the family business by male and female predecessors. The research revealed both similarities and differences in this issue. There is only one common behavior observed in how men and women increase the credibility of their successor. It is the accreditation. It is stated that women select the successor basing on “confidence, organized to inspire them, putting an accent on teamwork” (Koffi et al., 2014, p. 73), in other words, it can be called maternal leadership. Male predecessors tend to control the successors, make them prove their worth, and demonstrate “the didactic type of work” (Koffi et al., 2014, p. 73). Considering the information above, male predecessors prefer men as their successors, while women do not demonstrate a distinct preference. This fact can become one more challenge for women who want to enter a family business.

Theoretical Framework

Since the study combines two big issues, those of family business and gender inequality, the theories that will help to examine the problems that women face in the family business have to cover both subjects. The theoretical framework of the study includes a family business theory, theory of justice, and theory of social and gender roles. A family business theory presupposes that the leading positions in the company should be occupied by the family members. It means that there are family representatives both in the Board of Directors and the top management. Thus the issue of succession is important, particularly when there are two and more children in the family. The theory of justice presupposes that every individual is supposed to have equal rights. Concerning a family business, it means that any child, if he or she desires, should have the right to enter a family company. The theory of social and gender roles applies to the family business when a woman wants to join it. Sometimes male family members create barriers appealing to the fact that historically women’s role is to be a wife and a mother while men should make a living. Fortunately, these prejudices become less popular. However, there are still many problems that women face in a family business.

References

Family Business Center of Excellence. (2015). . Web.

Koffi, V., Guihur, I., Morris, T., & Fillion, G. (2014). Family businesses succession: How men and women predecessors can bring credibility to their successors? Entrepreneurial Executive, 19, 67-85.

Ward, J.L. (2016). Keeping the family business healthy: How to plan for continuing growth, profitability, and family leadership. New York, NY: Palgrave Macmillan.

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IvyPanda. (2020, September 29). Gender Inequality in Family Business. Retrieved from https://ivypanda.com/essays/gender-inequality-in-family-business/

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"Gender Inequality in Family Business." IvyPanda, 29 Sept. 2020, ivypanda.com/essays/gender-inequality-in-family-business/.

1. IvyPanda. "Gender Inequality in Family Business." September 29, 2020. https://ivypanda.com/essays/gender-inequality-in-family-business/.


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IvyPanda. "Gender Inequality in Family Business." September 29, 2020. https://ivypanda.com/essays/gender-inequality-in-family-business/.

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IvyPanda. 2020. "Gender Inequality in Family Business." September 29, 2020. https://ivypanda.com/essays/gender-inequality-in-family-business/.

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IvyPanda. (2020) 'Gender Inequality in Family Business'. 29 September.

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