April 8, 2023 from Canadian HRReporter
Recent research from the University of Alberta challenges the longstanding perception that women are more risk-averse than men in leadership roles. This study suggests that environmental context and scrutiny levels play a crucial role in decision-making differences between genders, especially among CEOs.
Daniel Gamache, the lead author and an associate professor at the Terry College of Business, University of Georgia, emphasizes that labeling female CEOs as inherently more conservative than their male counterparts oversimplifies a complex issue. “This general assumption of female CEOs being more conservative than male CEOs is probably too simplistic,” Gamache explains. The research is part of a broader initiative to delve deeper into the dynamics of female leadership in the corporate world.
The study, co-authored by Timothy Hannigan from the Alberta School of Business, highlights the significant impact of environmental factors and the level of scrutiny CEOs face. It found that gender differences in strategic decision-making among CEOs are heavily influenced by their specific work environments. “We need to think about context, that it would be important for HR managers to understand the nature of pressures that both men and women are facing, and understand how factors like scrutiny could be shaping that,” Gamache notes.
Scrutiny and Decision-Making
In high-scrutiny environments, differences between female and male CEOs diminish, with both engaging in acquisitions at comparable levels. The research indicates that female leaders may be more attuned to scrutiny than their male counterparts, potentially due to the greater challenges they face rising to top executive roles. “Female leaders may be more attuned to scrutiny than male leaders, simply because of what they’ve had to overcome to get into leadership roles,” Gamache remarks.
A 2016 neuro-analysis involving fMRI imaging found that women exhibit more brain activity while making decisions than men, suggesting a more comprehensive processing approach. However, this advantage may be compromised in high-pressure situations. The paper found that “women engage in detailed, elaborate, and effortful analysis of available information, whereas men rely more on single cues that are readily available during information processing.” In demanding jobs, the ability to process information effectively is crucial, and high levels of scrutiny may hinder this process, particularly for women.
Implications for HR and Leadership
This research has significant implications for human resources and organizational leadership. It challenges the notion that women are inherently more conservative decision-makers and highlights the importance of considering environmental context when evaluating leadership behavior.
Gamache and his colleagues suggest that boards of directors and HR professionals should consider how the context of situations might be influencing decision-making and potentially diminishing the benefits of diversity in leadership. “The context might be changing the way they would normally be thinking, and maybe there’s diversity benefits you’re losing out on if the context is creating too much scrutiny and pressure,” he explains.
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