KEY CONCEPT

The gender gap for women leaders exists in organizations of all types, but biases against women are greater in organizations that favor a competitive incentive culture.

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IDEA SUMMARY

While the extent of the gender gap in leadership roles is well documented, researchers continue to seek out the reasons for the tenacity of this gap despite a consensus for more women in positions of leadership and the best intentions of organizations to enable the success of women leaders.

One study by a US-Australian research team focused on the impact of an organization’s institutional environment on the leadership gender gap. The institutional environment relates to the rules, norms, beliefs, and assumptions of the organization and is a vital component of an organization’s culture. In this study, the researchers focused on competitive vs. cooperative institutional environments and how this might affect the success of women leaders. In competitive environments, individual success is incentivized so that any financial rewards garnered by an individual come at the expense of others. A cooperative environment, in contrast, develops team-based incentivized so that financial rewards are more evenly distributed among team members.

To explore what role the institutional environment could play in the success of women leaders, the researchers designed an experiment based on a modified Centipede game a game in game theory in which participants take alternative turns in deciding whether to take a portion of an increasingly larger part or pass the decision to the other player. Waiting longer can lead to greater rewards (since the pot continues to grow); however, waiting can also lead to significantly lower rewards if the other player decides to take the pot or the experiment randomly ends early. Success is determined by how late in the round a player makes his or her exit that is, decides to take the money rather than pass. A later exit means achieving a greater reward. Once one player exits, the game is over.

This study used a competitive version of the game in which the payoffs were deliberately uneven (any player who decided to exit would receive a significantly higher payoff than the other player) and a cooperative version of the game, in which the payoffs remained even (the later the exit of a player, the higher the payoffs for both players).

The first rounds were conducted with 2 participants; later rounds were conducted with 3 participants, the 2 deciders, and a leader who offered advice that could benefit both deciders. Several surveys of the participants provided additional data. Participants were asked early in the experiment whether they would want to be a leader, and in the leadership rounds were asked to evaluate their leaders.   

The results of the experiment revealed the following:

• Leaders improved the productivity of a team (compared to teams without leaders). Participants in the experiment who had no leader were less successful than participants with a leader offering advice.

• Despite being as effective as male leaders in improving the productivity of their followers, female leaders in competitive versions of the game received more negative evaluations than male leaders 50% lower than female leaders in cooperative games. Male participants were evaluated the same whether playing in competitive or cooperative games.

• The advice from women leaders was the same as the advice from men. In other words, female leaders received lower evaluations than male leaders for offering identical advice!

• When the advice was considered “bad” or “selfish” thus violating the female stereotype of being “more fair-minded” than men female leaders received an additional penalty in their evaluations.

For both competitive and cooperative environments, women were less willing to lead than men. Thus, stereotypes again played a role, although this time impacting self-perception of how women themselves think of their effectiveness as leaders.

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BUSINESS APPLICATION

The results of this study can be interpreted in terms of the supply side of female leadership women are less likely to want to be leaders—and the demand side evaluations of women leaders are biased. The demand side bias, evident only in competitive environments, can have serious consequences: decisions on promotions and pay raises often depend on the evaluations of others.

In seeking to redress the female gender gap in leadership, it’s important to recognize the difference between the supply side and demand side of female leadership. Many initiatives and approaches for increasing the number of women leaders, such as the popular “Lean In” approach, offer supply-side solutions. These approaches do not address the demand side biases evident in competitive environments. In such environments, in fact, an approach such as “Lean In” could potentially have unintended consequences as women might face a backlash and even greater unjustly negative evaluations.

Institutional environments aren’t easily changed: a competitive culture is likely to remain competitive. The lesson of this study is that in competitive environments, leaders need to be aware that the biases against women leaders are likely to be more pronounced, and efforts should be taken to mitigate these biases.

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FURTHER READING

Catherine Eckel’s profile at Texas A&M University

https://artsci.tamu.edu/economics/contact/profiles/catherine-eckel.html

Lata Gangadharan’s profile at Monash University

https://research.monash.edu/en/persons/lata-gangadharan

Philip Grossman’s profile at Monash University

https://research.monash.edu/en/persons/philip-grossman

Miranda Lambert’s profile at LinkedIn

https://www.linkedin.com/in/miranda-lambert-35b04630/

Nina Xue’s profile at LinkedIn

https://www.linkedin.com/in/nina-xue-564a5556/?originalSubdomain=au

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REFERENCES

The Gender Leadership Gap in Competitive and Cooperative Institutions. Catherine C. Eckel, Lata Gangadharan, Philip J. Grossman, Miranda Lambert, and Nina Xue. SSRN (31 May 2024). Available at SSRN: https://ssrn.com/abstract=4849618 or http://dx.doi.org/10.2139/ssrn.4849618

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