Circumventing The Glass
Ceiling: Women Entrepreneurs & Other Emerging Trends
The "glass ceiling" is a term coined in the 1970s to describe the invisible, artificial barriers created by attitudinal and institutional prejudices that prevent qualified individuals from advancing within their organization and reaching full potential. Originally, the term was almost exclusively used to describe a situation that women came up against. It was assumed that once women had the same education, experience, abilities, and career ambitions as men and had entered the same fields, they could rise up the workplace ladder in the same way as men. In fact, it is still evident today that ceilings and walls exist throughout most workplaces for women. Research shows that when all else is equal, women are still heavily under-represented in senior positions. In the absence of obvious barriers that they can identify and set out to overcome, women have said that they feel like they have come up against a "glass ceiling" invisible and seemingly impenetrable.
Some women have circumvented this problem by becoming entrepreneurs. New technology, instantaneous communication and the globalization of world markets have profoundly transformed the way business is done. In many respects, the increase in women-owned and run businesses have been fuelled by these changes. Women have seized upon the break down of the traditional methods of doing business and replaced them with their own models rather than copying comparable male business models. Women tend to start small, often in their own homes, and grow to meet demand, rather than start with a flashy business plan, expensive marketing campaign and a list of venture capital investors, who insist on being repaid fairly quickly. 1
There is a trend toward female entrepreneurship. Between 1992 and 1997, the number of women-owned firms increased two-and-a-half times faster than all U.S. businesses (16% compared to 6%). Employment in women-owned firms grew more than three times the rate for all firms (28% compared to 8%). During this same time period, the number of women-owned firms with employees grew six times faster than the national average (37% compared to 6%). Payroll in women-owned firms grew at almost twice the rate for all firms (46% compared to 25%).2
What is particularly interesting is that there is a greater degree of stability and staying power among women-owned businesses. This again has to do in part with women's different approach to business than their male counterparts. Instead of starting out on a mountain of credit, many women businesses start out with minimal financial resources and a more customized service for a smaller client base. According to a the Small Business Administration study, nearly three-fourths of women-owned firms which were founded in 1991, were still going three years later, as compared with two-thirds of all U.S. companies.
A bi-product of juggling career, family and households, is the fine honing of women's skills at multi-tasking and this translates into successfully being able to run a new business, be it alone or with a staff. In some cases, much of the valuable experience that women bring with them when starting their businesses comes from unpaid work of home management and motherhood.
Although all individuals building up their own company are concerned with turning a profit, studies show that the profit motive is not the primary reason for many women in creating their own companies. There are other factors influencing women when they give up their employee status to make it on their own. For example, lack of child care facilities, unacceptable working conditions, rigid hours, the wage gap between men and women, occupational segregation, job frustration resulting from the glass ceiling, or disillusionment with traditional employer/employee relationships. On the positive side, the factors include market opportunity, an interest in a particular area of activity, social objectives, greater income and financial independence, a need simply to get out of the house, and a desire for autonomy, personal growth, and increased job satisfaction. 3
Before the fall of the Berlin Wall, 94% of women in the former German Democratic Republic worked. Today, the 20% unemployment rate in east Germany has touched off a surge in female entrepreneurship: 150,000 new female-run companies have been launched since 1990. Unlike most men for whom the profit motive is the primary reason for creating their own companies, women in Germany put profits in fourth or fifth place after their desire to become self-sufficient and develop their own ideas. 4
Women business owners have styles of thinking and management that differ in several important ways from men. A 1994 Study commissioned by the National Foundation for Women Business Owners (USA) showed that men strongly emphasize logical, left-brain thinking. They tend to be more action oriented and competitive. Contrastingly, women are somewhat more likely to emphasize right-brain thinking -that is, feeling, intuition, relationships, sensitivity, and values and tend to be more evenly balanced between the two styles than men. 5 One can conclude from this study that men tend to take a more authoritative and competitive approach to management. Further, assuming the adage that women have the distinguishing traits of interdependence and cooperation, one could also conclude they women tend to take a "win-win" approach; they seek to understand the needs of the other party when coming to the negotiating table and seek to achieve a mutually agreeable result. This of course is not to imply that the restrictions of our biology are solely responsible for the differences in men and women's styles of doing business. External forces such as culture, habit, and expectations play a large role.
In general, women-run companies tend to consider the process and atmosphere in which the goals and objectives are achieved as opposed to just the goals and objectives. Additionally, creating an atmosphere of camaraderie is often made a priority. The typical structure of women-run enterprises is that of a web, in which everyone internally networks with one another. This form of co-dependence ensures that tasks are not overseen and creates a higher degree of camaraderie. The employees see themselves as working together as opposed to merely working in an isolated manner in the same office with others.
Trust in Business, an all-woman office services company located in Munich, Germany exemplifies this type of structure. The company which was founded by two women has increased its profits 5200% since its founding in 1999. The methods used by the company have much in common with other woman owned businesses; i.e. it started without venture capital in the home of one of the women and most of the advertising has come from articles written about the company which were of no cost to the company. Trust in Business presently employs 15 women and rents office space. The women work in a web structure. According to Anne Koark, one of the partners, "Each person's functions are interdependent with the functions of at least one other woman in the office."
Another strong trend in addition to entrepreneurship is women working on a contract basis. This type of arrangement generally allows for more overall flexibility and evidences that many women are now seeking employment outside of the structure of a traditional office environment. A study by Computer Jobs, an employment Web site, and Contract Professional, a national magazine for information technology contractors, underscored this point. It reported that while salaried male information technology workers earn 12% more than salaried women, female contract workers in the same field earn 8% more than their male counterparts. This supports the findings of another recent survey that showed that given a flexible work environment, women will put in more hours. 6 The survey found that women in technology love the creative freedom, opportunities for growth and relative lack of barriers to advancement in the field. Equally strong, however, are their feelings that the hours and level of commitment required in many information technology jobs are not sustainable long-term.
Although men as well as women face difficulties in finding a balance between work and the responsibilities of personal life, women still carry much of the traditional burden of the organization of childcare and household. It is often reported that women no longer bear this burden alone and that men do help out with the household chores. However, "helping out" still implies that the share of responsibilities are far from equal. A novel approach to this problem has been presented by the German air carrier, Deutsche Lufthansa AG. According to Monika Rühl of Lufthansa, a quantum leap is only possible if more equal opportunities are available for men. Men so far have no 'biological options'. Only when the responsibility for reproductive work is divided between both partners will the professional opportunities for women increase. The new topic must therefore be: men must also be allowed to take parental leave and reduce their working hours without losing anything in terms of respect or career opportunities. Lufthansa is clearly on the right path. The challenge will be of course, to translate such a policy into a market trend.
The emerging trends discussed herein clearly indicate that requiring women to work in an "overload" mode is no longer economically efficient. Male-led organizations will benefit from adopting structures and strategies similar to those now being created by women entrepreneurs which are sensitive to their employees ever-developing sense of how to make their careers and personal lives more compatible. Additionally, all companies that practice combining family and career and equal opportunities for men and women in the corporate culture will improve their chances of remaining competitive and becoming market leaders.
1. "Women's E-Businesses Are Alive and Thriving"
by Priscilla Y. Huff December 26, 2000. Online. [www.womensenews.org]
Stacey van Hooven is an American attorney living in Munich and the mother of three children. She works in cooperation with Trust in Business, www.trustib.com, a full service company for the start-up phase of international subsidiaries in Germany. She is a consultant on American- related business and legal issues. For further information, please contact Stacey van Hooven at Stacey@Trustib.com .
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